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Eastern Telecom Corp. v. Borough of East Conemaugh Francis Feist

argued: January 24, 1989.

EASTERN TELECOM CORPORATION, APPELLANT
v.
BOROUGH OF EAST CONEMAUGH FRANCIS FEIST, LARRY GOSSARD, ROBERT FISHER, JR., JOSEPH RISHELL, JOHN ZALUSKI, JOHN STECIK AND MICHAEL VARGO, INDIVIDUAL COUNCIL MEMBERS OR THEIR ELECTED REPLACEMENTS, APPELLEES



On Appeal from the United States District Court for the Western District of Pennsylvania, D.C. Civil No. 87-557

Gibbons, Chief Judge, Seitz and Greenberg, Circuit Judges

Author: Gibbons

Opinion OF THE COURT

GIBBONS, Chief Judge

Eastern Telecom Corporation, an operator of cable television systems, including the system serving the Borough of East Conemaugh, Pennsylvania, appeals from a judgment in favor of that Borough in Eastern's suit seeking to compel the Borough to comply with the franchise renewal procedures in the Cable Communications Policy Act of 1984. Pub. L. 98-549, 98 Stat. 2780, 47 U.S.C. § 521 et seq. The suit was tried non-jury, and the district court made findings of fact and conclusions of law. The court found that the Borough had in compliance with the Cable Act fixed a date for the submission of a renewal proposal, that Eastern missed this deadline, and that Eastern had no right to any further consideration of its proposal. There is no finding, and so far as we can determine, no evidence that a time limit for submission of proposals was fixed in the manner required by the Cable Act. We will therefore reverse and remand for further proceedings.

I.

In the 1984 Cable Act Congress amended the Communications Act of 1934 to provide a national policy concerning cable communications. Prior to the passage of the Cable Act there was no national policy on the development of cable television. The cable industry was regulated entirely at the local level through municipal franchise processes which defined the level of service, fixed rates, and in some instances fixed terms of franchises. Among the purposes of the Cable Act was the establishment of "an orderly process for franchise renewal which protects operators against unfair denials of renewal . . ." 47 U.S.C. § 521(5). The Cable Act defines "franchise" as "an initial authorization, or renewal thereof (including a renewal of an authorization which has been granted subject to section 526 of this title), issued by a franchising authority . . . which authorizes construction or operation of a cable system." 47 U.S.C. § 530(8). A "franchising authority" is "any governmental authority authorized by Federal, State or local law to grant a franchise." 47 U.S.C. § 530(9).

It is common ground that the Borough is a franchising authority authorized by Pennsylvania law to grant franchises, and that Eastern held a franchise which commenced on July 1, 1968, and continued until an expiration date of July 1, 1988. The Cable Act governs renewals of franchises which were in effect on October 30, 1984 and expire thereafter. 47 U.S.C. § 546(g). Thus renewal of Eastern's franchise is governed by the Cable Act, which provides for a two stage renewal process. 47 U.S.C. § 546(a)-(f).

In the first stage, the franchising authority may on its own initiative, or must if the cable operator requests, convene proceedings which afford the public in the franchise area an opportunity to participate in "(1) identifying the future cable-related community needs and interests, and (2) reviewing the performance of the cable operator under the franchise during the current franchise term." 47 U.S.C. § 547(a). Such a proceeding must take place "during the six-month period that begins with the 36th month before the franchise expiration." Id. It is common ground that on December 10, 1985 the Borough convened a section 546(a) proceeding for the receipt of public comment.*fn1

Once a section 546(a) public comment proceeding has occurred, a second stage of the renewal process is specified:

(b) Submission of renewal proposals; contents; time

(1) Upon completion of a proceeding under subsection (a) of this section, a cable operator seeking renewal of a franchise may, on its own initiative or at the request of a franchising authority, submit a proposal for renewal.

(2) Subject to section 544 of this title, any such proposal shall contain such material as the franchising authority may require, including ...


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