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Cable Investments Inc. v. Woolley

filed: January 31, 1989.

CABLE INVESTMENTS, INC., APPELLANT
v.
MARK WOOLLEY; WATERFORD ASSOCIATES, A PENNSYLVANIA LIMITED PARTNERSHIP; COLD SPRINGS APARTMENT ASSOCIATES, A PENNSYLVANIA LIMITED PARTNERSHIP; FIRST INVESTORS GENERAL, INC.; AND MGM ENTERPRISES, INC.



On Appeal from the United States District Court for the Middle District of Pennsylvania, D.C. Civil No. 85-1305

Sloviter and Hutchinson, Circuit Judges, and Debevoise, District Judge*fn*

Author: Sloviter

Opinion OF THE COURT

SLOVITER, Circuit Judge.

At issue in this case is the right of plaintiff-appellant Cable Investments, Inc., a provider of cable television service, to require the owners of two apartment complexes to give it access to the premises so that it can provide its cable services to the tenants. The district court dismissed Cable Investments' suit, Cable Investments, Inc. v. Woolley, 680 F. Supp. 174 (M.D. Pa. 1987), and for the reasons that appear below, we will affirm.

I.

Background

A.

Defendant Mark Woolley is a general partner in defendant Waterford Associates and defendant Cold Springs Apartment Associates, both Pennsylvania limited partnerships, and is a major stockholder in defendant MGM Enterprises, Inc. (MGM) and defendant First Investors General, Inc., both Pennsylvania corporations (collectively referred to for convenience as "Waterford Associates"). Waterford Associates owns two apartment complexes, Coventry at Waterford and King's Arms at Waterford (collectively "Waterford"), both located in York Township, York County, Pennsylvania.

Cable Investments offers cable television service to subscribers in York Township pursuant to a nonexclusive franchise granted it by the township. It provided cable television service to Coventry at Waterford beginning in 1979, and prior thereto through its predecessor, Keystone Communicable, Inc. As of August 1, 1985, Cable Investments served 189 subscribers out of the 288 units in Coventry at Waterford. Cable Investments began providing cable television service to King's Arms at Waterford after it had prewired the units during their construction, beginning in October 1984. As of August 1, 1985, Cable Investments provided service to 16 of the 60 units in the complex. There is no written agreement between Cable Investments and Waterford Associates for the provision of cable television at Waterford, and Cable Investments does not claim that it has any right based on contract.

In July 1985, Waterford Associates notified Cable Investments that as of August 1, 1985, it would no longer be permitted to provide cable television service to Waterford, and notified the Waterford tenants that Cable Investments would no longer provide such service. Although Waterford Associates requested Cable Investments to remove its equipment (primarily amplifiers placed along the cables on Waterford property), Cable Investments refused to do so. On approximately August 1 Waterford Associates disconnected Cable Investments' system. Thereafter, MGM began offering cable service to Waterford tenants through a satellite dish erected on the Waterford premises.

On September 10, 1985, Cable Investments initiated this suit in federal court based on a variety of federal and state claims and sought damages and injunctive relief to require Waterford Associates to permit Cable Investments to continue to offer its cable television service to Waterford Associates' tenants. On December 29, 1987, the district court granted Waterford Associates' motion to dismiss the claims alleging violation of Cable Investments' rights under the First Amendment, the Cable Communications Policy Act of 1984, 47 U.S.C. § 521 et seq. (Supp. IV 1986), the free speech clause of the Pennsylvania Constitution, and Pennsylvania's Landlord and Tenant Act, 68 Pa. Cons. Stat. Ann. § 250.554 (Purdon Supp. 1988). Cable Investments subsequently voluntarily dismissed the remainder of its claims, thereby rendering the district court's order dismissing the four claims a final order from which Cable Investments appeals.

B.

While a detailed understanding of the technicalities of the provision of cable television service is not essential to the disposition of the issues before us, a brief description will be useful. A cable television company receives television signals via, inter alia, a satellite link and/or an antenna tower at its receiving stations, called cable headends, processes the signals in form for conversion into television programming, and distributes the signals to the communities it serves through coaxial cables along trunk lines, which may be strung along telephone poles or placed underground following public rights of way. From the trunk lines, distribution (or feeder) lines run onto the property of subscribers. Distribution lines can also be aerial or underground. It is obviously desirable for the cable company to place its distribution lines in trenches dug by the telephone or utility companies during the construction of houses or apartments, thereby avoiding the additional expense of opening and closing the trenches or installing and maintaining an aerial system. Both trunk lines and distribution lines periodically have amplifiers to boost the signals, because signal power gradually diminishes as distance is traversed.

The distribution lines are connected to tap units, or distribution boxes, affixed, in this case, to the outside of the apartment buildings. From these tap units, drop lines extend to individual apartments. If the drop lines are installed during the construction of a multi-dwelling unit, the wiring can be placed inside the walls of the building and provide access to an individual apartment through an outlet similar to an electrical outlet. Such prewiring is a cheaper, more aesthetically pleasing, and more convenient alternative to postwiring after construction is complete and the residents have moved into the apartments. Postwiring requires that wires be strung either on the outside of buildings or on the inside along halls or through completed walls and ceilings/floors. In addition, because the wires ultimately must run into individual units, postwiring requires coordination with the residents of the building. See generally United States Dep't of Commerce, Video Program Distribution and Cable Television: Current Policy Issues and Recommendations, app. B at 3-6 (National Telecommunications and Information Administration Report No. 88-233, 1988) (hereinafter Department of Commerce Report).

II.

The Cable Communications Policy Act of 1984

A.

Cable Investments argues first that its right of access to and including the interior of a multi-unit dwelling for the purpose of offering cable television service can be derived from the Cable Communications Policy Act of 1984, 47 U.S.C. § 521 et seq. (Supp. IV 1986) (the Cable Act).

In support of its motion to dismiss, Waterford Associates argued, and the district court agreed, that no private right of action by a franchisee can be implied under the Cable Act. Instead, the district court held, enforcement should be left to the franchising authority. 680 F. Supp. at 179. The district court's opinion was issued shortly before the decision of the Eleventh Circuit holding that section 621(a)(2) does create a cause of action in favor of a cable company. See Centel Cable Television Co. v. Admiral's Cove Assocs., 835 F.2d 1359 (11th Cir. 1988) (holding Congress provided a right of action to a cable company seeking to place its cable in open trenches through easements listed on recorded plats provided by a residential developer for electric and telephone utilities). While we intimate no opinion on a private right of action under the Centel facts, we note that the substantive right sought to be enforced in Centel is more limited than that sought here, where Cable Investments seeks access to tenants inside buildings owned by Waterford Associates.

Generally, in cases considering whether a private right of action can be implied, the substantive right at issue has been established or assumed, and the only issue is whether it can be enforced and by whom. That is not the case with the right of a cable television company to provide service and utilize facilities within a private apartment complex. Because it appears more orderly to decide first whether the statute gives a substantive right of access to multi-unit dwellings before reaching the issue of who can enforce any such right,*fn1 we asked the parties to brief the substantive issue, which had been raised but not decided in the district court. It is an issue of law, which the parties agree it is appropriate for us to decide.

B.

The Cable Act created a new framework for the regulation of the rapidly developing cable television industry. The overall purpose of the Act is to "(1) establish a national policy concerning cable communications; (2) establish franchise procedures and standards which encourage the growth and development of cable systems and which assure that cable systems are responsive to the needs and interests of the local community; (3) establish guidelines for the exercise of Federal, State, and local authority with respect to the regulation of cable systems; (4) assure that cable communications provide and are encouraged to provide the widest possible diversity of information sources and services to the public; (5) establish an orderly process for franchise renewal which protects cable operators against unfair denials of renewal where the operator's past performance and proposal for future performance meet the standards established by this subchapter; and (6) promote competition in cable communications and minimize unnecessary regulation that would impose an undue economic burden on cable systems." 47 U.S.C. § 521.

As the Supreme Court noted recently, the Cable Act left franchising to state or local authorities. See City of New York v. FCC, 486 U.S. 57, 108 S. Ct. 1637, 1641, 100 L. Ed. 2d 48 (1988). The same section of the Cable Act, section 621(a), that provides for the award of franchises, see 47 U.S.C. § 541(a)(1), also authorizes the franchisee to construct its system over public rights-of-way and easements dedicated for compatible uses, see 47 U.S.C. § 541(a)(2). It is the latter provision on which Cable Investments relies for its claim of a statutory right to offer cable television service to Waterford's tenants. The relevant language provides:

Any franchise shall be construed to authorize the construction of a cable system over public rights-of-way, and through easements, which Is [sic] within the area to be served by the cable system and which have been dedicated for compatible uses . . . .

47 U.S.C. § 541(a)(2).

Cable Investments recognizes that its attempt to compel access to the Waterford tenants cannot be grounded on its statutory right to construct its cable system "over public right-of-way." It has not suggested that there is any public right-of-way through which it can place the final cable connections needed to hook up its service to multi-unit dwellings. Instead it argues that the statutory right to construct its system "through easements" gives it access over any easements ...


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