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In re Petition of Comcast Cablevision of Jersey City

July 18, 2007


On appeal from the Board of Public Utilities, CE01090585.

Per curiam.


Argued: December 5, 2006

Before Judges Kestin, Weissbard and Lihotz.

Appellant, Newport Associates Development Company (NADC), the owner of a large complex of residential buildings in Jersey City, appeals from the final decision of the Board of Public Utilities (Board) denying NADC's request for over $1,500,000 as just compensation for the entry of respondent, Comcast Cablevision of Jersey City, Inc. (Comcast), into its complex to provide cable television services to residents. NADC has contended it is entitled to the amount requested because Comcast's entry will bring competition that will eliminate the revenue NADC had received under an exclusive contract with a provider of satellite television, RCN Telecom (RCN). We affirm.

Comcast holds a certificate of approval to construct and operate its cable television system throughout the City of Jersey City. On September 21, 2001, Comcast filed a verified petition with the Board pursuant to N.J.S.A. 48:5A-49 and N.J.A.C. 14:18-4.5 for access to the multi-family residential property in Jersey City known as the Newport Complex (Complex), owned by NADC. On October 15, 2001, NADC filed an answer and a request for a contested case hearing before the Office of Administrative Law (OAL). The matter was referred to OAL as a contested case on December 10, 2001.

The Complex is comprised of eight buildings with twenty-two to thirty-six floors each and a total of 3150 residential units. The first four buildings were built in 1987. From 1997 to 2000, four additional buildings were constructed.

In 1987, NADC signed an agreement with Liberty Cable Newport, Inc. ("Liberty") granting Liberty a "license" to provide "private cable television residential services" consisting of "one or more TVRO satellite dish antennae, off-air television antennae, underground cable, amplifiers, splitters, encoders, converters, taps[,] conduits, indoor cables, wires and other equipment and associated hardware" necessary to provide television programming to each residential unit. The agreement granted to Liberty to the extent the Owner is not otherwise prohibited by applicable law or regulation, such rights, licenses and authority . . . as may be actually and legally required by the [c]ompany to enter the Property and to install[,] operate, maintain, and manage broadband telecommunications equipment . . . .

The agreement required Liberty to pay NADC, as a "royalty fee," ten percent of the gross revenues derived from the system and, additionally, twenty-five percent of the net profits from the operation as defined in the agreement. Newport Telecommunications, Inc. (NTI), an affiliate of NADC, provided resold telephone and internet services to residents of the Complex through its own wiring and Verizon's.

On November 26, 2001, two months after Comcast filed the verified petition in this matter, it sent a letter to the general manager of NADC seeking to construct and install its facilities in the Complex at no cost to NADC. Service would be optional and provided on an individual basis to those residents who ordered it. Pursuant to N.J.A.C. 14:18-4.5(b)(6), Comcast gave notice that it would tender one dollar to Newport Associates in consideration for access.

In a letter dated December 27, 2001, NADC rejected Comcast's proposal on the ground it did not set forth an acceptable basis for access pursuant to law, and because one dollar did not constitute just compensation for the taking of NADC's property. NADC offered to engage in "good faith negotiations."

James Monroe Condominium (JMC) and RCN Telecom Services, Inc. (RCN) moved to intervene in this matter. RCN was the successor to Liberty. Administrative Law Judge Gural denied JMC's application, but granted RCN permission to intervene.

After the testimony on behalf of the parties was prefiled, a two-day hearing was held on April 14 and 15, 2003. Comcast's attorney asserted that NADC had filed a lawsuit against RCN seeking to terminate the agreement between those entities "on the basis that RCN's service is obsolete, it's improper, it hasn't been functioning right, [and] they are otherwise in breach of their obligations." Comcast contended, on judicial estoppel grounds, that NADC could not rely on the expert financial evidence it had proffered in this matter because it had offered "two terribly dramatically inconsistent positions" in the two cases.

In response, NADC's attorney asserted that "at no point in the other litigation . . . does [NADC] contend that it is not entitled to royalties from RCN under that agreement." He also argued that judicial estoppel did not apply because the proceeding was still underway, and NADC had yet to prevail. The ALJ ...

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