In the Matter of BETTER T.V., INC. OF DUTCHESS COUNTY, N.Y.,
N.Y., COMPLAINANT v. NEW YORK TELEPHONE CO., DEFENDANT; In Re Applications of
NEW YORK TELEPHONE CO., FOR CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY
FOR CONSTRUCTION AND/OR OPERATION OF CATV CHANNEL DISTRIBUTION FACILITIES TO PROVIDE
SERVICE TO: U.S. CABLEVISION CORP., IN THE GENERAL VICINITY OF HYDE PARK, N.Y.;
COMTEL, INC., IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, N.Y.; BROOKHAVEN
CABLE TV, INC., IN THE GENERAL VICINITY OF BROOKHAVEN, N.Y.; MANHATTAN CABLE
TELEVISION IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, N.Y.; COMTEL, INC., IN
THE BOROUGH OF MANHATTAN, NEW YORK, N.Y.
Docket No. 17441; Docket No. 18525
File No; p-c-7271; Docket No. 18620 File No. P-C-7226; Docket No. 18623 File No.
P-C-7255; Docket No. 18624 File No. P-C 7282; Docket No. 18750 File No.
P-C-7430
FEDERAL COMMUNICATIONS COMMISSION
31 F.C.C.2d 939
RELEASE-NUMBER: FCC 71-1017
October 7, 1971 Released
Adopted September 29, 1971
COUNSEL:
APPEARANCES
Mr. Robert F. Corazzini (Smith,
Pepper, Shack & L'Heureux) for Better T.V. of Dutchess County; Messrs.
Philip L. Wettengel, Edward L. Friedman and Mark D. Luftig for New York
Telephone Company; Mr. Norman Redlich, Miss Sheila A. Mahony and Mr. Myron Gitness
for the City of New York; Mr. David H. Lloyd (Arnold & Porter) for Comtel,
Inc.; Mr. Alan Raywid (Cole, Zylstra and Raywid) for Tele Prompter Manhattan
CATV Corporation and Sterling Information Services Limited; Mr. Richard M.
Flynn (Goldwater & Flynn) for Sterling Information Services, Limited; Mr.
Bernard L. Burton (Mars, Burton and Weissman) for Suffolk Cable Corporation;
Messrs. Barry Grossman and Peter C. Cartensen for the Department of
Justice; Mr. Adrien R. Auger for the Common Carrier Bureau; and Messrs. Abraham
A. Leib and Martin L. Rothstein for the Cable Television Bureau.
JUDGES:
BY THE COMMISSION: CHAIRMAN BURCH
CONCURRING IN PART AND DISSENTING IN PART AND ISSUING A STATEMENT IN WHICH
COMMISSIONERS WELLS AND HOUSER JOIN; COMMISSIONER
BARTLEY ISSUING A STATEMENT IN WHICH COMMISSIONER JOHNSON JOINS.
OPINION:
[*940] 1. This
proceeding had its genesis in a complaint and petition for an order to show
cause, filed May 10, 1967, by Better T.V., Inc. of
2. In an Order, 17 FCC 2d 367,
released April 29, 1969, we designated Better T.V.'s complaint and N.Y.Telco's
application for hearing. Since an overlap was found to exist in the areas
which were receiving CATV service from Better T.V. and from U.S. Cablevision,
issues were designated to determine whether the facilities or any part of them
constituted wasteful duplication or were unnecessary. In addition, issues
were designated to determine whether N.Y.Telco had engaged in discriminatory or
other conduct inconsistent with the public interest and which would preclude
the grant of the requested certification. In a Memorandum Opinion and
Order, 18 FCC 2d 783, adopted July 29, 1969, the proceeding was consolidated
with a number of similar applications filed by N.Y.Telco to pvovide channel
service to CATV systems in several suburban New York communities and to Comtel,
Inc. and Manhattan Cable Television, a subsidiary of Sterling Information Services,
Ltd. (Sterling) in Manhattan. Another application proposing additional
facilities to serve Comtel in
(a) To determine the facts with
respect to the grant and denial by New York Telephone Company of duct space and
pole-line attachment [*941] agreements or arrangements with CATV operators
in or near any of the communities proposed to be served by the facilities for
which certification is being requested in the applications under consideration;
and the policies and practices underlying such actions;
(b) to determine whether said actions,
policies, and practices, relative to New York Telephone Company's tariff
offerings, subjected any person, class of persons, or locality to any undue or
unreasonable prejudice or disadvantage, or extended any undue or unreasonable
preference or advantage to any person, class of persons, or locality;
(c) to determine whether the present
or future public convenience and necessity requires or will require all or any
of the construction and operation for which certification is requested in the
subject applications;
(d) to determine, in the event of an
affirmative finding under issue (c) above, what conditions, if any, should
attach to a grant of any or all of the subject applications; and
(e) to determine, in light of the
evidence adduced under the foregoing issues, what further action, if any, the
Commission should take.
3. In an order released
October 29, 1969 (FCC 69M-1404), the Examiner dismissed an application filed by
N.Y.Telco to serve Hightower of Poughkeepsie, Inc. (File No. P-C-7117), Docket
No. 18618) because Hightower had withdrawn its request for service N.Y.Telco's
application to serve Catskill Cablevision Corporation (File No. P-C-7118,
Docket No. 18619) was dismissed for the same reason (FCC 69M-1403, released
October 29, 1969) and applications for service to Hudson Valley Cablevision
Corp. (File No. P-C-7114, Docket No. 18617) and to WEOK Cablevision, Inc. (File
Nos. P-C-7247 and P-C-7248, Docket Nos. 18621 and 18622) n1 were returned to the Common Carrier Bureau for
processing as unopposed applications. Remaining before the Commission for
consideration are the complaint of Better T.V. (Docket No. 17441) and
N.Y.Telco's applications for authority to construct channel distribution
facilities to provide service to Comtel, Inc. (File Nos. P-C-7226 and P-C-7430,
Docket Nos. 18620 and 18750) and
n1 While WEOK did not oppose these
applications which were for authority to provide channel service to its own
CATV system in the vicinity of
4. Hearings on the designated
issues were held between December 8, 1969, and March 6, 1970, and the record
was closed on the latter date. In an Initial Decision, FCC 70D-29,
released July 278 1970, Hearing Examiner David I. Kraushaar granted N.Y.Telco's
applications. Exceptions to each of the grants are now before us for
consideration. n2 Oral argument on the exceptions was
held before the Commission en banc on February 4, 1971.
n2 In an Order, FCC 70R-336,
released October 5, 1970, the Review Board certified the record in this
proceeding to the Commission for decision. The Commission now has under
consideration the following pleadings: exceptions to the Initial Decision,
appendix thereto, and supporting memorandum filed September 10, 1970, by
Sterling and TeleprompTer; separate exceptions and memorandum filed September
10, 1970, by Teleprompter; separate exceptions filed September 10, 1970, by
Sterling; exceptions and briefs filed September 10, 1970, by Comtel, N.Y.Telco,
the City of New York and the Cable Television Bureau; exceptions filed
September 10, 1970, by Better T.V. and by Suffolk Cable Corporation; and
replies filed by TelePrompTer and Sterling, Comtel, and the Common Carrier
Bureau on October 5, 1970, and by N.Y.Telco, and the City of New York on
October 12, 1970. On October 6, 1970, the Department of Justice filed a
petition for leave to intervene and to file a brief amicus curiae. In a
Memorandum Opinion and Order, 26 FCC 2d 559, released December 18 1970, the
Commission granted the Department leave to intervene and accepted its
pleading. Comments on the Department's brief were filed on December 2,
1970, by the Common Carrier Bureau on December 11, 1970, by the Cable
Television Bureau, and in a joint pleading by TelePrompTer and
5. In his Initial Decision,
the Examiner found that N.Y.Telco had not engaged in improper conduct and that
the public interest, convenience and necessity would be served by grants of the
subject applications. He limited the grants for service to Comtel in
6. There are presently pending
before the Commission rule making proceedings which may result in the revision
of existing CATV regulations n3 and such
proceedings must be taken into account in the disposition of this adjudicatory
case. Therefore, we have provided in certain instances, where we deemed
that the public interest so required, that the orders issued herein are subject
to modification in light of the outcome of the rule making proceedings.
It must be emphasized, however, that our decision is based upon the facts of
record as developed in this adjudicatory proceeding and represents our judgment
of the disposition of the particular certification applications before us which
will best serve the public interest. We have not undertaken here to
resolve the policy questions under study in the rule making proceedings and
nothing contained herein should be construed as indicating the disposition we
shall make of such policy questions.
n3 See Docket Nos. 18397-A, 18891,
18892 and 18894. Oral argument on these Dockets was held before the
Commission en banc during March, 1971. [*943]
7. In application File No.
P-C-7430, N.Y.Telco seeks authority to construct facilities to serve Comtel in
78 blocks located in midtown
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8. Comtel commenced service
using N.Y.Telco's channel facilities on November 1, 1966. On June 26,
1968, n4 Comtel was serving 15 hotels with
5,350 hookups, 2 office buildings with 26 hookups, 4 co-ops with 319 hookups
and 49 other buildings with 756 hookups. By February 8, 1970, Comtel had
expanded its service, utilizing existing cable to make additional drops, and it
now serves 26 hotels with 13,341 hookups, 3 office buildings with 53 hookups, 4
co-ops with 319 hookups, and 64 other buildings with 1,847 hookups.
N.Y.Telco has laid 5.5 miles of feeder cable and 3.6 miles of distribution
cable to serve Comtel and has spent $147,200 to construct the system. Comtel
has spent over $190,000 for installation of equipment, termination charges and
other expenses.
n4 This is the release date of the
decision in General Telephone of California, 13 FCC 2d 448, in which we
asserted that the construction and operation of CATV channel service facilities
by common carriers is subject to the certification provisions of Section 214 of
the Communications Act. Providing that certain specified conditions were
met, the decision permitted CATV systems to continue operation of existing
channel service facilities and to construct additional drops from existing
feeder and distribution cable.
9. In contrast to TelePrompTer
and
10. The Examiner found that
the City of
11. Sterling, TelePrompTer,
and the City of New York filed exceptions to the grant of N.Y.Telco's
applications for certification of facilities to provide service to Comtel,
asserting inter alia: that the grants would undermine the City's plan for
regulation of CATV; that Comtel would have an unfair competitive advantage
since it would not be required to comply with the requirements of Sterling's
and TelePrompTer's franchieses; that the construction would create a wasteful
duplication of facilities; and that N.Y.Telco, through its control of the
available underground duct space, engaged in improper conduct with respect to
the franchisees. n5 TelePrompTer and
n5 All subterranean communications
ducts in
12. Another reason advanced by
the franchisees for denial of the applications is that N.Y.Telco engaged in
improper conduct in order to secure an advantage for its channel service
customer. They assert that N.Y.Telco utilized its control over Empire
City to deny them access to duct records necessary to plan their systems and to
obtain for itself information on CATV activities and the location of available
duct space; that N.Y.Telco has thus been enabled to lease the last available
duct in a bank; that in about 60% of the cases where the franchisees were
denied duct space, N.Y.Telco leased the last available duct for maintenance
purposes; and that in 10% of the cases where access was denied, the maintenance
ducts were converted to use ducts. Sterling and TelePrompTer further
argue that, although Empire City is obligated under its contract with the City
to construct communications ducts for all potential users, as a matter of
course it constructs new ducts only on order from N.Y.Telco. Citing the
Emaminer's finding that there is a shortage of duct space in
13. The City of New York, citing
the Notice of Proposed Rule Making and Notice of Inquiry in Docket No. 18397,
15 FCC 2d 417, argues that grants of N.Y.Telco's applications would be
inconsistent with Commission policy which is to rely, to the extent feasible,
on local authority for regulation of CATV. The City contends that a grant
would undermine its regulation by permitting Comtel to avoid compliance with
the high standards established by its franchisees. It agrees with
14. Comtel supports the
Examiner's decision with respect to the applications to provide it with channel
service. It asserts that its service has already resulted in a public
benefit by inducing the franchisees to accelerate their construction in order
to serve all of
15. Exception is taken by
Comtel to the conditions imposed by the Examiner which limit the grant to 2
years, the capacity of its system to 12 channels, and the potential use of the
facilities. Comtel asserts that these conditions are unduly restrictive
and will prohibit it from competing effectively with the franchisees.
16. Like Comtel, N.Y.Telco
supports the Initial Decision, objecting only to the conditions imposed on the
grants of Section 214 authority. N.Y.Telco questions the wisdom of
authorizing it to invest money and construct facilities only to relitigate in 2
years whether or not the investment serves the public interest. It
further contends that the limits on channel capacity and usage serve only to
prohibit the most efficient utilization of the channel service facilities and
to prevent N.Y.Telco's customers from competing effectively with other CATV
systems.
17. N.Y.Telco also object to
the conditions imposed by the Examiner which would give CATV operators
unlimited access to duct records and which seek to insure that CATV systems
will have equal access to ducts and poles.
18. The Cable Television
Bureau supports the grant of authority for service to Comtel conditioned on
N.Y.Telco being prohibited from filing additional applications for
non-franchised CATV systems for 9 months. The Bureau stressed the
importance of local regulation of CATV and the need to support the City's
efforts in this regard. It recognized, however, the limited nature of the
City's regulatory authority and it suggested the 9 month moratorium in order to
afford the State of
n6 The City of New York requested
the State Legislature to broaden its franchise power, but so far its efforts
have been unsuccessful.
19. The Common Carrier Bureau
supports the Initial Decision. It had recommended the 2 year limitation
on the authorization for facilities to serve Comtel adopted by the Examiner so
that the effect of actual operations could be observed before a final
determination is made. However, in its supporting statement it now
suggests as an alternative that the grants be conditioned on Comtel negotiating
an agreement with the City, subject to Commission approval, which would place
it on an even footing with TelePrompTer and Sterling.
20. In the disposition of the
applications before us, a basic consideration is whether N.Y.Telco engaged in
conduct which subjected CATV operators to undue or unreasonable prejudice or
disadvantage, or extended any undue or unreasonable preference or advantage to
its channel service customers. As we have consistently held, if a
telephone company takes advantage of its monopoly control over the utility
poles or conduct space in its service area to confer an advantage on its
channel service customer to the detriment of CATV operators seeking only to
lease pole or duct space, such conduct would weigh heavily against a
certification that the public convenience and necessity require the requested
construction and operation. See Warrensburg Cable, Inc., et al., 27 FCC
2d 727, 734-735 (1971), and cases therein cited. See also Section 63.57
of the Rules. In this case, the Examiner concluded that N.Y.Telco had not
engaged in discriminatory activities and, while the question is a close one, we
do not believe that a sufficient basis exists to disturb his conclusion insofar
as the
21. The next question to be
resolved is whether the Examiner correctly concluded that any existing or
proposed duplication of facilities is neither wasteful nor unnecessary and that
the public interest would be served by grants of the requested authorizations
for providing channel service in
(a) THE PROPOSED CONSTRUCTION TO
SERVE COMTEL
22. As previously noted (par.
7, supra), N.Y.Telco seeks to construct and operate additional channel
distribution facilities in midtown Manhattan for the purpose of serving Comtel
in 51 blocks in an area east of Central Park and in 20 blocks of an area west
of Central Park. Of these 71 blocks,
[*948] 23. The
record indicates, and the Examiner found, that over 60 percent of the available
duct space in
n7 The location of the proposed
facilities to enable Comtel to expand its service includes an area where
24. In the resolution of the
fundamental issue of whether the public convenience and necessity will be
served by certification of the proposed facilities to enable Comtel to expand
its CATV system, we cannot predicate our decision solely on the situation which
exists today but must anticipate and prepare for the problems with which we are
likely to be faced in the foreseeable future. The enormous upsurge in the
demand for communications services of all types is a matter of which we
previously have had occasion to take cognizance and we must do so here.
See Microwave Communications, Inc., 21 FCC 2d 190, 193 (1970). We must also
consider the limited and rapidly diminishing duct space in Manhattan and the
fact that TelePrompTer and Sterling have completed construction of cable in
substantial portions of their respective service areas so that any additional
construction for Comtel necessarily must increase the conduits occupied by
cable to serve two separate CATV systems needs for the future. Taking all
available to satisfy communications needs for the future. Taking all the
factors into account, it would appear that, in the absence of substantial
countervailing public interest considerations, new construction by N.Y.Telco
for the purpose of serving Comtel would constitute a duplication of facilities
which is wasteful and unnecessary.
25. We find no such
countervailing considerations here. On the contrary, there are other
public interest considerations which serve to reinforce our view that the new
construction for Comtel should not be authorized. Under the consents
granted by the City of
n8 These obligations are contained
in the interim consents granted to the CATV operators which were introduced
into evidence at the hearing. The request by TelePrompTer and
26. These are potential
benefits to the public of substantial importance and their achievement is far
more likely through CATV systems which must meet the prerequisites and
standards specified by the City and under the supervisory control of the City
than through the channel customer of the telephone company which is under no
comparable contractual obligation to meet the City's specifications and
standards. In these circumstances, and in the absence of federal
regulation we cannot find it to be consistent with the public interest to risk
undermining the City's regulatory authority by certifying the construction of
facilities which will enable Comtel to expand its system and thereby enlarge
the area not under the City's supervision and control.
27. We wish to emphasize that
our determination not to certificate the construction of facilities for a
channel service customer which holds no franchise from the community to be
served is based upon the particular facts of record developed at the
evidentiary hearing in this proceeding. It is not our intention to
resolve here the policy questions concerning the respective roles of the federal
and local governments in the regulation of CATV, and our decision should not be
taken as reflecting the policy which ultimately will be adopted. Policy
questions on that subject are under consideration in rule making proceedings
and they will be resolved on the basis of the comments submitted in such
proceedings.
28. Comtel and N.Y.Telco argue
that Sterling and TelePrompTer have quasi-monopolies within their respective
service areas in Manhattan [*950] and that the grant of the request
Section 214 applications will bring the benefits of competition to the
public. The record indicates, however, that the unique housing situation
in New York prevents the development of true competition and negates any
subscriber influence on quality of CATV service. The access rights to
buildings are negotiated between the owners and the CATV system with the rights
usually being given to the highest bidder. n9 As a rule, only one CATV is permitted to wire any building. In
view of the acute scarcity of apartments, tenants do not consider the
availability of CATV service as a factor in selecting apartments and they have
no leverage with which to influence a building owner's selection of a CATV
system. Consequently, the determining factor in the landlord's selection
between competing CATV systems appears primarily to be which CATV system offers
the landlord the larger fee, not the better service, and this type of
competition is not, in our opinion, an affirmative public interest
factor. While the Examiner found "a scintilla of evidentiary support
for a conclusion, at least tentative, that there are probable competitive
benefits in the Borough of Manhattan" (para. 229), the alleged support is
too slight to be accorded decisional significance, and minor benefits, even if they
exist, are outweighed by the adverse public interest factors set forth
herein. Accordingly we conclude that N.Y.Telco has not sustained its
burden of proving that the public convenience and necessity will be served by
the proposed new construction to serve Comtel, and the request for Section 214
certification of such facilities must be denied.
n9 TelePrompTer and Sterling, which
are required to pay 5 percent of their gross receipts to the City, do not offer
a building owner over 5 percent of the proceeds from the building, whereas
Comtel pays up to 10 percent. As the record shows, there are instances
where each of the CATV operator pays the landlord less than the maximum
percentage.
THE EXISTING CHANNEL DISTRIBUTION
FACILITIES FOR COMTEL
29. On November 1, 1966,
N.Y.Telco commenced service to Comtel in Manhattan on CATV channel distribution
facilities which had been constructed without first obtaining a certificate of
public convenience and necessity pursuant to Section 214 of the Act.
Although we have refused to certify the construction of additional facilities
to enable Comtel to expand its system, we believe that equity and other
considerations justify favorable action on the request for certification of the
existing facilities.
30. N.Y.Telco and other common
carrier telephone companies were placed on notice by our Order, FCC 2d 357,
released October 21, 1966, that the Commission had under consideration the
question of whether Section 214 is applicable to the construction of CATV
channel distribution facilities. Consequently, the carriers thereafter
assumed the risk that any construction undertaken without prior certification
was unlawful and might be the subject of remedial action by the
Commission. The Associated Bell System Companies, 5 FCC 2d 357. However,
the initial facilities for Comtel had been substantially completed by the
October 21, 1966, date, and we held in our June 26, 1968, General Telephone
decision that in that type of situation, consideration would be given to
authorizing the continued operation of the channel service. In this case
it appears that both N.Y.Telco and Comtel made substantial [*951]
investments for the construction of the existing CATV facilities in the good
faith belief that Section 214 certification was not required and the system has
been in operation for almost 5 years. While Comtel holds no franchise
from the City of New York, the New York Courts have held that none is
required. Neither Comtel nor N.Y.Telco has been guilty of any wrongdoing
in Manhattan, other than the failure to obtain certification, and we find no
basis in the record for denying them the benefits of the equities which exist
in their favor by reason of their investments prior to and since October 21,
1966, and their operations since November, 1966.
31. We also believe that the
effects of withdrawing Comtel's existing service would be contrary to the
public interest and outweigh any benefits which might accrue from the eventual
substitution of a franchised operator. The substitution would result in
the disruption of service and additional expenditures by the public.
Whether the franchised operator purchased Comtel's facilities or constructed
new facilities, delays would be encountered while new agreements are negotiated
with building owners and the transfer of existing facilities is arranged.
Furthermore, it is likely that Comtel's subscribers would be subjected to a
second installation charge in order to receive CATV service from one of the
City's franchised operators. Considering the equities in favor of Comtel
and N.Y.Telco and the cost and inconvenience to Comtel's subscribers which
would result from the termination of its operations, we are convinced that
certification of N.Y.Telco's existing channel distribution facilities in the 27
blocks where Comtel presently operates will serve the public interest.
Within that area N.Y.Telco and Comtel may install additional drops from the
existing trunk and distribution cable which is certificated herein. See
General Telephone Co. of California, et al., 17 FCC 2d 25 (1969). The evidence
of record establishes that Comtel is a viable operation and there is every
reason to believe that the authorization we are granting will enable the CATV
operator to protect its investment and to continue service to its subscribers.
32. N.Y.Telco and Comtel
object to the condition imposed by the Examiner which limits the authorization
for the facilities to serve Comtel to a period of 2 years. In view of our
disposition of these applications, we see no useful purpose in providing such a
time limit. Our purpose in certificating the existing facilities is to
insure, to the extent possible, a continuity of service to Comtel's subscribers
and the avoidance of the expense and inconvenience which is likely to result
from a termination of Comtel's service. That objective can best be
realized by a grant which is unlimited as to time.
THE APPLICATION FOR SERVICE TO
STERLING
33. Application File No. P-C-7282
will permit N.Y.Telco to construct channel service facilities in an 18-block
area lying west of Central Park in order to serve Sterling. While the
CATV operator would prefer to construct its own facilities, it has been unable
to obtain from Empire City the duct space needed to serve the blocks in
question. In furtherance of its objective to reach all parts of its
franchised area as required in the Interim Consent granted by the City,
Sterling asserts [*952] that it had no alternative but to apply to
N.Y.Telco for channel service in this 18-block area. Therefore, Sterling
takes no exception to the grant of the application by the Examiner, but it
requests that the grant be made subject to conditions which will prevent
N.Y.Telco and Empire City from engaging in discriminatory action in the
allocation of duct space and will enable Sterling to have access to all blocks
within its franchised area and to expand its facilities. In addition,
Sterling request that N.Y.Telco be required to permit interconnection of the
channel service facilities with other CATV facilities and to afford Sterline
maximum use of the telephone company's CATV cable consistent with City
regulation and the operation of the remainder of Sterling's CATV system.
34. TelePrompTer, which
together with Sterling filed exceptions opposing the Comtel applications, filed
separate exceptions directed specifically to application P-C-7282.
TelePrompTer recognized that Sterling had requested channel service from
N.Y.Telco only because it was unable to obtain duct space from Empire
City. It argues, however, that Empire City has violated its obligation
under its contract with the City to make duct space available to Sterling, and
that N.Y.Telco is benefiting from the wrongdoing of its subsidiary.
Empire City is engaged in major construction to meet the needs of N.Y.Telco but
refuses to increase duct facilities for the franchised operators, TelePrompTer
argues, and approval of N.Y.Telco's application under these circumstances would
invite and encourage the telephone company to further monopolize scarce duct
facilities. N.Y.Telco objects to the restrictions imposed by the Examiner
on channel capacity and the use of the facilities, asserting that it should be
allowed to develop its technology to enable its customers to compete
effectively and achieve maximum utilization of the state of the art.
35. We concur with the
Examiner that the public interest requires a grant of the application for
service to Sterling. As we previously noted, the City has specified
standards of construction and operation which its franchisees must meet, and
the hearing record demonstrates that the City contemplates the adoption of a
regulatory scheme for its franchised CATV systems which may reasonably be
expected to bring significant benefits to the public. However, the
benefits of that regulatory scheme cannot fully be achieved if the public is
unable to gain access to the CATV systems required to provide them.
Sterling is endeavoring to extend its system throughout its service area in
order to meet its contractual obligations with the City. Efforts by
Sterling to do so through the construction of its own facilities have been
unsuccessful in the area covered by the application in File No. P-C-7282
because Empire City has refused to lease the necessary duct space on the ground
that none is available and it is either unwilling or unable to construct new
ducts in the are under consideration. To defer the disposition of this
application until it is determined whether additional duct construction is
possible or if possible, whether and when such construction is contemplated,
would unduly delay the commencement of service and would be unfair to the
public to be served by the proposed facilities as well as to Sterling. In
these circumstances, we conclude that the issuance of a certificate of public
convenience and necessity in File No. P-C-7282 clearly is warranted.
[*953] 36. In the
grants to both Sterling and Comtel the Examiner limited channel capacity and
usage of the certificated facilities. N.Y.Telco, Comtel, and Sterling
object to the 12 channel limitation and to the restriction imposed by the
Examiner. In the past we have included similar restrictions on Section
214 grants. See Order and Authorization (Filed No. P-c-7825), FCC 70-955,
released September 4, 1970; and Order and Certificate (File No. P-C-7954),
released October 6, 1970. Also, on January 14, 1971, we issued a Notice
of Proposed Rule Making in Docket No. 19117, FCC 71-28, 27 FCC 2d 36, to
determine whether or not similar restrictive provisions are in the public
interest. However, with respect to the City of New York we have an
adjudicatory record and our disposition of the applications before us must be
made in the light of the particular facts developed in that record.
37. In New York City, 12
channels may be occupied by the carriage of the local stations. This
would leave no room for the public service broadcasts or other program
originations affording further opportunities for local self-expression which
are contemplated by the City and by the CATV operators. In addition, it
appears that the Task Force appointed by the Mayor of New York to study the
technological, educational, social, economic and other aspects of CATV and
telecommunications submitted a report in 1968 which points up the numerous
benefits which may be derived from such programming and the potential for new
uses of CATV from technological advances. The City and the franchised
CATV operators have indicated an intention to implement these proposals and to
utilize technological advancements to provide new communications services to
the City. Insofar as the facilities constructed by TelePrompTer and
Sterling are concerned, the CATV operators are free to expand channel capacity
and to incorporate the technological advances in order to provide a variety of
services to the community. Even assuming that in the ordinary situation
advance authority from the Commission to make changes in the character and
quantity of service offered is advisable, we see no advantage to such
conditions here, where they would be effective only with respect to the
relatively small percentage of facilities requested by N.Y.Telco.
Furthermore, we believe that the imposition of such conditions on the grants to
N.Y.Telco may interfere with the integration of that portion of Sterling's
cable system receiving channel service into the remainder of its system and may
therefore be inconsistent with the public interest. We shall not attempt
to anticipate the policy determinations which will be reached in the pending
rule making proceedings but we see no object in imposing conditions which may
add complications to an already complex situation. We deem it sufficient
for our purposes merely to make the grants subject to such conditions which may
appear to be necessary and proper as a result of any policy determinations in
the pending rule making proceedings.
38. The Examiner also imposed
condition upon the grants to N.Y.Telco which were intended to insure that TelePrompTer
and Sterline would have access to information concerning the availability of
space in the subterranean conduits and to prevent N.Y.Telco Empire City from
discriminating against them in the allocation of duct [*954]
space. n10 While we realize that there is a
potential for discrimination by N.Y.Telco and Empire City, there appears to be
no adequate basis for including these conditions. We have denied the
certification applications for new service to Comtel, and the construction of
trunk cable by TelePrompTer and Sterling is substantially complete. The
Examiner found that N.Y.Telco had not engaged in improper conduct and we have
affirmed his finding. Thus, there is no customer for expanded channel
service which N.Y.Telco might tend to favor and no sufficient reason to believe
that N.Y.Telco will discriminate against the franchised CATV operators in
Manhattan in the few remaining areas where access to the ducts may still be
necessary. Conditions 7 through 9 will therefore be deleted.
n10 The conditions (subparagraphs 7
through 9 of the ordering clause in the Initial Decision) imposed by the
Examiner for this purpose read as follows:
7. New York Telephone Company
shall not use any duct, in the provision of the services herein certificated, which
has been leased for maintenance or in case of emergency cable failure, other
than for such purposes if a reasonable request for such duct by Sterling
Information Services, Ltd., or TelePrompTer Corporation has been denied by
Empire City Subway Company due to such lease;
8. New York Telephone Company
and Empire City Subway Company shall grant to authorized users or lessees of
Empire City's ducts reasonable access to all records relating to such ducts and
shall make information relating to such ducts available to all authorized users
or lessees thereof upon reasonable request without undue discrimination, and,
further they shall take immediate steps to improve the internal management of
the New York City duct system by Empire City Subway Company so that this
directive may be carried out without further complaints of discrimination;
9. New York Telephone Company
shall make pole attachment, as well as conduit space, rights available to all
authorized CATV systems in its telephone service areas, upon proper request,
within the limitations of technical feasibility; at reasonable charges and
without undue restrictions as to use; * * *
39. Sterling requests that
conditions be imposed to require N.Y.Telco: (1) to make reasonable efforts to
provide duct space for Sterling and to take other steps to enable Sterling to
expand its facilities; (2) to permit inter-connection of the channel service
cable facilities to the facilities of other cable operators; and (3) to prepare
and submit tariff amendments to achieve compliance with the conditions
requested and to submit schedules of rates for the additional services
proposed. We shall not assume that N.Y.Telco will refuse to comply with a
reasonable request for interconnection, and the record provides no basis for
such an assumption. If such a request is denied, the matter can then be
presented to the Commission for disposition in another and more appropriate
proceeding. Neither is there any basis for requiring in this proceeding
that N.Y.Telco file tariff amendments. In the absence of a showing to the
contrary, it is our expectation that N.Y.Telco. as a common carrier, will
endeavor to keep abreast of the state of the art and that it will make tariff
changes as it develops the capability of providing additional services.
If a subscriber to its service believes that it has failed to do so, the
complaint should be submitted to the Commission for resolution in a proceeding
where the validity and propriety of the tariffs are at issue. Other
requests by Sterling for special relief have been considered, but we believe
that no conditions, in addition to those provided for herein, are warranted.
40. On August 17, 1970,
Sterling and TelePrompTer moved to open the record for the introduction of new
evidence. They seek to have entered into evidence their permanent
franchises from the City of New York, a resolution of the Board of Estimate
establishing a Bureau of Communications, and letters from Empire City notifying
Sterling and TelePrompTer of an increase in duct rental fees, all issued
on [*955] July 28, 1970. n11
The Cable Television Bureau, in a pleading filed August 25, 1970, states that
it recognizes the probative value of the material sought to be introduced and
therefore does not oppose the motion provided no other party does so. It
further asserts that it does not oppose reliance on the said material even if
the motion to reopen is denied. In a pleading filed on August 25, 1970,
the Common Carrier Bureau contends that none of the proffered documents is of
decisional significance, that the record should be reopened only upon a showing
of unusual or compelling circumstances, and that no such showing had been
made. The Bureau further states that the Commission may take official
notice of the documents under Section 556(e) of the Administrative Procedure
Act and Section 1.203 of the Commission's Rules. The motion is opposed by
N.Y.Telco and Comtel in pleadings filed August 27, 1970. They argue that
the facts underlying the franchises and the City's regulation of CATV were
considered by the Examiner, and he noted the City's intention of granting
permanent franchises, but that these facts played no part in his decision; that
Empire City's increase in duct rental rates is not of decisional significance;
and that if the motion is granted, the parties will be entitled to an
opportunity to cross-examine concerning the documents, thereby causing a
further delay in the issuance of a final decision.
n11 On September 3, 1970, a motion
was filed to substitute executed franchises, as differentiated from the
unexecuted forms originally submitted. A supplementary motion was also
filed to include the resolution from the Board of Estimate which inadvertently
had been omitted from the original motion.
41. We conclude that the
proffered evidence is not of decisional significance and consequently does not
justify a reopening of the hearing. In the resolution of the issues
before us, consideration was given to the City's regulation under the interim
consents and we contemplated a continuation of City regulation with an eventual
grant of permanent franchises. The exact details of the franchises
actually granted or the method the City employs to effectuate regulation of the
franchised CATV systems will not affect the outcome of this proceeding and no
useful purpose will be served by a reopening for the introduction of the
proffered documents. The same reasoning applies to the letters concerning
the increased rental for duct space, and the motion to reopen is denied.
42. In a pleading filed on
June 21, 1971, TelePrompTer and Sterling requested that official notice be
taken of an Act of the New York Legislature enacted June 2, 1971, and signed by
the Governor on June 18, 1971. n12
The legislation prohibits, for a period of 1 year from the effective date
thereof, the award by a municipality of a franchise to operate a CATV
system. It also makes subject to review and confirmation by an agency,
which is to be set up for the purpose of regulating the CATV industry, any
franchise awarded on or after January 1, 1971. In the light of our
disposition of this case we do not believe that this legislation is
decisionally significant. Our decision in this case is based on the
situation as it existed at the time of the hearing. The fact that the State
Legislature has placed a moratorium [*956] on the award of new
franchises or that the franchises granted by the City may be subject to review
at some time in the future by an agency not yet established and where the
outcome of that review in unknown, is not a matter which we must consider at
this time. If the situation in New York is materially altered by the
review which is to take place pursuant to the legislation, any party affected
thereby may bring the matter to the attention of the Commission by an
appropriate pleading and it will be considered in the light of the
circumstances which then prevail. At this time, however, we see no
considered in the light of the circumstances which then prevail. At this
time, however, we see no reason to take official notice of the State
legislation.
n12 Other pleadings directed to this
legislation are: (1) comments of the Cable Television Bureau filed June 25,
1971; (2) comments of the Common Carrier Bureau filed June 28, 1971; (3) an
opposition filed by Comtel on June 30, 1971; (4) a pleading filed by the City
of New York on June 24, 1971; and (5) a motion filed by TelePrompTer and
Sterling on June 28, 1971, for authority to file additional comments and to
accept the comments attached thereto filing.
THE APPLICATIONS
FOR SERVICE TO OTHER COMMUNITIES IN NEW YORK STATE
43. The Examiner found, as he
did in connection with the applications for channel service in the Borough of
Manhattan, that N.Y.Telco had not discriminated against CATV operators desiring
to construct their own systems and in favor of their channel service customers
or potential channel customers. In reaching this conclusion, the Examiner
took the position that N.Y.Telco, in discouraging pole attachments, was
"not acting unreasonably merely because it makes it easier to take its
service than to take its property by license or lease" (I.D. para.
222). n13 Some of the evidence introduced in
support of the CATV operators' contention that representatives of N.Y.Telco
were deliberately engaging in tactics designed to discourage pole attachment
agreements was regarded by the Examiner as only an "isolated"
incident (I.D. para. 168), or was characterized by him as
"facetiously" made or merely the "puffing" of a salesman
(I.D. paras. 198, 220).
n13 In our Final Report and Order in
Docket No. 18509 released February 4, 1970 (21 FCC 2d 307), we adopted a rule,
Section 63.57, which requires that applications by a telephone company for
Section 214 certification of distribution facilities for channel service to CATV
systems be supported by a showing that the CATV customer "had available at
its option, and within the limitations of technical feasibility, pole
attachment rights (or conduit space, as the case may be) at reasonable charges
and without undue restrictions on the uses that may be made of the channel by
the customer." Also, by letter dated October 27, 1969, the American
Telephone and Telegraph Company advised the Commission that the Bell System
policy is to make poles and conduits available at appropriate charges.
However, both actions occurred after the commencement of this proceeding, and
our findings and conclusions are based on the evidence of record herein.
44. We cannot accept the
approach adopted by the Examiner in the resolution of the very difficult
problems raised by the complex factual situation in this case. By reason
of its position as a communications common carrier, N.Y.Telco owns or has
considerable control over the utility poles in the communities involved herein,
and we know from experience that, as a practical matter, a CATV operator
desiring to construct his own system must have access to those poles.
Most communities will not tolerate separate poles for CATV and for utility
wires and, even if permitted, the cost of erecting a separate set of poles for
CATV throughout the community would be prohibitive. Also, the fact
remains that, even though "N.Y.Telco is not itself engaged in CATV
competition" as the Examiner held (I.D. para. 222), it is in competition
with the CATV operator as to channel service, since the operator who builds his
own system does not buy channel service and, understandably, in view of the
difference in remuneration, the company prefers to sell channel service rather
than lease space on the telephone poles. Despite this understandable
preference, however, the telephone [*957] company may not utilize
its monopoly control over the utility poles in a community to force a CATV
operator to take channel service, and evidence that it has done so may preclude
the issuance of a certificate of public convenience and necessity under Section
214 of the Act. See paragraph 20 supra. Also, while the telephone
company legitimately could attempt to persuade applicants for pole attachment
agreements to take channel service instead, as it did in at least three
communities involved herein (Hyde Park, Brookhaven and Poughkeepsie), so long
as the "persuasion" is limited to representations concerning the
advantages of channel service, it may not extend the means of "persuasion"
to the affirmative use of obstructive tactics made possible by its monopoly
position as a lever to force acceptance of unwanted channel service. It
is against this background that we must consider whether N.Y.Telco was
"acting unreasonably" if it made the taking of channel service
"easier" than obtaining space on the telephone poles.
Furthermore, in appraising the evidence we do not deem it appropriate to
consider N.Y.Telco's conduct in each community in isolation since an
"isolated" incident in each of a number of communities may tend to
reveal a pattern of conduct intended to delay or obstruct the construction of
independent CATV systems in order either to coerce the operators to accept
channel service or to eliminate them as competitors to its channel service customers
throughout its service area. One of the reasons we designated these
applications for hearing in a consolidated proceeding was to enable us to
evaluate the evidence as a whole. See Better T.V., Inc. of Dutchess
County, N.Y. et al., 18 FCC 2d 783 at 785. Therefore we must determine on the
basis of the record as a whole whether N.Y.Telco acted reasonably or
unreasonably and whether it engaged in discriminatory conduct against the CATV
operator who preferred a pole attachment to channel service.
45. The Hearing Examiner also
appears to have been influenced in his decision by his assumption that no logal
obligation exists on the part of the carrier to make its utility poles
available for use by CATV systems (I.D. para. 155). However, the dispositive
question is not whether there is such a legal obligation but whether a
certificate of public convenience and necessity may be issue where the carrier
has employed policies which result in denying to CATV operators the opportunity
to construct and operate their own distribution facilities. As held in
the Final Report and Order in Docket No. 18509: n14
n14 Section 214 Certificates, 21 FCC
2d 307 at 328, released February 4, 1970.
"Since the standard of public
convenience and necessity is the watchword of any section 214 grant, there
should be no question about our responsibility to make it certain that any
authorization issued by us will not be used as a tool of discrimination and
unfair competition, and will not inhibit the future growth and development of the
wide-spectrum services. On the contrary, our authorizations should assure
that the common carrier applicant's service is offered in a manner consistent
with the best interest of the community it serves.
Although Docket
No. 18509 dealt primarily with situations where the telephone company and the
CATV system are affiliated, the underlying rationale is applicable here where
the local carrier has the potential, by reason of its monopoly position in the
community, to discriminate against CATV operators who desire to provide their
own distribution facilities. In both situations we deem it to be
essential in [*958] the public interest that a competitive
environment be preserved for the development and use of broad band cable
facilities.
Hyde Park
46. On March 3, 1965, Better
T.V. was issued a franchise to provide CATV service to Hyde Park, New York and
on April 5, 1965, submitted a formal request to N.Y.Telco for a pole attachment
agreement. However, operations by Better T.V. in the community did not
commence until June 30, 1967, on a no-charge basis and on August 14, 1967, on a
charge basis. On the other hand, a competing CATV operator, U.S.
Cablevision Corp., n15 which made a request for channel
service from N.Y.Telco on December 29, 1966, commenced operations on June 21,
1967, with facilities provided by the telephone company. The Examiner
indicated that any delay in the commencement of service by Better T.V. was at
least in part the fault of the cable operator, that N.Y.Telco had not engaged
in discriminatory conduct, and he recommended that N.Y.Telco's Hyde Park
facilities be certificated.
n15 The assets of Better T.V. and
U.S. Cablevision have been purchased by a new corporation, also known as U.S.
Cablevision. Better T.V. has remained a party to this proceeding, urging
that N.Y. Telco's application be denied.
47. Better T.V. in its
exceptions to the Initial Decision argues that N.Y.Telco engaged in a
consistent pattern of behavior designed to delay its attempts to secure a pole
attachment agreement and construct its CATV system. It charges that
N.Y.Telco was dilatory in responding to its correspondence and other requests,
arbitrarily rejected the form of its applications for pole attachments, denied
it the use of pole maps, and imposed on it unfair and onerous insurance
requirements. The Cable Television Bureau agrees with Better T.V. that
N.Y.Telco engaged in improper conduct and that its application for authority to
construct facilities in Hyde Park should be denied. The Examiner's
finding of no improper conduct by N.Y.Telco in Hydge Park is supported by the
Common Carrier Bureau and N.Y.Telco.
48. Because of the importance
which appears to have been attached to the matter by the parties, we shall
consider first Better T.V.'s charge that onerous and unprecedented insurance
requirements were imposed by N.Y.Telco as a condition to the use of its poles
in order to delay construction of the CATV system. The purpose of the
delay, it is contended, was to discourage Better T.V. in its proposal to
construct its own system and thereafter to enable the telephone company to
complete construction of facilities for U.S. Cablevision, its channel service
customer. In support of this contention Better T.V. points out that
N.Y.Telco insisted upon the inclusion of a provision to indemnify it against
damage arising out of the presence on the poles of Better T.V.'s facilities
even though the damage resulted solely from the telephone company's
negligence. In contrast, New England Telephone and Telegraph Company
(N.E.Telco), which is also a Bell system company, specifically exempted at
least one CATV system, Pioneer Valley Cablevision, Inc., from such
liability. Also, whereas N.E.Telco requires only a comprehensive general
liability insurance policy, N.Y.Telco required that and, on addition, an
owners' landlords' and tenants' liability policy; and it demands
[*959] neither from other utilities using its poles. Thus, it is
apparent that N.Y.Telco imposed on Better T.V. insurance requirements which
were more restrictive than those which N.E.Telco applied to CATV systems or
than the carrier itself applied to other users of its poles.
Nevertheless, such evidence alone does not establish that N.Y.Telco's insurance
demands were intended as obstacles to prevent Better T.V. from placing its
cable on the telephone poles. For the reasons set forth below, it is our
view that the evidence of record is insufficient to warrant a finding to that
effect.
49. At the hearing, N.Y.Telco
introduced evidence which showed that during 1965 three CATV systems were able
to provide policies to meet the carrier's requirements from the same insurance
company that Better T.V. claimed was objecting to the inclusion of certain of
the requested provisions. Evidence was also introduced to show that such
policies were obtained from seven other companies prior to January 24, 1967,
when Better T.V. obtained its policies; n16
and that thereafter CATV operators obtained such policies from seven additional
companies. In view of this showing by N.Y.Telco, it was certainly
incumbent upon Better T.V. to come forward, if it could, with some satisfactory
explanation for its failure to obtain the policies, as other CATV operators
were able to do from one of the numerous insurance companies that were issuing
them. No effort was made to show that the policies issued to the CATV
operators varied in any material respect from the policies demanded by
N.Y.Telco or that other valid reasons existed for its failure to secure the
required insurance. While Better T.V. insists that its insurance agent
had considerable experience in such matters and that the failure to obtain the
policies was due to the uniqueness -- and unreasonableness -- of the provisions
which N.Y.Telco was demanding, the insurance agent was not called as a witness
and the record contains no other reliable evidence connecting the delay in the
issuance of the policies to the character of the provisions specified by
N.Y.Telco. We do not know to which, if any, provisions the insurance
companies objected or whether the requirement for an owners', landlords' and
tenants' policy was, in fact, unreasonable. This deficiency is
particularly significant in view of the fact that satisfactory policies
ultimately were obtained by Better T.V., and they were obtained from the
company which N.Y.Telco suggested early in its discussions with Better T.V. as
one which was familiar with the telephone company's requirements and previously
had issued acceptable policies. In the absence of any such countervailing
evidence we cannot find that unreasonable insurance requirements were imposed
by N.Y.Telco as a device to delay or impede the construction of Better T.V.'s
CATV system in Hyde Park.
n16 The policies submitted on that
date required minor revisions and the insurance agent was so advised on January
27, 1967. The revisions were made and acceptable policies were delivered
to N.Y. Telco on February 23, 1967.
50. The further argument that
N.Y.Telco was guilty of dilatory tactics by its failure promptly to inform
Better T.V. of the requirement for both a comprehensive general liability
policy and an owners', landlords' and tenants' policy or of deficiencies in the
documents submitted is likewise found to be without merit. In addition to
prior oral discussions on the subject, Better T.V. was advised by letter
dated [*960] July 12, 1965, concerning the telephone company's
requirements for the two policies. When certificates of insurance instead
of the policies were submitted in February, 1966, there appears to have been no
material delay before Better T.V. was advised that certificates were
unacceptable. According to the cable operator's own evidence, at a
meeting between representatives of N.Y.Telco and Better T.V. in May, 1966, the
latter was advised that its owners', landlords' and tenants' liability policy
was not in order. Considering that the policies were not obtained until
January 1967, that three month period is without significance.
51. From other evidence of
record, however, we find substantial support for Better T.V.'s claim that
representatives of N.Y.Telco engaged in a course of conduct which was designed
to discourage and delay Better T.V. in its plans to construct a CATV
system. Thus, when Better T.V.'s representative initially approached
N.Y.Telco with respect to negotiating a pole attachment agreement, the
telephone company employee attempted to discourage any further exploration into
the matter by characterizing the agreement as a "monstrous document"
which Better T.V.'s attorney would advise him not to sign. n17 Nevertheless, Better T.V. concluded that, from a
business standpoint, construction of its own system was preferable and, on
April 5, 1965, a formal request for a pole attachment agreement was submitted.
Nothing was heard from N.Y.Telco for a period of two months.
n17 The Examiner considered this
conversation to be an "isolated incident" and found no showing that
the N.Y.Telco employee was under orders, expressed or implied, to discourage
CATV operators from applying for pole attachment agreements. Whether the
incident was "isolated" and whether it is indicative of instructions
received by the employee from policy making personnel of N.Y.Telco must, as
heretofore pointed out, be considered in light of N.Y.Telco's actions in
general in the several communities where CATVs sought pole attachment
arrangements.
52. An exchange of
correspondence and telephone conversations ensued in June 1965, but it was not
until July 12, 1965, that N.Y.Telco sent Better T.V. a sample pole attachment
agreement. Thereafter, on or about December 20, 1965, a formal agreement
between the carrier and the CATV operator was executed. While we accord
decisional weight to N.Y.Telco's failure to send a sample agreement for three
months, no significance is attached to the delay between the submission in July
and the execution in December of the formal document since both parties appear
to have utilized this period of time to draft and study the document.
N.Y.Telco's conduct thereafter, however, is particularly revealing as to its
intent to impede the effectuation of Better T.V.'s plans for a Hyde Park CATV
system.
53. In order to expedite the
planning and construction of its CATV system, Better T.V. attempted in May,
1966 to obtain maps showing the location of N.Y.Telco's poles. Better
T.V. first approached the local electric utility which advised that the maps
had to be secured from N.Y.Telco. On May 23, 1966, maps were requested
from N.Y.Telco. The telephone company employee who was contacted stated
that the company had no such pams but that he would attempt to obtain them from
the electric company. However, he also indicated that he could make no
promise of getting them since he previously had made efforts to do so without
success. Better T.V. also made efforts through other sources to get the
maps but its efforts were unsuccessful. Not until Better T.V. contacted
the telephone company employee in September, [*961] 1966, was the
cable operator told that the maps were not available. What is more
significant, however, is the fact that the telephone company does have pole
line records. In the memorandum in which this information is disclosed,
the telephone company excuses its failure to make them available to Better T.V.
on the grounds that its "pole line records are in coded form and any cable
maps we have we feel, as a policy matter, should not be supplied to any outside
organization, for security reasons and would probably be worthless to a CATV
operator anyway." No explanation was offered by N.Y.Telco as to why the
maps could not have been decoded or what "security" reasons precluded
their disclosure. n18 While it is likely that additional
measurements would be needed, it is virtually inconceivable that the maps would
not have been of benefit to Better T.V. and that N.Y.Telco did not know this to
be so. By reason of its inability to obtain the pole records, Better T.V.
had no alternative but to make its own maps, which was a time consuming
project. We are satisfied that this shunting of Better T.V. between the
telephone company and the electric company, n19
together with N.Y.Telco's failure to produce the pole records which it had, was
undertaken for the purpose of delaying the commencement of construction of the
CATV system and that the telephone company accomplished its purpose.
n18 It is also interesting to note
that the memorandum refers to the fact that there is "pending FCC hearings
on this very subject, i.e., are the telephone companies discriminating against
attachment applicants by using their tariff offerings as a 'market entry', it
would appear that we should make every effort to be sure that Mr. Ricci can not
make out a case against us on the grounds of delaying him or favoring our
potential tariff customer over him." In view of N.Y.Telco's concern over
the pending hearings and its efforts to insure that Better T.V. did not
"make out a case" we would have expected some further enlightenment
as to the justification for the concealment of the existence of the coded forms
or the failure to be more cooperative, if such justification actually exists.
n19 See Manatee Cablevision, Inc.,
22 FCC 2d 841 (1970) at page 864, where we had occasion to refer to the
"potential for discriminatory action" against a CATV operator by the
local telephone and power companies "which have served a common area and
have had occasion to work together over a period of many years * * *"
54. N.Y.Telco's dilatory
tactics became even more evident after December, 1966, when the order for
channel service was received from the competing CATV operator. On March
4, 1967, Better T.V. requested that a field survey to determine the necessary
make-ready work be undertaken as soon as possible. While there appears to
have been some discussions thereafter between representatives of the two
companies, N.Y.Telco waited until March 20 to advise the power company that a
joint pole survey was desired. The power company did not hasten to
respond but it does appeal that both orally and by letter dated April 10, the
power company called N.Y.Telco's attention to the fact that there was no
requirement for the power company to participate in a joint survey.
Finally, on April 28 the field survey was commenced and it was completed on May
5. In the meantime, on April 3, 1967, construction of the channel
distribution facilities to serve U.S. Cablevision was started. n20
n20 It should be noted that
construction was commenced months after the carrier had notice of its possible unlawfulness
by reason of the failure to obtain prior Section 214 certification. See
General Telephone Company of California, et al., 13 FCC 2d 448, 462, released
June 26, 1968.
55. In certain areas, little
or no make-ready work was required and by letter dated March 20, 1967, Better
T.V. requested permission to begin construction in those areas. No
response to this letter was ever received. It further appears that prior
thereto, on February 15, 1967, Better T.V. had submitted applications for
licenses to attach to a number [*962] of poles. At a meeting
on May 10, 1967, which N.Y.Telco's representative only reluctantly attended
because he didn't see where a meeting of this sort would accomplish anything,
Better T.V. was advised for the first time that the application was not in
acceptable form and that the request for licenses must be re-submitted in a
different manner. This required typing of approximately 40 new
applications in lieu of the one application originally submitted. Not
until May 25, 1967, was Better T.V. granted signed licenses to cover 177 poles
not requiring work. Construction was commenced by Better T.V. in early
June, 1967, and, as previously noted, Better T.V. commenced service on a
nocharge basis nine days after U.S. Cablevision began operations.
Unquestionably, substantial construction would have been completed by Better
"T.V. long prior to that June, 1967, date were it not for N.Y.Telco's
refusal to divulge information concerning its pole records, its tortoise-like responses
to inquiries and its generally uncooperative attitude.
56. That Hyde Park now has
duplicate CATV facilities is undisputed. As of approximately November 1,
1967, when both systems were completed, Better T.V. had 43 street miles of
feeder and distribution cable and only 2.7 miles of N.Y.Telco's distribution
facilities for U.S. Cablevision do not duplicate the Better T.V. system.
Whether the public convenience and necessity will be served by the common
carrier facilities in Hyde Park and the appropriate action to be taken in the
circumstances will be discussed later in this decision.
Brookhaven
57. Suffolk Cable secured a
non-exclusive franchise for a CATV system in the Town of Brookhaven in Suffolk
County, Long Island, New York, on October 5, 1965, and on October 15 it
requested a pole attachment agreement from N.Y.Telco. As occurred in Hyde
Park, N.Y.Telco's representatives initially tried to induce Suffolk Cable to
subscribe for channel service. Evidence was adduced that a N.Y.Telco
employee told Suffolk Cable that if it subscribed for channel service,
N.Y.Telco would not permit any competing cable system to utilize its
poles. The statement was denied by N.Y.Telco and the Examiner did not
resolve the conflict. Instead he noted that the Suffolk Cable employee to
whom the remark was addressed is a knowledgeable and experienced businessman
and electronics engineer who must have known that N.Y.Telco could not keep out
competition and that in these circumstances the statement attributed to the
N.Y.Telco employee, even if made, "cannot be considered anything more than
facetious 'puff' by a salesman of the tariff service offering of the telephone
company" (I.D. para. 198).
58. The Examiner found no
sufficient evidence of prejudicial conduct by N.Y.Telco and he recommended
favorable action on the application for certification of the facilities to
provide channel service to Brookhaven Cable TV, Inc., the competing CATV
operator. Arguing that the evidence establishes such conduct on the part
of N.Y.Telco in Brookhaven, the Cable Television Bureau excepts to the
grant. Suffolk Cable opposed the certification application at the
hearing. However, after the issuance of the Initial Decision, the cable
operator advised the Commission that its funds are exhausted and that it would
not further participate in this proceeding. Nevertheless, Suffolk
Cable [*963] asserted that the Initial Decision is against the
weight of the evidence and it requested that the matter be carefully
reviewed. The Examiner's favorable recommendation is supported by
N.Y.Telco and the Common Carrier Bureau. Despite Suffolk Cable's
withdrawal, a careful scrutiny of the events which occurred in Brookhaven is
essential both because of their significance in this proceeding as a whole and
because we must determine whether Section 214 certification of the Brookhaven
channel distribution facilities will serve the public convenience and
necessity.
59. Despite the request for a
pole attachment agreement on October 15, 1965, a form of agreement was not submitted
to the cable operator by N.Y.Telco until January 14, 1966. No explanation
for this delay is contained in the record. In the meantime, during
December, 1965, or January, 1966, N.Y.Telco received a request from the
predecessor of Brookhaven Cable for channel facilities to serve Brookhaven and
it commenced construction of the requested facilities soon thereafter.
Although Suffolk Cable learned of this construction it did not consider its own
proposal adversely affected thereby since the construction was at some distance
from the Eagle Estates area of Medford within the Town of Brookhaven which
Suffolk Cable proposed to serve and for which it had undertaken construction of
its headend in January. However, in early May, 1966, N.Y.Telco constructed
channel distribution facilities for Brookhaven Cable in order to serve Eagle
Estates. Whether N.Y.Telco disclosed to Brookhaven Cable, its channel
service customer, that Suffolk Cable contemplated such service and the channel
service request resulted therefrom, we, of course, do not know. We do
know, however, that the construction of the channel distribution facilities for
Brookhaven Cable was undertaken after Suffolk Cable had disclosed to N.Y.Telco
its proposal to provide CATV service to Eagle Estates and that the construction
proceeded without undue delay -- if not with undue haste.
60. Suffolk Cable did not fare
as well. Although it signed the agreement on January 21, 1966, a week
after its receipt, processing by N.Y.Telco's chief engineer and by its legal
legal department, and by Long Island Light, the power company, took
considerably longer, and the executed agreement was not returned to Suffolk
Cable until April 8, 1966.
61. On March 31, 1966, and
upon numerous occasions thereafter, Suffolk Cable attempted to obtain an
estimate of charges for makeready work on the poles it proposed to use, but the
estimate was not forthcoming until May 3, 1966 -- at about the time
construction of distribution facilities for the competing cable operator was
undertaken. A check for the estimated amount was delivered to N.Y.Telco
about May 6, but Suffolk Cable's problems were not at an end. In the
make-ready space for which it had paid, N.Y.Telco performed construction for
the channel facilities requested by its tariff customer. Evidence
introduced by Suffolk Cable disclosed that upon complaint by Sergio R. Bosco,
then its chief engineer, to R. M. Woodhull a representative of N.Y.Telco,
construction was suspended for one day and then it was resumed. When the
chief engineer again complained, he was told that although construction had in
fact been performed in Suffolk Cable's make-ready space, the construction for
the channel [*964] service had priority, and if the lines had to be
moved again, Suffolk Cable would be required to pay the additional make-ready
charge. Despite this evidence, the Examiner found it to be "by no
means clear" that N.Y.Telco built in space made ready for Suffolk Cable
but we cannot accept this finding. The facts concerning the space for
which Suffolk Cable had paid and whose cable, if any, was attached to the poles
in that space, are peculiarly within the knowledge and control of the telephone
company. There was unrebutted testimony that a N.Y.Telco employee
admitted that the telephone company had in fact used the make-ready space, and
if such testimony were untrue it could easily have been refuted. We
believe that the evidence adduced by Suffolk Cable together with N.Y.Telco's
silence, compels a finding that N.Y.Telco had in fact utilized Suffolk Cable's
prepaid make-ready space.
62. On June 9, Suffolk Cable
finally received permission to attach to the poles and on June 15 it gave up
the ghost. Suffolk Cable decided that it could not compete with
N.Y.Telco's channel service customer in Eagle Estates, it refunded all deposits
to its subscribers, and it with-drew from CATV activities in the area. n21 Perhaps, as the Examiner found, the N.Y.Telco
salesman was only "puffing" when he said that a pole attachment
applicant intending to compete with a channel service customer would not be
able to get on the telephone company's poles, but his statement turned out to
be a fairly accurate prediction.
n21 Thereafter the stock of Suffolk Cable
was sold to another corporation which has constructed an unerground system in
Brookhaven. (I.D. para. 208).
63. Suffolk Cable, as did
Better T.V., found it difficult to satisfy N.Y.Telco's insurance requirements
and, as late as June 6, 1966, it had not done so. A representative of
Suffolk Cable testified that N.Y.Telco would not accept the standard insurance
policy used by CATVs in most other areas of the country but was requiring a
type of insurance which was "completely new within the cable industry."
No claim was made by Suffolk Cable, however, that the insurance requirements
were unreasonable or that they were utilized as a means of keeping the cable
operator off the poles. Since the insurance policy was a prerequisite to
the use of the poles, the CATV operator might not have been able to attach its
cable sooner even if the telephone company had acted with dispatch.
Nevertheless, N.Y.Telco's conduct must be carefully scrutinized and weighed in
determining whether a pattern of anticompetitive conduct is indicated and
whether the public convenience and necessity would be served by a grant of the
Section 214 certification of the facilities used to serve its tariff customer.
Poughkeepsie
64. The posture of this
proceeding with respect to Poughkeepsie differs from that of the applications
for Brookhaven and Hyde Park in that the complaining CATV, WEOK Cablevision,
Inc., is also N.Y.Telco's channel service customer and that N.Y.Telco's
applications for authority to construct facilities, File Nos. P-C-7247 and
P-C-7248, were granted by the Chief, Common Carrier Bureau, under delegated
authority, as unopposed applications. Order and Certificates, released
April 10, 1970. Moreover, while Suffolk Cable and Better T.V. have filed
exceptions to the Initial Decision, WEOK has refrained from [*965]
doing so. In any event the Cable Television Bureau has filed exceptions
to the findings and conclusions of the Examiner regarding Pough-keepsie and the
matter must be considered here (see paragraph 3, supra).
65. WEOK Broadcasting, Inc.,
the predecessor to WEOK Cablevision, n22
was granted a non-exclusive franchise to construct a CATV system in
Poughkeepsie on October 20, 1965, and on February 1, 1966, it submitted to
N.Y.Telco an application for a pole attachment agreement. Upon receipt of
the application, N.Y.Telco, as it did in Hyde Park and Brookhaven, attempted to
persuade WEOK Cablevision to subscribe for its channel service offering.
It submitted cost estimates and other materials to demonstrate the advantages
of channel service over pole attachments, and we find no fault with this type
of persuasion. It appears, however, that in addition WEOK Cablevision was
advised that while expeditious action could be expected in the construction of
channel distribution facilities, it was uncertain when the telephone company
would be able to find the manpower to do the make-ready work necessary to
enable the cable operator to construct its own system. WEOK was not
persuaded as to the long term advantages of channel service and on April 26,
1966, it forwarded an executed pole attachment agreement to the telephone
company. Nevertheless, when WEOK Cablevision discovered that a potential
competitor, Hightower of Poughkeepsie, planned to finish CATV service to the community,
utilizing N.Y.Telco's channel service offering, it concluded that it could be
operational faster by using common carrier channel service. Accordingly,
on May 11, 1966, WEOK submitted a request to N.Y.Telco for such service.
n22 On May 31, 1966, ownership of
the cable system was transferred from WEOK Broadcasting to WEOK
Cablevision. Hereinafter, the cable operator will be referred to as WEOK
Cablevision.
66. For over two years WEOK
made no further inquiries with respect to the request for a pole attachment
agreement. Then on August 15, 1968, WEOK Cablevision wrote to N.Y.Telco
inquiring about the status of the application. By that time N.Y.Telco had
furnished WEOK with about 100 miles of cable pursuant to the request for
channel service. WEOK contended that it found N.Y.Telco's channel service
to be inadequate and as a result it decided to construct its own system.
It also admitted that our decision in General Telephone of California, supra,
proscribing construction of new channel service facilities by telephone
companies without Section 214 certification was a factor in its decision to
construct its own system and seek a pole attachment agreement. On
September 13, 1968, N.Y.Telco advised WEOK that it would need certified copies
of the franchise in the name of WEOK Cablevision before it would enter into an
attachment agreement. Although WEOK Cablevision previously had advised
the city of Poughkeepsie of the change in ownership of the CATV system, the
city did not require a new franchise and WEOK consequently never acquired one
which could have been forwarded to N.Y.Telco. In October 1968, WEOK
renewed its request for an attachment agreement, submitting certified copies of
WEOK Broadcasting's franchise and its certificate of incorporation. On
November 15, 1968, WEOK [*966] again requested a pole attachment
agreement. The record does not disclose what action, if any, has been
taken on the application.
67. In its proposed findings
of fact, WEOK requested that N.Y.Telco be directed to grant it a pole
attachment agreement, and that, upon construction of its system N.Y.Telco be
prohibited from rendering further channel service in Poughkeepsie. This
request was predicated on the argument that N.Y.Telco engaged in discriminatory
conduct by its continuing refusal to enter into a pole attachment
agreement. However, in this connection we note that WEOK Broadcasting and
WEOK Cablevision are separate corporate entities and that no written assignment
of the franchise to WEOK Cablevision was ever executed. In these
circumstances we believe that N.Y.Telco's request for proof that WEOK
Cablevision had authority to operate a CATV in the community was
reasonable. If in fact a new franchise was not required, WEOK Cablevision
should have obtained a statement to that effect from the City. In view of
the long delay before WEOK Cablevision renewed its request for a pole
attachment agreement, its request for and acceptance of channel service
throughout this period, the failure to take affirmative steps to ascertain what
alternatives to the franchise would satisfy N.Y.Telco, and at least to tender
such documents to the telephone company, together with its failure to file
exceptions to the Initial Decision and the fact that the Section 214
applications for Poughkeepsie have been granted, we do not believe that the
remedial action suggested by the cable operator in its proposed findings is
warranted. We shall, however, take into consideration N.Y.Telco's conduct
in Poughkeepsie in our overall determination of whether N.Y.Telco utilized its
monopoly control over the utility poles to impede construction by CATV
operators of their own system and thus force them to take common carrier
channel service.
CONCLUSIONS AND REMEDIES
68. The course of conduct
followed by N.Y.Telco employees in the communities under consideration such as
the express or implied threats of delay if the cable operators persisted in
their requests for pole attachment agreements, the interminable delays between
each step of the processing from request to the attachment of the cable to the
poles, the priority given to construction for the channel service customer and
the other conduct detailed herein, establish to our satisfaction that the
objective of such activities was improperly to discourage attachment
applications and to encourage the acceptance of common carrier channel
distribution service. This objective of the telephone company was to be
accomplished by persuasion as to the advantages of channel service over an
operator owned system, if possible, but if not possible by such persuasion,
than by utilization of such pressures upon the applicant as would be likely to
bring about the desired result. Since the telephone company owns or
controls the utility poles so essential to the construction of a cable system,
it was in a position to use a variety of pressures in pursuit of its goal of
forcing the acceptance of channel service or eliminating the requesting CATV
operator as a competitor to the channel service customer in the community, and
it used them. In Hyde Park, Better T.V. was kept off the poles until a
channel [*967] service customer was obtained and the construction
for the customer could be completed. Suffolk Cable, in addition to all of
the other delaying tactics employed by N.Y.Telco, had its make-ready space used
for its competitor's channel distribution facilities and never was able to get
started in Eagle Estates. In Poughkeepsie, WEOK Cablevision quickly took
the hint about the lack of manpower to perform make-ready work and accepted channel
service rather than run the risk of having the competing channel service
customer get such a head start as to make a grant of its request for a pole
attachment agreement an empty and worthless gesture. We conclude,
therefore, on the basis of our review of the evidence of record, that N.Y.Telco
subjected CATV operators who desired to construct their own CATV systems to
undue and unreasonable prejudice and disadvantage and extended undue and
unreasonable preference and advantage to its channel service customers and
potential channel service customers. The purpose of the conduct
established herein was to either induce the independent CATV operators to take
unwanted channel service or to impede and delay construction of their CATV
systems until a channel service customer could be obtained and channel
distribution facilities could be constructed.
The Remedy
for Hyde Park
69. As previously noted, two
parallel CATV systems are being operated in Hyde Park by the same corporate
entity. One system utilizes N.Y.Telco's channel service and the other is
an owner constructed operation pursuant to a pole attachment arrangement.
The existence of the owner constructed system, in and of itself, does not
preclude certification of the channel distribution facilities and a certificate
may nevertheless issue if the public convenience and necessity will be served
thereby. Neither is the fact that construction of a competing system
using common carrier channel service may make the owner constructed system less
profitable, or even unprofitable, a controlling consideration in the absence of
a showing that the public interest will be adversely affected. However,
in the circumstances of this case, we find no sufficient public interest
considerations favoring a grant of N.Y.Telco's certification application.
Construction of the distribution facilities was commenced in Hyde Park after
the telephone company was placed on notice that Section 214 appeared to be
applicable and that the Commission proposed to take remedial action with
respect to facilities constructed without first obtaining a certificate of
public convenience and necessity. The use by N.Y.Telco of its monopoly
position to delay and impede construction by Better T.V. is a matter of
substantial significance and is a decisive factor in our deliberations.
Moreover, no countervailing public interest factors to support a grant have
been presented in this case which would outweigh the numerous adverse factors
which have been detailed herein. We therefore conclude that the public
convenience and necessity will not be served by legalizing the construction or
authorizing the continued operation of channel distribution facilities in Hyde
Park, and the application in File No. P-C-7271 (Docket No. 18525) must be
denied. Since the said facilities were constructed without first
obtaining a certificate of public convenience and necessity pursuant to Section
214 of the Act and they were used for the prejudicial purposes enumerated
[*968] herein, N.Y.Telco may not include the undepreciated cost of such
facilities in its rate base. It is also prohibited from selling the said
facilities without the express permission of the Commission (See Warrensburg
Cable, Inc., et al., 27 FCC 2d 727, 733, released February 17, 1971).
However, the telephone company will be permitted to continue operation of the
facilities for a period of 180 days from the release date of this decision in
order to avoid an abrupt withdrawal of service from the subscribers of the CATV
system using these facilities and to provide for a transition period during
which the subscribers may obtain other CATV service.
The Remedy
for Brookhaven
70. The application for
certification in the Town of Brookhaven covers an area in the vicinity of
Selden, Centereach and Medford. Substantial construction appears to have
been undertaken for initial operations which commenced on August 15, 1966, a
date prior to the release date of our order (October 21, 1966), which placed
carriers on notice of the possible unlawfulness of such construction. In
addition to certification of facilities already constructed, N.Y.Telco seeks
authorization to construct 6.75 miles of feeder cable and 18.50 miles of
distribution cable. While the successor to Suffolk Cable has constructed
an underground system in the area, the record does not disclose the extent of
such service. However, that information is not material to the
disposition of the matter before us since the only evidence of improper conduct
by N.Y.Telco in the Town of Brookhaven relates to the Eagle Estates area of
Medford. Authorization of the facilities constructed in the Eagle Estates
area would reward N.Y.Telco by enabling it to benefit from its improper conduct
and clearly would be inconsistent with the public interest. We shall
therefore deny that portion of the application seeking authorization for
facilities to serve Eagle Estates.
71. In view of its
discriminatory conduct, N.Y.Telco will be prohibited from including the
undepreciated cost of the foregoing facilities in its rate base or from selling
the said facilities without the express authorization of the Commission.
Although the record does not establish that Brookhaven Cable TV, Inc. was
guilty of misconduct, we find no such substantial equities in its favor as to
outweigh the public interest in depriving N.Y.Telco of the benefits of its
wrong-doing. The distribution facilities for Brookhaven Cable in Eagle
Estates were constructed after Suffolk Cable had undertaken construction for
that area and had taken other steps to put its proposed CATV system into
operation, and the channel service customer must have known of Suffolk Cable's
plans. Also, since we are approving the certification application for the
facilities requested in application File No. P-C-7255 other than for Eagle
Estates, Brookhaven Cable will be able to continue its operation in the
remainder of the Town. In these circumstances, we do not believe that
N.Y.Telco should be permitted to retain the fruits of its misconduct merely
because Brookhaven Cable will be forced to discontinue a part of its
operations. As to the Eagle Estates area, we shall permit the continued
operation of the said facilities for a period of 180 days from the release date
of this order in order to permit an orderly transition of service to another
[*969] CATV operator, should the Brookhaven Cable subscribers in Eagle
Estates so desire.
72. As here before stated,
authorization pursuant to Section 214 of the Act for the construction and
operation of the remaining facilities, other than in the Eagle Estates area,
requested in application File No. P-C-7255 (Docket No. 18623), will be
granted. No improper conduct by N.Y.Telco occurred in the areas where
such facilities are located or are proposed and the authorizations will enable
the tariff customer to provide a continuity of service to existing subscribers
and to provide service to others not presently on the cable. We therefore
conclude that the public convenience and necessity will be served by a grant,
with the exception previously noted.
73. Accordingly, IT IS
ORDERED, That the application of New York Telephone Company for certification
of proposed construction and operation of the facilities specified in File No.
P-C-7226 (Docket No. 18620) to serve Comtel, Inc. in the Borough of Manhattan,
New York City, New York, IS DENIED.
74. IT IS FURTHER ORDERED That
insofar as the application File No. P-C-7430 (Docket No. 18750) seeks
certification of heretofore constructed facilities and the continued operation
thereof to serve Comtel, Inc. as set forth in the said application and in the
area described in paragraph 7, supra, IS GRANTED; and that in all other
respects, the said application IS DENIED.
75. IT IS FURTHER ORDERED That
the application for certification of proposed construction and operation of the
facilities specified in File No. P-C-7282 (Docket No. 18624) to serve Manhattan
Cable Television, a subsidiary of Sterling Information Services, Ltd. in the
Borough of Manhattan, New York City, New York IS GRANTED.
76. IT IS FURTHER ORDERED That
the motion to reopen filed August 17, 1970, the motion to substitute documents
filed September 3, 1970, the request for official notice filed June 21, 1971,
and the motion to accept joint comments filed June 28, 1971, all filed by
TelePrompTer Manhattan CATV Corporation and Manhattan Cable Television, a
subsidiary of Sterling Information Services, Ltd., ARE DENIED.
77. IT IS FURTHER ORDERED That
the application for certification of the construction and operation of the
facilities set forth in File No. P-C-7271 (Docket No. 18525) to serve U.S.
Cablevision Corp. in Hyde Park, New York, IS DENIED; that the operation of the
heretofore constructed facilities SHALL BE DISCONTINUED not later than 180 days
after the release date of this decision; that the New York Telephone Company IS
PROHIBITED from including the undepreciated cost of the said facilities in its
rate base; and that the sale of the said facilities without prior Commission
authorization IS PROHIBITED.
78. IT IS FURTHER ORDERED That
the application for certification of the construction and operation of the
facilities specified in File No. P-C-7255 (Docket No. 18623) to serve
Brookhaven Cable TV, Inc. in the Eagle Estates area of Medford in the Town of
Brookhaven, New York, IS DENIED; that the operation of the heretofore
constructed facilities SHALL BE DISCONTINUED not later than 180
[*970] days after the release date of this decision; that the New York
Telephone Company IS PROHIBITED from including the undepreciated cost of the
said facilities in its rate base; and that the sale of the said facilities
without prior Commission authorization IS PROHIBITED; n23 and that other than the facilities for Eagle
Estates, the said application for the construction and operation of channel
distribution facilities to serve Brookhaven Cable TV, Inc. in Selden,
Centereach and Medford in the Town of Brookhaven, New York, IS GRANTED.
n23 On July 14, 1971, N.Y. Telco
filed an application for authority to convey the facilities for which
certification is requested in File No. P-C-7255. In a pleading filed
August 17, 1971, the Common Carrier Bureau requested Commission approval of the
July 14, 1971 application. That application is under consideration and
will be treated in a separate order.
79. IT IS FURTHER ORDERED That
motions to correct transcript filed by the City of New York, Department of
Justice, Cable Television Bureau and Common Carrier Bureau ARE GRANTED.
80. IT IS FURTHER ORDERED That
the authorizations granted herein are not to be construed to relieve any of the
CATV operators to be served, their successors or assignees, from compliance
with the requirements of the interim procedures set forth in Docket No. 18397,
or of Part 74, Subpart K, of the Commission's Rules, or any rules that may be
promulgated by the Commission in Docket No. 18397, or any Commission order that
may be issued pursuant to Part 74, Subpart K, of the Commission's Rules and
Regulations.
81. IT IS FURTHER ORDERED That
all the authorizations herein are issued without prejudice to any Commission
action which may be deemed necessary and appropriate in the public interest as
the result of the consolidated proceeding in Docket Nos. 16928, 16943, and
17098, or of the rulemaking proceedings in Docket Nos. 18397, 18397-A, 18892,
18894, or 19117, or any other pending proceeding; and the grants are subject to
Commission action affecting CATV operations which may result from any
rulemaking initiated by the Commission.
82. IT IS FURTHER ORDERED That
the relief requested in the Complaint of Better T.V., Inc. IS GRANTED to
the extent set forth herein and the hearing on the said complaint IS
TERMINATED.
FEDERAL
COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
CONCURBY: BARTLEY; BURCH (IN PART)
CONCUR:
STATEMENT OF COMMISSIONER ROBERT T. BARTLEY
IN WHICH COMMISSIONER JOHNSON JOINS
The Examiner in his Initial Decision
and the Chairman in his dissent asserted that N.Y.Telco had an obligation to
protect the integrity of its basic telephone service from disruptions resulting
from pole attachment facilities. It is on this basis that they concluded
that it proves nothing to establish that N.Y.Telco made it "easier"
to get channel service than a pole attachment arrangement. However, the
record indicates that the telephone company has allowed numerous pole
attachments without interference to its basic service. Thus,
N.Y.Telco [*976] cannot be permitted under the guise of protecting
its telephone service to impose unreasonable requirements on its pole
attachment applicants or otherwise deliberately place obstacles in their path
to impede or prevent construction of the independent CATV system. Since
it is N.Y.Telco's policy to permit attachments where feasible, we must closely
scrutinize N.Y.Telco's conduct where such conduct serves to discriminate
against pole attachments in favor of prospective channel service
customers. Upon the basis of the substantial evidence of record recited
in our Decision we have found that N.Y.Telco engaged in a pattern of
discriminatory conduct designed to induce CATV operators to subscribe for its
tariff service.
While accepting our determination
with respect to
When a Better T.V. employee
approached a N.Y.Telco representative with respect to negotiating a pole
attachment agreement, the N.Y. Telco representative characterized the agreement
as a "monstrous document" which Better T.V.'s attorney would advise
him not to sign. We cannot agree with the Examiner and the Chairman that
this was an isolated incident when it is placed in context with N.Y.Telco's
other discriminatory conduct and it is recognized that n.y.t/elco employees
engaged in similar conduct in other communities. Thus, in Brookhaven, a
N.Y.Telco employee told Suffolk Cable that if it subscribed for channel
service, N.Y.Telco would not permit any competing cable system to utilize its
poles. Also, in
In discussing the incident
concerning the request by Better T.V. for pole maps in Hyde Park and concluding
that no improper conduct of decisional significance had occurred, the Chairman
has failed to give due weight to the very significant fact that while N.Y.Telco
was telling Better T.V. it did not have any pole maps, in fact such maps were
available if N.Y.Telco had chosen to produce them. n1
n1 See Better T.V. Exhibit 3, and
par. 53 of our Decision.
The Chairman notes that Better T.V.
waited until May 1966 to request pole maps and that this was 10 months after
N.Y.Telco mailed a pole attachment agreement to Better T.V. and five months
after the pole attachment agreement was executed. The record establishes
that during the period following the execution of the agreement in particular,
Better T.V. was actively pursuing the construction of its system. Thus,
the Examiner found that soon after execution of the [*977]
agreement a Better T.V. employee began working in the
We also believe that the Examiner
and the Chairman failed to give sufficient weight to the unrebutted testimony
of a Suffolk Cable witness that a N.Y.Telco employee told him that N.Y.Telco
was using Better T.V.'s make ready space. The weight of this testimony
cannot be minimized by finding that "80% of the 'leaseback' customers'
facilities... are 'lashed' to the telephone company's existing plant,"
when there is also testimony that the other 20% affects several areas in Eagle
Estates which was Suffolk Cable's proposed area of operations (Tr.
3660-3661). Moreover, the witness, Suffolk Calbe's chief engineer and a
man who has had years of experience in electronics and previously had engaged
in CATV construction and engineering (Tr. 3628, 3629), stated that he saw
N.Y.Telco performing construction in the make-ready space for which Suffolk
Cable had paid, and that the N.Y.Telco representative to whom he complained
admitted that this was being done. Nevertheless, the telephone company
never undertook to answer this very serious charge either by the production of
its records which would have shown what make-ready space Suffolk Cable had paid
for and what construction had been performed for the channel service customer
in that area, or by the production of the N.Y.Telco employee to whom the
complaint was alleged to have been made.
The Chairman's final argument is
that the wrongdoing here, if any, does not merit denial of 214 certification
and that as a result of such denial innocent subscribers will suffer.
Here again we cannot agree. Our Decision will prevent N.Y.Telco from
benefiting from its improper conduct, and we deem this to be essential in the
public interest and to outweigh any inconvenience which might result from our
Decision. In this connection also, we doubt that any significant number
of subscribers will suffer as a result of our decision. For the reasons
set forth therein (par. 67) we do not propose to take remedial action with
respect to
While N.Y.Telco's channel service
customer is likely to suffer, the fact remains that it benefitted by
N.Y.Telco's improper conduct by [*978] the elimination of Suffolk
Cable as a competitor. In these circumstances, we do not believe that the
channel service customer, any more than N.Y.Telco, should be permitted to
retain the fruits of the wrong-doing established herein. On the contrary,
we are persuaded that the public interest demands that no fruits of such
wrongdoing should be retained by N.Y.Telco and that this consideration
outweighs any channel service customer or its subscribers.
DISSENTBY:
BURCH (IN PART)
DISSENT:
CONCURRING AND DISSENTING STATEMENTS
OF CHAIRMAN DEAN BURCH IN WHICH COMMISSIONERS ROBERT WELLS AND THOMAS J. HOUSER
JOIN
I agree with the majority's action
respecting the Manhattan area served by Comtel. This is essentially a
policy judgment -- not one which definitively decided the broad policy issues
in this field but rather what is most appropriate on the undisputed facts of
this case. The majority has reached an equitable disposition of the
policy considerations pertinent herein with which I am in accord.
My dissent goes to the latter part
of the opinion where the majority has decided to deny the application and order
the discontinuance of service being provided by N.Y.Telco in Hyde Park and
Brookhaven. The issue here is a factual one -- whether N.Y.Telco has
improperly [*971] discriminated against CATV operators seeking to
construct their own distribution facilities, and in favor of rivals taking
channel service from the Company. But I wish to stress at the outset that
this is not just a matter of my drawing different inferences from the evidence
than the majority.
This was a complex case, labeled by
the Examiner as presenting an "exceedingly difficult task [for] the tier
of the facts to sift through all the chaff to find the wheat" (para. 214,
I.D.). It is exactly the type of case where the record would not be
certified to the Commission without an initial decision by the Hearing Examiner
who has had the benefit of hearing the testimony and observing the witnesses
and who obviously has a greater familiarity with the voluminous record.
The Examiner who thus had the best "feel" for this factual issue
reached the strongly held ultimate factual conclusion that the Company should
not be found to have engaged in improper activities.
In the circumstances, I believe that
the Commission should reverse that conclusion only if a substantial
preponderance of evidence to the contrary is found to exist. That is
simply not the case here. On the contrary, the majority's action --
particularly its finding of a pattern of improper conduct -- rests on extremely
thin grounds. I shall turn to an analysis of that action, after some
brief background observations.
At page 27, para. 45, the majority
Opinion correctly states:
... the dispositive question is not whether
there is such a legal obligation (to make its utility poles available for use
by CATV systems) but whether a certificate of public convenience and necessity
may be issued where the carrier has employed policies which result in denying
to CATV operators the opportunity to construct and operate their own
distribution facilities.
The law is now clear in this
area. The Section 214 Certificates case, 21 FCC 2d 307 (1970) requires
that applications by a telephone company for certification of distribution
facilities for channel service to cable systems be supported by a showing that
the cable customers "had available, at its option, and within the
limitations of technical feasibility, pole attachment rights at reasonable
charges and without undue restrictions on the uses that may be made of the
clearance by the customer." We there stated (at p. 328) that "... our
authorizations should assure that the common carrier applicant's service is
offered in a manner consistent with the best interest of the community it
serves." It should be noted also that prior to our decision (by letter
dated October 27, 1969), the Bell System stated a policy to make poles and
conduits available at appropriate charges.
But these actions are of recent
origin and neither the Section 214 case nor the Company's enlightened policy
change were in effect at the time the factual setting of the proceeding was
evolving.
The Examiner was acutely aware of
this and so cautions:
The policies of N.Y.Telco with
respect to the granting of licenses to CATV entrepreneurs to attach to the
company's telephone poles should be clearly understood before the particular
situations affecting CATV in Hyde Park, Poughkeepsie, and Brookhaven, New York
are taken up. Moreover, the so-called pole attachment policies, to be
fair about it, ought to be considered in the historical context in which they
evolved, especially in view of the fact that no legal precedent has been cited
herein, and that no evidence has been adduced, to show that the telephone
company was legally obliged in the first instance to make its utility poles,
which are essential to the provision of efficient, adequate and essential
[*972] communications common carrier services to the general public,
available for use by virtually unregulated entities. (Para. 155, I.D.,
emphasis supplied.)
As ever a cursory reading of that
history reveals, N.Y.Telco's original and basic position concerning attachment
of non-utility facilities to its poles has always been based upon a concern for
the risk to the integrity of its facilities and safety of its employees and a
recognition of its first obligation as a public utility to provide service to
telephone subscribers. In this perspective, the Examiner concluded
"the telephone company is not acting unreasonably merely because it makes
it easier to take its service than to take its property by license or lease
(I.D., para. 222), and at footnote 38, the Examiner elaborates:
In providing tariff service as a
regulated common carrier, the telephone company keeps control of its property
and has supervisory control of the personnel and independent contractors who
have to work on such property. In leasing its utility poles and conduits
to "independent" CATV entrepreneurs, any control it retains is
limited by contractual provisions. In working out such contractual
provisions the telephone company is reasonably justified in anticipating all
contingencies at their worst, the Examiner believes. For if telephone
service is disrupted by the locally non-regulated entities, where can the
public turn for redress except to the governmental bodies that are regulating
the telephone company and to the company itself? And if the telephone
company had been found to be remiss in some way by not thus protecting its
facilities, who would have to pay the piper?
Similarly, at p. 99, para. 221,
Initial Decision, the Examiner notes:
... it is question-begging to deduce
therefrom, ipso facto, that the conditions the company imposes on those
licensees or lessees for the protection of it personnel, equipment and service
are unreasonably discriminatory or 'anti-competitive'. Yet the present
record, as the Ex winner construes it, presents little more than an expose of
telephone company regulations and practices for pole attachment licensees that
are, of necessity, different and perhaps more onerous to the user than the
conditions imposed in its tariff upon channel service customers.
In short, it proves nothing to
establish that the Company made the taking of channel service
"cashier" than obtaining space on telephone poles. Take the
question of the insurance requirements in the latter instance. This
obviously makes channel service "easier," but as the majority
correctly finds, it is just as obvious that this is a reasonable requirement
when one is not simply a customer but rather a lessee of pole space. The
critical issue is whether the Company's course of conduct was such as to deny
the CATV operator the opportunity to build and operate their own
facilities. I turn now to the specific facts of the two situations.
Hyde Park
The majority opinion summarizes
Better-TV's charges in Hyde Park as follows: that N.Y.Telco was dilatory in
responding to its correspondence and other requests; arbitrarily rejected the
form of its applications for pole attachments; denied it the use of pole maps;
and imposed on it unfair and onerous insurance requirements.
Because of the importance attached
to the latter charge by the parties, the majority considers first the charge of
onerous and unprecedented insurance requirements and concludes that "it is
our view that the evidence of record is insufficient to warrant a finding to
that effect (para. 48)." The further argument that N.Y.Telco was guilty of
dilatory tactics by its failure to promptly inform Better T.V. of the requirement
for both a comprehensive general liability policy, and owners',
[*973] landlords', and tenants' policy or of deficiencies in the
documents submitted is likewise found to be without merit." (para. 50).
"From other evidence of record,
however, [the majority finds] substantial support for Better T.V.'s claim that
representatives of N.Y.Telco engaged in a course of conduct which was designed
to discourage and delay Better T.V...." (para. 51, emphasis
supplied). It then cites one instance when a representative of Better
T.V. approached a N.Y.Telco local representative who purportedly attempted to
discourage pole attachment by characterizing the agreements as a
"monstrous document." I cannot find that this isolated incident, as
the Examiner found it to be, is substantial support for Better T.V.'s
allegation; nor does it evidence a so-called "course of conduct."
Significantly, Better T.V.'s principal owner testified that he never felt
N.Y.Telco had "pressured" him to take the tariff offering, although
it had tried to sell him on it (T. 540, 41).
The majority opinion also states
that "In order to expedite the planning and construction of its CATV
system, Better T.V. attempted in May 1966 to obtain maps showing the location
of N.Y.Telco poles," (para. 53, emphasis supplied). First, I would
note the significant fact that this was ten months after N.Y.Telco mailed a
formal agreement to Better T.V. and five months after agreement was
executed. My point is that one could make the finding that Better T.V.
was deliberately delaying, since why else were there such substantial time
lags. This is obviously not the case, but it does point up the fallacy of
simply nothing a time period of some months in a matter of this kind.
Second, "[During] February of
1966, a Better T.V. employee began working in the Hyde Park area as a
"expediter", (para. 171, Initial Decision), and before seeking to
obtain maps devoted time measuring distances along certain of the streets
(para. 172. Initial Decision). No promises were made by N.Y.Telco
that a pole map could be secured and the "expediter" was or should
have been aware that N.Y.Telco did not have such maps available. Yet the
majority argues it was "not until Better T.V. contacted the telephone
company employee in September 1966, was the cable operator told that the maps
were not available."
In this regard, it is significant
that the so-called "expediter" was the manager of one of Better
T.V.'s CATV systems in Bennington, Vt. and was the only employee available to
obtain pole map information. Any allegation of delay to this employee's
effort to obtain pole maps must be tempered by his testimony that prior to
September 1966, because of other commitments, he began obtaining such
information independently but devoted only one day to this work; and between
June and September never inquired of the telephone company nor the electric
company about the availability of the maps. (Tr. pp. 648-649).
Brookhaven
In brookhaven, the majority notes
that Suffolk Cable made no claim "that the insurance requirements were
unreasonable or that they were utilized as a means of keeping the cable
operators off the poles." (para. 63). But as alleged by Better T.V.,
N.Y.Telco's representative purportedly tried to induce Suffolk to subscribe to channel
[*974] service. The statement was denied, however, and went without
further corroboration, although it appears that three other persons were
present (Tr. 3643). So no weight is placed upon this by the majority.
However, implying delaying tactics,
the majority opinion notes that "Despite a request for a pole attachment
agreement on October 15, 1965, a form of agreement was not submitted to the
cable operator until January 14, 1966. No explanation for that delay is
contained in the record." But in this connection, it is significant that
on October 27, 1965, N.Y.Telco was informed that certified copies of Suffolk's
incorporation papers requested by N.Y.Telco would shortly be provided; that on
November 3 the president of Unicom, Inc. informed N.Y.Telco that Unicom was
becoming the majority stockholder in Suffolk and requested that Suffolk's
request be renewed; and that on November 10, Suffolk requested pole attachment
agreements for additional areas. (para. 197, Initial Decision). In these
circumstances, with additional material being presented during the period, the
few months delay does not appear so unreasonable as to constitute the basis for
a finding of deliberate improper conduct. I am sure that I can easily
find similar gaps in the processing of this agency. And while I of course
strongly favor their elimination, my point is that no one would conclude on
such a flimsy basis that the agency had embarked on a deliberate course to
frustrate an applicant.
The gravamen of the majority's
argument therefore appears to come down to the one factor: that "there was
unrebutted testimony that a N.Y.Telco employee admitted that the telephone
company had in fact used the make-ready space on the poles to provide channel
service to Suffolk competitors and that "the evidence adduced by Suffolk
Cable together with N.Y.Telco's silence, compels a finding that N.Y.Telco had
in fact utilized Suffolk Cable's prepaid make-ready space," (para. 61),
thus disabling Suffolk from getting started in Eagle Estates.
The Examiner's findings and
discussion of this matter in para. 204, Initial Decision, bear repetition:
It appears from the evidence that
approximately 80 percent of the "leaseback" customer's facilities
provided by the telephone company in Eagle Estates are "lashed" to
the telephone company's existing plant, meaning, in effect, that the cable were
"bunched together" (Tr. 3660, 61). Apparently, therefore, not
all the space on the poles that was originally made available to Suffolk under
its made-ready could have been taken up by the "leaseback" system.
In footnote 31, para. 204, the
Examiner adds:
It is by no means clear from the
evidence that in fact any telephone company facilities were built in space made
ready for Suffolk. For there is also evidence that Suffolk's Chief Engineer
may have believed mistakenly that a 42 inch clearance was required, whereas the
pole attachment agreement only provided for a clearance of 12 inches between
cable lines (i.e., the "leaseback" customer's cable and Suffolk's
proposed cable) (Tr. 3642-43).
In any event, the majority
recognizes, "since the insurance policy was a prerequisite to the use of
the poles" and construction on behalf of Suffolk's competition commenced
prior to the time Suffolk had satisfied such requirements, "(they) might
not have been able to attach its cable sooner even if the telephone company had
acted with dispatch."
[*975] That is it -- the
sum total of the "course of conduct" upon which the majority relies
to reach the serious conclusion of deliberate discrimination. It is, I
submit, a thin gruel upon analysis -- one which reveals an ill-nourished
opinion against the preponderance of evidence marshaled by the Examiner.
There is no pattern of improper conduct, with isolated events taking on added
significance. Indeed, if one looks to the overall pattern, the Examiner's
finding in para. 164 presents an entirely different context -- one which bears
out Bell's stated policies:
N.Y.Telco's declared policy is to give
the CATV operator the choice of either constructing his own transmission
facilities or subscribing to telephone company CATV channel services.
Ninety such agreements have been executed by the telephone company in New York,
as opposed to fewer than 20 operators who use channel services.
Nation-wide, CATV operators have obtained 1,700 pole agreements and have in
only 74 cases taken the CATV channel service.
Finally, let us assume, arguendo,
that New York Telco was guilty of some misconduct. I again agree with the
Examiner:
... denial of the application at
issue, is far too harsh and further, that it is manifestly inequitable and
unfair, as well as unnecessary, to penalize bona fide customers of the
telephone company in any way. Initial Decision. para. 223
There is
not a scintilla of evidence implicating in any way Telco's customers. I
submit, therefore, that it is not proper to say that they are the beneficiaries
of the wrongful conduct -- ergo, they and perhaps their subscribers must also
suffer. Why should they, if innocent?
This Commission has the power under
4(i) to take all actions necessary or appropriate. We can devise remedies
here -- by placing conditions on the grant -- that do take into account the
alleged wrongful conduct and yet not punish the innocent customers. I do
not, however, find it necessary to dwell on this aspect, since I stress that it
is in my judgment a hypothetical situation: There is no wrongful conduct shown
to warrant any action by this Commission.
It is also worthy of mention that
this is a case of so-called first impression; and I believe, a case of last
impression. We now have a Section 214 decision and an announced policy
change toward pole attachments (AT&T, supra.) Accordingly, the problems
engendered herein which were the by-product of a period of great uncertainty
are unlikely to reappear.
The best the Commission can or
should do with this case, is leave it alone. I would therefore grant the
applications, without conditions and thereby affirm the Hearing Examiner in
Hyde Park and Brookhaven.
APPENDIX:
APPENDIX
RULINGS ON JOINT EXCEPTIONS OF
TELEPROMPTER AND STERLING
|
Exceptions |
Rulings |
|
1 |
Denied.
The statement is not an exception within the contemplation of Section
1.277(a) of the Rules. |
|
2, 3, 4, 5,
6, 7, 10, 19, 20, 27, 30, 31, 32, 33, 34, 36, 38, 41, 42, 50, 51, 54, 55, 56,
59, 62, 63, 65, 66, 73, 75, 89, 92, 98, 101. |
Denied.
The matters raised by the exceptions are not of decisional significance. |
|
8 |
Denied.
The Examiner's findings accurately reflect the law of the State of New York. |
|
9 |
Granted.
Footnote 7 is improper since it is based on a newspaper article published
after the close of the record. The record further establishes that the Mayor's
Task Force gave careful study to various alternatives for the regulation of
CATV. |
|
11 |
Granted
to the extent that subparagraph (a) of paragraph 18 of the Initial Decision
is amended to show that the Task Force recommended that cable television service
be made available to any home in New York City wishing to subscribe within
the next two to three years. The exception is denied in all other
respects for lack of decisional significance. |
|
12 |
Denied.
The findings accurately reflect the relationship between Empire City Subway
and the City. The conclusion in the last sentence may be drawn from the
evidence of record. |
|
13, 14,
16, 18 |
Denied.
The Examiner's findings accurately reflect the evidence of record. The
additional findings requested are not of decisional significance. |
|
15, 21,
22, 35 |
Denied.
The Examiner's findings are supported by and accurately reflect the evidence
of record. |
|
17 |
Granted.
The parenthetical phrase in paragraph 26 of the Initial Decision is revised
to read "(north of 86th Street on the East Side and 79th
Street on the West Side.)" |
|
23 |
Granted.
N.Y.Telco must construct separate facilities to provide Comtel with CATV
channel service. The facilities cannot be considered part of
N.Y.Telco's "regular plant". |
|
24 |
Denied.
The exception does not "point out with particularity alleged errors in
the decision" as required by Section 1.277(a) of the Rules. |
|
25 |
Denied.
N.Y.Telco is prepared to offer the service described in its tariff. The
findings in paragraph 45 with respect to rates are supported by the record. |
|
26 |
Denied.
It is reasonable to infer that N.Y.Telco is concerned about its ability to
serve the expanding market for CATV. |
|
28 |
Granted
to the extent that the exception challenges the Examiner's statement that the
choice of whether to take common carrier channel service or to undertake the
independent installation of a CATV system in New York City is "entirely
the CATV operator's --". That choice is affected by the lack of conduit
space for the indepnedent operator (See application File No. P-C-7282), and
the fact that Comtel did not have a City franchise, and other factors recited
in the Decision. The exception is denied in all other respects for lack
of decisional significance. |
|
29 |
Denied.
The examiner's findings of fact are supported by the record and the economic
benefit to N.Y.Telco is not of decisional significance in the absence of a
showing of discriminatory conduct. |
|
37 |
Denied.
A representative or Comtel testified that Comtel would eventually originate
programming to complete with Stering, although he admitted that no plans had
been formulated for program origination. |
|
39, 48 |
Denied.
The exceptions are not supported by record citations as required by Section
1.277(a) of the Rules. |
|
4043, 44,
46, 49, 58, |
Granted.
Sterling is serving 343 of the approximately 1000 residential blocks within
its service area, with 30 blocks wired but not energized and an additional
100 blocks designated for service. |
|
70 |
Denied.
The exceptions failed to state with specificity, the omitted or erroneous
evidence and findings. See Section 1.277(a) of the Rules. |
|
45 |
Denied.
N.Y.Telco's tariff was not specifically in issue in this proceeding and the
record does not substantiate a finding of improper conduct in Manhattan. |
|
47 |
Granted.
Approximately 60 percent of the ducts in Manhattan are occupied or rented and
N.Y.Telco rents or occupies approximately 85 percent of the ducts in use. |
|
52, 53,
74 |
Denied.
The Examiner's findings are supported by the evidence of record. |
|
57 |
Denied.
The exception fails to state with specificity the omitted evidence and why
the Examiner's findings were in error. See Section 1.277(a) of the
Rules. |
|
60 |
Granted
to the extent that the evidence establishes that N.Y.Telco has greater access
to information enabling it to more readily determine the location of
available duct space; and denied in other respects since the record supports
the remaining statements of the Examiner. |
|
61 |
Denied.
The saturation of subterranean duct space is of decisional significance in
this proceeding. |
|
64 |
Denied.
The Examiner's findings accurately reflect the evidence of record and the
evidence allegedly omitted is not of decisional significance. |
|
67 |
Denied.
The evidence substantiates that the rental of maintenance ducts is not a
discriminatory practice and that Sterling itself utilizes maintenance ducts. |
|
68 |
Denied.
The evidence of record establishes a valid basis for reserving maintenance
ducts. |
|
69 76,
77, 78, 79, 80, |
Denied.
The Examiner recognized that reliance on mid-block crossing entails
inconvenience and greater expense. |
|
81, 82,
83, 85, 86, 88, 90, 94. |
Denied.
The exceptions failed to set forth with specificity the alleged errors in the
Examiner's findings and conclusions. See Section 1.277(a) of the Rules. |
|
84 |
Granted
In Substance. Our Decision takes into account past conduct by N.Y.Telco
with respect to pole attachment policies which tended to favor its tariff
service customers. |
|
87 |
Denied.
The matters discussed by the Hearing Examiner were pertinent to the
disposition of this proceeding. |
|
91 |
Granted
to the extent that the evidence of record indicates that in the areas outside
the City of New York, N.Y.Telco engaged in improper conduct. The
remainder of the exception is denied for failure to state with specificity
the alleged errors in the Examiner's findings and conclusions as required by
Section 1.277(a) of the Rules. |
|
93 |
Granted.
The evidence established that N.Y.Telco engaged in a pattern of behavior
designed to discourage pole attachment agreements in favor of its channel
tariff service offering. |
|
95 |
Denied.
Footnote 36 is an accurate statement of the law. |
|
96 |
Denied.
Footnote 37 is an accurate statement of the law. |
|
97 |
Granted
for the reasons set forth in our Decision. |
|
99 |
Granted
In Substance. Although the Commission recognizes that there are public
interest factors which militate against the disruption of existing services,
these factors do not outweigh the substantial public interest in preventing
one guilty of misconduct from benefiting from his wrongdoing. The facts
warrant the denial of some of N.Y.Telco's applications but appropriate steps
have been taken to keep the inconvenience to the public at a minimum. |
|
100 |
Granted.
As set forth inour Decision, we find that acts and statements of N.Y.Telco
employees muct be im Puted to their employer in the circumstances of this
case.$102 |
|
Denied.
The exception fails to state with certainty the |
|
|
|
errors
contained in footnote 40. See Section 1.277(a) |
|
|
of the
Rules. |
|
103 |
Granted
to the extent that our Decision recognizes the public interest factors in the
City's regulatory policy. The exception is denied in other respects for the
lack of decisional significance. |
|
104 105,
106, 107, |
Granted.
The grant of the application for all of the facilities to serve Comtel would
tend to undermine the City's regulatory objectives. |
|
113 108, 109,
110, 111, |
Granted
to the extent that the matters raised in the exceptions are consistent with
our Decision which discusses in detail the competitive situation in New York City;
and denied in other respects as without decisional significance. |
|
112 |
Denied.
In light of our Decision herein, the matters raised by the exceptions are
without decisional significance. |
|
114 |
Denied.
The exception is general and fails to conform with Section 1.277(a) of the
Rules. |
Note: The supplemental proposed
findings attached to the exceptions have not been considered since they are based
on proffered matter which is not part of the record in this proceeding.
RULINGS ON SEPARATE EXCEPTIONS OF
TELEPROMPTER
|
1, 2 |
Denied.
The exceptions fail to state with specificity the alleged errors in the
decision. See Section 1.277 (a) of the Rules. |
|
|
|
RULINGS
ON SEPARATE EXCEPTIONS OF STERLING |
|
|
1, 2 |
Denied.
The matters raised in the exceptions are not of decisional significance. |
|
|
3 |
Denied.
The record does not support a finding of improper conduct within Manhattan. |
|
|
4 |
Denied
for failure to comply with the requirements of Section 1.277(a) of the
Rules. In any event, the matter of conditions is fully treated in our
Decision. |
|
|
RULINGS
ON EXCEPTIONS OF THE CITY OF NEW YORK |
|
|
|
1, 2, 3,
5, 6, 7, 8, 9 |
|
|
|
Denied.
The matters raised by exceptions are not of decisional significance. |
|
|
|
4 |
Denied.
In its report the Board of Estimate termed the CATV's performance as "somewhat
disappointing." The Board recommended an extention of the franchises in
order to permit a proper evaluation of the franchisees' CATV operations. |
|
|
10 |
Granted
to the extent that the exception raises matters pertaining to the benefits of
competition which are treated in our Decision; but denied in other respects
since the remaining matters raised in the exception are not of decisional
significance. |
|
|
11 |
Granted
to the extent that our Decision: denies certain of the applications for Section
214 certificates of public convenience and necessity; recognizes the
limitations on the benefits to the public of competition between Comtel on
the one hand and TelePrompTer and Sterling on the other, and has reversed or
qualified the findings and conclusions of the Examiner as to the advantages
and disadvantages of competition: and recognizes and takes into account the
regulatory program of the City, and that such program is likely to be
undermined by a grant of the applications to provide additional channel
service to Comtel. In all other respects, the exception is denied for
the failure to point out with particularity the errors alleged in the Initial
Decision as required by Section 1.277(a) of the Rules, and because the
remaining matters raised therein are not of decisional significance or are
inconsistent with the conclusions set forth in the Decision herein which are
supported by the record. |
|
|
RULINGS
ON EXCEPTIONS OF COMTEL, INC. |
|
|
|
1, 6 |
Denied.
The activities of CATV Enterprises are not germane to the disposition of the
applications for authority to render service in Manhattan. |
|
|
2, 4 |
Denied.
The proffered evidence was properly excluded as not relevant or material to
the disposition of the designated issues. |
|
|
3 |
Denied.
The newspaper accounts were hearsay and not of decisional significance. |
|
|
5, 10 |
Denied.
The exceptions do not raise matters of decisional significance. |
|
|
7, 8, 11 |
Denied.
The Examiner covered the subject of competition in his Initial Decision and
the additional findings requested would not affect the outcome of this case
in the light of the findings and conclusions in our Decision concerning
competition. |
|
|
9 |
Denied.
The Examiner adequately discussed the subjects raised in the exception and
his findings are supported by the record; the additional findings requested
are not of decisional significance. The Examiner's findings already
indicate that Sterling has been able to achieve access to some buildings
without payment of a fee; that Comtel pays a 10% rental fee to landlords; and
that Comtel has offered to pay a franchise fee to the city. |
|
|
12, 13 |
Granted.
Insofar as the Section 214 authorization is granted herein for continued
operation of existing facilities, the two year limitation is vacated. |
|
|
14 |
Granted.
With respect to the Section 214 authorization for the continued operation of
existing facilities, the condition complained of is vacated. |
|
|
RULINGS
ON EXCEPTIONS OF BETTER T.V., INC.$1 |
|
|
|
Denied.
The exception does not raise matters of deci- |
|
|
|
|
sional
significance. |
|
|
2 |
Granted
to the extent that the Examiner's finding as to competition has been
qualified in our Decision (para. 44); but denied in other respects since the
Examiner's remaining statements have record support. |
|
|
3 |
Granted.
The finding of the Examiner concerning the N.Y.Telco employee's statement as
being an isolated incident and not pursuant to express or implied orders is
not supported by the record. |
|
|
4 |
Granted.
See paragraph 53 of our Decision herein. |
|
|
5, 6 |
Denied.
The exceptions do not raise matters of decisional significance. |
|
|
7 |
Granted.
N.Y.Telco was on notice that the applicability of Section 214 to the type of
construction involved herein was under investigation by the Commission. |
|
|
8 |
Denied.
The Examiner's finding is not inconsistent with the evidence of record. |
|
|
9, 15 |
Denied
for the reasons set forth in paragraphs 48-50 of our Decision concerning
N.Y.Telco's insurance requirements. |
|
|
10 |
Denied.
The exception contains numerous requests for findings, some of which were
made by the Examiner, some are not supported by the record and others are
without decisional significance; and the exception therefore clearly violates
the provisions of Section 1.277(a) of the Rules. |
|
|
11 |
Granted
to the extent set forth in our Decision and for the reasons therein stated. |
|
|
12 |
Granted
insofar as Hyde Park is concerned for the rea- |
|
|
sons set
forth in our Decision concerning N.Y.Telco's |
|
|
|
|
improper
conduct. |
|
|
13 |
Granted
to the extent that the proposed conclusion is consistent with our Decision
herein but denied to the extent that it implies a certification application
may be denied solely because competition from the channel service customer
may have an adverse financial impact on Better T.V.'s operation without
regard to public interest considerations. See paragraph 69 or our
Decision. |
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14 |
Granted.
To the extent that the requested conclusion is consistent with our Decision
herein and for reasons therein stated. |
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16, 18,
19 |
Denied.
In light of our Decision herein, the matters raised by the exceptions are
without decisional significance. |
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17 |
Denied.
The exception fails to allege with specificity the errors in the Examiner's
conclusions. See Section 1.277 (a) of the Rules. |
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20 |
Granted
for the reasons set forth in our Decision insofar as the exception relates to
Hyde Park, New York. |
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RULINGS
ON EXCEPTIONS OF SUFFOLK CABLE CORPORATION |
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1, 2 |
Denied.
The exceptions fail to state with particularity the alleged errors in the
Decision. See Section 1.277 (a) of the Rules. |
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RULINGS
ON EXCEPTIONS OF THE CABLE TELEVISION BUREAU |
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1 |
Granted.
The evidence indicates that N.Y.Telco personnel attempted to discourage pole
attachments in both Hyde Park and Poughkeepsie. |
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2 |
Denied.
The record does not support the requested finding. See paragraph 50 of
our Decision. |
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3 |
Granted.
The record supports a finding that N.Y.Telco delayed Better T.V. by not
responding to its request of March 20, 1967, to permit construction. |
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4 |
Granted.
See paragraph 55 of our Decision. |
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5, 6 |
Denied
for the reasons set forth in paragraph 49 of our Decision. |
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7 |
Granted.
There is no basis for characterizing the period between December 20, 1965,
when the franchise was granted to WEOK Broadcasting and February 1, 1966. when
it applied for a pole attachment agreement as an unnecessary delay. |
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8 |
Granted.
The record indicates that statements made by N.Y.Telco personnel, implying
that tariff service could be obtained more expeditiously than pole
attachments, influenced Weok broadcasting's request for channel service. |
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9 |
Denied.
The evidence indicates that N.Y.Telco would have accepted a statement in lien
of a franchise and there is no evidence that WEOK Broadcasting ever sought a clarification
from N.Y.Telco concerning alternative requirements prior to the hearing. |
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10 |
Denied.
The exception is not of decisional significance. |
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11 |
Granted.
In light of N.Y.Telco's improper conduct there is no basis for concluding that,
even if made, a statement by a N.Y.Telco employee that it would delay any
competitor from gaining access to its poles was a "facetious puff." |
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12 |
Granted.
The evidence establishes that a N.Y.Telco employee admitted that it had
constructed facilities in Suffolk Cable's make-ready space. |
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RULING ON
EXCEPTIONS OF N.Y.TELCO |
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1 |
Granted
with respect to the facilities which have been certificated, but denied as
moot with respect to facilities for which the certification applications were
denied. |
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2, 3 |
Granted
to the extent, and subject to the conditions, specified in our Decision
herein. |
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4, 5, 6,
7 |
Granted.
While we are not attaching the specified conditions to the authorizations issued
herein, N.Y.-Telco is placed on notice that it is expected to administer its
stated policy of making conduit space available in a non-discriminatory
manner. |
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9 |
Denied.
The exception fails to specify with the particularity required by Section
1.277(a) of the Rules the alleged errors in the Initial Decision.
Furthermore, the Examiner properly rejected N.Y.Telco's argument that only
competitive impact on a common carrier is a relevant consideration, and the
relevant factor of competition have been fully treated in our Decision
herein. |
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EXCEPTIONS
IN APPENDIX I TO EXCEPTION 8 |
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1, 3, 4,
5 |
Denied.
The exceptions do not raise matters of decisional significance. |
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2 |
Granted.
Sterling has been able to secure access to some buildings without payment of
a rental fee. |
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