Source: http://ny.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20021021_0000337.SNY.htm/qx
Timestamp: 2017-05-29 07:53:36
Document Index: 329869092

Matched Legal Cases: ['§ 212', '§ 212', '§ 76', '§ 76', '§ 76', '§ 76', '§ 76', '§ 76', '§ 76', '§ 76', '§ 76', '§ 76', '§ 76', '§ 215', '§ 591', '§ 221', '§ 546', '§ 227', '§ 216', '§ 228', '§ 76']

| CSC HOLDINGS v. WESTCHESTER TERRACE AT CRISFIELD
CSC HOLDINGS v. WESTCHESTER TERRACE AT CRISFIELD
CSC HOLDINGS, INC., PLAINTIFF,V.WESTCHESTER TERRACE AT CRISFIELD CONDOMINIUM; WESTCHESTER TERRACE AT CRISFIELD CONDOMINIUM ASSOCIATION; RICHARD NEUMAN, AS PRESIDENT OF WESTCHESTER TERRACE AT CRISFIELD CONDOMINIUM ASSOCIATION; AND DIGITECH TV CORP., INC., DEFENDANTS.
DECISION AND ORDER GRANTING IN PART AND DENYING IN PART THE
PARTIES' CROSS MOTIONS FOR SUMMARY JUDGMENT
Both sides in this case have moved for summary judgment. Most
of the issues raised by the cross-motions are amenable to
summary disposition. However, four claims remain, as well as one
counterclaim. Thus, I cannot dispose of the case on motion.
Plaintiff is the operator of "Cablevision". It holds a
franchise from, inter alia, the City of Yonkers in Westchester
County, to operate a "cable television system." A cable
television system is defined, at Public Service Law § 212(2),
. . . . .any system which operates for hire the
service of receiving and amplifying programs
broadcast by one or more television or radio
stations or any other programs originated by a
cable television company or by any other party, and
distributing such programs by wire, cable,
microwave or other means, whether such means are
owned or leased, to persons in one or more
municipalities who subscribe to such service. Such
definition does not include: (a) any system which
serves fewer than fifty subscribers; or (b) any
master antenna television system.
Westchester Terrace at Crisfield ("WT") is a three story, 60
unit condominium apartment building located in Yonkers, New
York. Westchester Terrace at Crisfield Condominium Association
("WTA") is a voluntary association formed by WT's
resident-owners and appointed as their agent to manage the
common areas of the building. Richard Neuman is the President of
Defendant Digitech TV Corp., Inc., operates a satellite master
antenna television (SMATV) service known as DirecTV. Unlike the
traditional cable television system operated by plaintiff, which
delivers video programming to a large community of subscribers
though coaxial cables laid under city streets or along utility
lines, DirecTV receives a signal from a satellite through a dish
located on a rooftop, and then retransmits the signal by wire to
units within a building or complex of buildings. FCC v. Beach
Communications, Inc., 508 U.S. 307, 311, 113 S.Ct. 2096, 124
L.Ed.2d 211 (1993) (defining SMATV system). New York Public
Service Law § 212(5) defines a "master antenna television
system" as:
. . . any system which serves only the residents of
one or more apartment dwellings under common
ownership, control or management, unless such system
uses facilities located in a public right of way to
As noted above, a master antenna television system is not a
cable television system within the meaning of the Public Service
Law; indeed, the law expressly states that the two are mutually
exclusive ("cable television system. . . . does not include
. . . any master antenna television system"). As a result,
Digitech is not required to obtain a franchise from a
municipality prior to installing its equipment at a condominium
complex like Westchester Terrace.
The Agreement at Issue
In 1995, WT entered into an Access Agreement ("Agreement")
Cablevision Systems Corporation (now known as CSC Holdings),
authorizing CSC to install and update a telecommunications
system for the use of occupants of the 66 Crisfield Street
building. For that purpose, the Agreement granted CSC "the
non-exclusive right to provide telecommunications services to
the Premises by placing, maintaining, affixing, and attaching
cables, wires, equipment, molding and appurtenant devices
(hereinafter `Equipment') through, in or on the Premises."
(Emphasis added) WT retained the right to approve plans for the
installation, and CSC agreed to restore the premises following
the installation. Per paragraph 2 of the Agreement, WT agreed to
afford CSC reasonable access to the building from time to time
for the purpose of installing, maintaining or removing the
Equipment. Per Paragraph 8, the Equipment "shall remain the
property of the Company, and nothing herein shall be deemed to
create any property interest herein in" WT or anyone else.
Paragraph 12 states, "[T]he parties each agree that this
Agreement shall remain in full force and effect from the time
the Premises is rewired and reactivated with the Company's
signal until the termination of the Company's franchise with the
City of Yonkers including any extensions or renewals thereof."
Pursuant to the parties' Agreement, CSC installed the
Equipment at 66 Crisfield and has provided cable service to the
building continuously from that day to this using that
There is a utility closet on each floor of the building.
Inside each utility closet is a lock box, known by the name
Multiple Dwelling Unit Box, or MDU. The MDU's were installed by
CSC and are under CSC's control. The MDU is the distribution
point, transferring the signal from the main cable running into
the building to the individual coaxial cables, each of which
serves an apartment. Each MDU has inside it many "taps," and the
cables that serve each individual apartment are connected to one
of the taps inside the locked Box. These wires emerge from that
box to enter a metal conduit affixed to the wall inside the
utility closet. That conduit runs a short distance into a cavity
inside the sheetrock hallway ceiling. Once the cable wiring is
inside the ceiling cavity, the metal conduit ends. The wire
servicing an individual subscriber runs inside the ceiling
cavity to a point where it penetrates the sheetrock demising
wall between the hallway and the apartment it serves. There are
21 apartments on each floor of the building, so there are a
total of 63 points where the wire penetrates the sheetrock
demising wall between the hallway and each of the apartments in
The MDU and all the wiring that runs out of it is "Equipment"
within the meaning of the contract and is the property of
Home Run Wiring vs. Home Wiring
The Federal Communications Commission (FCC) has established
rules that govern the use and disposition of wiring inside
multiple dwelling buildings such as WT. The FCC divides the wire
that runs from the MDU into an individual apartment into two
segments. The wire running from the MDU (which is where the
cable becomes dedicated to an individual unit within the
building) to a point known as the "demarcation point" is
categorized as "home run wiring." 47 C.F.R. § 76.800(d). From
the demarcation point to the back of the resident's television
set, the wire is categorized as "home wiring."
47 C.F.R. § 76.76.5(II). A somewhat crude way of explaining the difference
between home and home run wiring is that home run wiring is the
cabling located in the
common areas of the building, whereas home wiring is located
primarily within the subscriber's apartment or in the common
area immediately adjacent thereto.*fn1
Under the rules, the demarcation point is presumptively
located at a point that is twelve inches outside the point where
the wire enters the apartment. 4 C.F.R. § 76.5(mm)(2). However,
if that point is "physically inaccessible" — which means that
obtaining access to the wiring at that point would require
"significant" modification or damage to "existing structural
elements" and would add "significantly" to the "physical
difficulty or cost of accessing a subscriber's home wiring,"
47 C.F.R. § 76.5(mm)(4) — then the demarcation point moves to "the
closest point at which the wiring becomes physically accessible
that does not require access to the subscriber's unit."
47 C.F.R. § 76.5(mm)(5); see also Report and Order and Second
Further Notice of Proposed Rulemaking, CS Dkt. No. 92-260, MM
Dkt. No. 92260, FCC No. 97-376 (Oct. 17, 1997), (hereinafter
"FCC Report"), ¶ 150. The FCC has determined that "wiring
embedded in brick, metal conduit or cinder blocks with limited
or without access openings would likely be `physically
inaccessible,' wiring enclosed within hallway molding would
not." Id.
The distinction between "home wiring" and "home run wiring"
and the location of the demarcation point between the two is
important. In 1996 and 97 the FCC issued a series of regulations
(known as the Home Wiring Rules and the Home Run Wiring Rules)
to govern the disposition and use of coaxial cable owned by a
service provider (the incumbent service provider) that either
has lost or is about to lose the legal right to service
customers in a multi-family building.
The "home wiring" rules (which are found at
47 C.F.R. § 76.802(a)(2)) govern disposition of the "home wiring" when an
individual customer within a multi-family building terminates
its service with the incumbent provider in order to acquire
service from a competitor. In such a case, before a cable
operator can remove existing wiring it owns, the customer must
be given an opportunity to purchase the "home wiring" from the
incumbent (in this case, CSC) at "replacement cost," so that the
competing vendors can access its premises without unduly
impacting the condition of their homes. If the customer declines
to purchase the home wiring, the incumbent service provider must
remove it within seven days. The "home wiring" rules recognize
the installer's ownership rights in the coaxial cables it
installed and offer compensation whenever an individual consumer
wishes to use those cables to obtain alternative service.
By their terms, the home wiring rules apply only when there is
a "voluntary termination of cable service by an individual
subscriber in a multiple-unit installation." FCC Report ¶¶
122-123. Since residents of multiple-family dwellings ordinarily
obtain and cancel their own cable service, a condominium
association or coop board cannot ordinarily exercise the
subscriber's right to terminate service; that right is reserved
to the individual customer. Indeed, the FCC specifically
declined to adopt a proposed rule that would have permitted
building owners and condominium associations (like WTA) to act
as tenants' agents in providing notice of intent to
change service providers for their individual units. FCC Report
at ¶ 50.
The "home run wiring" rules, 47 C.F.R. § 76.804, as the name
suggests, govern the disposition of home run wiring when an
incumbent provider is about to be ejected from a building. There
are two different types of home run wiring rules: rules that
govern disposition of cabling on a building-wide basis
("Building-by Building Disposition") and separate rules that
govern disposition of home run wires on an individual subscriber
basis ("Unit-by-Unit Disposition").
Under the Building by Building rules, should the owner of the
building (in this case, defendant WTA) wish to use the existing
home run wiring to provide all the residents in the building
with service from another provider, it must give the incumbent
90 days' notice that the incumbent's access to the building will
be terminated. The incumbent must then elect to do one of the
following: (1) remove its wiring and restore the building to its
original condition (within a certain number of days); (2)
abandon the wiring without disabling it at the end of the 90 day
notice period; or (3) sell the wiring at a privately negotiated
price, either to the building owner or to the alternative
service provider. 47 C.F.R. § 76.804(a).
As an alternative to contracting with a new provider for the
entire building, the building owner may permit a variety of
service providers to compete for the right to serve individual
units. In that case, upon sixty days' written notice, the
incumbent (which will no longer be servicing anyone in the
building) may choose to (1) remove the wiring and restore the
premises; (2) abandon the wiring without disabling it; or (3)
sell it to the building's owner. This is the "Unit by Unit"
approach. 47 C.F.R. § 76.804(b).
Under either scenario, if the parties are unable to agree on a
price, the incumbent must either remove the wiring, abandon it,
or submit the issue of price to binding arbitration.
Before EITHER the Building by Building or Unit by Unit Home
Run Wiring rules can be invoked, the incumbent service provider
must have lost, or be about to lose, its right to remain on the
premises against the wishes of the building's owner (or the
condominium association). If the incumbent retains the right to
service so much as one customer in the building, these rules
simply do not apply. The FCC Report makes this crystal clear at
¶ 69, which states:
As noted above, the procedural mechanisms we are
adopting will apply only where the incumbent provider
no longer has an enforceable legal right to maintain
its home run wiring on the premises against the will
of the MDU owner. These procedures will not apply
where the incumbent provider has a contractual,
statutory or common law right to maintain its home
run wiring on the property. We also reiterate that we
are not preempting any rights the incumbent provider
may have under state law. In the building-by-building
context, the procedures will not apply where the
incumbent provider has a legally enforceable right to
maintain its home run wiring on the premises, even
against the MDU owner's wishes, and to prevent any
third party from using the wiring. In the
unit-by-unit context, the procedures will not apply
where the incumbent provider has a legally
enforceable right to keep a particular home run wire
dedicated to a particular unit (not including the
wiring on the subscriber's side of the demarcation
point) on the premises, even against the property
owner's wishes.
Furthermore, only when the owner or the condominium
association elects to dispose of the incumbent's entire stock of
home run wiring under the Building by Building Disposition rules
can an entity like WTA exercise home wiring rights on behalf of
a building's residents. In such a case, 47 C.F.R. § 76.804(a)(4) of
the home run wiring rules permits the building owner or
condominium association to acquire the home wiring on behalf of
all of the building's residents. This permits an owner or condo
association to end the incumbent's access to and service within
the entire building via a single procedure. However, should the
building owner (a) have the right to invoke the home run wiring
rules and (b) choose the unit by unit method, then each
individual subscriber must take care of its own home wiring
under the home wiring rules. The FCC took care to state that it
was not creating "any new right of MDU owners and alternative
providers to act on behalf of subscribers in terminating
service." FCC Report ¶ 50.
The procedures set forth in the home run wiring rules apply in
every case where the rules are properly invoked unless and until
the incumbent provider obtains a court ruling or an injunction
"enjoining its displacement" within forty-five days following
the initial notice "of eviction." 47 C.F.R. § 76.804(c). Thus, if
an incumbent believes that the building owner has no right to
force it to leave the premises, it has ample time, following
invocation of the rules, to obtain a court order adjudicating
its right to continue providing service on the premises. That
the only type of injunction contemplated by the rules is an
injunction against the "displacement" (i.e., eviction) of the
incumbent provider from the premises is evident from the FCC
Report, which states, "an incumbent's failure to obtain a state
court injunction justifies a presumption that the incumbent no
longer has an enforceable legal right to remain on the
premises." FCC Report at ¶ 77.
Both the "home run" and the "home" wiring rules balance the
economic rights of the cable companies with the consumer's right
to the benefits of free an open competition for
Laws Relevant to Cable TV Franchise Operation in New York
To operate a cable television franchise within a municipality
in New York State, a cable system must have a franchise granted
by that municipality and approved by the Public Service
Commission (PSC). Pub. Serv. Law (PSL) §§ 215(d)(5), 219(1),
221(1). An application to renew a franchise must be directed in
the first instance to the municipality, which holds hearings and
makes a public determination whether to grant the renewal. 9
NYCRR § 591.3(c)(1). The PSC must also approve any renewal. PSL
§ 221(1). To prevent a municipality from unfairly denying
renewal of a franchise for political reasons, Congress requires
local franchising authorities to consider certain issues on a
prescribed timetable and limits the reasons why a franchise
cannot be renewed. 47 U.S.C. § 546(c)(1) and (3). However, "A
franchise shall terminate at the expiration of its term or
otherwise in accordance with the provisions thereof, unless,
prior thereto, the commission otherwise orders." PSL § 227(1).
The same section of the PSL provides that the PSC may enter such
an order (i.e., an order that a franchise shall not terminate at
the expiration of its term or otherwise in accordance with its
provisions) only if it makes certain types of findings after
notice and a public hearing. No such hearing has ever been held
with respect to CSC's operation in Yonkers and no such findings
made by the PSC relative to this particular franchise,
However, PSL § 216(1) empowers the PSC to issue and amend such
orders as it finds necessary or appropriate to carry out the
purposes behind the State's laws regulating cable television
companies. The PSC has long followed the practice of issuing
temporary orders of authority (TOA) in instances when a cable
company's municipal franchise was about to expire but the local
authority had not timely acted on the franchise renewal
application. Each TOA indicates that the PSC "has determined
that it would be in the public interest to grant Temporary
Operating Authority so that the [operator] may continue to
provide cable television services during the franchise renewal."
(Ex. D to Plaintiffs Rule 56.1 Statement.) The TOAs require the
cables operators to continue paying franchise fees to the
municipal government and address issues of insurance
indemnification and maintenance. According to Chad Hume, Deputy
Director for Cable, Office of Communications at the PSC, the PSC
issues hundreds of TOAs annually to cable system operators, and
has done so for the past 20 years. Fully 80% of all existing
franchises in the State of New York require one or more TOAs to
continue in operation. DPS maintains a practice of monitoring
franchise expiration dates and issuing TOAs to ensure that
franchises do not lapse. This procedure has been followed for
over twenty years, and has never been the subject of any legal
challenge. (Hume Aff. ¶¶ 3-7)
Public Service Law § 228, New York's "cable access statute,"
provides in pertinent part as follows:
No landlord shall (a) interfere with the installation
of cable television facilities upon his property or
premises, except that a landlord may require: (1)
that the installation of cable television facilities
conform to such reasonable conditions as are
necessary to protect the safety, functioning and
appearance of the premises, and the convenience and
well being of the other tenants;. . . . . . . . .
By its terms this law addresses one thing only: the installation
of cable television facilities. It limits landlords (like WTA)
from preventing a cable operator from coming into a dwelling in
New York State, but permits the landlord to have reasonable
requirements to prevent disruptions to the premises resulting
from installation.
CSC's Yonkers Franchise: Current Status
The Franchise Agreement between CSC and the City of Yonkers
was due to expire by its terms in December 1996. Since that
time, CSC has provided cable television service to Yonkers
residents pursuant to a series of TOAs issued by the PSC. These
TOAs extend CSC's operating authority for six additional months
on the terms and conditions that were in effect prior to
December 1996. The City of Yonkers has taken no affirmative
steps to prevent the PSC from issuing these TOAs, or to prevent
CSC from sending its cable signals into Yonkers. Indeed, Yonkers
has willingly accepted millions of dollars in franchise fees
from CSC throughout the five and a half year period while CSC
has been operating pursuant to TOAs. Similarly, the PSC has not
threatened to stop issuing TOAs in order to goad Yonkers into
taking action on CSC's renewal application. Doing business
pursuant to TOA has become the modus operandi for CSC in Yonkers
— as it is elsewhere in the State. (Affidavit of Chad G. Hume,
Deputy Director for Cable, Office of Communications, New York
State Department of Public Service)
THE DISPUTE THAT GIVES RISE TO THIS ACTION
Direct TV Comes to 66 Crisfield
On or about April 23, 2001, WTA, by counsel, advised CSC that
Digitech, a
satellite television service provider affiliated with DirectTV
would be providing video programming to WT residents. In the
same letter, counsel for WTA further advised CSC that Digitech
planned to use CSC's Equipment — specifically identified as its
"home run wiring" — to provide service to residents of WT. The
letter served notice "that the Association hereby invokes the
procedures set forth in 47 C.F.R. § 76.804(b) for the `unit by
unit' disposition of home run wiring in the Property."
The defect in this letter is obvious. The letter nowhere
asserts that CSC has lost, or is about to lose, its right to
provide cable service to WT residents. Indeed, the letter
specifically states that Digitech will only be using the home
run wiring (which it refers to as "cable drops," a term that
nowhere appears in the FCC's rules) "that are not actually in
use to serve any of your customers." Thus, the letter concedes
that CSC had a legally enforceable right to continue servicing
WT residents. That being the case, the home run wiring rules had
no applicability, and their invocation was a nullity.
Nonetheless, CSC had only a non-exclusive license to provide
telecommunications services at 66 Crisfield. It was, therefore,
in no position to object to Digitech's arrival as a competitor
on the premises. And it did not do so. However, CSC strongly
objected to Digitech's proposed use of CSC's Equipment (which
CSC continued to own, per the Agreement) to carry its signal
from the satellite to the apartments of its new subscribers. In
other words, CSC objected to co-location.
By letter dated May 22, 2001, CSC protested that the "home run
wiring rules" invoked by WTA did not apply to CSC, for the
obvious reason that it still had the right to provide service in
the building, under the Access Agreement and under New York
State Law ...