Opinion ID: 1894562
Heading Depth: 1
Heading Rank: 2

Heading: NYT Cable TV v. Homestead at Mansfield, Inc.

Text: This matter involves three separate appeals, consolidated by the Appellate Division and arising out of the efforts by NYT Cable TV (NYT), the authorized cable operator in Mansfield Township, to install its cable facilities in an 1187-unit planned adult community developed by Homestead at Mansfield, Inc. (Homestead). In addition to Homestead, defendants include the Homestead at Mansfield Homeowners Association (the Association), and the officers and owners of Homestead, Michael Laino and Daniel Quigley. A proposed feature of the Homestead development was a two-way cable television network that would provide normal cable television programming by linking the units with an SMATV system, and would also permit the owners to transmit signals from their units to central locations in the development. Thus, the proposed SMATV system would enable unit owners, for example, to communicate with the development's security staff to summon medical or emergency assistance. When Homestead initially received a communication from NYT seeking access to the development to install its cable equipment, it advised NYT that it desired a two-way cable system. NYT offered to install a two-way system, but one that did not offer all of the features contemplated by Homestead. Communication between Homestead and NYT did not resolve the issue. In May 1982, Homestead advised NYT that its proposed system was inadequate, that Homestead would proceed to install its own SMATV system, and that NYT would not be afforded access to the development to install its cable equipment. Homestead formed its own cable television company in 1983, which began development of the SMATV system at a projected cost of $175,000 to $200,000. In early 1984 NYT resumed its effort to gain access to the Homestead development. When Homestead persisted in refusing access, NYT instituted an action in the Chancery Division claiming an absolute right of access under N.J.S.A. 48:5A-49 and seeking to enjoin Homestead from interfering with such access. This action resulted in an order entered in July 1984 that denied all injunctive relief, determined NYT's right of access to be subject to terms and conditions to be prescribed by the BPU, and transferred the matter to the BPU for further proceedings. After the July 1984 order was certified as a Final Judgment, defendants appealed to the Appellate Division. In reliance on the Chancery Division's ruling that the BPU should determine the conditions of access, NYT initiated a separate access proceeding against defendants before the BPU's Office of Cable Television. This matter was referred to the Office of Administrative Law as a contested case, and a prehearing order characterized the issues as follows: (1) whether NYT was entitled to access to the development; (2) whether the BPU could grant immediate access or could only authorize NYT to proceed under the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 et seq.; (3) whether, assuming NYT otherwise had a right of access, it should be curtailed because of the public interest in the bi-directional system; (4) the terms and conditions of access; and (5) whether the BPU could make the determination of the amount of just compensation. At the administrative hearing, the proofs demonstrated that the similarity in programming offered by the NYT and Homestead Cable systems would probably result in residents choosing one system or the other, but not both, and that the economic feasibility of the SMATV system could be threatened by NYT's proposed installation. The parties also produced expert testimony concerning just compensation for NYT's access and installation. NYT's expert testified that the installation would cause no reduction in Homestead's value and suggested that $1.00 was adequate compensation. Defendants' expert suggested compensation at the rate of $3.20 per linear foot of cable for improved areas and $2.50 per linear foot for unimproved areas. The administrative law judge ruled that NYT was entitled to access to the Homestead development, approved its proposed method of installation, and determined that NYT should pay $1.00 as total compensation for the value of its access and installation rights. The BPU affirmed the ALJ's decision, but deleted the just compensation award pending the completion of a rule-making proceeding by the BPU to establish standards for determining just compensation in cable access cases. Defendants appealed the BPU's decision to the Appellate Division. Defendants' third appeal is from the BPU's order in a rule-making proceeding initiated pursuant to the Chancery Division's opinion in Princeton Cablevision, Inc. v. Union Valley Corp., 195 N.J. Super. 257 (1983). In that case the court construed § 49 of the Cable Television Act to require cable companies to pay compensation for access rights, and recommended that the BPU adopt rules to govern the payment of such compensation. 195 N.J. Super. at 270-71. The BPU held a public hearing, receiving expert testimony on various methods for calculating just compensation under § 49. Following the public hearing, the Office of Cable Television proposed a new rule, 16 N.J.R. 563(a) (1985), establishing the sum of $1.00 as the standard compensation to be paid by a cable company to compensate a property owner for the right of access pursuant to § 49 of the Act. The rule permitted a property owner to apply for additional compensation, based on a before and after test that compared the value of the property before the cable installation with its value after the installation is completed. The rule imposed on property owners the burden of proving that the diminution in the property's value because of the cable installation exceeded $1.00. In May 1985, the BPU issued its order adopting the proposed rule. 17 N.J.R. 1666(a). Defendants appealed to the Appellate Division, challenging the BPU's order adopting N.J.A.C. 14:18-3.10. [3] As noted, the Appellate Division consolidated the appeals from the Chancery Division order granting access, the BPU order granting access, and the BPU order adopting N.J.A.C. 14:18-3.10. The Appellate Division rejected defendants' contention that N.J.S.A. 48:5A-49 was unconstitutional, adopting the reasoning advanced in Princeton Cablevision, Inc. v. Union Valley Corp., supra, 195 N.J. Super. 257, that § 49 could be construed to require payment by a cable company for the right of access. NYT Cable TV v. Homestead at Mansfield, supra, 214 N.J. Super. at 159-60 (citing 195 N.J. Super. at 270). The court also held that the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 to -50, did not apply to proceedings to determine compensation for access under the Act, reasoning that the broad authority conferred by the Act to the Office of Cable Television encompassed the incidental power to fix the compensation payable by cable companies for the exercise of their statutory right of access. Id. at 160-63. The court rejected defendants' assertion that the BPU was required to balance the interests of residents desiring cable service against the convenience, safety and well-being of other residents, concluding that the statutory right to receive cable service was unqualified. Id. at 163. Finally, the court upheld the BPU's just compensation regulation, dismissing challenges to the before and after method of valuation and to the regulation's adoption of the sum of $1.00 as a presumptive standard of just compensation. Id. at 163-67. Petitioners and defendants in both the TKR and NYT cases reassert before us their contentions that N.J.S.A. 48:5A-49 is unconstitutional, that the BPU's access compensation regulation is invalid, and that the Eminent Domain Act provides the exclusive procedure for determining just compensation for the cable companies' exercise of access rights. III