Court Opinion

ID: 9757135
Source: CourtListenerOpinion
Date Created: 2023-08-28 22:19:57.08866+00
Date Added: 2024-06-11T07:28:35.131453
License: Public Domain

OPINION
PACKEL, Justice.
The appellant, a cable television company, seeks reversal because the court of common pleas and the Commonwealth Court have upheld a provision in an ordinance which prohibited the Company from increasing its charges to the people in the community, without approval of the appellee Borough. Although the Borough has denied three requests to increase the charges, fixed more than eight years ago, the parties have stipulated as follows:
“13. It is stipulated that the primary issue involved in this case is whether or not the Borough of Scottdale has the legal authority to insist upon prior approval for any increase or revision in the service charges as set forth in Section 4(c) of the aforesaid Ordinance.”
No factual issue has been raised by the record or by the questions presented to this Court as to the unreasonableness of any action of the Borough.
The Borough initiated the litigation by a complaint in equity to restrain the Company from increasing its charges without prior approval of the Borough. After preliminary objections, a stipulation of the parties, an opinion, an amended opinion as to a permanent injunction, exceptions filed and *50argued and the entry of a final order, the Company was enjoined from increasing its charges without the prior approval of the Borough.
The basic issue, as the parties have stipulated, refers to the legal authority of the Borough to insist upon approval of any increase in charges. A proper analysis of the legal question calls for a brief examination of the history of cable television and its public regulation.1
In the past quarter century cable television has developed to an important position in our present-day economy.2 Its early growth as an unregulated industry commenced in small communities throughout the nation. The original concept was of a high antenna receiving unit on a mountain peak or other high place, coupled by transformers, amplifiers and transmission and distribution cables to homes in the vicinity.3 Through an evolutionary process the industry has come to large cities where, through the use of high towers and other developments in distribution, signals can be picked up and carried by microwave and cable to customers hundreds of miles away. The potential of cable television companies has vastly increased because of the use of the systems not only to carry programs picked up out of the air, but also to carry programs which the companies originate. This is referred to as cablecasting.
The industry had little or no regulatory control at the outset. The initial problems related to the high capital investment requirements for a system and the proper techni*51cal installation and servicing of the systems.4 The first controls came from local governments. In many a town or borough, franchises were sought for cable television systems and severe competition developed among applicants for franchises. In some states public utility commissions, by administrative construction of their statutes or by legislative amendments, began to assert jurisdiction.5 In other places, as in Pennsylvania, cable television was deemed not to be within the statutory definition of a public utility.6
The jurisdiction of the federal government over cable television was not finally resolved until the decision in United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968). That control does not relate to rates or charges made by cable television companies or any other television companies. United States v. Radio Corporation of America, 358 U.S. 334, 79 S.Ct. 457, 3 L.Ed.2d 354 (1959). The federal regulation over some phases of the industry does not preclude other local regulation so long as it does not unreasonably burden interstate commerce. TV Pix, Inc. v. Taylor, 304 F.Supp. 459 (D.Nev.1968), aff’d, 396 U.S. 556, 90 S.Ct. 749, 24 L.Ed.2d 746 (1970); Lamb Enterprises, Inc. v. City of Erie, 396 F.2d 752 (3d Cir. 1968).
As to the legality of municipal control in Pennsylvania over charges by cable television companies, the starting point is the power of the local governmental unit with respect to the use of public places, including streets, roads and highways. It is conceded that Pennsylvania municipalities do have the power and authority to grant permission for the use of public ways, Forty-six South Fifty-second Street Corporation v. Manlin, 398 Pa. 304, 157 A.2d 381 (1960). In City of Farrell v. Altoona CATV, 419 Pa. 391, 214 A.2d 231 (1965), this power was held so important that the municipali*52ty could exercise it only by ordinance and not by the informality of a resolution. The Borough Code, Act of February 1, 1966, P.L. (1965) 1656, No. 581, § 1202, 53 P.S. § 46202, by subdivision (17), specifically confers the power to regulate the use of public ways. Significantly, subdivision (74) grants the very broad power to adopt ordinances so long as they are “not inconsistent with or restrained by the Constitution and laws of this Commonwealth . . . .”
The crux of the Company’s attack is upon the regulatory aspect of the Borough’s ordinance. The claim is not only that it is unauthorized but also that it is unconstitutional. Taking the last point first, it comes immediately to mind that, the claim of the Company is that it is in the class of “a butcher, baker or candlestick maker” so that its charges could not be publicly regulated. Cable television companies are or tend to be monopolies, have large capital investment, purport to provide their services to the public and make use of consent, license or franchise to use public ways as an important aspect of their businesses.7 There is no closed category of business activities affected with public interest which can be subjected' to regulation as public utilities.8 But for the local exercise of control over charges, there is no rate protection for the benefit of the consumer exercised by the federal government or by the Commonwealth. Accordingly, the constitutional argument by the appellant has no sound basis.
The alleged lack of regulatory authority can be met by the express broad authority conferred by the Borough Code provisions already referred to. Even if the authority were not express, it could be implied from the admitted *53grant of authority with respect to the use of public ways. This Court, in Allegheny City v. Railway, 159 Pa. 411, 416-17, 28 A. 202, 203 (1893), long ago recognized that reasonable conditions can be attached to a grant for the use of streets:
“Nor can we see that there is anything unreasonable in these conditions,' even if that matter were within our province. A valuable franchise, to use public property, the streets, for corporate profit, is about to be granted. It is not illegal or unreasonable that the public, or the city which represents it, should have a consideration for the privilege that it confers. If it were a right of passage over private property, there would be no question about it, and the right could not be got in any other way. We see no reason why the public interest should not be promoted by requiring special privileges in the public property to be paid for in the same way.”
In Philadelphia Electric Co. v. Philadelphia, 301 Pa. 291, 300, 152 A. 23, 26 (1930), this Court spoke of the propriety of conditions imposed on the use of streets for underground conduits:
“This court has repeatedly held that if a public service corporation accepts imposed municipal conditions in consideration of the right given to construct its works, it must perform as stipulated or suffer the penalty arising from failure to do so. The kind and range of the conditions imposed by the municipality were within the discretion of its executive and administrative officers, and it has long been an established principle of law that the court, except in cases of manifest abuse of discretion, will not substitute its judgment for that of the body to whom the parties committed the right of imposing conditions (Carlisle v. M. St. Ry. Co.’s App., 245 Pa. 561, 91 A. 959; Cameron v. Carbondale, 227 Pa. 473, 76 A. 198); and the conditions enacted, and which plaintiff accepted, were such as the city deemed proper: Allegheny City v. Peoples’ N. Gas & Pipeage Co., 172 Pa. 632, 33 A. 704; Allegheny v. Millville, etc., Ry., supra.”
*54Still further support for the validity of the condition can be seen in the broad contractual powers under Section 1401 of the Borough Code, 53 P.S. § 46401 which provides:
“Each borough may make contracts for lawful purposes and for the purpose of carrying into execution the provisions of this act and laws of the Commonwealth.”
In Philadelphia v. Holmes E. P. Co., 335 Pa. 273, 279, 6 A.2d 884, 887 (1939), this Court upheld the city’s charge as a binding contractual condition allowing the use of underground wires in the streets as follows: “When such an ordinance is accepted and acted on by the grantee of the privilege the corporation becomes contractually bound to pay the consideration and perform the terms and conditions specified in the ordinance, and the contract thereby formed has the same legal status as any other contract: [citations omitted].”
The acceptance of the terms of the ordinance created a contractual relationship. The Borough, in its control over any increases in the charges, was performing an important function in protecting its residents from being subjected to uncontrolled price increases for the duration of the contract.
Courts in other jurisdictions, depending upon local law, have upheld and have denied the assertion of municipal power with respect to the charges of cable television companies.9 Unless and until there is a valid preemptive control over such charges by the federal government or by the Commonwealth, we conclude that Pennsylvania municipalities have the legal authority to control the charges made by cable television companies. We do not have before us nor do we pass upon the issue of whether the exercise of control in this case was unreasonable or an abuse of discretion.
Order of the Commonwealth Court affirmed.
ROBERTS, J., filed a dissenting opinion.

. See Note, The Wire Mire: The FCC and CATV, 89 Harv.L.Rev. 366 (1965).

. In United States v. Midwest Video Corp., 406 U.S. 649, 651, 92 S.Ct. 1860, 1862, 32 L.Ed.2d 390 (1972), the Court referred to its earlier observation that “the growth of CATV since the establishment of the first commercial system in 1950 has been nothing less than ‘explosive’ ” and then added: “The potential of the new industry to augment communication services now available is equally phenomenal.”

. A cable television system “provides a well-located antenna with an efficient connection to the viewer’s television set.” Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390, 399, 88 S.Ct. 2084, 2089, 20 L.Ed.2d 1176 (1968).

. See United States v. Jerrold Electronics Corp., 187 F.Supp. 545, 551-52 (E.D.Pa.1960), aff’d, 365 U.S. 567, 81 S.Ct. 755, 5 L.Ed.2d 806 (1961).

. Annot., 61 A.L.R.3d 1150 (1975).

. Investigation Upon Commissioner’s Motions, 41 Pa.P.U.C. Decisions 381 (1964).

. “[F]rom early times the enjoyment of a franchise or privilege for the performance of a service (whether by virtue of ‘a prescription time out of mind, or a charter from the King’), of which service the public has a real and continuing need and no ready means of obtaining it otherwise, subjects the business to regulation and control in the public interest.” Hertz Drivurself v. Siggins, 359 Pa. 25, 34, 58 A.2d 464, 470 (1948).

. Nebbia v. New York, 291 U.S. 502, 536, 54 S.Ct. 505, 78 L.Ed. 940 (1934).

. Annot., 41 A.L.R.3d 384 (1972).