United States District Court, E.D. Pennsylvania
March 16, 2004.
ROBERT T. HEALY, et al.
COMCAST OF SOUTHEAST PENNSYLVANIA, INC
The opinion of the court was delivered by: HARVEY BARTLE, III, District Judge
This action involves a dispute between Robert and William Healy, who
are the owners of two apartment complexes in Falls Township, Bucks
County, Pennsylvania, and Comcast of Southeast Pennsylvania, Inc.
("Comcast").*fn1 The owners claim the right to terminate the cable
television services provided by Comcast to their tenants and to remove
the so-called home run wiring over which Comcast transmits its service
into the apartments. The owners in their complaint and Comcast in its
counterclaim seek a declaration of their rights under the Federal
Communications Act, 47 U.S.C. § 541, et seq., and a related
regulation, 47 C.F.R. § 76.804(a)(1), as well as under the
Pennsylvania Landlord and Tenant Act, 68 Pa. Stat. Ann. §§ 250.504-B,
et seq. Comcast also requests injunctive relief. This action
was tried without a jury. Our findings of fact and conclusions of law
It is undisputed that at all relevant times, the plaintiffs have owned
two apartment complexes in Falls Township known as the Commons at
Fallsington and Falls Creek Village. Comcast has supplied cable
television service to the apartments for a number of years over what is
known as home run wiring owned by Comcast. Home run wiring is defined as
"[t]he wiring from the demarcation point to the point at which the [cable
operator's] wiring becomes devoted to an individual subscriber or
individual loop." 47 C.F.R. § 76.800. The plaintiffs have also
installed parallel home run wiring at their two properties for use by
Viking Communications, Inc. ("Viking"), a competing cable television
service that they own. The present dispute had its genesis when Viking
Associates,*fn2 which manages properties owned by the Healys, sent
Comcast two similar letters on May 13, 2003, terminating Comcast's
services at the Commons at Fallsington and at Falls Creek Village. The
letter concerning the Commons at Fallsington read:
As you know Comcast does not have a contract to
serve the above referenced property, accordingly
your services to the Commons at Fallsington are
hereby terminated effective August 10, 2003. As a
result your access to the premises will also
terminate on that date.
Should you wish to terminate sooner, please let me
On June 13, 2003, Edward Pardini, Regional Vice President of Comcast,
met with Edward Nepa, Chief Operations Officer of Viking, to discuss the
May 13 letters and other suits that were pending between Comcast and
Viking. They made an oral agreement "not to raise new legal issues or
challenges within [pending] cases, and not to file any new legal actions"
for the time being in an attempt to mollify the escalating conflict
between the two companies. On July 25, 2003, the parties entered into a
Standstill Agreement which stayed all pending matters between Comcast and
Viking until October 8, 2003. Included in the Standstill Agreement were
the pending matters that were the subject of the May 13 termination
letters. On November 3, 2003, Comcast sent plaintiffs a "Notice of
Intention to Provide Cable Television Service Pursuant to the Tenants'
Rights to Cable Television Act" for each of the properties and attached
requests of tenants for continued Comcast cable service.
Plaintiffs contend that Comcast, after receiving the May 13, 2003
letters, failed to take certain steps within the time periods enumerated
in the Federal Communications Commission ("FCC") Regulation at
47 C.F.R. § 76.804(a)(1). According to plaintiffs, Comcast has now abandoned
its home run wiring and has no right to continue to provide service to
the tenants at the Commons at Fallsington and Falls Creek Village.
that it has not met the time requirements set forth in the above
regulation but argues that it does not apply.
For present purposes, the key language of §§ 76.804(a)(1) is found
in its first sentence, which reads:
Where an MVPD*fn4 [cable television operator]
owns the home run wiring in an MDU*fn5 and does
not (or will not at the conclusion of the notice
period) have a legally enforceable right to
remain on the premises against the wishes of the
MDU owner, the MDU owner may give the MVPD a
minimum of 90 days' written notice that its access
to the entire building will be terminated to
invoke the procedures in this section.
47 C.F.R. § 76.804(a)(1) (emphasis added). The FCC promulgated
this regulation pursuant to its authority under the Federal
Communications Act, 47 U.S.C. § 544. In a 1997 report, the FCC
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.
FCC Report and Order and Second Further Notice of Proposed
Rulemaking In the Matter of Telecommunications Services Inside
Wiring, CS Docket No. 95-184, MM Docket No. 92-260, 13 FCC Red.
3659, *3693 ¶ 69, 1997 WL 644031 (Oct. 17, 1997) (emphasis added).
It is Comcast's position that it has a "legally enforceable right to
remain on the premises against the wishes of the MDU owner." Comcast
relies on two 1997 agreements between plaintiffs and Suburban Cable TV
Co., Inc. ("Suburban"), one of which is in the form of a stipulation and
court order,*fn6 as well as on a 2002 franchise agreement between it and
Falls Township authorizing it to provide cable service within the
Township's boundaries. In addition, Comcast contends it has a legally
enforceable right under the Tenants' Rights to Cable Television Act,
68 Pa. Stat. Ann. §§ 250.501-B, et seq., which is part of the
Pennsylvania Landlord and Tenant Act. If Comcast is correct, the
federal regulation and its time deadlines on which plaintiffs rely
are not applicable. Not surprisingly, plaintiffs maintain that the
evidence presented at this trial and the law preclude such a result.
We first turn to the question of whether the 1997 agreement between
plaintiffs and Suburban and the 1997 agreement incorporated in a court
order operate to the benefit of Comcast. We find that they do. Suburban
was a wholly-owned subsidiary of Lenfest Communications, Inc. until the
latter merged with Comcast Corporation in November, 1999. As a result of
the merger, Suburban became a subsidiary of Comcast Corporation. In
September, 2000, Suburban changed its name, first to Comcast Cablevision
of Southeast Pennsylvania, Inc., and then in August, 2003, to Comcast of
Southeast Pennsylvania, Inc. Thus, Comcast of Southeast Pennsylvania,
Inc., the defendant here, is simply Suburban with a new name.
The 1997 agreements between Suburban and the plaintiffs make it
abundantly clear not only that Suburban owns the wiring which Suburban or
Suburban's predecessor, Oxford Valley Cablevision Inc. put in place at
Falls Creek Village and the Commons at Fallsington but also that Suburban
has the right to use it. The 1997 agreement in the form of a stipulation
and order by the state court recognized that Suburban was "the rightful
owner" of the wire which Suburban or its predecessor had installed at the
Commons at Fallsington and which it "uses or has used to provide cable
television service to the tenants."
Suburban Cable TV Co. v. Robert T. Healy, et al., Court
of Common Pleas, Bucks County, No. 97001596-17-15, Stipulation and Order
and Agreement of Settlement and Release, *4 ¶ 11 (Apr. 28, 1997). It
also "permanently enjoined [the Healys] from removing, cutting, using or
otherwise tampering with the wire, cable, and equipment . . . Suburban
Cable uses or has used to provide cable television service to the
occupants of the rental units in the Commons at Fallsington."
Id. at *4 ¶ 12. The 1997 agreement pertaining to Falls
Creek Village contained analogous provisions. The May 13, 2003 letters
seeking to terminate Comcast's access to the premises can only be read as
attempting to contravene the 1997 agreements. Indeed, the letter related
to the Commons at Fallsington is nothing less than a violation of the
injunction entered by the Court of Common Pleas of Bucks County.
Plaintiffs next contend that even if Comcast has a valid right to
ownership and use of the wiring by virtue of the 1997 agreements, Comcast
nonetheless has no legally enforceable right to remain on the properties
because Comcast does not have a valid franchise from Falls Township to
provide cable television service. With limited exceptions that have not
been asserted here, a cable operator cannot provide cable service in a
municipality without a franchise. See 47 U.S.C. § 541(b).
Suburban's franchise agreement with Falls Township expired on February
10, 2000 and Comcast's current franchise agreement with Falls Township
was not signed and effective until January 22, 2002. Plaintiffs argue
that this interval rendered the
agreements between Suburban and the plaintiffs ineffective. During
this time frame, however, Comcast continued to pay franchise fees to the
Township and provide cable television service to tenants at the Commons
at Fallsington and Falls Creek Village while the parties negotiated the
renewal of the franchise. The Township did nothing inconsistent with the
continued existence of a franchise. Moreover, the plaintiffs did nothing
inconsistent with the continued validity of the franchise or the 1997
agreements. Although the record is devoid of any written extension of the
franchise agreement from February 10, 2000 until January 22, 2002, the
conduct of Comcast, Falls Township, and the plaintiffs during
this period establish that all three parties maintained their
relationships as if nothing had changed. "When [the] parties continued to
act under the contract, their tacit agreement to be bound by it is as
strong as any express renewal could make it." Good Intent Co. v.
Hartzell, 22 Pa. 277, 1853 WL 6452, *10 (Pa. 1853). See also
EFCO Importers v. Halsobrunn, 500 F. Supp. 152, 157 (E.D. Pa. 1980).
Plaintiffs also attack the current franchise agreement between Comcast
and Falls Township on the basis that there is no evidence that it
received the requisite approval from the Township Board of Supervisors.
Section I.C of the franchise agreement itself states that it "shall
become effective upon signing by the Board of Supervisors and the
Franchisee." The copy of the agreement before us, which provides a
ten-year nonexclusive franchise, is signed by the Township Manager and by
representative of Comcast, the franchisee. The Supreme Court of
Pennsylvania "has often held that there is a legal presumption that
municipal officers are presumed to have properly performed their duties
and to have taken the steps necessary to give validity to their official
acts." Mamallis v. Borough of Millbourne, 164 A.2d 209, 211
(Pa. 1960) (internal punctuation omitted). See also Kennedy v. Upper
Milford Twp. Zoning Hearing Bd., 834 A.2d 1104, 1123 (Pa. 2003). The
plaintiffs have presented no evidence that the Board of Supervisors did
not approve the agreement and did not authorize the Township Manager to
sign on its behalf. Nor have plaintiffs shown that the Township has
dishonored the agreement on this or any other ground or that the
agreement is not authentic. See Mamallis, 164 A.2d at 211.
Thus, based on the presumption under Pennsylvania law, we find the 2002
franchise agreement to be valid and effective.*fn7 See id.
In addition to its legally enforceable contractual rights, Comcast
contends that the federal regulation §§ 76.804(a)(1) is not applicable
because it also has the statutory right to remain on the premises and
television service under the Tenants' Rights to Cable Television
Act, which, as noted above, is part of the Pennsylvania Landlord and
Tenant Act. 68 Pa. Stat. Ann. §§ 250.501-B, et seq.
Pennsylvania is known as a "mandatory access" state because it gives a
cable television operator mandatory access to an apartment building or
complex upon the request of a tenant. See FCC First Order on
Reconsideration and Second Report and Order In the Matter of
Telecommunications Services Inside Wiring, CS Docket No. 95-184, MM
Docket No. 92-260 (January 29, 2003), found at
68 Pa. Stat. Ann. §§ 250.501-B, et seq.; Surnamer v. RCN Telecom Servs.
of Pa., Inc., No. Civ.A. 98-5077, 1999 WL 171455, *7 (E.D. Pa. March
26, 1997); Weinberg v. Comcast Cablevision of Philadelphia,
L.P., 759 A.2d 395, 399 (Pa. Super. 2000); Adelphia Cablevision
Assocs. of Radnor, L.P. v. Univ. City Housing, 755 A.2d 703, 712
(Pa. Super. 2000).
When enacting the Tenants' Rights to Cable Television Act, the
Pennsylvania General Assembly made the following findings:
(1) Cable television has become an important
medium of public communication, education and
(2) It is in the public interest to assure
apartment residents and other tenants of leased
residential dwellings access to cable television
service of a quality and cost comparable to
service available to residents living in
personally owned dwellings.
(3) It is in the public interest to afford
apartment residents and other tenants of leased
residential dwellings the opportunity to obtain
cable television service of their choice and to
prevent landlords from treating
such residents and tenants as a captive market
for the sale of television services selected or
provided by the landlord.
68 Pa. Stat. Ann. §§ 250.502-B, Historical and Statutory Notes.
Upon a tenant's request and the cable operator's decision to provide
service, the operator must notify the landlord within ten days
after its decision. The notification triggers a forty-five day
period for negotiation between the operator and the landlord.
68 Pa. Stat. Ann. §§ 250.504-B. If there is no agreement between the landlord
and the operator during this period, the matter proceeds to arbitration.
"The right of a tenant to receive [cable television] service from an
operator of his choice may not be delayed beyond the forty-five day
period contained in the original notice or otherwise impaired unless the
matter proceeds to arbitration." Id. The arbitrator's decision,
however, is limited to the issues of just compensation for loss of value
of the property resulting from permanent installation of cable television
system facilities and reasonableness of the terms of the proposal
involving the work to be performed. Weinberg, 759 A.2d at 402;
68 Pa. Stat. Ann. §§ 250.506-B(b). Once a tenant requests cable
television service, the cable operator has the right to provide service
even over the objection of the property owner. See 68 Pa. Stat.
Ann. §§ 250.501-B, et seq. Thus, the negotiation period and
arbitration process under the Tenants' Rights to Cable Television Act are
not to bargain over or decide whether a cable operator may have access to
the property, but only concern matters of
compensation and how access will be effectuated. See
Weinberg, 759 A.2d at 402. Significantly, the Act states, "the
operator shall retain ownership of all wiring and equipment used in any
installation or upgrade of a [cable television] system in multiple
dwelling premises." 68 Pa. Stat. Ann. §§ 250.503-B.
Since the May 13, 2003 termination letters were sent, a number of
tenants at the Commons at Fallsington and Falls Creek Village have
requested that Comcast continue to provide cable services. On November 3,
2003, Comcast sent the plaintiffs a "Notice of Intention to Provide Cable
Television Service Pursuant to the Tenants' Rights to Cable Television
Act" for each of the properties, in order to trigger, if necessary, the
negotiation period under the Act. See 68 Pa. Stat. Ann. §§
250.504-B. Under the circumstances, Comcast has the right pursuant to the
Act to provide cable to tenants at Commons at Fallsington and Falls Creek
Village, despite the owners' opposition.
Comcast, of course, is already present on both properties as a result
of the 1997 agreements with the landlord. Even assuming that for some
reason an incumbent cable television operator must negotiate or
renegotiate with a landlord, we do not view the Act as authorizing the
landlord to terminate that operator's services during any negotiation
period or subsequent arbitration. See 68 Pa. Stat. Ann. §§
250.501-B, et seq. Allowing the building owner to require an
incumbent operator to cut off service or allowing the building owner to
rip out the operator's home run wiring during this short hiatus, absent
compelling ground not present here, would be an unreasonable and
absurd interpretation of the Tenants' Rights to Cable Television Act.
See I Pa. Cons. Stat. Ann. §§ 1922(1). The wiring
and equipment under the Act belong to the operator. 68 Pa. Stat. Ann.
§§ 250, 503-B. Moreover, as we have previously noted, the operator has
an absolute right to provide service at the request of the tenant. The
only issues for resolution are compensation and the manner of access. We
must not forget that the Act seeks to "afford apartment residents and
other tenants of leased residential dwellings the opportunity to obtain
cable television service of their choice and to prevent landlords from
treating such residents and tenants as a captive market for the sale of
television services selected or provided by the landlord." 68 Pa. Stat.
Ann. §§ 250.502-B, Historical and Statutory Notes.
Accordingly, we will enter a declaratory judgment in favor of Comcast
and against the plaintiffs. We will also enjoin plaintiffs and their
agents, successors, and assigns from displacing Comcast from the premises
at the Commons at Fallsington and Falls Creek Village or from interfering
with Comcast's home run wiring or service at those locations.
AND NOW, on this ___ day of March, 2004, based on the foregoing
findings of fact and conclusions of law, it is hereby ORDERED that:
(1) judgment is entered in favor of defendant Comcast of Southeast
Pennsylvania, Inc. and against plaintiffs Robert T. Healy and William J.
Healy, as co-partners t/a "Falls Creek Village" and "Commons at
Fallsington" on plaintiffs' complaint for declaratory relief; and
(2) judgment is entered in favor of the counterclaim plaintiff Comcast
of Southeast Pennsylvania, Inc. ("Comcast") and against counterclaim
defendants Robert T. Healy and William J. Heal, as co-partners t/a "Falls
Creek Village" and "Commons at Fallsington" declaring that:
(a) Comcast owns and has the right to use the
home run wiring installed by Comcast or its
predecessor at the Commons at Fallsington and
Falls Creek Village; and
(b) Comcast is entitled to access to the Commons
at Fallsington and Falls Creek Village to provide
cable television service to the tenants requesting
(3) the plaintiffs Robert T. Healy and William J. Healy, as co-partners
t/a "Falls Creek Village" and "Commons at Fallsington", their agents,
successors, and assigns are enjoined from preventing Comcast from
entering the premises at the Commons at Fallsington and Falls Creek
Village for the purposes of constructing, reconstructing, installing,
servicing, or repairing its cable television system facilities or
maintaining cable television services for the tenants requesting those