Cablevision of Boston Inc. v. Public Improvement Comm'n

Page 88

184 F.3d 88 (1st Cir. 1999)

CABLEVISION OF BOSTON, INC., Plaintiff, Appellant, v. PUBLIC IMPROVEMENT COMMISSION OF THE CITY OF BOSTON; JOSEPH F. CASAZZA, MICHAEL GALVIN, GARY MOCIA, PARA M. JAYASINGHE, and STEPHEN SHEA, as Commissioners of the Public Improvement Commission of the City of Boston; CITY OF BOSTON; BOSTON EDISON COMPANY; BECOCOM, INC.; RCN-BECOCOM, LLC; RCN TELECOM SERVICES OF MASSACHUSETTS, INC.; and RCN CORPORATION, Defendants, Appellees.

No. 99-1222.

United States Court of Appeals for the First Circuit.

Heard June 7, 1999.

Decided Aug. 25, 1999.

On Appeal from an Order Denying a Motion for Preliminary Injunction Entered by the United States District Court for the District of Massachusetts

J. Anthony Downs, with whom Stephen D. Poss, Jeffrey A. Simes, and Goodwin, Proctor & Hoar LLP were on brief, for appellant Cablevision of Boston, Inc.

Merita A. Hopkins, Corporation Counsel, with whom Laura Steinberg and Sullivan & Worcester LLP were on brief, for appellees Public Improvement Commission of the City of Boston; Joseph F. Casazza, Michael Galvin, Gary Mocia, Para M. Jayasinghe, and Stephen Shea, as Commissioners of the Public Improvement Commission of the City of Boston; and the City of Boston.

Roscoe Trimmier, Jr., with whom R.K. Gad III, Philip C. Koski, Russell P. Hanser, Deborah L. Levi, and Ropes & Gray were on brief, for appellees Boston Edison Company and BecoCom, Inc.

Michael J. McHugh, with whom James T. Finnigan, K. Jill Rizzotti, and Rich, May, Bilodeau & Flaherty, P.C. were on brief, for appellees RCN-BecoCom, LLC; RCN Telecom Services of Massachusetts, Inc.; and RCN Corporation.

Before Lynch, Circuit Judge, Noonan, Senior Circuit Judge,^* and Lipez, Circuit Judge.

LYNCH, Circuit Judge.

Cablevision of Boston sought a preliminary injunction in federal court against its principal local competitors in the developing broadband¹ telecommunications market. Its complaint alleged that these competitors had taken unfair advantage of their access to underground electrical conduit in violation of Mass. Gen. Laws ch. 93A. Cablevision also sought injunctive relief against the City of Boston, arguing that the City had failed to manage the conduit rights of way in a competitively neutral and nondiscriminatory manner in violation of § 253(c) of the Federal Telecommunications Act of 1996, 47 U.S.C. § 253(c).² After an evidentiary hearing, the district court denied the motion for a preliminary injunction. Cablevision appeals.

Cablevision's suit names as defendants Boston Edison Company, a public utility, and its unregulated affiliate BecoCom, Inc. (collectively "Boston Edison"), as well as RCN Corporation and its subsidiary RCN Telecom Services of Massachusetts (collectively "RCN").³ It also names RCN-BecoCom ("the Joint Venture"), a joint venture between RCN and BecoCom which, like Cablevision, plans to offer broadband telecommunication services in Boston. For convenience, we refer to these entities collectively as the private defendants. In addition, Cablevision sued the Public Improvement Commission of the City of Boston ("PIC"), the PIC Commissioners, in their official capacities, and the City of Boston. We refer to these defendants collectively as "the City."

Cablevision complains that Boston Edison pulled telecommunications cable through its existing electrical conduit for the benefit of the Joint Venture without giving proper public notice of this altered use and without seeking prior approval from the City. It alleges that the City wrongfully enabled the Joint Venture to take unfair advantage of Boston Edison's existing conduit and cable, by allowing Boston Edison to convert conduit and cable for the Joint Venture's benefit over a two-year period without imposing on Boston Edison the obligations imposed on entities constructing new conduit. In contrast, Cablevision says, it has been required to go through a time-consuming public application process for new grants of location⁴ when it wished to construct new conduit for broadband telecommunications cable, and it has had to provide the City with shadow conduit in that construction.

Approximately two years after passage of the Telecommunications Act, the City began imposing on conduit owners an unwritten policy that requires the owners to seek amended grants of location if they wish to expand or alter their use of existing conduit. PIC has since awarded such amended grants of location to Boston Edison, including after-the-fact amendments for conduit conversions that occurred between 1996 and 1998. Cablevision's preliminary injunction would prevent the City from granting the private defendants any further amended grants of location and would forbid the private defendants from installing any new telecommunications cable in electrical conduit or expanding their commercial usage of any previously installed telecommunications cable.

We set aside, for the narrow purposes of this appeal, the difficult question whether Cablevision has a cause of action to enforce rights under § 253(c), as well as related questions regarding the proper interpretation of that section of the Telecommunications Act. Assuming arguendo that Cablevision has a § 253(c) cause of action and that § 253(c) requires the City to manage its rights of way on a competitively neutral and nondiscriminatory basis, we determine that Cablevision is unlikely, in any event, to show that the City failed to fulfill this requirement. We further conclude that Cablevision is unlikely to prevail on its Chapter 93A claim in this action. Thus, we affirm the district court's denial of preliminary injunctive relief.

I. FACTS

The facts are largely taken from the opinion of the district court. For the most part, these are undisputed; the few points of disagreement are noted. Because key aspects of this case involve changes that have occurred over time and actions that are alleged to have been untimely, we present the facts chronologically.

In Boston, as elsewhere, the electricity and cable television businesses were once entirely distinct enterprises. Boston Edison has provided electricity to customers in the Greater Boston area since 1886, using a large network of underground conduits as well as above-ground transmission lines and towers. As a public utility, Boston Edison has enjoyed a statutory monopoly. Cablevision is equally well-established in Boston as a provider of cable television. It began building a system to deliver cable television signals within Greater Boston in the 1970s and largely completed that system, and began providing cable service, by 1982. Unlike Boston Edison, Cablevision does not possess a statutory monopoly. However, it did enjoy a de facto monopoly for many years. Although its two franchise agreements with the City have been non-exclusive, it had no local competitors until 1996, when a predecessor affiliate of RCN entered the Boston cable television market. Cablevision still services approximately ninety-seven percent of Boston cable customers.

In order to reach their customers, both Boston Edison and Cablevision have needed to install conduit under the streets of Boston. State law permits them to do so, see Mass. Gen. Laws ch. 166, § 21, but requires them to first obtain a grant of location from the appropriate municipal authority, see id. § 22. Cablevision obtains grants of location for its conduit from the PIC, which is the division of the City's Department of Public Works responsible for construction projects involving City streets. Applicants submit a detailed public petition to the PIC, which decides after a public hearing whether to bestow the requested grant of location. Boston Edison receives similar grants of location for its electrical conduit from another municipal authority, the Inspectional Services Division (ISD). It is not clear from the record whether the ISD process is as open to public involvement as the PIC procedure. It appears, in any case, that the PIC is the entity ultimately responsible for maintaining a record of the various grants of location -- a record that amounts to a map of Boston's subterranean conduit network.

Since 1988, the PIC has enforced a written "Policy Relating to Grants of Location for New Conduit Network for the Provision of Commercial Telecommunications Services" ("the PIC Policy"), which was designed to minimize the number of times City streets would have to be torn up for underground construction, while simultaneously maximizing the amount of conduit space available for the provision of telecommunication services. As its full name makes clear, the PIC Policy applies only to the installation of new conduit for commercial telecommunications purposes. The PIC Policy requires any entity or "Lead Company" that wishes to install new telecommunications conduit to build additional empty shadow conduit for the City that can be used to meet future demand. Once the City's shadow conduit is installed, the PIC Policy requires a provider to lease any available space in that conduit before constructing new conduit. The PIC Policy, as amended, also requires those constructing new conduit to notify all interested telecommunications providers of their intent to cut the street and to offer these providers the opportunity to have their own conduit installed at the same time. Under the policy, participants in approved projects share the costs of excavation, conduit construction (including construction of shadow conduit), and street resurfacing.

The parties debate the extent to which Cablevision has been economically burdened by the PIC Policy. Boston Edison notes that most of Cablevision's conduit was constructed prior to the adoption of the PIC Policy in 1988, while Cablevision emphasizes the delays and expenses that it has borne for any conduit installed since that time. By contrast, Boston Edison has been able to avoid these burdens to the extent that it installed conduit for electric utility purposes only. Before ...