Oct. 27, 1993 Mem. at 17.) Thus, Cablevision contends that the Town is not permitted to regulate the rates for the Family Cable tier, and that the rate increase is not a valid ground for revocation of the Franchise Agreement.
The Town apparently concedes, and the Court agrees, that the Town has no authority to regulate the rates for the Family Cable tier under the 1992 Cable Act.
The Town submits, however, that on the date that the rate changes were implemented, the 1992 Act was not in effect. (Defs.' Apr. 4, 1994 Mem. at 28-30.) The Town contends that under the previous Cable Act, the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521-59 ("1984 Cable Act"), which was in effect at the time of the rate increase, the Town retained the authority to regulate the rates for the Family Cable tier. (Id. at 30-35.) Therefore, the Town contends that the unapproved rate increase was a material breach of the Franchise Agreement, and is a ground for revocation. (Id. at 37-39.)
First, the Court considers whether the 1992 Cable Act was in effect at the time of the rate changes. The amendments to Section 543 of the 1992 Cable Act were enacted on October 5, 1992, and the amendments became effective 180 days after the date of enactment. 47 U.S.C. § 543. Therefore, the amendments were effective on April 3, 1993. See id.; see also Time Warner Entertainment Co. v. Briggs, 1993 U.S. Dist. LEXIS 1196, Civ. A. No. 92-40117- GN, 1993 WL 23710, at * 4 (D. Mass. Jan. 14, 1993). The Town is thus correct in asserting that because Cablevision implemented its rate changes on April 1, 1993, it did so prior to the effective date of the relevant provisions of the 1992 Cable Act.
That Cablevision implemented its rate increase a mere two days prior to the effective date, however, does not necessarily constitute a valid ground for the revocation of the franchise. Even assuming that, under the 1984 Cable Act, the Town possessed the authority to regulate the rates for the Family Cable tier,
the Court is not persuaded that the Town may revoke the franchise.
The parties agree that, to warrant revocation, Cablevision must have materially breached the Franchise Agreement. (See Pls.' Oct. 29, 1993 Mem. at 20-21; Defs.' Apr. 4, 1994 Mem. at 37-39; see also Fr. Agmt. at § 24.) "A material breach . . . has been defined as one that would justify the other party to suspend his own performance of the contract." Lanvin Inc. v. Colonia, Inc., 739 F. Supp. 182, 195 (S.D.N.Y. 1990) (citing 6 Williston on Contracts § 864 at 290 (3d ed. 1963); 12 Williston on Contracts § 1469 at 186 (3d ed. 1970)). It is well-settled that, to find that there was a material breach, the departure from the terms of the contract or defects of performance must have pervaded the whole of the contract or have been so essential as substantially to defeat the object that the parties intended to accomplish. Miller v. Benjamin, 142 N.Y. 613, 617, 37 N.E. 631 (Ct. App. 1894). Moreover, "the right of a party to enforce a contract will not be forfeited or lost by reason of technical, inadvertent, or unimportant omissions or defects." Id.
In this case, it is uncontested that, as of April 3, 1993, Cablevision was free to raise the rates for the Family Cable tier without prior Town approval. That Cablevision raised its rates on April 1, 1993 -- a mere two days in advance of the effective date of the Act -- is certainly insignificant in light of the nine-year duration of the franchise (see Fr. Agmt. at § 4), and the effect of the breach on the "whole of the contract" is negligible. See Miller, 142 N.Y. at 617. Indeed, the Town has not asserted, in other than conclusory fashion, that the premature increase defeated any objective of the Franchise Agreement. See id. The Court thus finds that "the deviation from the contract occurred in such a way, and was of such a character, that it did not, as a matter of law, amount to" a material breach of the contract. See id. Revocation of the franchise on the ground that Cablevision increased its rates for the Family Cable tier was, therefore, inappropriate.
C. Elimination of the Grandfathered Tier
As a final ground for revocation of the franchise, the Town contends that the elimination of the Grandfathered tier violates Section 17(d) of the Franchise Agreement, which provides that Cablevision "shall not abandon any service or portion thereof without the written consent of the municipality." In response, Cablevision first submits that it did not violate Section 17(d).
The Court is unable, however, on this motion for summary judgment, to determine whether Cablevision has violated Section 17(d) of the Franchise Agreement. The terms of this Section, which prohibit any "abandonment of service," are ambiguous, and neither of the parties has submitted evidence to support its interpretation of this Section.
See Mellon Bank, N.A. v. United Bank Corp. of New York, 31 F.3d 113, 1994 WL 416159, at * 2 (2d Cir. Aug. 9, 1994) ("Summary judgment is only proper in contract disputes if the language of the statute is '"wholly unambiguous.'") (quoting Wards Co. v. Stamford Ridgeway Assocs., 761 F.2d 117, 120 (2d Cir. 1985)) (further citation omitted).
Cablevision contends, however, that even if it has violated Section 17(d), and has "abandoned service" by eliminating the Grandfathered tier, the violation does not permit the Town to revoke Cablevision's franchise, for, to the extent that Section 17(d) prohibits such an action, it is preempted by Section 544 of the 1984 and 1992 Cable Acts.
The 1984 Act provides, generally, that "any franchising authority may not regulate the services . . . provided by a cable operator except to the extent consistent with this subchapter." 47 U.S.C. § 544(a). The remainder of the Act only permits franchising authorities "to enforce any requirements contained within the franchise . . . for broad categories of video programming or other services."
Id. at § 544(b)(2)(B) (emphasis added). These provisions were not amended by the 1992 Cable Act, and remain in effect.
As one court has explained, "judicial interpretation of 'broad categories of video programming' is sparse." Jones Intercable v. City of Stevens Point, 729 F. Supp. 642, 648 (W.D. Wis. 1990). Indeed, neither this Court nor the parties to the action have located any reported cases applying Section 544 to a cable operator's restructuring of its tiers of service.
The cases that have interpreted Section 544, however, provide some guidance, in that they offer an indication of the extent to which Congress intended to allow franchising authorities to enforce contract provisions regarding programming and services. For example, these cases explain that franchising authorities may enforce requirements regarding the provision of regional programming, see id. at 648 (upholding franchise authority's requirements for "east coast programming"), or local programming, see Chicago Cable Communications v. Chicago Cable Comm'n, 678 F. Supp. 734 (N.D. Ill. 1988) (upholding franchise provision requiring programming originating in the Chicago area), aff'd, 879 F.2d 1540 (7th Cir. 1989), cert. denied, 493 U.S. 1044, 107 L. Ed. 2d 835, 110 S. Ct. 839 (1990), for such provisions regulate "broad categories" of programming, as defined in the Act. The cases also reveal, however, that franchising authorities are precluded from enforcing franchise requirements that usurp the cable operator's power to determine the details and particulars of the provision of cable service. See Jones Intercable, 729 F. Supp. at 649.
In light of the rationale of these cases, the Court finds that, in attempting to prevent the elimination of the Grandfathered tier, the Town is not seeking to regulate any "broad category" of programming or services. To the contrary, the Town is impermissibly seeking to control the particulars of the provision of cable service. The elimination of the Grandfathered tier does not affect any broad category of programming or services, for all of the channels previously offered on the Grandfathered tier remain available on the Family Cable tier. (Pls.' Oct. 5, 1993 Mem. at 22, 24.) Cablevision merely restructured the manner in which its programming was packaged. Under the Cable Act, the Town has no authority to regulate such a particular as the manner in which Cable service is packaged for the Consumer.
The Court's conclusion that such regulation is improper is supported by the legislative history of Section 544(b)(2)(B), which provides that
the Committee does not intend by this provision to give franchising authorities . . . the authority to require the cable operator to offer certain program services or service packages.