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V CABLE, INC. v. GUERCIO

June 26, 2001

V CABLE, INC., AND CABLEVISION SYSTEMS CORPORATION, PLAINTIFFS,
V.
THOMAS GUERCIO, DEFENDANT.



The opinion of the court was delivered by: Hurley, District Judge.

MEMORANDUM AND ORDER

The captioned cases were tried before the Court non-jury. The purpose of this decision is to provide my findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52.

By two separate complaints, later consolidated, V Cable, Inc. and Cablevision Systems Corporation ("Cablevision" or "plaintiffs") have asserted claims against defendant Thomas Guercio ("Guercio" or "defendant"), under the Communications Act of 1934, as amended, 47 U.S.C. § 553(a)(1), 605(a), and 605(e)(4) (the "Communications Act"). Specifically, the claims against Guercio are as follows:

First, Cablevision alleges that Guercio has sold and distributed "pirate" cable television converter-decoder equipment with knowledge and intent that such devices be used by third party purchasers and end-users for unauthorized interception and reception of Cablevision's satellite-delivered premium and pay per view programming services. This alleged conduct is in violation of sections 605(e)(4) and 553(a)(1) of the Communications Act. . . .
Second, Cablevision alleges that Guercio has personally used "pirate" cable television converter-decoder equipment to intercept and receive Cablevision's premium and pay per view cable television programming services which defendant was not authorized to receive in violation of sections 605(a) and 553(a)(1) of the Communications Act. The use of "pirate" cable television converter-decoder equipment to intercept satellite delivered cable television programming is a violation of sections 605(a) and 553(a)(1) of the Communications Act.

(Pls.' Rev. Pre-Trial Order at 2-3.)

Defendant in his answer and during his trial testimony denied that he purchased, used, or distributed pirate cable television converter-decoder equipment. Additionally, defendant has asserted a number of affirmative defenses, including that plaintiffs' actions are time barred under the applicable statute of limitations.

FINDINGS OF FACT

1. Stipulated Facts

a) At all times hereinafter mentioned, Cablevision Systems Corporation is a corporation organized and existing under the laws of the State of Delaware which is duly registered to do business in New York State and having its principal business offices at One Media Crossways, Woodbury, New York.
b) At all times hereinafter mentioned, defendant Thomas Guercio is an individual residing at 6 Cliftwood Place, Kings Park, New York 11754.
c) Cablevision operates cable television systems pursuant to franchises awarded to it by the political subdivisions of Nassau and Suffolk Counties, New York, which authorize it to construct, operate and maintain cable television systems in Nassau and Suffolk Counties, New York. Cablevision offers cable television services to subscribers who request and pay for them.
d) Cablevision's programming is offered to its subscribers in "packages" of programming services. "Basic" and "Family" tiers are packages of programming services that a subscriber receives at a monthly rate. Subscribers may also elect to purchase certain premium programming services, such as Cinemax, Home Box Office and Showtime, for an additional monthly charge per service.
e) Additionally, Cablevision offers pay per view programming, a service enabling a subscriber to purchase individual movies, sporting events, or other entertainment for a pre-event fee over and above the subscriber's regular monthly fee.
f) Each subscriber is entitled to receive only that level of programming services that he or she selects and purchases.
g) The signals for Cablevision's cable television services are received via satellite and transmitted from Cablevision's satellite reception facilities to subscribers' homes through a network of cable wiring and equipment.

(Id. at 4-6)

2. Cable Television Converter-Decoder Equipment

To prevent its subscribers from receiving services that they have not purchased, Cablevision encodes or "scrambles" the signals for all of its premium and pay per view programming. When signals to Cablevision's premium or pay per view programming are scrambled, that programming is rendered unviewable by a subscriber who has not purchased such programming. In conjunction with its encryption security process, Cablevision provides to those subscribers who have purchased any premium or pay per view programming a device known as a "converter-decoder." Cablevision's authorized converter-decoder devices are "addressable, " which means that Cablevision programs each device in a subscriber's home from its central computer to descramble only those specific premium and pay per view programming services that a subscriber has purchased.

Conversely, any premium or pay per view programming that the subscriber has not purchased will not be descrambled by the device furnished by Cablevision. The industry is plagued by individuals and entities who market unauthorized "pirate" converter-decoders which permit a purchaser of the device to obtain Cablevision's scrambled premium and pay per view programming without paying the required fee to Cablevision.

3. Cablevision Has Established That Defendant Purchased Pirate Descrambling Devices ...

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