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Ill.-ind. Cable T.v. Ass'n v. Comm. Com.







APPEAL from the Circuit Court of McHenry County, the Hon. CHARLES S. PARKER, Judge, presiding.


The Illinois Commerce Commission initiated proceedings to determine if it should exercise regulatory jurisdiction under authority granted by "An Act concerning public utilities" (hereinafter referred to as the Public Utilities Act) (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 1 et seq.) over community antenna television systems, commonly called CATV or cable television. After extensive hearings, the Commission concluded that cable television was a public utility within the definition of section 10.3(b) of the Act and by its interim opinion and order asserted jurisdiction to regulate the industry.

The Illinois-Indiana Cable Television Association (hereinafter referred to as the Association) appealed from this order to the circuit court of McHenry County. At the same time a number of cable television companies petitioned the same court for a declaratory judgment that the Commission had no authority to regulate cable television systems.

The trial court consolidated the two cases and indicated that, based upon judicial convenience, it would be more appropriate to determine the principal issue in the administrative review proceeding. The court pointed out that the record in the administrative review proceeding was extensive, and a determination in that proceeding rather than a possible ruling based upon a more narrow, limited, or procedural ruling in the declaratory judgment action was desirable.

The trial court thus granted the Commission's motion to dismiss the petition in the declaratory judgment proceeding. An appeal was taken from that order. The trial court also reversed the interim order of the Commission in the administrative review proceeding, thus holding that the Commission had erred in assuming regulatory jurisdiction over cable television. An appeal also was taken from that order. Both appeals were allowed directly to this court under Supreme Court Rule 302(b) (Ill. Rev. Stat. 1971, ch. 110A, par. 302(b)) and were consolidated for determination.

The central issue is whether cable television is a public utility under the statutory definition contained in section 10.3 of the Public Utilities Act. Ill. Rev. Stat. 1971, ch. 111 2/3, par. 10.3.

The Illinois Commerce Commission has only that jurisdiction conferred upon it by the legislature. (Lambdin v. Commerce Com. (1933), 352 Ill. 104, 106.) It may not extend its jurisdiction, that being a prerogative of the legislature. Thus, if cable television is not within the statutory definition of a public utility, the Commission is without power to assume jurisdiction over such services.

The relevant portions of section 10.3 of the Act are as follows:

"`Public utility' means and includes every corporation, company, association, joint stock company or association, firm, partnership or individual, their lessees, trustees, or receivers appointed by any court whatsoever that owns, controls, operates or manages, within this State, directly or indirectly, for public use, any plant, equipment or property used or to be used for or in connection with, or owns or controls any franchise, license, permit or right to engage in:

b. The transmission of telegraph or telephone messages between points within this State;

* * *." (Emphasis ours.)

The Commission made the following relevant findings after conducting extensive hearings:

"1. Cable television is a system of delivery of television signals over a grid of coaxial cables possessing a broad frequency bandwidth, which system can also deliver a variety of other video, audio, and data-grade signals. The system as a whole is properly termed `broadband cable communications.'

3. The business of providing cable television and other forms of broadband cable communications is an engagement `for public use' in `the transmission of telegraph or telephone messages within this State', within the meaning of Section 10-3(b) of the Public Utilities Act, Ill. Rev. Stats., Ch. 111 2/3, Sec. 1 et seq.

(a) As a matter of practical construction, `telephone' service within the meaning of the statute has come to mean a total telecommunications service embracing narrowband and broadband transmission of a wide variety of video, audio, and data-grade messages including television signals.

(b) There is at present a significant service overlap between the offerings of cable television and telephone companies, restrained from full competitive realization by a federal antitrust consent decree entered into by the Bell System and by a cease-and-desist regulation of the Federal Communications Commission affecting independent telephone companies. Neither of these legal restraints is immutable, and present federal policy favors the development of regulated competition for the total telecommunications service each industry is or can become technically equipped to provide.

(c) The huge financial needs of the cable television industry, if it is to meet the objective of wiring the cities and towns of America over the coming decade, will require the adoption of financing techniques similar to those employed by the conventional telephone ...

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