S1886

An Act concerning the review and approval of certain cable television company transactions and amending P.L.1972, c. 186.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 38 of P.L.1972, c.186 (C.48:5A-38) is amended to read as follows:

38. a. [No] Except as otherwise provided by subsection b. of this section, no CATV company shall combine, merge or consolidate with, or acquire control of, another organization without first obtaining the approval of the board, which shall be granted only after an investigation and finding that such proposed combination, merger, consolidation or acquisition is in the public interest.

b. Nothing herein shall require the review or approval by the board of any CATV company's combination, merger or consolidation with, or acquisition or control of, another organization, if the CATV company which seeks to engage in any of the aforementioned transactions does not itself provide cable television service over a cable television system but does directly or through one or more affiliates own a significant interest in such a cable television system or does otherwise control or exercise responsibility for, through any arrangement, the management and operation of such a cable television system.

(cf: P.L.1972, c.186, s.38)

2. Section 40 of P.L.1972, c.186 (C.48:5A-40) is amended to read as follows:

40. a. [No] Except as otherwise provided by subsections b. and c. of this section, no CATV company shall, without the approval of the board, sell, lease, mortgage or otherwise dispose of or encumber its property, franchises, privileges or rights, or any part thereof; or merge or consolidate its property, franchises, privileges or rights, or any part thereof, with that of any other CATV company. Every sale, mortgage, lease, disposition, encumbrance, merger or consolidation made in violation of this section shall be void.

b. Nothing herein shall prevent the sale, lease or other disposition by any CATV company of any of its property in the ordinary course of business, nor require the approval of the board to any grant, conveyance or release or any property or interest therein heretofore made or hereafter to be made by any CATV company to the United States, the State or any county or municipality or any agency, authority or subdivision thereof, for public use. The approval of the board shall not be required to validate the title of the United States, the State or any county or municipality or any agency, authority or subdivision thereof, to any lands or interest therein heretofore condemned or hereafter to be condemned by the United States, the State or any county or municipality or any agency, authority or subdivision thereof for public use.

c. Nothing herein shall require the review or approval by the board of any CATV company's sale, lease, mortgage or other disposition or encumbrance of any of its property, franchises, privileges or rights, or any part thereof; or the merger, or consolidation of its property, franchises, privileges or rights, or any part thereof, with that or those of any other CATV company, if the CATV company which seeks to engage in any of the aforementioned transactions does not itself provide cable television service over a cable television system but does directly or through one or more affiliates own a significant interest in such a cable television system or does otherwise control or exercise responsibility for, through any arrangement, the management and operation of such a cable television system.

(cf: P.L.1972, c.186, s.40)

3. Section 42 of P.L.1972, c.186 (C.48:5A-42) is amended to read as follows:

42. [No] Except as otherwise provided by subsection c. of this section, no CATV company shall, unless it shall have first obtained authority from the board to do so:

a. Issue any stocks, bonds, notes or other evidence of indebtedness payable more than 12 months after the date or dates thereof, or extend or renew any bond, note or other evidence of indebtedness so that any extension or renewal thereof shall be payable later than 12 months after the date of the original instrument; or

b. Permit any demand note to remain unpaid for a period of more than 12 months after the date thereof.

The board shall approve any such proposed issue, with or without hearing at its discretion, when satisfied that such issue is to be made in accordance with law and the purpose thereof is approved by the board.

c. Nothing herein shall require the review or approval by the board of any CATV company's issuance of any stocks, bonds, notes or other evidence of indebtedness payable more than 12 months after the date or dates thereof, or extension or renewal of any bond, note or other evidence of indebtedness so that any extension or renewal thereof shall be payable later than 12 months after the date of the original instrument, or permission for any demand note to remain unpaid for a period of more than 12 months after the date thereof, if the CATV company which seeks to engage in any of the aforementioned transactions does not itself provide cable television service over a cable television system but does directly or through one or more affiliates own a significant interest in such a cable television system or does otherwise control or exercise responsibility for, through any arrangement, the management and operation of such a cable television system.

(cf: P.L.1972, c.186, s.42)

4. This act shall take effect immediately.

STATEMENT

This bill would permit certain parent companies which do not themselves provide cable television service but which own a significant interest in cable television systems or otherwise control or are responsible for cable television systems, to engage in various types of corporate transactions, including combining, merging or consolidating with, or acquiring control of, another organization, without review or approval by the Board of Public Utilities (“BPU”).

The bill would also permit certain parent companies which do not themselves provide cable television service but which own a significant interest in cable television systems or which otherwise control or are responsible for cable television systems, to sell, lease, mortgage or otherwise dispose of or encumber their property, franchises, privileges or rights, or any part thereof; or to merge or consolidate their property, franchises, privileges or rights, or any part thereof, with that or those of any other cable television company, without review or approval of the BPU.

The bill would also permit certain parent companies which do not themselves provide cable television service but which own a significant interest in cable television systems or which otherwise control or are responsible for cable television systems, to issue any stocks, bonds, notes or other evidence of indebtedness payable more than 12 months after the date or dates thereof, or extend or renew any bond, note or other evidence of indebtedness so that any extension or renewal thereof shall be payable later than 12 months after the date of the original instrument, or permit any demand note to remain unpaid for a period of more than 12 months after the date thereof, without review or approval by the BPU.

Under a recent decision, the BPU has asserted jurisdiction over parent companies of cable television subsidiaries, based upon the definition of cable television company under P.L.1972, c.186 (C.48:5A-1 et seq.). As a result, parent company transactions unrelated to the activities of a subsidiary cable television company may be subject to review or approval by the BPU. This bill would exempt various corporate transactions of such parent companies from the requirement for BPU review or approval.