RCN Seeks Damages in Pa. Lawsuit

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RCN Corp. will seek damages equal to the amount of revenue they will lose during the next four years because they were improperly denied access to conduits by a Pennsylvania landowner.

The company is seeking $383,326.43 in damages, according to pretrial filings in the case against the original landowners, Jaindl Land Co. and subsequent developer DeLuca Enterprises.

Last month, the judge hearing the suit in U.S. District Court for the Eastern District of Pennsylvania rendered a partial summary judgment, agreeing with RCN that an exclusivity agreement between Jaindl and local incumbent cable company Service Electric Corp. was illegal.

The defendants argued that RCN shouldn’t prevail in its suit because it also sought exclusive access agreements in the state. But the judge said RCN’s inconsistency did not doom the suit.

Because of the agreement, inherited by DeLuca when it bought the land, RCN was denied access to the utility trenches in a 240-home development in the state. RCN filed suit in 2003, alleging the exclusivity agreement violates the federal Cable Communications Policy Act.

On Oct. 7, the competitive cable company informed the judge in the case that after careful consideration, RCN has decided “not to disturb or disrupt” the residents of the development by demanding access to the conduits, which are now closed and covered. Instead, attorneys for RCN seek monetary damages, based on the revenue the bundled services provider would have collected had it been allowed to compete.

The pre-trial filing estimates that RCN would have been able to achieve 55% penetration in competition with Service Electric, an estimate based on take rates by consumers in similar developments in the area. If those 132 homes had subscribed, RCN could have made $138,505 a month, according to the filing. When that figure is multiplied by the length of the “life” of a customer, estimated to be 4.4 years, RCN computes that it lost $383,326.43 in profits. The trial on the damages demand is pending.

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