Snider Communication Corp. v. Cue Paging Corp.

840 F. Supp. 664, 74 Rad. Reg. 2d (P & F) 947, 1994 U.S. Dist. LEXIS 306, 1994 WL 8828
CourtDistrict Court, E.D. Arkansas
DecidedJanuary 6, 1994
DocketNo. LR-C-92-561
StatusPublished
Cited by1 cases

This text of 840 F. Supp. 664 (Snider Communication Corp. v. Cue Paging Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Snider Communication Corp. v. Cue Paging Corp., 840 F. Supp. 664, 74 Rad. Reg. 2d (P & F) 947, 1994 U.S. Dist. LEXIS 306, 1994 WL 8828 (E.D. Ark. 1994).

Opinion

MEMORANDUM AND OPINION

STEPHEN M. REASONER, Chief Judge.

Trial in this matter came on to be heard on September 20-21, 1993. After consideration of the arguments and issues, the Court is of the opinion that judgment should be entered in favor of the defendants on plaintiffs Communications Act claim. Aso, the motions for reconsideration will be granted, and the Court will allow the parties to amend their pleadings as desired.

I. FINDINGS OF FACT

1. The Plaintiff, Snider Communications Corporation (Snider) is an Akansas corporation with its principal place of business in Little Rock, Akansas. Snider is engaged in the business of providing paging service to customers in the State of A’kansas.

2. Separate Defendant Cue Paging Corporation (Cue) is a Delaware corporation with its principal place of business in the State of California. Cue is a supplier of national telecommunications services using the 57 kilohertz subcarriers of FM broadcast stations.

3. Separate Defendant Magic Broadcasting, Inc. d/b/a Magic 105 (Magic 105) is an Akansas corporation with its principal place of business in the State of Akansas. Magic 105 is an FM broadcast station with the call letters of KMJX.

4. Cue operates a nationwide paging system that serves more than 35,000 paging customers who use more than 85,000 active paging devices throughout all of the contiguous 48 states and much of Canada. Cue’s nationwide paging information is broadcast over more than 300 FM stations. Cue’s nationwide customers include private businesses, such as trucking companies, and governmental agencies, such as the Defense Department, the Central Intelligence Agency, the FBI, and the White House Communications Agency.

5. The nationwide paging services offered by Cue utilize an MBS protocol at the 57 kilohertz subcarrier channel of FM radio stations. The MBS protocol includes a “country code” which signals certain identification information to the pagers.

6. Snider operates a statewide paging system by means of a subcarrier network that also utilizes an MBS protocol at the 57 kilohertz subcarrier channel of FM radio stations in various parts of Akansas and Memphis, Tennessee. Snider has leased from each of the various FM stations the right to utilize the 57 kilohertz subcarrier channel of the FM base band to transmit the paging information.

7. Both Snider and Cue make use of the B5 country code, and there are no nationwide paging systems, other than Cue, that use a similar MBS protocol scheme. Therefore, the B5 country code is the only such code in use on a nationwide basis in the United States.

8. Diversicom, Cue’s predecessor in interest, started the nationwide system based upon the MBS protocol and the 57 kilohertz subcarrier band of FM radio stations in 1985.

9. Diversicom selected the B5 country code for its nationwide paging system.

10. Diversicom was and Cue is now the exclusive dealer/distributor of Nokia pagers in the United States.

11. Nokia is the only manufacturer of pagers designed to scan and interpret the B5 country code used by Cue and Snider.

12. In March of 1987, Nokia arranged to purchase Diversicom.

13. In April of 1990, Cue purchased the assets and assumed control of the nationwide paging system previously established by Diversicom and owned by Nokia.

[666]*66614. In March, 1986, Diversicom introduced the combined locai/nationwide paging system to Snider. The introduction included a technical description of the system and further provided Snider with certain equipment so that Snider could test the B5 system. Snider retained the equipment for an extended period and continued to evaluate the B5 system.

15. Snider’s state system did not-utilize the B5 country code, except through the direct assistance and cooperation of Diversicom.

16. In February, 1987, Snider and Diversicom entered into a five (5) year Affiliation Agreement and a First Amendment to the Affiliation Agreement, formalizing Snider’s status as an affiliate. After the five (5) year term, the contract stated that it was to continue in effect “at the then current terms and conditions for similar agreements, until not less than sixty (60) days advance written notice of termination ha[d] been given by either party to the other.” Cue gave Snider such notice on October 2, 1992.

17. Pursuant to the Affiliation Agreement, Diversicom granted Snider the right to operate as the Diversicom Affiliated FM sub-carrier paging service in Arkansas and Shelby and Tipton counties in Tennessee.

18. Throughout the duration of their contractual relationship, Cue paid Snider, by subcarrier credits, the full amount of Snider’s subcarrier leases with the FM stations on the Cue network.

19. Cue’s nationwide data is received by Snider via satellite and microwave transmission and is then combined by Snider with its statewide data. The combined data is transmitted via Snider’s own satellite and microwave link to the various FM radio stations located throughout Arkansas and rebroadcast over the subcarrier channels of the FM stations.

20. Upon assuming control of the former Diversicom nationwide paging system in April, 1990, Cue began working with its Affiliates to restructure the company and the affiliate arrangements. A majority of the Affiliates signed a new affiliation or distribution agreement soon thereafter. Snider refused to sign a new agreement and insisted on enforcing the 1987 Affiliation Agreement.

21. In October, 1991, Cue and Snider met to discuss renewal of their contractual relationship. At this meeting Cue gave Snider a proposed contract which Snider did not sign.

22. In subsequent negotiations, Snider contended that Cue should give Snider special terms that would favor Snider over other affiliates.

23. Although Cue and Snider never reached agreement on the terms of a new contract, they did continue doing business with one another on a month-to-month basis, generally pursuant to the terms of the existing 1987 Affiliation Agreement.

24. On or about July 31, 1992, Cue entered into a contract with Magic 105 and leased Magic 105’s subcarrier capacity.

25. On August 1, 1992, Snider entered into a contract with MobilComm, a competing nationwide paging network that operates with what is termed a 900 Megahertz system.

26. On August 17, 1992, Cue began intercepting the combined Cue and Snider data streams from KUAR, one of the stations with whom Snider had a subcarrier lease, and retransmitting the combined data streams over Magic 105’s FM subcarrier band. The data streams were intercepted from KUAR’s tower located in central Arkansas.

27. This dual broadcast of the combined data streams over Magic 105 occurred from August 17, 1992, until September 3, 1992 at approximately 1:50 p.m.

28. The pagers issued to the customers of Cue and Snider utilize a method wherein the pager scans for a frequency carrying the B5 country code. Once an appropriate signal is found, the pager will lock on and begin searching for messages intended for the paging customer to which it has been assigned. The pager will stay locked on to the frequency until the pager is either turned off or taken out of that frequency’s broadcast area.

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Bluebook (online)
840 F. Supp. 664, 74 Rad. Reg. 2d (P & F) 947, 1994 U.S. Dist. LEXIS 306, 1994 WL 8828, Counsel Stack Legal Research, https://law.counselstack.com/opinion/snider-communication-corp-v-cue-paging-corp-ared-1994.