Cable TV not a "Utility" for purposes of section 366
I've always wondered whether Internet service could constitute a "utility" for purposes of section 366. If it did, section 366 would protect the debtor with past-due bills from having his or her service cut off.
The Court of Appeals for the Fifth Circuit, in In re Darby
, 470 F.3d 573 (5th Cir. 2006), shed a little light on the issue. However, the Darby
case dealt with cable TV access, not Internet service. The Court held that cable TV is a convenience, not a necessity, and thus differs from the traditional utilities specifically identified in section 366. Thus, section 366 did not provide the debtor any protection when Time Warner terminated his service.
The decision did provide some guidance. The Court noted that the debtor had options to his cable TV. For example, he could get satellite television. Although Internet service is a necessity (at least in my opinion), one can obtain Internet access through many different providers. In this respect it is more like television than like electric service or telephone service (athough these days anyone with an Internet connection can get phone service without going through the phone company - is phone service no longer a "utility"?)
Is an Internet connection a convenience or a necessity? We still don't know, but at least we know what television is.
Labels: 366, utility
A Minority Decision from a Major Court
Judge Gerber, sitting in the Southern District of New York, followed the Footstar
decision in adopting the "actual" test with respect to assumption of a franchise agreement. In In re Adelphia Communications Corp.
, 2007 WL 64128 (Bankr. S.D.N.Y. 2007), the Court needed to address the debtor's ability to assume and assign a franchise agreement. While the Court spent a significant amount of time analyzing the debtor's right to assign the contract, it easily and quickly dispensed with the question of assumption.
Labels: 365, assignment, assumption, license