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J. Certain Legal Expenses Which NITCO Paid
During the years in issue, NITCO paid substantial fees to
various attorneys and law firms in connection with certain legal
proceedings and other legal matters. Most of the legal expenses
that are in dispute between the parties are attributable to
proceedings that were commenced before the FCC in 1983,
concerning whether NICATV (the cable television company Rhys
owned) was an affiliate of NITCO or are attributable to
subsequent related legal proceedings that were brought as a
result of the FCC proceedings.
Divestiture Action
On October 13, 1983, another cable television company that
was a competitor of NICATV filed a complaint with the FCC against
Rhys Mussman d/b/a NICATV and NITCO. The complaint alleged that
NICATV and NITCO were affiliated companies engaged in
discriminatory and anticompetitive conduct in violation of the
Communications Act and the FCC's telephone company/cable
television company cross-ownership rules.6 In its complaint, the
other cable television company sought damages and a cease and
6The FCC’s cross-ownership rules generally prohibited a
local telephone company from offering cable television services
to the viewing public within its telephone service area, either
directly or indirectly through an affiliated company. The FCC’s
rules broadly defined affiliation to include any financial or
business relationship between the telephone company and the cable
television company, except the common carrier-user relationship.
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