*Pages 1--2 from Microsoft Word - 8437.doc* Federal Communications Commission DA 01- 1024 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Teleponce Cable TV, Inc. Petition for Determination of Effective Competition in Ponce, Puerto Rico and Two Other Puerto Rico Franchise Areas ) ) ) ) ) ) ) CSR 5644- E MEMORANDUM OPINION AND ORDER Adopted: April 18, 2001 Released: April 23, 2000 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. Teleponce Cable TV, Inc, (“ Teleponce”) has filed with the Commission a petition pursuant to Section 623( a)( 1) of the Communications Act of 1934, as amended (" Communications Act") and Sections 76.7( a)( 1) and 76.905( b)( 1) of the Commission's rules for a determination of effective competition in Ponce, Puerto Rico and two other franchise areas in Puerto Rico (the “Franchise Areas”). 1 Teleponce alleges that its cable systems serving the Franchise Areas are subject to effective competition and are therefore exempt from cable rate regulation. Teleponce claims the presence of effective competition in the Franchise Areas because fewer than thirty percent of the households in each of the Franchise Areas subscribe to the cable services of its cable systems serving the Franchise Areas. No opposition to the petition was filed. 2 II. DISCUSSION 2. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition, 3 as that term is defined by Section 76.905 of the Commission's rules. 4 The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition is present within the relevant franchise area. 5 Section 623( l)( 1)( A) of the Communications Act provides that a cable operator is subject to effective competition, and therefore 1 Ponce, Puerto Rico makes up Franchise #FC- 18. The towns of Arroyo, Guayama, Maunabo, Patillas and Salinas, Puerto Rico make up Franchise #FC- 62; the towns of Adjuntas, Coamo, Guyayanilla, Jayuya, Juan Diaz, Penuelas, Santa Isabel, Villalba and Yauco, Puerto Rico make up Franchise #FC- 63. Petition at 2. 2 See Public Notice, Cable Services Bureau Registrations; Special Relief and Show Cause Petitions, Report No. 1300, dated February 6, 2001. 3 47 C. F. R. § 76.906. 4 47 C. F. R. § 76.905. 5 See 47 C. F. R. §§ 76.906 & 907. 1 Federal Communications Commission DA 01- 1024 2 exempt from cable rate regulation, if “fewer than 30 percent of the households in the franchise area subscribe to the cable service of the cable system.” 6 For these purposes, the Commission accepts 1990 census data as an appropriate measure of households and defines households as occupied housing units. 7 The Commission has stated: The first statutory test for effective competition is fulfilled when fewer that 30 percent of the households in the franchise area subscribe to the cable service of the cable system. The measurement of subscribership under this test will be based on the subscribership of the particular cable system in question, and not on the aggregation of the subscriberships of all cable systems and competitors in the franchise area. 8 3. Teleponce submitted evidence regarding household and subscriber data, which show that its cable systems serve less than 30 percent of households in each of the cable Franchise Areas at issue. Teleponce provided 1990 Census household data from each community in each of the Franchise Areas. Teleponce also provided Census Bureau projected 2000 population data for each community in each of the Franchise Areas. 9 Finally, Teleponce provided the count of actual subscribers in each community in each of the Franchise Areas, which it then used to calculate subscriber- to- household penetration ratios for each community and each of the Franchise Areas. The data established that Teleponce had a total of 15, 442 subscribers in Franchise #FC- 18 where there were 60,212 households for a penetration ratio of 25.65%; a total of 6,198 subscribers in Franchise #FC- 62 where there were 40,501 households for a penetration ratio of 15.30%; and a total of 15,767 subscribers in Franchise #FC- 63 where there were 73,959 households for a penetration ratio of 21. 32%. 10 Based on this record, we conclude that Teleponce has demonstrated that its cable systems meet the requirements of low penetration effective competition under our rules, and we grant its petition. III. ORDERING CLAUSES 4. Accordingly, IT IS ORDERED, pursuant to 47 C. F. R § 0.321, that the petition for a determination of effective competition filed by Teleponce Cable TV, Inc. IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Service Bureau 6 47 U. S. C § 543( l)( l)( A). 7 See Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Third Order on Reconsideration, 9 FCC Rcd 4316, 4325- 26 (1994). 8 See Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992, Report and Order and Further Notice of Proposed Rulemaking, 8 FCC Rcd 5631 (1993) and 47 C. F. R § 76.915( a). 9 The projected 2000 population data was obtained from the Puerto Rico Planning Board. Petition at Exhibit 1. Based on observed home construction, Teleponce anticapates that 2000 Census data will show an increase in households in each of the franchise areas from that shown by the 1990 Census household data. Petition at Exhibit 2. 10 Petition at 2- 3 and Exhibits 1 & 2. 2