*Pages 1--3 from Microsoft Word - 19088.doc* Federal Communications Commission DA 02- 1329 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of ) ) Galaxy Telecom, L. P. ) File No. EB- 02- TS- 122 ) Operator of Cable Systems in: ) ) Alma, Missouri ) Wilber, Nebraska ) ) Request for Waiver of Section 11. 11( a) of the ) Commission’s Rules ) ORDER Adopted: June 18, 2002 Released: June 21, 2002 By the Chief, Technical and Public Safety Division, Enforcement Bureau: 1. In this Order, we grant Galaxy Telecom, L. P., (“ Galaxy”) temporary, 18- month waivers of Section 11.11( a) of the Commission’s Rules (“ Rules”) for the two above- captioned cable television systems. Section 11.11( a) requires cable systems serving fewer than 5,000 subscribers from a headend to either provide national level Emergency Alert System (“ EAS”) messages on all programmed channels or install EAS equipment and provide a video interrupt and audio alert on all programmed channels and EAS audio and video messages on at least one programmed channel by October 1, 2002. 1 2. The Cable Act of 1992 added new Section 624( g) to the Communications Act of 1934 (“ Act”), which requires that cable systems be capable of providing EAS alerts to their subscribers. 2 In 1994, the Commission adopted rules requiring cable systems to participate in EAS. 3 In 1997, the Commission amended the EAS rules to provide financial relief for small cable systems. 4 The 1 47 C. F. R. § 11.11( a). 2 Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102- 385, § 16( b), 106 Stat. 1460, 1490 (1992). Section 624( g) provides that “each cable operator shall comply with such standards as the Commission shall prescribe to ensure that viewers of video programming on cable systems are afforded the same emergency information as is afforded by the emergency broadcasting system pursuant to Commission regulations ….” 47 U. S. C. § 544( g). 3 Amendment of Part 73, Subpart G, of the Commission’s Rules Regarding the Emergency Broadcast System, Report and Order and Further Notice of Proposed Rule Making, FO Docket Nos. 91- 171/ 91- 301, 10 FCC Rcd 1786 (1994) (“ First Report and Order”), reconsideration granted in part, denied in part, 10 FCC Rcd 11494 (1995). 4 Amendment of Part 73, Subpart G, of the Commission’s Rules Regarding the Emergency Broadcast System, Second Report and Order, FO Docket Nos. 91- 171/ 91- 301, 12 FCC Rcd 15503 (1997) (“ Second Report and Order”). 1 Federal Communications Commission DA 02- 1329 2 Commission declined to exempt small cable systems from the EAS requirements, concluding that such an exemption would be inconsistent with the statutory mandate of Section 624( g). 5 However, the Commission extended the deadline for cable systems serving fewer than 10, 000 subscribers to begin complying with the EAS rules to October 1, 2002, and provided cable systems serving fewer than 5,000 subscribers the option of either providing national level EAS messages on all programmed channels or installing EAS equipment and providing a video interrupt and audio alert on all programmed channels and EAS audio and video messages on at least one programmed channel. 6 In addition, the Commission stated that it would grant waivers of the EAS rules to small cable systems on a case- by- case basis upon a showing of financial hardship. 7 The Commission indicated that waiver requests must contain at least the following information: (1) justification for the waiver, with reference to the particular rule sections for which a waiver is sought; (2) information about the financial status of the requesting entity, such as a balance sheet and income statement for the two previous years (audited, if possible); (3) the number of other entities that serve the requesting entity’s coverage area and that have or are expected to install EAS equipment; and (4) the likelihood (such as proximity or frequency) of hazardous risks to the requesting entity’s audience. 8 3. On April 2, 2002, Galaxy filed a request for temporary waivers of Section 11.11( a) for 234 small rural cable systems in 15 states. Galaxy requests waivers ranging from 18 months to 36 months depending on the system size. In particular, Galaxy requests 18- month temporary waivers for the two captioned cable systems. Galaxy indicates that the Alma, Missouri cable system serves approximately 6,814 subscribers, and the Wilber, Nebraska cable system serves approximately 3,173 subscribers. In further support of its waiver request, Galaxy states that it is currently operating under Chapter 11 bankruptcy pursuant to a Court- approved plan of reorganization. 9 Based on price quotes provided by EAS equipment manufacturers, Galaxy estimates that it would cost approximately $10,000 per headend, for a total of over $2.3 million to install EAS equipment at these systems. Galaxy asserts that this cost will impose a substantial financial hardship on it and provides its financial statements for 2000 and 2001 in support of this assertion. In addition, Galaxy submits that its subscribers will continue to have ready access to national EAS information from other sources, including its cable systems. In this regard, Galaxy notes that its subscribers currently have access to national EAS messages from several sources, including from Galaxy’s own cable systems. Galaxy also asserts that its subscribers will have access to EAS information through over- the- air reception of broadcast television and radio stations. Finally, Galaxy expects to be able to fund the EAS equipment and installation for its largest system by April 2004, with the remainder of its systems being brought into compliance on a phased- in schedule by October 2005. 5 Id. at 15512- 13. 6 Id. at 15516- 15518. 7 Id. at 15513. 8 Id. at 15513, n. 59. 9 On October 31, 2001, Galaxy Telecom, L. P. and Galaxy Telecom Capital Corp. filed for Chapter 11 bankruptcy with the United States Bankruptcy Court, the Eastern District of Missouri. 2 Federal Communications Commission DA 02- 1329 3 4. Based upon our review of the financial data and other information submitted by Galaxy we conclude that a temporary, 18- month waiver of Section 11.11( a) for the two systems is warranted. 10 In particular, we find that the estimated $2.3 million cost of EAS equipment for these cable systems could impose a financial hardship on Galaxy. 5. We note that the Commission recently amended the EAS rules to permit cable systems serving fewer than 5,000 subscribers to install FCC- certified decoder- only units, rather than both encoders and decoders, if such a device becomes available. 11 Based on comments from equipment manufacturers, we anticipate that such a decoder- only system could result in significant cost savings to small cable systems. 12 6. Accordingly, IT IS ORDERED that, pursuant to Sections 0.111, 0.204( b) and 0.311 of the Rules, 13 Galaxy Telecom, L. P. IS GRANTED a waiver of Section 11.11( a) of the Rules until April 1, 2004 for the captioned cable systems. 7. IT IS FURTHER ORDERED that Galaxy Telecom, L. P. place a copy of this waiver in its system files. 8. IT IS FURTHER ORDERED that a copy of this Order shall be sent by Certified Mail Return Receipt Requested to counsel for Galaxy Telecom, L. P., Christopher C. Cinnamon, Esq., Cinnamon Mueller, 307 North Michigan Avenue, Suite 1020, Chicago, Illinois 60601. FEDERAL COMMUNICATIONS COMMISSION Joseph P. Casey Chief, Technical and Public Safety Division Enforcement Bureau 10 The waivers will extend 18 months from October 1, 2002, until April 1, 2004. Galaxy Telecom, L. P. also specifically requested waiver of the testing and monitoring requirements of the EAS rules for the two systems. We clarify that the waivers we are granting also encompass the EAS testing and monitoring requirements. 11 Amendment of Part 11 of the Commission’s Rules Regarding the Emergency Alert System, EB Docket 01- 66, FCC 02- 64 at ¶ 71 (released February 26, 2002). 12 One manufacturer estimated that an EAS decoder- only system can reduce the cost by 64% over what a cable operator would spend for an encoder/ decoder unit. Id. at ¶ 70. 13 47 C. F. R. §§ 0.111, 0. 204( b) and 0.311. 3