*Pages 1--9 from Microsoft Word - 19085.doc* Federal Communications Commission DA 02- 1331 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 the States of ) ) Alabama, Colorado, Florida, Georgia, Illinois, ) Kansas, Kentucky, Louisiana, Missouri, Mississippi, ) Nebraska, South Carolina, South Dakota, Tennessee, ) Texas ) ) 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, 36- month waivers of Section 11.11( a) of the Commission’s Rules (“ Rules”) for the 217 cable systems listed in the Attachment A. 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 1 Federal Communications Commission DA 02- 1331 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 based on system size. In particular, Galaxy requests 36- month temporary waivers for the 217 cable systems listed in Attachment A of this Order. Galaxy indicates that these cable systems serve approximately between 9 and 948 subscribers. In further support of its waiver requests, 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. Order”). 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- 1331 3 4. Based upon our review of the financial data and other information submitted by Galaxy we conclude that a temporary, 36- month waiver of Section 11.11( a) for the 217 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 October 1, 2005 for the cable systems listed in Attachment A. 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 36 months from October 1, 2002, until October 1, 2005. Galaxy Telecom, L. P. also specifically requested waiver of the testing and monitoring requirements of the EAS rules for the 217 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 Federal Communications Commission DA 02- 1331 4 Attachment A Galaxy Telecom, L. P. Cable Systems: Alabama Butler, Alabama Grove Hill/ Whatley Alabama Uniontown, Alabama Nauvoo, Alabama Pine Hill, Alabama Arley, Alabama Jasper/ Pineywood, Alabama Thomaston, Alabama Mexia, Alabama Cuba, Alabama Orville, Alabama Pennington, Alabama Colorado Limon, Colorado Larimer Co., Colorado Gilpin/ Jefferson/ Boulder, Colorado Lyons, Colorado Ordway, Colorado Hugo, Colorado Cheyenne Wells, Colorado Weld Co., Colorado Holly, Colorado Eads, Colorado Walsh, Colorado Westcliffe, Colorado Granada, Colorado Stratton, Colorado Flagler, Colorado Deertrail, Colorado Wiley, Colorado Florida Clay Co./ Middleburg, Florida Spruce Creek South, Florida Lawtey, Florida Penney Farms, Florida W. Putnam Co./ Hawthorne, Florida Pedro/ Summerfield, Florida 4 Federal Communications Commission DA 02- 1331 5 Bronson, Florida Hernando Co., Florida E Lake Co/ Paisley/ Deland, Florida Sandpiper MHP/ Umatilla, Florida Hampton/ Stark, Florida E Putnam Co., Florida Live Oak, Florida Sharpes Ferry, Florida Smith Lake Shores MHP, Florida Georgia Sanford/ Clarke, Georgia Arnoldsville/ Clark Co., Georgia Lincolnton Co., Georgia Avalon City, Georgia Bishop City, Georgia Rayle, Georgia Raysville, Georgia Illinois Lake of Egypt/ Johnson Co., Illinois Carrier Mills, Illinois Jackson Co., Illinois Alexander Co., Illinois Rosiclare, Illinois Freeman Spur, Illinois Vienna, Illinois Galatia, Illinois Pittsburg, Illinois Golconda, Illinois Kansas Marion, Kansas Minneapolis, Kansas Hillsboro, Kansas Rossville, Kansas Chapman, Kansas Strong City, Kansas Clifton, Kansas Blue Rapids, Kansas Solomon, Kansas Wakefield, Kansas Overbrook, Kansas Americus, Kansas Pomona, Kansas Riley, Kansas Onaga, Kansas Alma, Kansas 5 Federal Communications Commission DA 02- 1331 6 Meriden, Kansas Waverly, Kansas Olpe, Kansas Milford, Kansas Hartford, Kansas Maple Hill, Kansas White City, Kansas Melvern, Kansas Eskridge, Kansas Hope, Kansas Alta Vista, Kansas Dwight, Kansas Quenemo, Kansas Richmond, Kansas Neosha Rapids, Kansas Cuba, Kansas Vassar Lake/ Osage, Kansas Woodbine, Kansas McFarland, Kansas Lyons Co., Kansas Havensville, Kansas Reading, Kansas Tamps, Kansas Williamsburg, Kansas Harveyville, Kansas Morganville, Kansas LakeWabaunsee, Kansas Palmer, Kansas Barnes, Kansas Paxico, Kansas Lehigh, Kansas Walton, Kansas Durham, Kansas Green, Kansas Kentucky Hickman, Kentucky Hazel, Kentucky Louisiana Kentwood, Louisiana Missouri Slater, Missouri Gallatin, Missouri Memphis, Missouri Princeton, Missouri Smithton, Missouri 6 Federal Communications Commission DA 02- 1331 7 Cass Co., Missouri Green Castle, Missouri Greentop, Missouri Hallsville, Missouri New Bloomfield, Missouri Novinger, Missouri Sturgeon, Missouri Higbee, Missouri Mississippi Canton, Mississippi Winona, Mississippi Lexington, Mississippi Iuka, Mississippi Calhoun City, Mississippi Charleston, Mississippi Sumner, Mississippi Itta Benna, Mississippi Poplarville, Mississippi Eupora, Mississippi Monticello, Mississippi Shelby, Mississippi Tylertown, Mississippi Mound Bayou, Mississippi Prentiss, Mississippi Hickory Flat, Mississippi Coffeeville, Mississippi Taylorsville, Mississippi Lake, Mississippi Lumberton, Mississippi Macedonia, Mississippi Ashland, Mississippi Marshall Co., Mississippi N. A. S. Meridian, Mississippi Richton, Mississippi Dekalb, Mississippi Leakesville, Mississippi Sumrall, Mississippi Chunky, Mississippi Shubuta, Mississippi Bassfield, Mississippi Bentonia, Mississippi Stateline, Mississippi Mosselle, Mississippi Pachuta, Mississippi 7 Federal Communications Commission DA 02- 1331 8 Nebraska Central City, Nebraska Wymore, Nebraska Albion, Nebraska Burwell, Nebraska Fullerton, Nebraska Stromsburg, Nebraska Grand Island. Nebraska Genoa, Nebraska Osceola, Nebraska Waco, Nebraska Deshler, Nebraska Newman Grove, Nebraska Peru, Nebraska Saint Edward, Nebraska Sargent, Nebraska Humphrey, Nebraska Shelby, Nebraska Nelson, Nebraska Ceresco, Nebraska Valparaiso, Nebraska Silver Creek, Nebraska Cedar Rapids, Nebraska Bellwood, Nebraska Beaver Crossing, Nebraska Chester, Nebraska Meadow Grove, Nebraska Malcolm, Nebraska Polk, Nebraska Arcadia, Nebraska North Loup, Nebraska Western, Nebraska Scotia, Nebraska Gresham, Nebraska Duncan, Nebraska Bradshaw, Nebraska Glenvil, Nebraska Garland, Nebraska Ulysses, Nebraska Brainard, Nebraska Raymond, Nebraska Taylor, Nebraska Staplehurst, Nebraska Byron, Nebraska Benedict, Nebraska 8 Federal Communications Commission DA 02- 1331 9 South Carolina Cross Hill East (Mountville), South Carolina Greenville (SE) Co., South Carolina Laurens SE, South Carolina McCormick Co., South Carolina South Dakota Pennington/ Rimrock Hwy, SD, South Dakota Hill City, South Dakota Newell, South Dakota Boulder Canyon, South Dakota Whitewood, South Dakota Tennessee Hazel, Kentucky Texas Franklin, Texas Calvert, Texas Bremond, Texas Lott, Texas Crawford, Texas Chilton, Texas 9