*Pages 1--6 from Microsoft Word - 48651.doc* Federal Communications Commission DA 05- 1393 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Mediacom Iowa, LLC MCC Iowa, LLC MCC Iowa, LLC & Mediacom Iowa, LLC Mediacom Minnesota, LLC Mediacom Wisconsin, LLC Charter Communications Twenty- two Unopposed Petitions for Determination of Effective Competition in 33 Local Franchise Areas ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CSR 6554- E CSR 6550- E, 6553- E, 6555- E, 6556- E, 6565- E, 6587- E, 6588- E, 6589- E, 6624- E CSR 6558- E CSR 6566- E CSR 6591- E CSR 6468- E, 6469- E, 6470- E, 6471- E, 6472- E, 6473- E, 6474- E, 6475- E, 6476- E MEMORANDUM OPINION AND ORDER Adopted: May 18, 2005 Released: May 19, 2005 By the Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION 1. This Order considers twenty- two unopposed petitions which cable operators (the “Cable Operators”) have filed with the Commission pursuant to Sections 76.7, 76.905( b)( 2) and 76.907 of the Commission's rules for a determination that such operators are subject to effective competition pursuant to Section 623( 1) of the Communications Act of 1934, as amended (" Communications Act"), 1 and the 1 47 U. S. C. § 543( 1). 1 Federal Communications Commission DA 05- 1393 2 Commission's implementing rules, 2 and are therefore exempt from cable rate regulation in the communities listed in Attachment A (the “Communities”). No opposition to any petition was filed. Finding that the Cable Operators are subject to effective competition in the listed Communities, we grant the petitions. 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 623( 1) of the Communications Act of 1934, as amended, and 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 II. DISCUSSION 3. Section 623( l)( 1)( B) of the Communications Act provides that a cable operator is subject to effective competition if its franchise area is (a) served by at least two unaffiliated multi- channel video programming distributors (" MVPD") each of which offers comparable video programming to at least 50 percent of the households in the franchise area; and (b) the number of households subscribing to programming services offered by MVPDs other than the largest MVPD exceeds fifteen percent of the households in the franchise area. 6 Turning to the first prong of this test, we find that the DBS service of DirecTV Inc. (“ DirecTV”) and DISH Network (“ Dish”) is presumed to be technically available due to its nationwide satellite footprint, and presumed to be actually available if households in a franchise area are made reasonably aware that the service is available. 7 The two DBS providers’ subscriber growth reached approximately 23.16 million as of June 30, 2004, comprising approximately 23 percent of all MVPD subscribers nationwide; DirecTV has become the second largest, and DISH the fourth largest, MVPD provider. 8 In view of this DBS growth data, and the data discussed below showing that more than 15 percent of the households in each of the communities listed on Attachment A are DBS subscribers, we conclude that the population of the communities at issue here may be deemed reasonably aware of the availability of DBS services for purposes of the first prong of the competing provider test. With respect to the issue of program comparability, we find that the programming of the DBS providers satisfies the Commission's program comparability criterion because the DBS providers offer substantially more than 12 channels of video programming, including more than one non- broadcast channel. 9 We further find that the Cable Operators have demonstrated that the Communities are served by at least two unaffiliated MVPDs, namely the two DBS providers, each of which offers comparable video programming to at least 50 percent of the households in the franchise area. Therefore, the first prong of the competing provider test is satisfied. 2 47 C. F. R. § 76.905( b)( 4). 3 47 C. F. R. § 76.906. 4 See 47 U. S. C. § 543( 1) and 47 C. F. R. § 76. 905. 5 See 47 C. F. R. §§ 76.906 & 907. 6 47 U. S. C. § 543( 1)( 1)( B); see also 47 C. F. R. § 76.905( b)( 2). 7 See MediaOne of Georgia, 12 FCC Rcd 19406 (1997). 8 Eleventh Annual Assessment of the Status of Competition in the Market for Delivery of Video Programming, FCC 05- 13, at ¶¶ 54- 55 (rel. Feb. 4, 2005). 9 See 47 C. F. R. § 76.905( g). 2 Federal Communications Commission DA 05- 1393 3 4. The second prong of the competing provider test requires that the number of households subscribing to MVPDs, other than the largest MVPD, exceed 15 percent of the households in a franchise area. The Cable Operators sought to determine the competing provider penetration in the Communities by purchasing a subscriber tracking report that identified the number of subscribers attributable to the DBS providers within the Communities on a zip code basis. The Cable Operators assert that they are the largest MVPD in the Communities because their subscribership exceeds the aggregate DBS subscribership for those franchise areas. Based upon the aggregate DBS subscriber penetration levels as reflected in Attachment A, calculated using 2000 Census household data, we find that the Cable Operator’s have demonstrated that the number of households subscribing to programming services offered by MVPDs, other than the largest MVPD, exceeds 15 percent of the households in the Communities. Therefore, the second prong of the competing provider test is satisfied. Based on the foregoing, we conclude that the Cable Operators have submitted sufficient evidence demonstrating that their cable systems serving the Communities set forth on Attachment A are subject to competing provider effective competition. III. ORDERING CLAUSES 5. Accordingly, IT IS ORDERED that the petitions filed by the Cable Operators listed on Attachment A for a determination of effective competition in the Communities listed thereon ARE GRANTED. 6. IT IS FURTHER ORDERED that the certifications to regulate basic cable service rates granted to any of the local franchising authorities overseeing the Cable Operators ARE REVOKED. 7. This action is taken pursuant to authority delegated under Section 0.283 of the Commission’s rules. 10 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Deputy Chief, Policy Division, Media Bureau 10 47 C. F. R. § 0.283. 3 Federal Communications Commission DA 05- 1393 4 Attachment A Cable Operators Subject to Competing Provider Effective Competition MEDIACOM IOWA LLC: CSR 6554- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Bancroft IA0106 29.20% 339 99 MCC IOWA, LLC: CSR 6550- E, 6553- E, 6555- E, 6556- E, 6565- E, 6587- E, 6588- E, 6589- E, 6624- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Atlantic IA0034 16.35% 3,126 511 Denver IA0501 18.98% 648 123 Eagle Grove IA0024 23.76% 1,511 359 Northwood IA0487 17.51% 914 160 Corydon IA0118 25.35% 718 182 Greenfield IA0154 18.68% 937 175 Lamoni IA0081 24.69% 818 202 Leon IA0087 18.18% 858 156 Osceola IA0111 20.98% 1,945 408 Winterset IA0185 20.49% 1,884 386 Preston IA0635 17.03% 417 71 Newton IA0104 21.87% 6,713 1,468 Durant IA0414 19.49% 672 131 Knoxville IA0155 28.39% 3,191 906 4 Federal Communications Commission DA 05- 1393 5 MCC IOWA, LLC & MEDIACOM IOWA LLC: CSR 6558- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Kalona IA0266 22.70% 947 215 Washington IA0082 20.08% 2,928 588 MEDIACOM MINNESOTA, LLC: CSR 6566- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Arlington SD0057 19.34% 424 82 Brookings SD0005 15.16% 6,971 1,057 Volga SD0058 20.67% 571 118 MEDIACOM WISCONSIN, LLC: CSR 6591- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Cashton WI0594 21.45 415 89 CHARTER COMMUNICATIONS: CSR 6468- E, 6469- E, 6470- E, 6471- E, 6472- E, 6473- E, 6474- E, 6475- E, 6476- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Chewelah WA0176 52.8% 911 481 E Wenatchee WA0113 25.2% 2,295 578 Leavenworth WA0298 41.4% 899 372 Ellensburg WA0102 19.5% 6,249 1,217 Grand Coulee WA0309 26.6% 410 109 Omak WA0130 39.9% 1,861 742 Oroville WA0131 41.7% 691 288 WA0265 5 Federal Communications Commission DA 05- 1393 6 Tonasket WA0132 48.8% 420 205 WA0266 Pomeroy WA0133 44.3% 645 286 Sunnyside WA0226 39.6% 3,827 1,517 Yakima WA0302 26.0% 26,498 6,876 Waitsburg WA0152 32.3% 490 158 CPR= Percent DBS penetration + = See Cable Operator Petitions 6