*Pages 1--8 from Microsoft Word - 49956.doc* Federal Communications Commission DA 05- 1932 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Charter Communications MCC Georgia LLC Mediacom Delaware LLC Mediacom Southeast LLC Telesat Acquisition LLC d/ b/ a Adelphia Cable Communications Seventeen Petitions for Determination of Effective Competition in Thirty- Five Local Franchise Areas ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CSR 6488- E, 6490- E & 6491- E CSR 6549- E, 6557- E, 6662- E, 6665- E, 6669- E & 6680- E CSR 6663- E CSR 6640- E, 6656- E, 6682- E, 6683- E & 6685- E CSR 6533- E & 6534- E MEMORANDUM OPINION AND ORDER Adopted: June 30, 2005 Released: July 6, 2005 By the Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION 1. This Order considers seventeen petitions which cable operators (“ the “Cable Operators”) have filed with the Commission pursuant to Sections 76. 7, 76.905( b)( 1) & (2) and 76. 907 of the Commission’s rules for a determination that such operators are subject to effective competition pursuant to Section 623( a)( 1) of the Communications Act of 1934, as amended (“ Communications Act”) 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, 1 as that term is defined by Section 623( 1) of the Communications Act, and Section 76.905 of the Commission's rules. 2 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. 3 1 47 C. F. R. § 76.906. 2 See 47 U. S. C. § 543( 1); 47 C. F. R. § 76.905. 3 See 47 C. F. R. §§ 76. 906 & 907. 1 Federal Communications Commission DA 05- 1932 2 II. DISCUSSION A. Competing Provider Effective Competition 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. 4 Turning to the first prong of this test, 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. 5 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. 6 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. 7 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. 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. 8 The Cable Operators assert that they are the largest MVPD in the Communities because their subscribership exceeds the aggregate DBS 4 47 U. S. C. § 543( 1)( 1)( B); see also 47 C. F. R. § 76. 905( b)( 2). 5 See MediaOne of Georgia, 12 FCC Rcd 19406 (1997). 6 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). 7 See 47 C. F. R. § 76. 905( g). 8 Charter Petition CSR 6488- E at 6- 7; Charter Petition CSR 6490- E at 6- 7; Charter Petition CSR 6491- E at 6- 7; MCC Petition CSR 6549- E at 6 and Amendment to Petition at 6; MCC Petition CSR 6557- E at 6- 7; MCC Petition CSR 6662- E at 6; MCC Petition 6665- E at 6- 7; MCC Petition 6680- E at 7; Mediacom Delaware Petition CSR 6663- E at 6; Mediacom Southeast Petition CSR 6640- E at 6; Mediacom Southeast Petition CSR 6656- E at 6; Mediacom Southeast Petition CSR 6682- E at 6; Mediacom Southeast Petition CSR 6683- E at 6; Mediacom Southeast Petition 6685- E at 6. Charter Petitions CSR 6488- E/ CSR 6490- E/ CSR 6491- E and MCC Petitions CSR 6557- E/ CSR 6680- E reported DBS subscribership on a five digit zip code basis that was adjusted based upon an allocation methodology previously approved by the Commission. See, e. g., In re Petition for Determination of Effective Competition in San Luis Obispo County, California, 17 FCC Rcd 4617 (2002); Fibervision, Inc. Petition for Determination of Effective Competition in Laurel, MT and Park City, MT, 17 FCC Rcd 16313 (2002). The remaining MCC and Mediacom reports were provided on a zip code plus four basis. 2 Federal Communications Commission DA 05- 1932 3 subscribership for those franchise areas. 9 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. B. Low Penetration Effective Competition 5. Section 623( 1)( 1)( A) of the Communications Act provides that a cable operator is subject to effective competition, and therefore 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.” 10 Three Cable Operators listed on Attachment A (Charter CSR 6491- E, MCC Georgia CSRs 6669- E/ 6680- E, and Telesat CSRs 6533- E/ 6534- E) provided information showing that less than 30 percent of the households within its franchise area subscribe to its cable services. Accordingly, we conclude that that the Cable Operators have demonstrated the existence of low penetration effective competition under our rules. III. ORDERING CLAUSE 6. Accordingly, IT IS ORDERED that the petitions filed by Charter Communications, MCC Georgia LLC, Mediacom Delaware LLC, Mediacom Southeast LLC, and Telesat Acquisition LLC d/ b/ a Adelphia Cable Communications for a determination of effective competition in the communities listed on Attachment A ARE GRANTED. 7. 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. 8. This action is taken pursuant to delegated authority pursuant to Section 0.283 of the Commission’s rules. 11 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Deputy Chief, Policy Division, Media Bureau 9 Id. 10 47 U. S. C. § 543( 1)( 1)( A). 11 47 C. F. R. § 0.283. 3 Federal Communications Commission DA 05- 1932 4 Attachment A Cable Operators Subject to Competing Provider Effective Competition Charter Communications: CSR 6488- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Lake Park City GA0397 29.5% 224 66 Charter Communications: CSR 6490- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Woodbury GA0700 46.9% 454 213 Charter Communications: CSR 6491- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Aldora Town GA0707 27.9% 43 12 Barnesville City GA0212 29.5% 2079 614 Hampton City GA0329 30.9% 1411 436 Jackson City GA0552 46.8% 1510 707 Jenkinsburg GA0816 34.2% 76 26 McDonough GA0332 28.4% 3069 870 Milner City GA0480 50.3% 189 95 Stockbridge GA0955 20.7% 3749 774 GA0333 MCC Georgia LLC: CSR 6549- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Lowndes County GA0210 21.9% 14655 3214 4 Federal Communications Commission DA 05- 1932 5 MCC Georgia LLC: CSR 6557- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Alapaha GA0630 52.2% 270 141 MCC Georgia LLC: CSR 6662- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Colquitt GA0200 26.9% 9832 2641 MCC Georgia LLC: CSR 6665- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Hazlehurst GA0023 26.1% 1513 395 Jeff Davis County GA0502 16.6% 3315 549 MCC Georgia LLC: CSR 6680- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Donalsonville GA0244 35.4% 1008 357 Mediacom Delaware LLC: CSR 6663- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Pittsville MD0105 15.9% 477 76 Willards MD0106 15.4% 364 56 5 Federal Communications Commission DA 05- 1932 6 Mediacom Southeast LLC: CSR 6640- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Atmore AL0114 23.7% 3148 746 Brewton AL0117 28.9% 2216 641 East Brewton AL0118 24.3% 1043 253 Mediacom Southeast LLC: CSR 6656- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Lucedale MS0199 23.8% 916 218 Mediacom Southeast LLC: CSR 6682- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscriber+ Gulf Breeze FL0373 16.3% 2377 387 Mediacom Southeast LLC: CSR 6683- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscriber+ Bay Minette AL0162 20.5% 2739 560 Daphne AL0170 18.5% 6563 1212 Fairhope AL0160 18.6% 5345 995 Spanish Fort AL0721 22.9% 2035 466 6 Federal Communications Commission DA 05- 1932 7 Mediacom Southeast LLC: CSR 6685- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscriber+ Frisco City AL0338 16.3% 589 96 Monroeville AL0156 19.4% 2687 522 Cable Operator Subject to Low Penetration Effective Competition Charter Communications: CSR 6491- E Franchise Area Cable Penetration Communities Households Subscribers Level Lamar County 3401 427 12.6% MCC Georgia LLC: CSR 6669- E Franchise Area Cable Penetration Communities Households Subscribers Level Sumter County 5651 815 14.4% MCC Georgia LLC: CSR 6680- E Franchise Area Cable Penetration Communities Households Subscribers Level Decatur County 5936 855 14.4% Seminole County 2423 157 6.5% Telesat Acquisition LLC d/ b/ a Adelphia Cable Communications: CSR 6533- E Franchise Area Cable Penetration Communities Households Subscribers Level Orange County 212021 28995 13.7% 7 Federal Communications Commission DA 05- 1932 8 Telesat Acquisition LLC d/ b/ a Adelphia Cable Communications: CSR 6534- E Franchise Area Cable Penetration Communities Households Subscribers Level Osceola 36140 3353 .9% CPR = Percent DBS penetration + = See Cable Operator Petitions 8