*Pages 1--6 from Microsoft Word - 51938* Federal Communications Commission DA 05- 2535 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Mediacom Wisconsin LLC MCC Iowa Eighteen Petitions for Determination of Effective Competition in Thirty- three Local Franchise Areas ) ) ) ) ) ) ) ) ) ) ) CSR 6729- E, 6840- E, 6841- E, 6847- E, 6851- E, 6852- E, 6862- E, 6867- E CSR 6710- E, 6756- E, 6768- E, 6770- E, 6773- E, 6775- E, 6788- E, 6797- E, 6798- E, 6799- E MEMORANDUM OPINION AND ORDER Adopted: September 27, 2005 Released: September 28, 2005 By the Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION 1. This Order considers eighteen 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 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 1 47 U. S. C. § 543( 1). 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. 1 Federal Communications Commission DA 05- 2535 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. 6 Turning to the first prong of this test, we find that the DBS service of DirecTV Inc. (“ DirectTV”) 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. 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. 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, 20 FCC Rcd 2755, 2793 (2005). 9 See 47 C. F. R. § 76.905( g). 2 Federal Communications Commission DA 05- 2535 3 B. Low Penetration Effective Competition 5. Section 623( l)( 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 The Cable Operator listed on Attachment A provided information showing that less than 30 percent of the households within the franchise areas subscribe to its cable services. Accordingly, we conclude that the Cable Operator has demonstrated the existence of low penetration effective competition under our rules. 6. Based on the foregoing, we conclude that the Cable Operators listed on Attachment A have submitted sufficient evidence to demonstrate that their cable systems are subject to effective competition. III. ORDERING CLAUSES 7. 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. 8. 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. 9. This action is taken pursuant to authority delegated under Section 0.283 of the Commission’s rules. 11 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Deputy Chief, Policy Division, Media Bureau 10 47 U. S. C § 543( l)( l)( A). 11 47 C. F. R. § 0.283. 3 Federal Communications Commission DA 05- 2535 4 Attachment A Cable Operators Subject to Competing Provider Effective Competition MEDIACOM WISCONSIN LLC: CSR 6729- E, 6840- E, 6841- E, 6847- E, 6851- E, 6852- E, 6862- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Belmont WI0222 20.16% 377 76 Cuba City WI0206 32.40% 861 279 WI0207 Darlington WI0208 26.40% 985 260 Potosi WI0209 25.17% 302 76 Shullsburg WI0214 22.96% 527 121 Tennyson WI0210 24.46% 139 34 Orfordville WI0451 42.64% 455 194 Monticello WI0468 35.54% 498 177 Fremont WI0551 37.75% 302 114 Browntown WI0701 28.00% 100 28 Iola WI0466 25.22% 567 143 Scandanavia WI0552 31.39% 137 43 Albany Village WI0456 30.56% 468 143 4 Federal Communications Commission DA 05- 2535 5 MCC IOWA LLC: CSR 6710- E, 6756- E, 6768- E, 6770- E, 6773- E, 6775- E, 6788- E, 6797- E, 6798- E, 6799- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Marshalltown IA0046 21.27% 10,175 2,164 Oskaloosa IA0078 15.01% 4,603 691 Bussey IA0491 17.93% 184 33 Hamilton IA0490 15.09% 53 8 Pleasantville IA0171 17.89 615 110 Lucas IA0794 21.05% 95 20 Woodburn IA0793 17.98% 89 16 Bertram IA0885 18.37% 98 18 Ackley IA0464 19.75% 734 145 Iowa Falls IA0129 18.96% 2,215 420 Cherokee IA0042 15.50% 2,362 366 Remsen IA0404 18.78% 671 126 Belle Plaine IA0366 21.29% 1,212 258 Marengo IA0371 28.19% 1,057 298 Albia IA0009 23.51% 1,531 360 Centerville IA0004 16.96% 2,583 438 Cable Operator Subject to Low Penetration Effective Competition MEDIACOM WISCONSIN LLC: CSR 6862- E, 6867- E Communities Franchise Area Cable Penetration Households Subscribers Level Albany Township 279 16 5.73% Lafayette 595 2 0.34% Lagrange 923 8 0.87% Sugar Creek 1,197 193 16.12% 5 Federal Communications Commission DA 05- 2535 6 CPR= Percent DBS penetration + = See Cable Operator Petitions 6