*Pages 1--7 from Microsoft Word - 54045.doc* Federal Communications Commission DA 05- 3332 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Mediacom Indiana LLC Charter Communications Twelve Petitions for Determination of Effective Competition in various Local Franchise Areas ) ) ) ) ) ) ) ) ) ) ) ) ) ) CSR 6702- E, 6706- E, 6736- E, 6741- E, 6742- E, 6744- E, 6754- E, 6839- E, 6869- E CSR 6808- E, 6809- E, 6810- E MEMORANDUM OPINION AND ORDER Adopted: December 27, 2005 Released: December 28, 2005 By the Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION 1. This Order considers twelve 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 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. 1 Federal Communications Commission DA 05- 3332 2 competition is present within the relevant franchise area. 5 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 Operators 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 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, 20 FCC Rcd 2755, 2793 (2005). 9 See 47 C. F. R. § 76.905( g). 2 Federal Communications Commission DA 05- 3332 3 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( 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 Operators listed on Attachment A provided information showing that less than 30 percent of the households within the franchise areas subscribe to their cable services. Accordingly, we conclude that the Cable Operators have 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- 3332 4 Attachment A Cable Operators Subject to Competing Provider Effective Competition MEDIACOM INDIANA LLC: CSR 6702- E, 6706- E, 6736- E, 6741- E, 6742- E, 6744- E, 6754- E, 6839- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Culver IN0389 18.47% 655 121 Knox IN0388 22.37% 1,466 328 North Judson IN0393 24.23% 648 157 Walkerton IN0320 22.84% 810 185 Albion IN0342 28.25% 846 239 Auburn IN0130 16.76% 4,927 826 Churubusco IN0383 36.77% 650 239 Columbia IN0245 30.75% 3,018 928 Garrett IN0141 18.40% 2,185 402 Ligonier IN0158 40.07% 1,390 557 North Man. IN0142 20.30% 2,192 445 South Whitley IN0520 27.49% 742 204 St. Joe IN0594 23.03% 165 38 Waterloo IN0140 19.95% 832 166 Bluffton IN0110 19.33% 3,922 758 Decatur IN0109 20.61% 3,960 816 Vera Cruz IN0862 29.17% 24 7 Kendallville IN0112 15.93% 3,873 617 Rome City IN0514 19.40% 629 122 Wolcottville IN0515 18.86% 350 66 including IN0516 4 Federal Communications Commission DA 05- 3332 5 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Argos IN0540 24.55% 615 151 Bourbon IN0963 25.23% 646 163 Bremen IN0199 28.60% 1,689 483 Nappanee IN0160 24.71% 2,521 623 Pierceton IN0526 29.62% 260 77 Syracuse IN0376 19.82% 1,236 245 Lagrange IN0287 20.63% 1,149 237 Angola IN0024 17.88% 2,769 495 Butler IN0731 20.04% 983 197 Steuben IN0500 29.08% 12,738 3,704 Brook IN0171 17.63% 397 70 Goodland IN0135 17.97% 434 78 Kentland IN0028 29.47% 733 216 CHARTER COMMUNICATIONS: CSR 6808- E, 6809- E, 6810- E 2000 Census DBS Communities CUIDS CPR* Households + Subscribers + Elberfeld IN0410 45.2% 261 118 Loogootee IN0213 36.9% 1226 453 Ferdinand IN0351 52.7% 808 426 Santa Claus IN0353 56.3% 732 412 5 Federal Communications Commission DA 05- 3332 6 Cable Operator Subject to Low Penetration Effective Competition MEDIACOM INDIANA LLC: CSR 6702- E, 6706- E, 6736- E, 6742- E, 6839- E, 6869- E Communities CUIDS Franchise Area Cable Penetration Households Subscribers Level Francesville IN0825 357 89 24.93% Medaryville IN0826 225 58 25.77% St. Joseph County IN0655 26,835 86 0.32% including IN0422 Starke Cnty including IN0395 8,740 636 7.28% Bass Lake & IN0390 Koontz Lake & IN0391 San Pierre IN0861 Allen County IN0591 128,745 620 0.48% including IN1089 & Leo- Cedarville IN1067 Dekalb IN0592 15,134 704 4.65% Wabash IN0627 13,215 110 0.83% Whitley Cnty including IN0991 11,711 319 2.72% Tri Lakes IN0993 Adams County IN1100 11,818 644 5.45% Wells County IN1102 10,402 522 5.02% Elkhart IN0961 66,154 86 0.13% Kosciusko County IN0440 27,283 991 3.63% including IN0832 & Dewart Lake IN0960 Marshall County IN1106 16,519 132 0.80% including IN0973 6 Federal Communications Commission DA 05- 3332 7 & Lake of the Woods IN0962 & Tippecanoe IN0971 Noble County IN0626 16,696 472 2.83% Newton County IN1103 5,340 384 7.19% Lagrange County IN0831 11,255 221 1.97% including Howe IN0833 CHARTER COMMUNICATIONS: CSR 6808- E Communities CUIDS Franchise Area Cable Penetration Households Subscribers Level Warrick County IN0719 13,491 33 .2% CPR= Percent DBS penetration + = See Cable Operator Petitions 7