*Pages 1--8 from Microsoft Word - 47928.doc* Federal Communications Commission DA 05- 996 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Adelphia Communications Bright House Networks, LLC Charter Communications MCC Georgia LLC Mediacom Southeast Nineteen Unopposed Petitions for Determination of Effective Competition in Forty- Seven Local Franchise Areas ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CSR 6512- E & 6513- E CSR 6543- E & 6544- E CSR 6415- E, 6416- E, 6480- E, 6485- E, 6486- E, 6487- E, 6489- E, 6499- E, 6500- E , 6501- E, 6527- E, 6528- E & 6529- E CSR 6478- E CSR 6481- E MEMORANDUM OPINION AND ORDER Adopted: March 31, 2005 Released: April 1, 2005 By the Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION 1. This Order considers nineteen unopposed 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- 996 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 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 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 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 Adelphia Petitions CSR 6512- E/ 6513- E at 6; Bright House Petitions CSR 6543- E at 7- 9; Charter Petitions CSR 6415- E/ 6416- E at 5- 6; Charter Petition CSR 6480- E at 6- 7; Charter Petition CSR 6485- E at 6- 7; Charter Petitions 6486- E/ 6487- E/ 6489- E at 6- 8; Charter Petitions CSR 6499- E/ 6500- E/ 6501- E at 5- 7; Charter Petitions CSR 6527-E/ 6528- E/ 6529- E at 5- 7; MCC Petition CSR 6778- E at 6; Mediacom Petition CSR 6481- E at 7. MCC and Mediacom provided a report that provided zip code plus four information. The remaining petitions reported on a five digit zip code basis that was adjusted based upon an allocation methodology previously approved by the Commission. 9 Id. 2 Federal Communications Commission DA 05- 996 3 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 One Cable Operator listed on Attachment A (Charter, CSR 6480- 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 Operator has demonstrated the existence of low penetration effective competition under our rules. 6. Based on the foregoing, we conclude that the five Cable Operators listed on Attachment A have submitted sufficient evidence to demonstrate that their cable systems are subject to effective competition. III. ORDERING CLAUSE 7. Accordingly, IT IS ORDERED that the petitions filed by Adelphia Communications, Bright House Networks, LLC, Charter Communications, MCC Georgia, LLC, and Mediacom Southeast for a determination of effective competition in the communities listed on Attachment A 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 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 10 47 U. S. C. § 543( 1)( 1)( A). 11 47 C. F. R. § 0.283. 3 Federal Communications Commission DA 05- 996 4 Attachment A Cable Operators Subject to Competing Provider Effective Competition Adelphia Cable Communications: CSR 6512- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Carroll VA0135 37.8% 12186 4607 Adelphia Cable Communications: CSR 6513- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Culpeper County VA0224 26.1% 12141 3167 Bright House Networks, LLC: CSR 6543- E & 6544- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Brooksville FL0241 23.7% 3220 763 FL1055 Charter Communications: CSR 6415- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Albertville AL0039 18.5% 6566 1212 AL0492 Arab AL0015 21.1% 3012 635 Charter Communications: CSR 6416- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Moundville AL0544 37.5% 688 258 4 Federal Communications Commission DA 05- 996 5 Mountain Brook AL0086 15.5% 7998 1238 AL0220 Pelham AL0178 26.1% 5637 1472 Irondale AL0496 17% 4019 684 Charter Communications: CSR 6480- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscriber+ Bowdon GA0399 41.6% 815 339 Cave Spring GA0213 36.9% 404 149 Cedartown GA0052 22.2% 3370 747 Rockmart GA0087 30.4% 1541 468 Temple GA0401 39.8% 864 344 Villa Rica GA0282 31.8% 1550 493 Charter Communications: CSR 6485- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Chatsworth GA0252 23.0% 1416 325 Dalton GA0051 20.1% 9689 1943 Menlo GA0538 38.9% 229 89 Ringgold GA0172 27.0% 1033 279 Summerville GA0114 32.3% 1823 588 Trion GA0115 24.2% 832 201 Whitfield GA0317 21.8% 18513 4038 5 Federal Communications Commission DA 05- 996 6 Charter Communications: CSR 6486- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Broxton GA0404 35.9% 527 189 Douglas GA0015 17.8% 3977 707 Charter Communications: CSR 6487- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Dubin GA0006 19.7% 6130 1207 Charter Communications: CSR 6489- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Zebulon GA0698 43.5% 464 202 Charter Communications: CSR 6499- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Upson County GA0891 20.0% 6577 1316 Charter Communications: CSR 6500- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Manchester GA0099 21.2% 1629 346 Warm Springs GA0473 40.6% 175 71 6 Federal Communications Commission DA 05- 996 7 Charter Communications: CSR 6501- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Hamilton GA0775 38.2% 131 50 Charter Communications: CSR 6527- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Anderson SC0028 22.0% 10641 2340 Spartanburg SC0031 18.9% 15989 3025 Gaffney SC0007 25.2% 5304 1335 Union City SC0008 23.5% 3791 890 Laurens SC0065 24.5% 3952 970 Clinton SC0149 20.7% 2683 554 SC0094 Williamston SC0218 27.2% 1590 433 SC0219 Pickens SC0312 27.8% 24379 6783 SC0523 SC0584 SC0290 Charter Communications: CSR 6528- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Chester SC0105 31.0% 2465 765 Charter Communications: CSR 6529- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Camden SC0130 24.6% 2874 706 SC0129 7 Federal Communications Commission DA 05- 996 8 MCC Georgia LLC: CSR 6478- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ McRae GA0026 20.6% 1057 218 Mediacom Southeast LLC: CSR 6481- E 2000 Census DBS Communities CUIDS CPR* Households+ Subscribers+ Flat Rock NC1008 16.6% 1169 194 Fletcher NC1007 20.0% 1744 354 Henderson NC0050 19.2% 28992 5575 Hendersonville NC0012 15.6% 4579 714 Laurel Park NC0051 15.4% 930 143 Cable Operator Subject to Low Penetration Effective Competition Charter Communications: CSR 6480- E Franchise Area Cable Penetration Communities Households Subscribers Level Haralson 6292 72 0.11% CPR = Percent DBS penetration + = See Cable Operator Petitions 8