*Pages 1--4 from Microsoft Word - 56103.doc* Federal Communications Commission DA 06- 744 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Mediacom Wisconsin LLC Two Petitions for Determination of Effective Competition in Seven Local Franchise Areas ) ) ) ) ) ) ) ) ) ) CSR 6660- E, 6667- E MEMORANDUM OPINION AND ORDER Adopted: March 30, 2006 Released: March 31, 2006 By the Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION 1. Mediacom Wisconsin LLC (“ Mediacom”) has filed two petitions with the Commission pursuant to Sections 76.7, 76.905( b)( 2) and 76.907 of the Commission’s rules for a determination that Mediacom is subject to effective competition pursuant to Section 623( a) of the Communications Act of 1934, as amended (“ Communications Act”) 1 and is therefore exempt from cable rate regulation in the franchise areas listed in Attachment A (the “Communities”). No opposition to either petition was filed. 2 Finding that Mediacom is subject to effective competition in the 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, 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( a) 2 Service of the petitions for special relief were deficient for failing to provide notice to some of the local franchising authorities at issue. Prior to consideration of the petitions, Mediacom corrected this deficiency by serving all of the Communities. The Communities were afforded sufficient additional time to file an opposition. 3 47 C. F. R. § 76.906. 4 See 47 U. S. C. § 543( 1); 47 C. F. R. § 76.905. 5 See 47 C. F. R. §§ 76. 906 & 907. 1 Federal Communications Commission DA 06- 744 2 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, 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 26.1 million as of June 2005, comprising approximately 27.7 percent of all MVPD subscribers nationwide; DirecTV has become the second largest, and DISH the third 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 the Communities 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 Mediacom 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 areas. 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. To make the showing, Mediacom’s petitions furnished Satellite Broadcasting and Communications Association (“ SBCA”) Effective Competition Tracking Reports. Each tracking report corresponds to a community, and identifies the number of subscribers attributable to the DBS providers within the Communities on a zip code plus four basis. 10 Mediacom asserts that it is the largest MVPD in the franchise areas because its subscribership exceeds the aggregate DBS subscribership for those franchise areas. 11 Based upon the aggregate DBS subscriber penetration levels as reflected in Attachment A, calculated using 2000 Census household data, 12 we find that Mediacom has 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 Mediacom has submitted sufficient evidence demonstrating that their cable systems serving the Communities are subject to 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 Twelfth Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, FCC 06- 11 at ¶¶ 6, 13, 72- 73 (rel. March 3, 2006). 9 See 47 C. F. R. § 76. 905( g). 10 Mediacom Wisconsin Petition CSR 6660- E at 6- 7; Mediacom Wisconsin Petition CSR 6667- E at 6. 11 Id. at 6. 12 Id. at 6- 7 and Exhibits E and G. 2 Federal Communications Commission DA 06- 744 3 III. ORDERING CLAUSE 5. Accordingly, IT IS ORDERED that the petitions filed by Mediacom Wisconsin LLC for a determination of effective competition in the Communities listed in Attachment A 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 Mediacom in the Communities ARE REVOKED. 7. This action is taken pursuant to delegated authority pursuant to Section 0.283 of the Commission’s rules. 13 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Deputy Chief, Policy Division, Media Bureau 13 47 C. F. R. § 0.283. 3 Federal Communications Commission DA 06- 744 4 Attachment A Franchise Areas Subject to Competing Provider Effective Competition 2000 Census DBS Franchise Area CUIDS CPR* Households + Subscribers + CSR- 6660- E Boscobel WI0017 22.74% 1,174 267 Bridgeport WI0156 25.43% 346 88 Fennimore WI0216 26.93% 1,021 275 Muscoda WI0237 21.80% 610 133 WI0239 CSR- 6667- E Necedah WI0217 20.61% 359 74 Norwalk WI0223 22.37% 219 49 Wilton WI0167 21.96% 214 47 * CPR = Percent DBR Penetration + = See Cable Operator Petitions 4