Federal Communications Commission DA 07-4260 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of MCC Georgia LLC Petition for Determination of Effective Competition in Fitzgerald, Georgia (CUID GA0501) ) ) ) ) ) ) ) CSR 6679-E MEMORANDUM OPINION AND ORDER Adopted: October 12, 2007 Released: October 16, 2007 By the Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION 1. MCC Georgia LLC (“MCC”) has filed with the Commission a petition pursuant to Sections 76.7 and 76.905(b)(1) & (2) and 76.907 of the Commission's rules seeking a finding of effective competition in the unincorporated areas within the County of Ben Hill, Georgia, which is commonly known as Fitzgerald and is adjacent to the incorporated area of the City of Fitzgerald (“Fitzgerald”).1 MCC alleges that its cable system serving Fitzgerald is subject to effective competition pursuant to Section 623(a)(1) of the Communications Act of 1934, as amended ("Communications Act")2 and therefore exempt from cable rate regulation because of competing service provided by two direct broadcast satellite ("DBS") providers, DirecTV, Inc. (“DIRECTV”) and DISH Network (“DISH”). Fitzgerald filed an opposition, to which MCC replied. For the reasons set forth below, we grant the petition. II. DISCUSSION 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 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 Based on the record in this proceeding, MCC has met this burden. 3. Section 623(l)(1)(B) of the Communications Act provides that a cable operator is subject to effective competition if the 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 15 percent of the 1See 47 C.F.R. §§ 76.7(a)(1) and 76.905(b)(1) & (2). 2See 47 U.S.C. § 543(a)(1). 347 C.F.R. § 76.906. 447 C.F.R. § 76.905. 5See 47 C.F.R. §§ 76.906 & 907. Federal Communications Commission DA 07-4260 2 households in the franchise area.6 Turning to the first prong of the competing provider test, DBS service 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 MCC has provided evidence of the advertising of DBS service in the news media serving the community.8 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 was the second largest, and DISH the third largest, MVPD provider during this period.9 In view of this DBS growth data, and the data discussed below showing that more than 15 percent of the households in Fitzgerald are DBS subscribers, we conclude that the population of Fitzgerald 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 at least 12 channels of video programming, including at least one non-broadcast channel.10 We find further that MCC has demonstrated that Fitzgerald is 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. MCC asserts that it is the largest MVPD in the community.11 MCC initially sought to determine the zip code+4 extension areas that encompassed the franchise area in whole or in part by obtaining data from Media Business Corp., formerly SkyTRENDS.12 MCC then sought to determine the competing provider penetration of its franchise area by purchasing a report from the Satellite Broadcasting and Communications Association (“SBCA”) that identified the number of subscribers attributable to DBS providers within the Community on the basis of zip code+4 extension areas.13 5. In opposition, Fitzgerald filed a response denying all of the allegations contained in MCC’s petition without further explanation. In reply, MCC argues that it has satisfied its burden of establishing effective competition under the competing provider test as a result of the presence of the DBS providers and Fitzgerald has failed to meaningfully rebut MCC’s assertion of effective competition. We agree. Because Fitzgerald fails to explain its reasoning for denying all of the allegations contained in MCC’s petition, we cannot accord any evidentiary weight to its opposition.14 6. Based upon the aggregate DBS subscriber penetration levels, as reflected in Attachment A, calculated using Census 2000 household data,15 we find that MCC 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 Fitzgerald. Therefore, the second prong of the competing provider test is satisfied as to Fitzgerald. Based on the foregoing, we conclude that MCC has submitted sufficient evidence demonstrating that its cable system serving Fitzgerald, Georgia, is subject to effective competition. 647 U.S.C. § 543(1)(1)(B); see also 47 C.F.R. § 76.905(b)(2). 7See MediaOne of Georgia, 12 FCC Rcd 19406 (1997). 8See Petition at 3-4 and Exhibit A. 9Twelfth 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). 10See 47 C.F.R. § 76.905(g). See also Petition at 4-5 and Exhibits B, C, and D. 11Id. at 6. 12Id. at 6 and Exhibit E. 13Id. 14Fitzgerald filed a Response that would be an acceptable answer in a civil proceeding under civil procedure rules, however, this is an administrative matter that seeks a substantive response to MCC’s Petition. 15Id. at 5-8 and Exhibits 4, 5, and 6. Federal Communications Commission DA 07-4260 3 III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the petition for a determination of effective competition filed in the captioned proceeding by MCC Georgia LLC IS GRANTED. 8. IT IS FURTHER ORDERED that any certification granted to the unincorporated areas within the County of Ben Hill, Georgia to regulate basic cable service rates IS REVOKED. 9. This action is taken pursuant to delegated authority pursuant to Section 0.283 of the Commission’s rules.16 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Deputy Chief, Policy Division, Media Bureau 1647 C.F.R. § 0.283. Federal Communications Commission DA 07-4260 4 CSR 6679-E COMMUNITY SERVED BY MCC GEORGIA LLC 2000 Estimated Census DBS Communities CUIDS CPR* Households+ Subscribers+ Fitzgerald GA0501 52.40% 2126 1114 *CPR = Percent of competitive DBS penetration rate. +See MCC Petition at 6 and Exhibits E, F, and G.