Federal Communications Commission DA 10-1028 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Charter Communications, on behalf of its Subsidiaries and Affiliates Petition for Determination of Effective Competition in Five Communities in Louisiana ) ) ) ) ) ) ) CSR 7857-E CSR 7858-E CSR 7859-E MEMORANDUM OPINION AND ORDER Adopted: June 4, 2010 Released: June 4, 2010 By the Senior Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION AND BACKGROUND 1. Charter Communications, on behalf of its subsidiaries and affiliates, hereinafter referred to as “Petitioner,” has filed with the Commission a petition pursuant to Sections 76.7, 76.905(b)(2) and 76.907 of the Commission’s rules for a determination that Petitioner is subject to effective competition in those communities listed on Attachment A and hereinafter referred to as “Communities.” Petitioner alleges that its cable system serving the Communities is subject to effective competition pursuant to Section 623(1)(1)(B) of the Communications Act of 1934, as amended (“Communications Act”),1 and the Commission’s implementing rules,2 and is therefore exempt from cable rate regulation in the Communities because of the competing service provided by two direct broadcast satellite (“DBS”) providers, DirecTV, Inc. (“DirecTV”), and Dish Network (“Dish”). The petition is unopposed. 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(l) 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 For the reasons set forth below, we grant the petition based on our finding that Petitioner is subject to effective competition in the Communities listed on Attachment A.6 1 See 47 U.S.C. § 543(l)(1)(B). 2 47 C.F.R. § 76.905(b)(2). 3 47 C.F.R. § 76.906. 4 See 47 U.S.C. § 543(l)(1) and 47 C.F.R. § 76.905(b). 5 See 47 C.F.R. §§ 76.906 & 907. 6 Petitioner, in CSR 7858-E, briefly claims to be subject to Local Exchange Carrier or “LEC” effective competition in its French Settlement franchise area due to the cable service of the LEC EATEL. Petition in CSR 7858-E at 2 n.6; 47 U.S.C. § 543(l)(1)(D). Because we find Petitioner subject to competing provider effective competition in French Settlement, we need not address its claim of LEC effective competition. Federal Communications Commission DA 10-1028 2 II. DISCUSSION 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 (“MVPDs”), 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 households in the franchise area.7 This test is referred to as the “competing provider” test. 4. The first prong of this test has three elements: the franchise area must be “served by” at least two unaffiliated MVPDs who offer “comparable programming” to at least “50 percent” of the households in the franchise area.8 5. Turning to the first prong of this test, it is undisputed that the Communities are “served by” both DBS providers, DIRECTV and Dish, and that these two MVPD providers are unaffiliated with Petitioner or with each other. A franchise area is considered “served by” an MVPD if that MVPD’s service is both technically and actually available in the franchise area. DBS service is presumed to be technically available due to its nationwide satellite footprint, and presumed to be actually available if households in the franchise area are made reasonably aware of the service's availability.9 The Commission has held that a party may use evidence of penetration rates in the franchise area (the second prong of the competing provider test discussed below) coupled with the ubiquity of DBS services to show that consumers are reasonably aware of the availability of DBS service.10 The “comparable programming” element is met if a competing MVPD provider offers at least 12 channels of video programming, including at least one channel of nonbroadcast service programming11 and is supported in the petition with copies of channel lineups for both DIRECTV and Dish.12 Also undisputed is Petitioner’s assertion that both DIRECTV and Dish offer service to at least “50 percent” of the households in the Communities because of their national satellite footprint.13 Accordingly, we find that the first prong of the competing provider test is satisfied. 6. 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. Petitioner asserts that it is the largest MVPD in all but one of the Communities.14 Petitioner sought to determine the competing provider penetration in the Communities by purchasing a subscriber tracking report from the Satellite Broadcasting and Communications Association that identified the number of 7 47 U.S.C. § 543(1)(1)(B); see also 47 C.F.R. § 76.905(b)(2). 8 47 C.F.R. § 76.905(b)(2)(i). 9 See Petition in CSR 7857-E at 3. 10 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006). 11 See 47 C.F.R. § 76.905(g). See also Petition in CSD 7858-E at 4. 12 See Petition in CSR 7859-E at Exh. 2. 13 See Petition in CSR 7857-E at 3. 14 See Petition in CSR 7858-E at 5. In Pointe Coupee Parish in CSR 7857-E, Petitioner states that it and the DBS providers serve more than 15 % of all households. Petition in CSR 7857-E at 6. The Commission has recognized previously that where “the subscriber penetration for both [the cable operator] and the aggregate DBS information each exceed 15 percent in the franchise area, the second prong of the competing provider test is satisfied.” Charter Commun., 21 FCC Rcd 1208, 1210, ¶ 5 (2006). Federal Communications Commission DA 10-1028 3 subscribers attributable to the DBS providers within the Communities on a zip code plus four basis.15 7. Based upon the aggregate DBS subscriber penetration levels that were calculated using Census 2000 household data,16 as reflected in Attachment A, we find that Petitioner 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 for each of the Communities. 8. Based on the foregoing, we conclude that Petitioner has submitted sufficient evidence demonstrating that both prongs of the competing provider test are satisfied and Petitioner is subject to effective competition in the Communities listed on Attachment A. III. ORDERING CLAUSES 9. Accordingly, IT IS ORDERED that the petition for a determination of effective competition filed in the captioned proceeding by Charter Communications, on behalf of its subsidiaries and affiliates, IS GRANTED. 10. IT IS FURTHER ORDERED that the certification to regulate basic cable service rates granted to any of the Communities set forth on Attachment A IS REVOKED. 11. This action is taken pursuant to delegated authority pursuant to Section 0.283 of the Commission’s rules.17 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Senior Deputy Chief, Policy Division, Media Bureau 15 See Petition in CSR 7859-E at 6. A zip code plus four analysis allocates DBS subscribers to a franchise area using zip code plus four information that generally reflects franchise area boundaries in a more accurate fashion than standard five digit zip code information. 16 See Petition in CSR 7857-E at Exh. 5. 17 47 C.F.R. § 0.283. Federal Communications Commission DA 10-1028 4 ATTACHMENT A CSRs 7857-E, 7858-E, 7859-E COMMUNITIES SERVED BY SUBSIDIAIRIES AND AFFILIATES OF CHARTER COMMUNICATIONS Communities CUID(s) CPR* 2000 Census Households Estimated DBS Subscribers CSR 7857-E New Roads LA0174 20.6% 1818 375 Pointe Coupee Parish LA0175 18.6% 5472 1016 CSR 7858-E French Settlement LA0451 48.5% 359 174 Tangipahoa Parish LA0065 39.2% 24608 9648 CSR 7859-E Terrebonne Parish LA0167 LA0218 LA0533 21.5% 24363 5231 *CPR = Percent of competitive DBS penetration rate.