Federal Communications Commission DA 10-876 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Comcast Cable Communications, LLC, on behalf of its subsidiaries and affiliates Petition for Determination of Effective Competition in Nashville, Tennessee ) ) ) ) ) ) ) CSR 7970-E, CSR 7971-E, CSR 7972-E, CSR 7973-E, CSR 7974-E, CSR 7975-E, CSR 7976-E & CSR 7977-E MEMORANDUM OPINION AND ORDER Adopted: May 17, 2010 Released: May 17, 2010 By the Senior Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION AND BACKGROUND 1. Comcast Cable Communications, LLC, 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), 76.905(b)(1) 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) 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”). Petitioner alternatively claims to be exempt from cable rate regulation in the Communities listed on Attachment B because the Petitioner serves fewer than 30 percent of the households in these franchise areas. The petitions are 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 petitions based on our finding that Petitioner is subject to effective competition in the Communities listed on Attachments A and B. 1See 47 U.S.C. § 543(a)(1). 247 C.F.R. § 76.905(b)(2) and 47 C.F.R. § 76.905(b)(1). 347 C.F.R. § 76.906. 4See 47 U.S.C. § 543(l) and 47 C.F.R. § 76.905. 5See 47 C.F.R. §§ 76.906 & 907. Federal Communications Commission DA 10-876 2 II. DISCUSSION A. The Competing Provider Test 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 households in the franchise area;6 this test is otherwise 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.7 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.8 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.9 We further find that Petitioner has provided sufficient evidence of DBS advertising in local, regional, and national media that serve the Communities to support its assertion that potential customers in the Communities are reasonably aware that they may purchase the service of these MVPD providers.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 this 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 647 U.S.C. § 543(1)(1)(B); see also 47 C.F.R. § 76.905(b)(2). 747 C.F.R. § 76.905(b)(2)(i). 8See Petition CSR 7970-E at 3-4; Petition CSR 7971-E at 3-4; Petition CSR 7972-E at 3-4; Petition CSR 7973-E at 3-4; Petition CSR 7974-E at 3-4; Petition CSR 7975-E at 3-4; Petition CSR 7976-E at 3-4; Petition CSR 7977-E at 3-4. 9Mediacom Illinois LLC et al., Eleven Petitions for Determination of Effective Competition in Twenty-Two Local Franchise Areas in Illinois and Michigan, 21 FCC Rcd 1175 (2006). 1047 C.F.R. § 76.905(e)(2). 11See 47 C.F.R. § 76.905(g). See also Petition CSR 7970-E at 5; Petition CSR 7971-E at 5; Petition CSR 7972-E at 5; Petition CSR 7973-E at 5; Petition CSR 7974-E at 5; Petition CSR 7975-E at 5; Petition CSR 7976-E at 5; Petition CSR 7977-E at 5. 12See Petition at Petition CSR 7970-E at 5 and Exhibits 2 and 3; Petition CSR 7971-E at 5 and Exhibits 2 and 3; Petition CSR 7972-E at 5 and Exhibits 2 and 3; Petition CSR 7973-E at 5 and Exhibits 2 and 3; Petition CSR 7974-E at 5 and Exhibits 2 and 3; Petition CSR 7975-E at 5 and Exhibits 2 and 3; Petition CSR 7976-E at 5 and Exhibits 2 and 3; Petition CSR 7977-E at 5 and Exhibits 2 and 3. 13See Petition CSR 7970-E at 3; Petition CSR 7971-E at 3; Petition CSR 7972-E at 3; Petition CSR 7973-E at 3; Petition CSR 7974-E at 3; Petition CSR 7975-E at 3; Petition CSR 7976-E at 3; Petition CSR 7977-E at 3.. Federal Communications Commission DA 10-876 3 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 most 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 (“SBCA”) that identified the number of 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. B. The Low Penetration Test 9. Section 623(l)(1)(A) of the Communications Act provides that a cable operator is subject to effective competition if the Petitioner serves fewer than 30 percent of the households in the franchise area; this test is otherwise referred to as the “low penetration” test.17 Petitioner alleges that it is subject to effective competition under the low penetration effective competition test because it serves less that 30 percent of the households in the franchise areas listed on Attachment B. 10. Based upon the subscriber penetration level calculated by Petitioner, as reflected in Attachment B, we find that Petitioner has demonstrated the percentage of households subscribing to its cable service is less than 30 percent of the households in the Communities listed on Attachment B. Therefore, the low penetration test is also satisfied as to the Communities listed on A and B. 14Id. at 6. Comcast is the largest MVPD in 32 of the 49 franchise areas, but in the remaining franchise areas of Adams, Cedar Hill, Charlotte, Cross Plains, Dekalb County, Dickson, Dickson County, Franklin County, Harstville, Lafayette, Orlinda, Robertson County, Slayden, Vanleer, Westmoreland, Wilson County, and Woodbury, both the Comcast penetration figure and the aggregate DBS figure clearly exceed 15 percent. Comcast argues that it is subject to effective competition because in addition to DBS penetration exceeding 15 percent of the occupied households, the number of Comcast subscribers also exceed 15 percent and the Commission has recognized that in such cases the second prong of the competing provider test is satisfied. 15Petition CSR 7970-E at 7-8; Petition CSR 7971-E at 7-8; Petition CSR 7972-E at 7-8; Petition CSR 7973-E at 7-8; Petition CSR 7974-E at 7-8; Petition CSR 7975-E at 7-8; Petition CSR 7976-E at 7-8; Petition CSR 7977-E at 7-8. 16Petition CSR 7970-E at 8; Petition CSR 7971-E at 8; Petition CSR 7972-E at 8; Petition CSR 7973-E at 8; Petition CSR 7974-E at 8; Petition CSR 7975-E at 8; Petition CSR 7976-E at 8; Petition CSR 7977-E at 8. 1747 U.S.C. § 543(l)(1)(A). Federal Communications Commission DA 10-876 4 III. ORDERING CLAUSES 11. Accordingly, IT IS ORDERED that the petitions for a determination of effective competition filed in the captioned proceeding by Comcast Cable Communications, LLC, on behalf of its subsidiaries and affiliates ARE GRANTED. 12. IT IS FURTHER ORDERED that the certification to regulate basic cable service rates granted to any of the Communities set forth on Attachments A and B IS REVOKED. 13. This action is taken pursuant to delegated authority pursuant to Section 0.283 of the Commission’s rules.18 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Senior Deputy Chief, Policy Division, Media Bureau 1847 C.F.R. § 0.283. Federal Communications Commission DA 10-876 5 ATTACHMENT A CSRs 7970-E, CSR 7971-E, CSR 7972-E, CSR 7973-E, CSR 7974-E, CSR 7975-E, CSR 7976-E & CSR 7977-E COMMUNITIES SERVED BY COMCAST COMMUNICATIONS, LLC, ON BEHALF OF ITS SUBSIDIARIES AND AFFILIATES 2000 Estimated Census DBS Communities CUID(S) CPR* Household Subscribers Adams TN0652 71.92% 203 146 Burns TN0321 52.46% 549 288 Carthage TN0322 46.01% 952 438 Cedar Hill TN0653 82.65% 98 81 Charlotte TN0322 65.32% 395 258 Cowan TN0113 33.65% 746 251 Cross Plains TN0424 62.50% 504 315 Decherd TN0027 57.39% 960 551 Dekalb County TN0345 44.58% 4666 2080 Dickson City TN0288 38.79% 4934 1914 Dickson County TN0289 53.45% 9511 5084 Estill Springs TN0498 44.26% 827 366 Fairview TN0385 44.13% 2105 929 Franklin City TN0139 27.85% 16128 4492 Franklin County TN0389 36.70% 8722 3201 Gallatin TN0188 30.79% 8963 2760 Goodlettsville TN0643 25.82% 5601 1446 Greenbrier TN0378 40.28% 1837 740 Hartsville TN0192 59.70% 938 560 Federal Communications Commission DA 10-876 6 Hendersonville TN0162 23.82% 15823 3769 Kingston Springs TN0343 35.93% 983 353 La Vergne TN0180 48.29% 6536 3156 Lafayette TN0253 41.15% 1718 707 Millersville TN0428 24.62% 1990 490 Mount Juliet TN0215 39.12% 4341 1698 Murfreesboro TN0082 22.75% 35842 8154 Nashville TN0148 15.69% 238691 37461 Nolensville TN0413 44.72% 995 445 Orlinda TN0676 50.64% 235 119 Pegram TN0330 45.92% 773 355 Portland City TN0342 54.89% 3226 1771 Ridgetop TN0379 27.79% 385 107 Robertson County TN0380 36.30% 8683 3152 Rutherford County TN0234 28.17% 23601 6648 Slayden TN0656 70.89% 79 56 Smithville TN0185 52.41% 1675 878 Smyrna TN0179 32.87% 9608 3158 South Carthage TN0344 45.49% 554 252 Springfield TN0138 43.08% 5453 2349 Sumner County TN0231 33.67% 15152 5101 TN0309 TN0391 TN0671 Vanleer TN0655 73.39% 124 91 Waverly TN0147 57.93% 1716 994 Westmoreland TN0256 51.49% 804 414 White Bluff TN0320 57.55% 881 507 Federal Communications Commission DA 10-876 7 White House TN0230 47.18% 2497 1178 Williamson County TN0141 28.33% 15668 4439 TN0460 Wilson County TN0216 41.84% 19928 8337 Winchester TN0028 50.23% 2992 1503 Woodbury TN0221 64.26% 1052 676 *CPR = Percent of competitive DBS penetration rate. Federal Communications Commission DA 10-876 8 ATTACHMENT B CSRs 7970-E, CSR 7971-E, CSR 7972-E, CSR 7973-E, CSR 7974-E, CSR 7975-E, CSR 7976-E & CSR 7977-E COMMUNITIES SERVED BY COMCAST COMMUNICATIONS, LLC, ON BEHALF OF ITS SUBSIDIARIES AND AFFILIATES Franchise Area Cable Penetration Communities CUID(S) Households Subscribers Percentage Ashland City TN0669 1416 65 4.59% Cannon County TN0222 3844 112 2.91% Cheatham County TN0331 8701 952 10.94% Dekalb County TN0345 4666 819 17.55% Franklin County TN0389 8722 1578 18.09% Goodlettsville TN0643 5601 1383 24.69% Hickman County TN0567 6518 410 6.29% Lafayette TN0253 1718 513 29.86% Lynchburg TN0105 2211 156 7.06% (Moore County) Macon County TN0627 5794 83 1.43% Robertson County TN0380 8683 1968 22.66% Smith County TN0507 4926 476 9.66% Westmoreland TN0256 804 199 24.75%