Federal Communications Commission DA 10-970 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Cebridge Acquisition, L.P., d/b/a Suddenlink Communications MCC Georgia LLC Mediacom Southeast LLC Petitions for Determination of Effective Competition in Various Communities ) ) ) ) ) ) ) ) ) ) ) CSR 7204-E CSR 8277-E & CSR 8279-E CSR 8280-E & CSR 8281-E MEMORANDUM OPINION AND ORDER Adopted: May 26, 2010 Released: May 26, 2010 By the Senior Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION AND BACKGROUND 1. Cebridge Acquisition, L.P., d/b/a Suddenlink Communications (“Cebridge”), MCC Georgia LLC (“MCC”), and Mediacom Southeast LLC (“Mediacom”), hereinafter referred to as “Petitioners,” have filed with the Commission petitions pursuant to Sections 76.7, 76.905(b)(2) and 76.907 of the Commission’s rules for a determination that the Petitioners are subject to effective competition in those communities listed on Attachment A and hereinafter referred to as “Communities.” Petitioners allege that their cable systems serving the Communities are 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 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 the Petitioners are subject to effective competition in the Communities listed on Attachment A. 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. Federal Communications Commission DA 10-970 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.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 the Petitioners have provided sufficient evidence of DBS advertising in local, regional, and national media that serve the Communities to support their 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 their petitions with copies of channel lineups for both DIRECTV and Dish.12 We further find that Petitioners MCC and Mediacom have provided sufficient citations and references to the DBS providers’ web pages and other media available in the Attachment A Communities to support its assertion that potential customers in those Communities are reasonably aware that they may purchase the service of these MVPD providers.13 Also undisputed are Petitioners’ 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.14 Accordingly, we find that the first prong of the competing provider test is satisfied. 6 47 U.S.C. § 543(1)(1)(B); see also 47 C.F.R. § 76.905(b)(2). 7 47 C.F.R. § 76.905(b)(2)(i). 8 See Cebridge Petition CSR 7204-E at 3; MCC Petition CSR 8277-E at 3-4; MCC Petition CSR 8279-E at 3-4; Mediacom Petition CSR 8280-E at 4-5; Mediacom Petition CSR 8281-E at 4-5. 9 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006). 10 47 C.F.R. § 76.905(e)(2). 11 See 47 C.F.R. § 76.905(g). See also Cebridge Petition CSR 7204-E at 4; MCC Petition CSR 8277-E at 5; MCC Petition CSR 8279-E at 5; Mediacom Petition CSR 8280-E at 5; Mediacom Petition CSR 8281-E at 5. 12 See Cebridge Petition CSR 7204-E at 4 and Exhibits 1 and 2; MCC Petition CSR 8277-E at 6; MCC Petition CSR 8279-E at 6; Mediacom Petition CSR 8280-E at 6; Mediacom Petition CSR 8281-E at 6. 13 47 C.F.R. § 76.905(e)(2). 14See Cebridge Petition CSR 7204-E at 2; MCC Petition CSR 8277-E at 2; MCC Petition CSR 8279-E at 2; Mediacom Petition CSR 8280-E at 2; Mediacom Petition CSR 8281-E at 2. Federal Communications Commission DA 10-970 3 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. Petitioners assert that they are the largest MVPD in the Communities.15 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 subscribers attributable to the DBS providers within the Communities on a zip code plus four basis.16 7. Based upon the aggregate DBS subscriber penetration levels that were calculated using Census 2000 household data,17 as reflected in Attachment A, we find that the Petitioners have 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 the Petitioners have submitted sufficient evidence demonstrating that both prongs of the competing provider test are satisfied and the Petitioners are subject to effective competition in the Communities listed on Attachment A. III. ORDERING CLAUSES 9. Accordingly, IT IS ORDERED that the petitions for a determination of effective competition filed in the captioned proceeding by Cebridge Acquisition, L.P., d/b/a Suddenlink Communications, MCC Georgia LLC, and Mediacom Southeast LLC ARE 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.18 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Senior Deputy Chief, Policy Division, Media Bureau 15 Cebridge Petition CSR 7204-E at 5; MCC Petition CSR 8277-E at 7; MCC Petition CSR 8279-E at 7; Mediacom Petition CSR 8280-E at 7; Mediacom Petition CSR 8281-E at 7. 16 Cebridge Petition CSR 7204-E at 4-6; MCC Petition CSR 8277-E at 7; MCC Petition CSR 8279-E at 7; Mediacom Petition CSR 8280-E at 7; Mediacom Petition CSR 8281-E at 7. 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. 17 Cebridge Petition CSR 7204-E at 6-7 and Exhibit 6; MCC Petition CSR 8277-E at 7 and Exhibit C; MCC Petition CSR 8279-E at 8 and Exhibit C; Mediacom Petition CSR 8280-E at 7 and Exhibit C; Mediacom Petition CSR 8281- E at 7 and Exhibit C. 18 47 C.F.R. § 0.283. Federal Communications Commission DA 10-970 4 ATTACHMENT A CSR 7204-E COMMUNITIES SERVED BY CEBRIDGE ACQUISITION, L.P. D/B/A SUDDENLINK COMMUNICATIONS Community CUID CPR* 2000 Census Households Estimated DBS Subscribers San Angelo TX0224 18.06 34006 6140 CSR 8277-E COMMUNITIES SERVED BY MCC GEORGIA LLC Community CUID CPR* 2000 Census Households Estimated DBS Subscribers Ashburn GA0095 17.98 1624 292 CSR 8279-E COMMUNITIES SERVED BY MCC GEORGIA Communities CUIDs CPR* 2000 Census Households Estimated DBS Subscribers Fitzgerald GA0022 17.23 3448 594 Ocilla GA0028 20.02 1099 220 Vienna GA0102 15.92 1068 170 CSR 8280-E COMMUNITIES SERVED BY MEDIACOM SOUTHEAST LLC Community CUID CPR* 2000 Census Households Estimated DBS Subscribers Camden AL0057 26.96 868 234 Federal Communications Commission DA 10-970 5 CSR 8281-E COMMUNITIES SERVED BY MEDIACOM SOUTHEAST LLC Community CUID CPR* 2000 Census Households Estimated DBS Subscribers York AL0076 17.78 1046 186 *CPR = Percent of competitive DBS penetration rate.