Federal Communications Commission DA 11-39 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Mediacom Companies Petitions for Determination of Effective Competition in 20 Communities in Illinois, Missouri, and Ohio ) ) ) ) ) ) ) ) ) ) CSR 8308-E CSR 8319-E CSR 8322-E CSR 8323-E CSR 8324-E CSR 8325-E CSR 8327-E CSR 8328-E CSR 8330-E CSR 8332-E MEMORANDUM OPINION AND ORDER Adopted: January 10, 2011 Released: January 10, 2011 By the Senior Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION AND BACKGROUND 1. Several Mediacom companies,1 hereinafter referred to as “Petitioner,” 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 Petitioner is subject to effective competition in those communities listed on Attachment A and hereinafter referred to as the “Communities.” Petitioner alleges that its cable system serving the Communities is subject to effective competition pursuant to Section 623(l)(1)(B) of the Communications Act of 1934, as amended (“Communications Act”),2 and the Commission’s implementing rules,3 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,4 as that term is defined by Section 623(l) of the Communications Act and Section 76.905 of the Commission’s rules.5 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.6 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 Attachment A. 1 Specifically, the companies are Mediacom Indiana LLC in CSR 8308-E; Mediacom Illinois in CSRs 8319-E, 8322-E, 8324-E, 8325-E, 8327-E, 8328-E, and 8330-E; Mediacom Southeast LLC and MCC Missouri LLC in CSR 8323-E; and Mediacom Southeast LLC in CSR 8332-E. 2 See 47 U.S.C. § 543(l)(1)(B). 3 47 C.F.R. § 76.905(b)(2). 4 47 C.F.R. § 76.906. 5 See 47 U.S.C. § 543(l)(1); 47 C.F.R. § 76.905(b). 6 See 47 C.F.R. §§ 76.906 & -.907(b). Federal Communications Commission DA 11-39 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 petitions with citations to the 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, exceeds 15 percent of the households in a franchise area. Petitioner asserts that it is the largest MVPD in 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 subscribers attributable to the DBS providers within the Communities on a zip code plus four basis.15 7 47 U.S.C. § 543(l)(1)(B); see also 47 C.F.R. § 76.905(b)(2). 8 47 C.F.R. § 76.905(b)(2)(i). 9 See, e.g., Petition in CSR 8308-E at 3-5; Petition in CSR 8319-E at 3-5. 10 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006). 11 See 47 C.F.R. § 76.905(g). See also, e.g., Petition in CSR 8322-E at 5-6; Petition in CSR 8323-E at 5-6. 12 See, e.g., Petition in CSR 8324-E at 4 n.11; id. at 6. 13 See, e.g., Petition in CSR 8325-E at 6-7; Petition in CSR 8327-E at 6-7. 14 See, e.g., Petition in CSR 8328-E, Declaration of Edward Pardini, Mediacom Senior Divisional Vice President, at ¶ 2 (dated March 24, 2010). 15 See, e.g., Petition in CSR 8330-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. Federal Communications Commission DA 11-39 3 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 petitions for a determination of effective competition filed in the captioned proceeding by the Mediacom Companies specified in footnote 1 above ARE GRANTED. 10. IT IS FURTHER ORDERED that the certification to regulate basic cable service rates granted to or on behalf of 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 16 See, e.g., Petition in CSR 8332-E at 7. 17 47 C.F.R. § 0.283. Federal Communications Commission DA 11-39 4 ATTACHMENT A CSRs 8308-E, 8319-E, 8322-E, 8223-E, 8324-E, 8325-E, 8327-E, 8328-E, 8330-E, 8332-E COMMUNITIES SERVED BY MEDIACOM COMPANIES Communities CUIDs CPR* 2000 Census Households Estimated DBS Subscribers CSR 8308-E (Mediacom Indiana) Antwerp OH0916 15.83% 739 117 CSR 8319-E (Mediacom Illinois) Casey IL1173 19.04% 1266 241 CSR 8322-E (Mediacom Illinois) Jacksonville IL0036 27.06% 7336 1985 South Jacksonville IL0038 32.58% 1584 516 CSR 8223-E (Mediacom Southeast and MCC Missouri) Excelsior Springs MO0033 MO0034 26.87% 4079 1096 Lawson City MO0548 MO0618 36.55% 818 299 Richmond City MO0178 30.39% 2488 756 CSR 8324-E (Mediacom Illinois) Mahomet IL0477 18.22% 3557 648 Fisher IL0582 23.65% 630 149 Rantoul IL0200 19.36% 5330 1032 Thomasboro IL0347 16.16% 495 80 CSR 8325-E (Mediacom Illinois) Delavan IL0788 22.84% 705 161 Elkhart IL0992 23.58% 229 54 Emden IL0790 27.31% 216 59 CSR 8327-E (Mediacom Illinois) Lena IL0704 25.77% 1164 300 Dakota IL1244 19.94% 316 63 CSR 8328-E (Mediacom Illinois) Mount Carroll Township IL0998 16.45% 997 164 Warren IL0697 15.27% 622 95 CSR 8330-E (Mediacom Illinois) Watseka IL0035 29.43% 2314 681 CSR 8332-E (Mediacom Southeast) Hayti MO0011 22.76% 1318 300 *CPR = Percent of competitive DBS penetration rate.