Federal Communications Commission DA 11-728 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Bresnan Communications, LLC Petition for Determination of Effective Competition in 28 Communities in Colorado ) ) ) ) ) ) ) ) ) ) ) ) ) ) CSR 8456-E CSR 8457-E CSR 8458-E CSR 8459-E CSR 8460-E CSR 8461-E CSR 8462-E CSR 8463-E CSR 8464-E CSR 8465-E CSR 8466-E CSR 8467-E CSR 8468-E CSR 8469-E MEMORANDUM OPINION AND ORDER Adopted: April 21, 2011 Released: April 22, 2011 By the Senior Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION AND BACKGROUND 1. Bresnan Communications, LLC (“Bresnan” or “the Company”), 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 the Company is subject to effective competition in those communities listed on Attachment A and hereinafter referred to as the “Communities.” Bresnan 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”),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”).3 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,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 petition based on our finding that Bresnan is 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 Bresnan states that its rates are not regulated in any of the Communities and that it is seeking formal exemption from the beginning of regulation under current conditions. Petition at 3 n.6. 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 11-728 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 part 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 It is undisputed that the Communities are “served by” both DBS providers, DIRECTV and DISH, and that these two MVPD providers are unaffiliated with Bresnan 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 subscribership rates in the franchise area (the second part 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 We further find that Bresnan has provided sufficient evidence of DBS advertising in local and regional 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.11 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 programming12 and is supported in this petition with copies of channel lineups for both DIRECTV and DISH.13 Also undisputed is Bresnan’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.14 Accordingly, we find that the first part of the competing provider test is satisfied. 5. The second part 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. Bresnan asserts that in some Communities it is the largest MVPD and in others one of the DBS providers is the largest and the combined household share of Bresnan and the other DBS provider exceeds 15 percent.15 The Commission has recognized that in those conditions, whichever MVPD is the largest, the remaining competitors have subscribership of over 15 percent.16 Bresnan sought to determine the 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 Petition at 4. 10 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006). 11 47 C.F.R. § 76.905(e)(2). 12 See 47 C.F.R. § 76.905(g). See also Petition at 7. 13 See Petition at Exh. 4. 14 See Petition at 4. 15 Petition at 8 & Exh. 1 (Declaration of Paul Jamieson, Managing Counsel, Legislative & Regulatory, Cablevision Systems Corp. (an affiliate of Bresnan), dated Feb. 8, 2011) at ¶ 3. 16 If Bresnan is the largest MVPD, then MVPDs other than the largest one are the DBS providers, which have a combined share of over 15%. On the other hand, if one of the DBS providers is the largest MVPD, then Bresnan (continued....) Federal Communications Commission DA 11-728 3 competing provider subscribership 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.17 6. Based upon the aggregate DBS subscriber subscribership levels that were calculated using Census 2000 household data,18 as reflected in Attachment A, we find that Bresnan 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 part of the competing provider test is satisfied for each of the Communities. Based on the foregoing, we conclude that Bresnan has submitted sufficient evidence demonstrating that both parts of the competing provider test are satisfied and Bresnan is subject to effective competition in the Communities listed on Attachment A. III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the petition for a determination of effective competition filed in the captioned proceeding by Bresnan Communications, LLC, IS GRANTED. 8. This action is taken pursuant to delegated authority pursuant to Section 0.283 of the Commission’s rules.19 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Senior Deputy Chief, Policy Division, Media Bureau (...continued from previous page) (which alone has over 15%) and the other DBS provider combined have over 15%. See, e.g., Time Warner Cable Inc., 25 FCC Rcd 14422, 14424, ¶ 6 (2010); Charter Commun., 21 FCC Rcd 1208, 1210, ¶ 5 (2006). 17 Petition at Exh. 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. 18 Petition at Exh. 5. 19 47 C.F.R. § 0.283. Federal Communications Commission DA 11-728 4 ATTACHMENT A CSRs 8456-E, 8457-E, 8458-E, 8459-E, 8460-E, 8461-E, 8462-E, 8463-E, 8464-E, 8465-E, 8466-E, 8467-E, 8468-E, 8469-E COMMUNITIES SERVED BY BRESNAN COMMUINICATIONS, LCC Communities CUIDs CPR* 2000 Census Households Estimated DBS Subscribers CSR 8456-E Alamosa CO0005 32.07% 2974 954 Alamosa County CO0090 53.53% 2445 1309 Monte Vista CO0009 39.07% 1715 670 Rio Grande County CO0099 67.12% 2047 1375 CSR 8457-E Delta CO0007 40.13% 2569 1031 Montrose County CO0114 49.22% 6711 3303 CSR 8458-E Brookside CO0504 30.59% 85 26 Florence CO0216 25.60% 1488 381 Fremont County CO0121 40.96% 6980 2859 Williamsburg CO0408 41.28% 235 97 CSR 8459-E La Junta CO0079 20.59% 2977 613 Lamar CO0019 25.18% 3324 837 Prowers County CO0463 57.01% 1198 683 Rocky Ford CO0292 22.36% 1655 370 CSR 8460-E Lake County CO0100 53.48% 1724 922 Leadville CO0008 34.96% 1253 438 CSR 8461-E Log Lane Village CO0263 37.37% 289 108 Morgan County CO0036, CO0344 58.82% 3169 1864 CSR 8462-E Chafee County CO0081 84.41% 2900 2448 Salida CO0010 26.76% 2504 670 CSR 8463-E Logan County CO0035 55.94% 2442 1336 CSR 8464-E Mancos CO0295 23.01% 478 110 Federal Communications Commission DA 11-728 5 Communities CUIDs CPR* 2000 Census Households Estimated DBS Subscribers CSR 8465-E Meeker CO0158 64.31% 919 591 CSR 8466-E Craig CO0122 35.12% 3525 1238 Moffat County CO0157 74.59% 1334 995 CSR 8467-E Otero County CO0519 45.38% 2208 1002 CSR 8468-E Paonia CO0300 33.67% 631 213 CSR 8469-E Fruita CO0012 39.19% 2447 959 *CPR = Percent of competitive DBS subscribership rate.