Federal Communications Commission DA 13-1467 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Comcast Cable Communications, LLC, on behalf of its subsidiaries and affiliates Petitions for Determination of Effective Competition in 19 Communities in Illinois ) ) ) ) ) ) ) MB Docket No. 12-9 CSR 8571-E MB Docket No. 12-10 CSR 8572-E MB Docket No. 12-11 CSR 8573-E MB Docket No. 12-12 CSR 8574-E MEMORANDUM OPINION AND ORDER Adopted: June 27, 2013 Released: June 28, 2013 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), 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 “Attachment A Communities.” Petitioner alleges that its cable systems serving the Attachment A Communities are 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 are therefore exempt from cable rate regulation in the Attachment A Communities because of the competing service provided by two direct broadcast satellite (“DBS”) providers, DIRECTV, Inc. (“DIRECTV”), and DISH Network (“DISH”), and AT&T (collectively, the “Competing Providers”). Petitioner additionally claims to be exempt from cable rate regulation in the community listed on Attachment B and hereinafter referred to as Attachment B Community, pursuant to Section 623(l)(1)(A) of the Communications Act3 and Section 76.905(b)(1) of the Commission’s rules,4 because the Petitioner serves fewer than 30 percent of the households in the franchise area. The petitions are unopposed.5 2. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition,6 as that term is defined by Section 623(l) of the Communications Act and Section 76.905 of the Commission’s rules.7 The cable operator bears the burden of rebutting the 1 See 47 U.S.C. § 543(l)(1)(B). 2 47 C.F.R. § 76.905(b)(2). 3 See 47 U.S.C. § 543(l)(1)(A). 4 47 C.F.R. § 76.905(b)(1). 5 A franchise authority for one of the Attachment A Communities in MB Docket No. 12-11, the Village of Mettawa, Illinois, requested an extension of time in which to consider filing an opposition. Ultimately, the Village decided not to file anything. E-Mail from Gregory T. Smith, Esq., Klein, Thorpe & Jenkins, Ltd., to John W. Berresford, Esq., Media Bureau, March 8, 2012, 2:49 PM. 6 47 C.F.R. § 76.906. 7 See 47 U.S.C. § 543(l); 47 C.F.R. § 76.905. Federal Communications Commission DA 13-1467 2 presumption that effective competition does not exist with evidence that effective competition is present within the relevant franchise area.8 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. 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 (“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.9 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.10 It is undisputed that the Attachment A 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.11 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.12 We further find that Petitioner has provided sufficient evidence to support its assertion that potential customers in those Communities are reasonably aware that they may purchase the service of these MVPD providers.13 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 programming,14 and is supported in the petitions with copies of channel lineups for both DIRECTV and DISH.15 Also undisputed is Petitioner’s assertion that both DIRECTV and DISH offer service to at least “50 percent” of the households in the Attachment A Communities because of their national satellite footprint.16 Accordingly, we find that the first prong of the competing provider test is satisfied. 5. 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 8 See 47 C.F.R. §§ 76.906-.907(b). 9 47 U.S.C. § 543(l)(1)(B); see also 47 C.F.R. § 76.905(b)(2). 10 47 C.F.R. § 76.905(b)(2)(i). 11 See, e.g., Petition in CSR 8571-E at 3. 12 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006). 13 47 C.F.R. § 76.905(e)(2). 14 See 47 C.F.R. § 76.905(g); see also, e.g., Petition in CSR 8572-E at 5. 15 See, e.g., Petition in CSR 8574-E at Ex. 2. 16 See, e.g., Petition in CSR 8571-E at 3. Federal Communications Commission DA 13-1467 3 franchise area. Petitioner asserts that it is the largest MVPD in the Attachment A Communities.17 Petitioner sought to determine the competing provider penetration there 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 Attachment A Communities on a zip code plus four basis.18 Petitioner obtained subscriber numbers for AT&T directly from that company. AT&T requested that its subscriber numbers be kept confidential. We will accede to that request in this proceeding by combining subscribership figures for AT&T and DBS providers. In providing the aggregate number of competing provider subscribers, we are thereby safeguarding AT&T’s request for confidentiality.19 6. Based upon the aggregate Competing Provider subscriber penetration levels that Petitioner calculated, 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 Attachment A Communities. Therefore, the second prong of the competing provider test is satisfied for each of the Attachment A Communities. 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 Attachment A Communities. B. The Low Penetration Test 7. 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 referred to as the “low penetration” test.20 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 Attachment B Community. 8. 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 Attachment B Community. Therefore, the low penetration test is satisfied as to the Attachment B Community. 17 See, e.g., Petition in CSR 8572-E at 8. 18 See, e.g., Petition in CSR 8573-E at Ex. 6. 19 We reserve the right to exercise our discretion to require more disclosure in future decisions. 20 47 U.S.C. § 543(l)(1)(A). Federal Communications Commission DA 13-1467 4 III. ORDERING CLAUSES 9. 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. 10. 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. 11. This action is taken pursuant to delegated authority pursuant to Section 0.283 of the Commission’s rules.21 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Senior Deputy Chief, Policy Division, Media Bureau 21 47 C.F.R. § 0.283. Federal Communications Commission DA 13-1467 5 ATTACHMENT A MB Docket No. 12-9, CSR 8571-E MB Docket No. 12-10, CSR 8572-E MB Docket No. 12-11, CSR 8573-E MB Docket No. 12-12, CSR 8574-E COMMUNITIES SERVED BY SUBSIDIARIES AND AFFILIATES OF COMCAST CABLE COMMUNICATIONS, LLC Communities CUIDs CPR 2010 Census Estimated Competing Households Provider Subscribers CSR 8571-E Golf IL1089 37.18 156 58 CSR 8572-E Lisle IL0538 22.76 9,304 2,118 Saint Charles IL1053 18.76 18,101 3,395 Wheaton IL1050 17.86 19,191 3,428 CSR 8573-E Lake Bluff IL1387 28.27 2,055 581 Mettawa IL1827 47.52 202 96 CSR 8574-E Clarendon Hills IL1132 31.74 3,132 994 Downers Grove IL0402 23.76 19,187 4,559 Elmhurst IL0395 32.81 15,765 5,173 Evanston IL0601 18.75 30,047 5,634 Forest Park IL0363 25.63 7,159 1,835 Hinsdale (Cook) IL1134 30.50 5,488 1,674 IL1135 Northfield IL1360 27.99 2,190 613 Oak Park IL0311 23.67 22,670 5,366 River Forest IL0456 27.85 3,961 1,103 Westmont IL0904 27.66 10,357 2,865 Willowbrook IL1142 25.40 4,032 1,024 Wilmette IL0423 23.66 9,742 2,305 Federal Communications Commission DA 13-1467 6 ATTACHMENT B MB Docket No. 12-10, CSR 8572-E COMMUNITY SERVED BY SUBSIDIARY OR AFFILIATE OF COMCAST CABLE COMMUNICATIONS, LLC Community CUID Franchise Area Households Cable Subscribers Penetration Percentage Elgin Il1301 33,084 3,691 11.16