Federal Communications Commission DA 13-2245 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Cablevision Systems Corp. Petitions for Determination of Effective Competition in 23 New York Communities ) ) ) ) ) ) MB Docket No. 12-54, CSR 8591-E MB Docket No. 12-55, CSR 8592-E MB Docket No. 12-56, CSR 8593-E MB Docket No. 12-57, CSR 8594-E MB Docket No. 12-58, CSR 8595-E MB Docket No. 12-59, CSR 8596-E MEMORANDUM OPINION AND ORDER Adopted: November 22, 2013 Released: November 22, 2013 By the Senior Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION AND BACKGROUND 1. Cablevision Systems Corporation, hereinafter referred to as “Petitioner,” has 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”),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 Petitioner is subject to effective competition in the Communities listed on Attachment A.6 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); 47 C.F.R. § 76.905(b). 5 See 47 C.F.R. §§ 76.906-.907(b). 6 Petitioner discloses in note 2 on pages 2-3 of each petition that its rates in some Communities are regulated by the New York State Public Service Commission (“the PSC”) and that its rates in other Communities have never been regulated by any authority. Our grants herein terminate regulation by the PSC in the former Communities and prohibit it by any authority in the latter Communities under current conditions. See, e.g., Bresnan Commc’ns, LLC, 26 FCC Rcd 6137, ¶ 1, n.3 (2011); Subsidiaries of Cablevision Systems Corp., 25 FCC Rcd 4786, ¶ 1, n.3 (2010). Federal Communications Commission DA 13-2245 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 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 We further find that Petitioner has provided sufficient evidence of DBS advertising in 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 programming,12 and is supported in these petitions with copies of channel lineups for both DIRECTV and DISH.13 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.14 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, exceeds 15 percent of the households in a franchise area. Petitioner asserts that in some Communities it is the largest MVPD, with over 15 percent of the households subscribing to its cable service, and in other Communities, assuming that one of the DBS providers is the largest MVPD in the community, the combined subscribership of Petitioner and any one DBS provider exceeds 15 percent.15 In these conditions, whichever MVPD is the largest, the remaining competitors have subscribership of over 15 percent.16 Petitioner sought to determine the competing 7 47 U.S.C. § 543(l)(1)(B); 47 C.F.R. § 76.905(b)(2). 8 47 U.S.C. § 543(l)(1)(B)(i); 47 C.F.R. § 76.905(b)(2)(i). 9 See, e.g., Petition in CSR-8591-E at 3-4. 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, e.g., Petition in CSR-8592-E at 6. 13 See, e.g., Petition in CSR-8593-E at Ex. 4. 14 See, e.g., Petition in CSR-8594-E at 3. 15 See, e.g., Petition in CSR-8595-E at 7; id., Ex. 1, Declaration of Paul Jamieson, Vice President, Legal & Regulatory Affairs for Petitioner, at ¶ 3 (Feb. 22, 2012). 16 See, e.g., Bresnan Commc’ns, LLC, 26 FCC Rcd 6122, 6123-24, ¶5 (2011); Time Warner Cable Inc., 25 FCC Rcd 14422, 14424, ¶ 6 (2010); Charter Commc’ns, 21 FCC Rcd 1208, 1210, ¶ 5 (2006). Federal Communications Commission DA 13-2245 3 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 five-digit zip code basis.17 6. Based upon the aggregate DBS subscriber penetration levels that were calculated using the most recent available decennial Census data,18 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. 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 7. Accordingly, IT IS ORDERED that the petitions for a determination of effective competition filed in the captioned proceeding by Cablevision Systems Corporation ARE GRANTED. 8. 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. 9. 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 17 See, e.g., Petition in CSR-8596-E at Ex. 6. 18 See, e.g., Petition in CSR-8591-E at 7-8 & n.26 (noting that for two Communities, in which Petitioner’s franchise areas are small parts of municipalities, the most recent household numbers of sufficient granularity are in the 2000 Census). 19 47 C.F.R. § 0.283. Federal Communications Commission DA 13-2245 4 ATTACHMENT A MB Dockets No. 12-54 through 12-59, CSRs 8591-E through 8596-E COMMUNITIES SERVED BY CABLEVISION SYSTEMS CORPORATION Communities CUIDs CPR* Census Households Estimated DBS Subscribers MB Docket No. 12-54, CSR 8591-E Amenia NY0657 17.86 1741 311 Clinton NY1676 21.79 1602 349 Dover NY0213 20.87 3259 680 East Fishkill NY0275 16.20 9512 1541 Kent NY1897 16.67 18 3 Marlborough NY0306 21.28 141 30 Millbrook NY1142 20.69 691 143 Millerton NY1143 35.35 396 140 North East NY1141 23.51 1259 296 Pine Plains NY1462 47.57 1007 479 Union Vale NY1461 21.49 1708 367 Stanford NY1475 24.13 1496 361 Plattekill NY0307 16.96 3861 655 Washington NY0658 15.24 1956 298 MB Docket No. 12-55, CSR 8592-E Atlantic Beach NY0932 17.27 857 148 Old Westbury NY1096 21.99 1073 236 MB Docket No. 12-56, CSR 8593-E Greenville NY1694 17.15 1504 258 Minisink NY1355 22.56 1485 335 Unionville NY1354 29.00 231 67 Florida NY0674 19.50 1031 201 MB Docket No. 12-57, CSR 8594-E Bellport NY0581 17.59 921 162 MB Docket No. 12-58, CSR 8595-E Greenport NY0176 21.46 820 176 MB Docket No. 12-59, CSR 8596-E Tuxedo Park NY0939 16.94 248 42 *CPR = Percent of competitive DBS penetration rate.