Federal Communications Commission DA 14-407 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Fifty-Five Unopposed Petitions for Determination of Effective Competition ) ) ) ) MEMORANDUM OPINION AND ORDER Adopted: March 25, 2014 Released: March 26, 2014 By the Senior Deputy Chief, Policy Division, Media Bureau: I. INTRODUCTION AND BACKGROUND 1. By this Order, we grant fifty-five unopposed petitions for a finding of effective competition. The unopposed petitions set forth on Attachments A, B and C were filed by various cable companies (the “Petitioners”) seeking determinations of effective competition in their local franchise areas pursuant to Sections 76.7, 76.905(b)(1), (2) and (4) and 76.907 of the Commission’s rules.1 Most of the Petitioners allege that their cable systems are subject to effective competition in their local franchise areas (the “Attachment A Communities”) pursuant to Section 623(l)(1)(B) of the Communications Act of 1934, as amended (“Communications Act”) and Section 76.905(b)(2) of the Commission’s rules,2 and are therefore exempt from cable rate regulation, principally because of the competing service provided by two direct broadcast satellite (“DBS”) providers, DIRECTV, Inc., and DISH Network. Some Petitioners claim to be exempt from cable rate regulation in their local franchise areas (the “Attachment B Communities”) pursuant to Section 623(l)(1)(A) of the Communications Act and Section 76.905(b)(1) of the Commission’s rules3 because those petitioners serve fewer than 30 percent of the households in their franchise areas. Finally, some Petitioners claim to be exempt from cable rate regulation in their franchise areas (the Attachment C Communities) pursuant to Section 623(l)(1)(D) of the Communications Act and Section 76.905(b)(4) of the Commission’s rules4 because a local exchange carrier or its affiliate offers comparable video programming services directly to subscribers in the Petitioner’s franchise area. 2. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition5 as that term is defined by Section 623(l) of the Communications Act and Section 76.905 of the Commission’s rules.6 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.7 For the reasons set forth below, we conclude that Petitioners have carried that burden. We grant these unopposed petitions based on our finding that Petitioners are subject to effective competition in the Communities listed on Attachments A, B and C. 1 47 C.F.R. §§ 76.7, 76.905(b)(1), (2), & (4), 76.907. 2 47 U.S.C. § 543(l)(1)(B); 47 C.F.R. § 76.905(b)(2). 3 47 U.S.C. § 543(l)(1)(A); 47 C.F.R. § 76.905(b)(1). 4 47 U.S.C. § 543(l)(1)(D); 47 C.F.R. § 76.905(b)(4). 5 47 C.F.R. § 76.906. 6 47 U.S.C. § 543(l); 47 C.F.R. § 76.905. 7 47 C.F.R. §§ 76.906, 76.907(b). Federal Communications Commission DA 14-407 2 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 its franchise area is (a) “served by at least two unaffiliated multichannel 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.”8 This test is referred to as the “competing provider” test. 4. We have reviewed each of the Attachment A petitions in full. We find that each petition provides sufficient and reliable evidence to establish that both elements of the competing provider test for effective competition are satisfied consistent with the Communications Act, our implementing rules, and over 20 years of effective competition adjudicatory precedent. Specifically, we find that each of the Attachment A Communities is served by at least two unaffiliated MVPDs each of which offers comparable video programming to at least 50 percent of the households in the franchise area. We further find that the number of households subscribing to programming services offered by MVPDs other than the largest MVPD exceeds 15 percent of the households in each of the Attachment A Communities. Each of the Petitioners has demonstrated the presence of effective competition in their respective franchise areas. In so doing, Petitioners have satisfied their burden of rebutting the presumption that effective competition does not exist with evidence that effective competition is present within the relevant franchise areas. B. The Low Penetration Test 5. Section 623(l)(1)(A) of the Communications Act provides that a cable operator is subject to effective competition if “fewer than 30 percent of the households in the franchise area subscribe to the cable service of a cable system.” 9 This test is referred to as the “low penetration” test. Petitioners allege that they are subject to effective competition under the low penetration effective competition test because each serves fewer than 30 percent of the households in the Attachment B Communities. 6. We have reviewed each of the Attachment B petitions in full. We find that each petition provides sufficient and reliable evidence to establish that the low penetration test for effective competition is satisfied consistent with the Communications Act, our implementing rules, and over 20 years of effective competition adjudicatory precedent. Specifically, we find that each of the Petitioners serves fewer than 30 percent of the households in the Attachment B Communities. Each of the Petitioners has demonstrated the presence of effective competition in their respective franchise areas. In so doing, Petitioners have satisfied their burden of rebutting the presumption that effective competition does not exist with evidence that effective competition is present within the relevant franchise areas. C. The Local Exchange Carrier Test 7. Section 623(l)(1)(D) of the Communications Act provides that a cable operator is subject to effective competition in franchise areas where “a local exchange carrier or its affiliate (or any [MVPD] using the facilities of such carrier or its affiliate) offers video programming services directly to subscribers by any means (other than direct-to-home satellite services) in the franchise area of an unaffiliated cable operator which is providing cable service in that franchise area, but only if the video programming services so offered in that area are comparable to the video programming services provided 8 47 U.S.C. § 543(l)(1)(B); 47 C.F.R. § 76.905(b)(2). 9 47 U.S.C. § 543(l)(1)(A); 47 C.F.R. § 76.905(b)(1). Federal Communications Commission DA 14-407 3 by the unaffiliated cable operator in that area.”10 This test is referred to as the “local exchange carrier” test, or the “LEC” test. In implementing the LEC test, the Commission determined that an incumbent cable operator could satisfy the LEC effective competition test by showing that the LEC is technically and actually able to provide comparable services that substantially overlap the incumbent operator's service in the franchise area.11 8. We have reviewed each of the Attachment C petitions in full. We find that each petition provides sufficient and reliable evidence to establish that the LEC test for effective competition is satisfied consistent with the Communications Act, our implementing rules, and nearly 20 years of effective competition adjudicatory precedent. Specifically, we find that each of the Petitioners has demonstrated that the LEC competitor is technically and actually able to provide comparable services that substantially overlap the Petitioner’s service in the Attachment C Communities. Each of the Petitioners has demonstrated the presence of effective competition in their respective franchise areas. In so doing, Petitioners have satisfied their burden of rebutting the presumption that effective competition does not exist with evidence that effective competition is present within the relevant franchise areas. III. ORDERING CLAUSES 9. Accordingly, IT IS ORDERED that the petitions for a determination of effective competition set forth in Attachments A, B and C ARE GRANTED. 10. IT IS FURTHER ORDERED that any certification to regulate basic cable service rates granted to any of the Attachment A, B and C Communities IS REVOKED. 11. This action is taken pursuant to delegated authority pursuant to Section 0.283 of the Commission’s rules.12 FEDERAL COMMUNICATIONS COMMISSION Steven A. Broeckaert Senior Deputy Chief, Policy Division, Media Bureau 10 47 U.S.C. § 543(l)(1)(D); 47 C.F.R. § 76.905(b)(4). 11 See Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 14 FCC Rcd 5296, 5305 (1999) (“Cable Reform Order”). 12 47 C.F.R. § 0.283. Federal Communications Commission DA 14-407 4 Attachment A Subject to Competing Provider Test Bright House Networks, LLC Proceedings and Communities CUIDs MB Docket 12-249, CSR-8702-E Citrus County FL0843 MB Docket 12-285, CSR 8717-E Cedar Key FL0261 MB Docket 12-337, CSR 8743-E New Port Ritchey FL0126 San Antonio FL1006 St. Leo FL1007 Zephyrhills FL0679 MB Docket 13-215, CSR 8817-E Chattahoochee FL0167 MB Docket 13-217, CSR 8828-E Lake View AL0825 MB Docket 13-218, CSR 8829-E Ariton AL0499 Clio AL0252 Louisville AL0265 MB Docket 13-219, CSR 8830-E Butler County AL0421 Fort Deposit AL0413 Georgiana AL0253 MB Docket 13-220, CSR 8831-E Blountstown FL0169 MB Docket 13-221, CSR 8832-E Coosada AL0144 Deatsville AL0754 Elmore County AL0146 Tallassee AL0145 MB Docket 13-222, CSR 8833-E Eunola AL0722 Geneva AL0077 Hartford AL0070 Federal Communications Commission DA 14-407 5 Samson AL0055 Slocomb AL0069 Chipley FL0024 De Funiak Springs FL0038 Graceville FL0586 Paxton FL0965 Comcast Proceedings and Communities CUIDs MB Docket 13-143, CSR 8801-E Mansfield MA0186 North Attleboro MA0144 MB Docket 13-144, CSR 8802-E Revere MA0032 MB Docket 13-199, CSR 8822-E Banks OR0325 Beaverton OR0283 Columbia City OR0405 Cornelius OR0318 Durham OR0326 Forest Grove OR0289 Gaston OR0442 Hillsboro OR0290 King OR0317 North Plains OR0341 Rivergrove OR0330 Scappoose OR0267 Sherwood OR0327 St. Helens OR0404 Tigard OR0288 Tualatin OR0328 Wilsonville OR0331 Wilsonville OR0332 Washington County OR0231 Washington County OR0333 MB Docket 13-251, CSR 8840-E Peoria County IL1021 Peoria Heights IL0153 Charter Communications Proceedings and Communities CUIDs MB Docket 13-104, CSR 8780-E Mankato MN0002 Federal Communications Commission DA 14-407 6 MB Docket 13-252, CSR 8841-E Champaign County IL0541 Champaign County IL0913 Indianola IL1442 Oakwood IL0547 Savoy IL0540 MB Docket 13-253, CSR 8842-E Blandinsville IL0737 McDonough IL0164 MB Docket 13-254, CSR 8843-E Normal IL0147 MB Docket 13-255, CSR 8844-E Bartlett IL0555 MB Docket 13-256, CSR 8845-E DeKalb IL0006 DeKalb County IL1637 MB Docket 13-257, CSR 8846-E Alcorn County MS0223 Corinth MS0023 MB Docket 13-258, CSR 8847-E Dixon IL0022 Hopkins IL0095 Lee County IL1182 Montmorency IL0129 MB Docket 13-275, CSR 8850-E Walterboro SC0155 MB Docket 13-276, CSR 8851-E Newberry SC0012 MB Docket 13-285, CSR 8853-E Grays Harbor County WA0171 Grays Harbor County WA0173 Grays Harbor County WA0174 Grays Harbor County WA0475 Grays Harbor County WA0828 Grays Harbor County WA0845 Raymond WA0156 MB Docket 13-315, CSR 8864-E Amherst County VA0149 Amherst VA0208 Federal Communications Commission DA 14-407 7 Lynchburg VA0106 MB Docket 13-316, CSR 8865-E Culpeper VA0068 Culpeper County VA0224 Culpeper County VA0562 MB Docket 14-10, CSR 8867-E Elmhurst IL1855 Harwood Heights IL0876 MB Docket 14-11, CSR 8868-E Bridgewater VA0032 Broadway VA0033 Dayton VA0034 Elkton VA0144 Harrisonburg VA0035 Shenandoah VA0145 Timberville VA0037 Cox Communications, Inc. Proceedings and Communities CUIDs MB Docket 13-233, CSR 8835-E Bellevue NE0064 La Vista NE0065 Offutt AFB NE0110 Omaha NE0111 Omaha NE0155 Omaha NE0239 Gretna NE0512 Valley NE0531 Waterloo NE0530 Council Bluffs IA0092 Carter Lake IA0214 MB Docket 13-234, CSR 8836-E Bellevue ID0083 Time Warner Cable Inc. Proceedings and Communities CUIDs MB Docket 12-293, CSR 8725-E Bloom OH1512 Genoa OH1515 Jefferson OH1510 Lockbourne OH1236 Madison (Franklin County) OH1953 Federal Communications Commission DA 14-407 8 New Albany OH1519 Pataskala OH3173 Plain OH1521 MB Docket 13-60, CSR 8766-E Covington KY0667 Fort Mitchell KY0677 Fort Wright KY0679 Kenton Vale KY0681 Ludlow KY0685 Park Hills KY0687 Uninc. Kenton County KY0541 MB Docket 13-61, CSR 8767-E Bellevue KY0663 Southgate KY0690 Wilder KY0694 Uninc. Campbell County KY0540 MB Docket 13-66, CSR 8770-E Crescent Springs KY0669 Florence KY0676 Fort Thomas KY0678 Uninc. Boone County KY0542, KY0867 Uninc. Warren County KY0468 MB Docket 13-69, CSR 8773-E Hillsboro OH0182 Jefferson (Clinton County) OH2450 Leesburg OH0638 Lynchburg OH0637 Midland OH1494 Owensville OH1314 West Harrison IN0384 MB Docket 13-108, CSR 8783-E Portsmouth OH0100 MB Docket 13-109, CSR 8784-E Baldwinsville NY0781 Camillus NY0333 Cicero NY0372 Clay NY0373 DeRuyter NY1440 E. Syracuse NY0329 Fayetteville NY0332 Geddes NY0327 Federal Communications Commission DA 14-407 9 Granby NY0937 Hannibal NY1170 Liverpool NY0326 Lysander NY0782 New Haven NY1626 North Syracuse NY0546 Port Byron NY0981 Salina NY0346 Schroeppel NY1460 Solvay NY0671 Van Buren NY0715 Volney NY1144 MB Docket 13-118, CSR 8785-E Orchard Park NY0874 MB Docket 13-124, CSR 8792-E Boonville NY0476 Cape Vincent NY1420 Chaumont NY1344 Clayton, Town of NY1345 Clayton, Village of NY1346 Dexter NY1347 Glen Park NY0631 Harrisville NY1371 Henderson NY1700 Hounsfield NY1401 Orleans NY1495 Pamelia NY0144 Rutland NY0562 Theresa NY1363 Watertown NY0146 Brasher NY0529 Burke NY0302 Chateaugay NY0301 Colton NY0813 Gouverneur NY0101 Morristown NY0931 Norfolk NY0323 Rouses Point NY1029 Russell NY1621 Waddington NY0811 Waverly NY1853 MB Docket 13-141, CSR 8799-E Milwaukee WI0438 Federal Communications Commission DA 14-407 10 MB Docket 13-162, CSR 8808-E Anchorage KY0493 Audubon KY0378 Bancroft KY0514 Barbourmeade KY0582 Beechwood KY0496 Bellemeade KY0437 Brownsboro Farm KY0584 Brownsboro Village KY0441 Crossgate KY0456 Douglass Hills KY0502 Glenview Hills KY0510 Glenview Manor KY0488 Graymoor-Devondale KY1321 Green Springs KY0660 Hurstbourne KY1183 Indian Hills KY0500 Jeffersontown KY0458 Lyndon KY0452 Meadowview Estates KY0445 Murray Hill KY1195 Northfield KY0517 Norwood KY0518 Parkway KY0384 Rolling Fields KY0400 Seneca Gardens KY0380 Shively KY0436 Spring Valley KY1196 St. Matthews KY0451 St. Regis Park KY0501 West Buechel KY0521 Wildwood KY0513 Windy Hills KY0432 MB Docket 13-171, CSR 8813-E Louisville/Jefferson County Metro Government KY0169 MB Docket 13-196, CSR 8819-E Carlisle OH3185 Centerville OH0497 Clifton OH1819, OH1820 Gratis OH3183 Isreal OH3184 Kettering OH0496 Oakwood OH0498 Washington OH0610 Rockport IN0210 Federal Communications Commission DA 14-407 11 Riley IN0613 Vevay IN0222 MB Docket 13-200, CSR 8823-E Canal Winchester OH0748, OH0749 Lithopolis OH1518 Pickerington OH0747 Reynoldsburg OH0519, OH3176, OH3174 Whitehall OH0818 MB Docket 13-232, CSR 8834-E Brady Lake OH0964 Chippewa Lake OH1089, OH1505 Craig Beach OH0843 Creston OH3188 Cuyahoga Falls OH0218 Howland OH0213 Jackson OH1981 Kent OH0353 Lafayette OH1502 Magnolia OH3190 Malvern OH0326 Mansfield OH0083 Niles OH0210 North Canton OH0106 Oxford OH2634 Rittman OH0293 Spencer OH3251 Stone Creek OH2745 Stow OH0243 Sugar Creek OH3260 Tiro OH1716 Warren OH0270 Westfield Center OH1087 MB Docket 13-273, CSR 8848-E Bellewood KY0450 Blue Ridge Manor KY0617 Brandenburg KY0953 Houston Acres KY0443 LaGrange KY0575 Maryhill Estates KY0448 Moorland KY0586 Muldraugh KY0607 River Bluff KY0659 Strathmoor Manor KY0382 Woodland Hills KY0512 Federal Communications Commission DA 14-407 12 Worthville KY1076 MB Docket 13-274, CSR 8849-E Bromley KY0664 Butler KY1049 Crestview Hills KY0670 Dry Ridge KY0869 Fairview KY0747 MB Docket 13-288, CSR 8856-E City of Lexington/Fayette Urban County KY0469 MB Docket 13-289, CSR 8857-E Avon lake OH0988 Bay Village OH0739 Beachwood OH0201 Brecksville OH1274 Cleveland Heights OH0695 Cuyahoga Falls OH1271 Gates Mills OH1944 Highland Heights OH0986 Independence OH0993 Lyndhurst OH0663 Marblehead OH1393 Mayfield Heights OH0777 Mayfield OH0862 Mentor OH0740 Mentor on the Lake OH0896 North Kingsville OH0282 North Olmsted OH0800 University Heights OH0662 Valley View OH1195 Wickliffe OH0802 Willoughby Hills OH0801 Woodmere OH0775 MB Docket 13-290, CSR 8858-E Crothersville IN0387 Jeffersonville IN0086 MB Docket 13-314, CSR 8863-E Cathedral City CA0994 Indian Wells CA0057 Indio CA0056 La Quinta CA1166 Palm Desert CA0058 Rancho Mirage CA0740 Federal Communications Commission DA 14-407 13 Attachment B Subject to Low Penetration Test Comcast Proceedings and Communities CUIDs MB Docket 13-251, CSR 8840-E Fulton County IL1172 Knox County IL1636 MB Docket 13-253, CSR 8842-E La Harpe IL0738 MB Docket 13-254, CSR 8843-E McLean County IL0241 MB Docket 13-258, CSR 8847-E Coloma IL0058 Ogle County IL0240 Sterling IL0061 MB Docket 13-315, CSR 8864-E Bedford County VA0185 Bright House Networks, LLC Proceedings and Communities CUIDs MB Docket 13-216, CSR 8827-E Escambia FL0905 MB Docket 13-217, CSR 8828-E Helena AL0820 MB Docket 13-219, CSR 8830-E Greenville AL0026 MB Docket 13-220, CSR 8831-E Calhoun County FL0966 Liberty County FL0969 MB Docket 13-221, CSR 8832-E Tallapoosa County FL0244 MB Docket 13-222, CSR 8833-E Walton County FL0970 Washington County FL0971 Federal Communications Commission DA 14-407 14 Time Warner Cable Inc. Proceedings and Communities CUIDs MB Docket 12-275, CSR-8711-E Anderson County (Uninc.) KY1140 Bath County (Uninc.) KY1035 Bourbon County (Uninc.) KY1039 Boyle County (Uninc.) KY1139 Carter County (Uninc.) KY0933 Clark County (Uninc.) KY0207 Fleming County (Uninc.) KY0939 Franklin County (Uninc.) KY1168 Garrard County (Uninc.) KY1038 Harrison County (Uninc.) KY1040 Jessamine County (Uninc.) KY1030 Lincoln County (Uninc.) KY1138 Madison County (Uninc.) KY0622 Marion County (Uninc.) KY1037 Mercer County (Uninc.) KY1141 Montgomery County (Uninc.) KY1021 Nelson County (Uninc.) KY1089 Nicholas County (Uninc.) KY1029 Rowan County (Uninc.) KY0064, KY0065 Scott County (Uninc.) KY1033 MB Docket 12-293, CSR 8725-E Brown OH2138 Jersey OH1903 Madison (Pickaway County) OH1906 Truro OH2305 Westerville OH3175 MB Docket 13-61, CSR 8767-E California KY1225 MB Docket 13-109, CSR 8784-E Wolcott NY1126, NY1988 MB Docket 13-200, CSR 8823-E Brice OH1513 Violet OH0750 MB Docket 13-232, CSR 8834-E Clark OH3187 Greenwich OH3248 Killbuck OH3277 Milton OH3191 Federal Communications Commission DA 14-407 15 Nelson OH1592 Norwalk OH0461 Prairie OH3278 MB Docket 13-289, CSR 8857-E Monroe OH3247 Federal Communications Commission DA 14-407 16 Attachment C Subject to Local Exchange Carrier Test Time Warner Cable Inc. Proceedings and Communities CUIDs CSR 8563-E Waianae HI0001 Hawaii Kai HI0003 Oahu Central HI0004 Honolulu HI0005, HI0006 Kailua HI0007 Kalihi HI0008 Kaneohe HI0009 Palolo HI0010 North Shore HI0012 Ewa District HI0041 Ahuimanu HI0057, HI0058 Enchanted Hills HI0059 Hauula HI0060 Iwilei HI0061 Laie HI0062 Kaaawa HI0063 Kaimuki HI0064 Kahaluu HI0065 Kapahulu HI0067 Maunawili HI0068 Moanalua HI0069 Pearl Harbor HI0070 Salt Lake HI0071 Waimanalo HI0072 MB Docket 13-108, CSR-8783-E Bainbridge OH0304 Chillicothe OH0025 Frankfort OH0978