Federal Communications Commission DA 96-2065 
Before the . 
Federal Communications Commission 
Washington, D.C. 20554 
In the Matter of: 
Time Warner Entertainment Co., L.P. 
d/b/a Warner Cable 
Petition for Determination of 
Effective Competition 
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Columbus, OH 
CUID Nos. OH0178 
OH0239 
OH0480 
MEMORANDUM OPINION AND ORDER 
Adopted: December 6, 1996 Released: December 9, 1996 
By the Chief, Cable Services Bureau: 
I. INTRODUCTION 
1. In the captioned proceediilg, Time Warner Entertainment Company, L.P. ("Time 
Warner") seeks a determination that Time Warner is subject to effective competition in 
Columbus, Ohio ("Columbus") on or after June 10, 1996, the date(s) on which Ameritech New 
Media's cable service would be considered "offered" to the public. 1 The City of Columbus filed 
comments in opposition to Time Warner's petition to which Time Warner filed a reply. 
2. Section 623(a)(4) of the Communications Act of 1934, as amended 
("Communications Act"), allows franchising authorities to become certified to regulate basic cable 
service rates of cable operators that are not subject to effective competition.2 For purposes of the 
initial request for certification, local franchising authorities may rely on a presumption that cable 
operators within their jurisdiction are not subject to effective competition unless they have actual 
knowledge to the contrary. 3 Certification becomes effective 30 days from the date of filing unless 
the Commission finds that the authority does not meet the statutory certification requirements.4 
In Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 
10n June 25, 1996, Time Warner filed a supplement to its Petition for Special Relief stating that, as of June 10, 
1996, there were no further regulatory impediments to households taking Ameritech New Media's service. 
2Communications Act §623(a)(4), 47 U.S.C. §543(a)(4). 
347 C.F.R. §§76.906, 76.910(b)(4). 
447 C.F.R. §76.910(e); 47 C.F.R. §76.9IO(b); see also Communications Act §623(a)(4), 47 U.S.C. §543(a)(4). 
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("Cable Act Reform Order")5, the Commission instructed cable operators believing themselves 
subject to local exchange carrier ("LEC") effective competition under Section 623(1)(1)(D) of the 
Communications Act . to file a petition for determination of effective competition pursuant to 
Section 76.7 of the Commission's rules.6 Section . 623(1)(1)(D) of the Communications Act 
provides that a cable operator is subject to effective competition where: 
a local exchange carrier or its affiliate (or any multichannel video 
programming distributor 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 by 
the unaffiliated cable operator in that area. 7 
Successful LEC effective competition petitions will exempt a cable operator from rate regulation 
as of February 8, 1996, the enactment date of the Telecommunications Act of 1996 (the "1996 
Act").8 
II. THE PLEADINGS 
3. Time Warner asserts that it is subject to LEC effective competition in its 
Columbus, Ohio franchise areas. With regard to the LEC affiliation requirement, Time Warner 
asserts that Ameritech New Media ("Ameritech") is a competing franchised cable operator wholly 
owned by Ameritech Corporation, a local ·exchange carrier serving customers in Ohio, Illinois, 
Indiana, Michigan, and Wisconsin.9 Ameritech makes available at least 80 channels of video 
programming on its Columbus cable system. · 
4. With regard to the requirement that the LEC competitor offer10 video programming 
50rder and Notice of Proposed Rulemaking, FCC 96-154, at ,17 (rel. April 9, 1996). 
647 C.F.R §76.7. 
7Comm.unications Act §623(l)(l)(D), 47 U.S.C. §543(1)(1)(0). 
8Cable Act Reform Order at ,17. 
9The Columbus City Council awarded a franchise to Ameritech on April 29, 1996. Petition at 4. 
101n implementing the LEC effective competition test on an interim basis, the Commission detennined that its 
pre-existing definition of the tenn "offer" as used in the three effective competition definitions set forth in the 1992 
Cable Act would apply to the LEC test. Cable Act Reform Order at ,8. The Commission previously determined that 
service of a multichannel video programming distributor will be deemed offered: 
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service in the unaffiliated cable operator's franchise area, Time Warner first asserts Ameritech 
is physically able to- offer service to subscribers in Columbus. 11 Time Warner attaches a map 
provided to the City of Columbus by Ameritech that outlines the LEC's construction schedule. 12 
Time Warner states that this map shows that Ameritech has already completed construction in 
a significant portion of the City with the majority of Columbus to be wired by the end of 1997. 
Time Warner also asserts that, as of June 10, 1996, there are no regulatory, technical, or other 
impediments to households taking service. 13 The operator states that Ameritech became eligible 
to begin service to Columbus residents on that date, 60 days after the LEC complied with the 
City's requirement to file its proposed rates and services. Time Warner also asserts that potential 
subscribers in the franchise area are "reasonably aware" that they may purchase Ameritech's 
service. 14 Time Warner states that Ameritech has generated extensive publicity about its new 
Columbus cable service through news releases, newspaper articles, and other marketing 
materials. 15 
5. Time Warner asserts that Ameritech offers comparable programming16 to Columbus 
subscribers. Specifically, Time Warner provides Ameritech's channel line-up which demonstrates 
that Ameritech offers at least 80 channels, .6 of which are local television broadcasting signals. 17 
Time Warner points out that its system offers 73 channels in Columbus. 18 
(1) When the multichannel video programming distributor is physically able to deliver 
service to potential subscribers, with the addition of no or only minimal additional 
investment by the distributor, in order for an individual subscriber to receive service; and 
(2) When no regulatory, technical or other impediments to households taking service exist, 
and potential subscribers in the franchise area are reasonably aware that they may 
purchase the services of the multichannel video programming distributor. 
47 C.F.R. §76.905(e). 
11 Petition at 5. 
12ld at Exhibit E. 
13Jd. at 7. 
15fd. at 8. 
16The Commission observed that Congress specified a different definition of co111parable programming for the 
LEC effective competition test from that .adopted for the first three effective competition tests enacted as part of the 
1992 Cable Act. Although soliciting comment as to the revised definition, the Commission on an interim basis 
determined that it will apply this new comparable programming standard which "includes access to at least 12 
channels of programming, at least some of which are television broadcasting signals" to the LEC effective 
competition test. See Cable Act Reform Order at ,12 (quoting 1996 Act Conference Report, S. Rep. 104-230 at 170 
(Feb. 1, 1996)). 
17Petition at 8 and Exhibit H. 
18ld. at Exhibit I. 
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6. The City of Columbus opposes Time Warner's petition, arguing that the petition 
is premature. The City asserts that while a small number of Columbus residents may take 
Ameritech's cable service as of June of 1996, most city residents will not have a choice of cable 
operators for some time to come during Ameritech's construction period. 19 The City adds that 
because Ameritech's system is not yet fully built out, the LEC's presence has not had the effect 
of restraining Time Warner's rates.20 The City states that it intends to monitor the progress of 
Ameritech, and may withdraw its objection to the petition at a later date upon its determination 
that Time Warner is subject to effective competition. In the meantime, the City requests that the 
petition be denied, or in the alternative, that the Commission seek additional information 
concerning the competitive circumstances in Columbus and grant the application only when 
effective competition exists.21 
7. In its reply, Time Warner argues that the LEC effective competition test does not 
contain a percentage pass or penetration provision, as the City seems to believe. 22 Time Warner 
argues that Congress purposely did not include such provisions in Section 301(b)(3) of the 1996 
Act and pass or penetration figures cannot be read into it. Time Warner then reiterates that 
Ameritech has completed construction in a significant portion of Columbus, adding that over 30% 
of the area where Time Warner ·currently serves customers is · now wired by the LEC.23 Time 
Warner argues that the rate at which Ameritech chooses to activate its completed plant does not 
impact the determination that, under the 1996 Act's definition of "offer," Ameritech is physically 
able to deliver service to potential subscribers in the City.24 Time Warner contends that it cannot 
be "bound in a regulatory straight-jacket" through Ameritech's voluntary business strategy of 
selectively offering its services in discrete portions of Columbus.25 In response fo the City's 
labeling of the petition as "premature," Time Warner asserts that the City itself allowed 
Ameritech to commence construction of its competing cable system prematurely, prior to the 
effective grant of a franchise. 
ID. ANALYSIS 
8. In the absence of a demonstration to the contrary, cable systems are presumed not 
190pposition at 3. 
20/d. at 4. 
21/d. 
22R.eply at 2. 
23/d. at 3. 
24Time Warner includes a new map, attached as Exhibit A, which purportedly shows that Ameritech is providing 
service to a portion of Columbus. 
25Reply at 4. 
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to be subject to effective competition as defined in the Communications Act. 26 The cable 
operator bears the burden of rebutting the presumption that such effective competition does not 
exist and so must provide evidence sufficient to demonstrate that effective competition, as defined 
by Section 76.905 of the Commission's rules, is present in the franchise area.27 Time Warner has 
met this burden. 
9. \Vith regard to the first part of the LEC effective competition test, which requires 
that the alleged competitive service be provided by a LEC or its affiliate (or any multi-channel 
video programming distributor ["MVPD"] using the facilities of such LEC or its affiliate), we 
find that Time Warner has provided sufficient evidence demonstrating that Ameritech New Media 
is an MVPD wholly owned by a LEC. Ameritech is unquestionably a LEC as defined by the 
Communications Act,28 and Ameritech New Media meets the Commission's definition ofMVPD. 
Therefore, we find that Time W am.er satisfies the affiliation prong of the LEC effective 
.competition test. Time Warner is unaffiliated with both Ameritech New Media and Ameritech. 
10. We also find that Time Warner has submitted sufficient evidence that the 
programming of Ameritech is comparable to that which it provides. The channel line-up for 
Ameritech submitted by Time W am.er establishes that Ameritech offers at least 80 channels, 
including 6 local broadcast channels; this satisfies the Commission's programming comparability 
criterion. 29 
11. To meet the LEC effective competition test, the alleged competitive service must 
also be offered directly to subscribers in the franchise area In enacting the LEC test, Congress 
indicated that the Commission should apply its preexisting definition of the term "offer" to the 
new LEC effective competition test. Under that definition service is offered: 
(1) When the multichannel video programming distributor is physically 
able to deliver service to potential subscribers, with the addition of no or 
only minimal additional investment by the distributor, in order for an 
individual subscriber to receive service; and (2) When no regulatory, 
2647 C.F.R. §76.906. 
2747 C.F.R. §76.91 l(b)(l). 
28The Communications Act defines the term "local exchange carrier" as: 
any person that is engaged in the provision of telephone exchange service or exchange 
access. Such term does not incl_ude a person insofar as such person is engaged in the 
provision of a commercial mobile service under Section 332(c), except to the extent that 
the Commission finds that such service should be included in the definition of such term. 
Communications Act §3(26), 47 U.S.C. §153(26). 
29See supra note 16. • 
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technical or other impediments to households taking service exist, and 
potential subscribers in the franchise area are re8$onably aware that they 
may purchase the services of the multichannel video programming 
distributor. 30 · 
12. Based on the information before us, we find that Ameritech is offering service in 
Columbus sufficient to demonstrate the presence of effective competition. Ameritech's initial 
service area lies in the core of the City of Columbus, with current construction expanding from 
that point in both a northern and southern direction during the next 15 months. According to the 
documents attached to Time Warner's petition, in those areas wired by Ameritech and released 
to Ameritech for marketing, potential subscribers need only contact Ameritech to activate service. 
Time Warner has provided Ameritech's cpnstruction schedule, maps of wired areas, and other 
demonstrations of the actual and planned offering of service by Ameritech. 
13. Time Warner indicates that Ameritech has wired about a third of the area in the 
City where Time Warner currently serves subscribers. Within the area that Ameritech has wired, 
potential subscribers are able to receive service for only a minimal additional investment and 
without regulatory, technical or other impediments. Ameritech's aggressive marketing efforts, 
combined with the extensive press coverage of Ameritech in the local media, ensure that potential 
subscribers are well aware of the availability of Ameritech' s service. While the entire franchise 
area is still in the process of being wired, Ameritech's franchise agreement appears to provide 
that Ameritech will construct its system throughout the City of Columbus. 31 Under its franchise, 
Ameritech is obligated to complete system construction on or before the third anniversary 
following its initial system activation.32 Ameritech also has a legal obligation to provide the City 
with a bond of not less than three million dollars guaranteeing its full and faithful performance 
under the terms of the franchise agreement.33 There is every indication that investment in the 
community will continue and that expansion of service is proceeding in accordance with an 
established schedule. We also note that Time W amer has upgraded its cable plant, expanded 
customer service to 24 hours a day, moved the Disney Channel to its expanded basic package, 
3047 C.F.R. §76.905(e); see Cable Act Reform Order at if9 (citing Telecommunications Act of 1996 Conference 
Report, S. Rep. 104-230 at 170 (Feb. 1, 1996)). 
31See Ameritech's franchise agreement with the City of Columbus at Section 2-A (attached as Exhibit A to Time 
Warner's Petition for Special Relief) (Ameritech will "construct and operate a Cable Communications System within 
the City and in, under, or over the streets, highways, and other public property or public grounds of the City.") 
(emphasis added). See also Ameritech's public affairs informational, "The Choice for Columbus", dated.April 25, 
1996 (attached as Exhibit B to Time Warner's Petition for Special Relief) ("Ameritech New Media is proposing to 
construct throughout the City of Columbus, the most sophisticated broadband telecommunications system available 
today.") (emphasis added). 
32/d at Section 2-D-3. 
33 Id. at Section 2-E-6. 
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and added 4 new channels. 34 In the circumstances, consistent with Congressional intent in 
adopting Section 623(l)(l)(d) of the Communications Act, we find "effective competition" to be 
present. 
14; With ·regard to the City's. proposal that the Commission ask for additional 
information with regard to pass and penetration rates, we decline to follow such a course. As 
discussed above, · Time Warner has provided evidence sufficient to satisfy all parts of the LEC 
effective competition test. The showing presented here supports a finding of service being 
offered, which is sufficient to meet Time Warner's burden of proof. As Time Warner has 
submitted sufficient evidence demonstrating that its cable system serving Columbus, Ohio is 
. subject to LEC effective competition from Ameritech, its petition is granted, and the certification 
of the City of Columbus is revoked. 
IV. ORDERING CLAUSES 
15. Accordingly, IT IS ORDERED that the Petition for Determination of Effective 
Competition filed by Time Warner Entertainment Co. d/b/a Warner Cable challenging the 
certification of the City of Columbus, in Columbus, Ohio IS GRANTED. 
16. IT IS FURTHER ORDERED that the certification of the City of Columbus, Ohio 
to regulate the basic cable rates of Time Warner Entertainment Co. d/b/a Warner Cable in 
Columbus, Ohio IS REVOKED. 
. 17. This action is taken pursuant to the interim rules adopted in Implementation of 
Cable Reform Provisions of the Telecommunications Act of 1996, and is without prejudice to any 
further action taken by the Commission in adopting final rules pursuant to the Notice of Proposed 
Rulemaking contained therein. 35 
18. This action is taken pursuant to delegated authority under Section 0.321 of the 
Commission's rules, as amended.36 
FEDERAL COMMUNICATIONS COMMISSION 
Meredith J. Jones 
Chief, Cable Services Bureau 
34See Warren's Cable Regulation Monitor, "This Week's News", September 23, 1996. In that same article, and 
in response to Ameritech's presence, a Time Warner spokeswoman also stated that the company has "done a number 
of things that will cost us money, but its worth it." 
35Cable Act Reform Order, 11 FCC Red at 5938-5945, 5961-5964. 
3647 C.F.R §0.321. 
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