*Pages 1--20 from C:\Pdf2Text\Ready4Text_in\pdf\51518.pdf* Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D. C. 20554 RECEIVED Possible Revision or Elimination of Rules Under the Regulatory Flexibility Act, 5 U. S. C. § 610 SEP -I 2005 fede!! 1 Communications Commlssi{) n OfficeotSecre" 3Ff COMMENTS OF THE NATIONAL ASSOCIATION OF TELECOMMUNICATIONS OFFICERS AND ADVISORS AND MT. HOOD CABLE REGULA TORY COMMISSION Frederick E. Ellrod III Gerard Lavery Lederer Miller & VanEaton, P .L. L. C. 1155 Connecticut Avenue, N. W. # 1 000 Washington, D. C. 20036- 4306 202- 785- 0600 Counsel for the National Association of Telecommunications Officers And Advisors and Mt. Hood Cable Regulatory Commission September 1, 2005 1 TABLE OF CONTENTS II. III. INTRODUC ION 1 THE REVI W'S FOCUS ON "SMALL ENTITIES" IMPLIES INCREASED ATTENTIO TO THE NEEDS OF CONSUMERS. 4 EMERGEN Y ALERT SYSTEM STANDARDS MUST BE UPHELD FOR SMALL COMMUNI IES AS WELL AS LARGE 5 THE CO ISSION MUST RESPECT THE NEEDS OF CONSUMERS IN SMALL COMMUNI IES WITH RESPECT TO PART 76 ISSUES 7 IV. A. progrfn Access 7B. Sign Carriage Obligations 8 C. Custo er Service Obligations D. Franc 'se Transfers ' '.. '.."... E. Horiz ntal and Vertical Cable Ownership Caps F. Cable Rate Regulation G. Effect ve Competition EQUAL E LOYMENT OPPORTUNTY REQUIREMENT DISPENSED WITH FOR SMALL BUSINESSES CONCLUSI N 10 11 12 13 13'S CANNOT BE 14 v. VI. 16 2 SUMMARY The Nationaf Association of Telecommunications Officers and Advisors and the Mt. Hood Cable Regula~ ory Commission reaffinn their earlier comments related to the rules under review and point out that given industry consolidation, most of the "small entities" affected by the rules are in fac~ local governments, which means that consumers' interests must receive increased attention it1 the Commission's review. Emergency ~ert systems, and rules to ensure that they are ready to function, continue to be needed for small I as well as large communities. The program access rules are required to prevent anticompeti, ive misuse of exclusive programming arrangements, and the terrestrial loophole should be ~liminated. Public, educational and governmental (pEG) channels must be protected in any re~ ision of the Commission's carriage rules. The Commission's customer service rules, as supplemented by local rules, are essential to protect consumers, especially in small communities. Cable franchife transfer rules should be improved to ensure that a community receives all the infonnation it h~ indicated to be necessary before commencing the 120- day review process, as the statute requir~ s. The horizontal and vertical ownership caps do not appear to apply to small business entiti~ s. Local communities' concerns about the rate regulation and effective Finally, equal competition rules, which have been discussed in prior filings, remain significant. employment oppo~ ty rules cannot be dispensed with for small businesses as that term is used here. ii 3 ! Before the IFEDERAL COMMUNICATIONS COMMISSION Washington, D. C. 20554 Possible Revision Or ~ liminatiOn of Rules Under the R gulatory Flexibility Act, 5 U. .C. § 610 COMMENTS O~ THE NATIONAL ASSOCIATION OF TELECOMMUNICATIONS OFFICERS AND ADVISORS AN MT. HOOD CABLE REGULATORY COMMISSION I. INTRODuctION In a Public ~otice dated May 31, 2005, DA- 05- 1524 (the "Notice"), the Commission announced that it waf seeking comment regarding whether certain of its rules adopted in 1993, 1994 and 1995 shoul~ be continued without change, or should be amended or rescinded. The purpose of the revier, as explained in the Notice, is "to minimize any significant economic impact of such rules upon a substantial number of small entities." Notice at 1. The Notice also indicated that only a s~ ngle round of comments would be entertained in this proceeding. Because there Iwill be no opportunity to file reply comments, the National Association of Telecommunications pfficers and Advisors (" NATOA") and the Mt. Hood Cable Regulatory Commission (collectiyely, the "Local Governments") 1 file these comments not only to address 1 The Nation Association of Telecommunications Officers and Advisors (NATOA) is a national association that represents the communications needs and interests of local governments. The m mbership is predominantly composed of local government agencies, local government staff an public officials, as well as consultants, attorneys, and engineers who consult with local g vernments on their communications needs. Government members have responsibilities that r ge from cable administration, telecommunications franchising, right- of-way management and governmental access programming to information technologies and I- Net planning and manage ent. NATOA's membership also includes not- for- profit organizations 4 certain of the Co~ ission's rules directly, but also in anticipation of comments that may be made by other partie~. The Local Gpvernments are pleased to participate in this proceeding and applaud the Commission's readi, ess to re- examine its regulations to detennine whether they continue to serve useful purposefo It should be noted, however, that the Notice does not provide full notice and opportunity to cfmment in the sense required under the Administrative Procedures Act for regulatory actions. 2 ~f the Commission concludes that rules should be eliminated or revised, it will be necessary to ~rovide public notice of the proposed changes and provide interested parties an opportunity to co~ ent. NA TOA and tts member communities made numerous filings in the original proceedings that gave rise to the rfIes under review. These comments, and those of other parties, contributed to the original ratio~ a1es for the subject rules and should not be ignored in reviewing their continued applicabili~. The Local Governments incorporate these earlier filings by reference as part of the answer to fhe question of the continued need for each of the rules they will address in this proceeding. 3 whose needs and in erests are complementary to those of NATOA's government members; vendors to local gov rnments; and communications providers of all types of services to local governments. The t. Hood Cable Regulatory Commission is a governmental entity that administers cable fr chise agreements in Multnomah County and the Cities of Fairview, Gresham, Portland, T outdale and Wood Village, Oregon. 2 See 5 U. S. C. I§ 553 3 Comments ! the National Association of Telecommunications Officers and Advisors, National League of ities, United States Conference of Mayors and National Association of Counties, Implement tion of the Cable Consumer Protection and Competition Act of 1992, Broadcast Signal Carriage Issues, MM Docket No. 92- 259, filed January 4, 1993 (" 1992 Rate Regulation Comment "); Reply Comments of the National Association of Telecommunications Officers and Adviso s, National League of Cities, United States Conference of Mayors and National Association of Counties, Implementation of the Cable Consumer Protection and Competition Act of 992, Broadcast Signal Carriage Issues, MM Docket No. 92- 259, filed 2 5 Finally, thes+ comments will of necessity focus on certain rules that are of central importance from the ~oca1 Governments' point of view. However, silence as to other rules listed in the Notice should I not be assumed by the Commission to mean that the Local Governments consider all such rulFs dispensable. Given limited resources and the very broad scope of the Notice, the Local Gorernrnents have chosen to address themselves to a key subset of the rules at Issue. January 19, 1993 (' 1992 Rate Regulation Reply Comments"); Comments of the National Association of Telec mmunications Officers and Advisors, National League of Cities, United States Conference of Mayors and National Association of Counties, Implementation of Section 8 of the Cable Televisi n Consumer Protection and Competition Act of 1992, Consumer Protection and Customer Servic , MM Docket No. 92- 263, filed January 11, 1993 (" Consumer Protection Comments"); Co ents of the National Association of Telecommunications Offices and Advisors, the Natio al League of Cities, the United States Conference of Mayors and the National Association of Counties, In the Matter of Implementation of Sections 11 and 13 of the Cable Television Co umer Protection and Competition Act of 1992, Horizontal and Vertical Ownership Limits, oss- Ownership Limitations and Anti- Trafficking Provisions, MM Docket No. 92- 264, filed F bruary 9, 1993 and August 23, 1993 (" Ownership Comments"); Reply Comments of the ational Association of Telecommunications Offices and Advisors, the National League of ities, the United States Conference of Mayors and the National Association of Counties, In the atter of Implementation of Sections 11 and 13 of the Cable Television Consumer Protection and Competition Act of 1992, Horizontal and Vertical Ownership Limits, Cross- Ownership Li itations and Anti- Trafficking Provisions, MM Docket No. 92- 264, filed March 3, 1993 (" 0 ership Reply Comments"); Anti- trafficking Petition for Reconsideration of the National Associ ion of Telecommunications Offices and Advisors, the National League of Cities, the United S tes Conference of Mayors and the National Association of Counties filed September 7, 1993 "Anti- Trafficking Petition"); Comments of the National Association of Telecommunications fficers and Advisors, the National League of Cities, and the Miami Valley Cable Council, In the Matter of Revisions to Cable Television Rate Regulation, MB Docket No. 02- 144, MM Docket No. 92- 266, MM Docket No. 93- 215, CS Docket No. 94- 28, CS Docket No. 96- 157 (Nove ber 4, 2002) (" 2002 Rate Regulation Comments"); Comments ACM/ NA TOA, In th Matter of Annual Assessment of the Status of Competition in the Market for the Delivery 0 Video Programming, MB Docket No. 04- 227, filed July 23, 2004 (" Competition Repo Comments"); ACM/ NA TOA Reply Comments, In the Matter of Annual Assessment of the St tus of Competition in the Market for the Delivery of Video Prog1'amming, MB Docket No. 04- 2 7, filed Aug. 25, 2004 (" Competition Reply Comments"). 3 6 II. THE REVIEW'S FOCUS ON "SMALL ENTITIES" IMPLIES INCREASED ATTENTIO~ TO THE NEEDS OF CONSUMERS. The Notice, Qiting to Section 610 of the Regulatory Flexibility Act (" RFA"), 5 V. S. C. § substantial number ~f small entities." Notice at ~ 1. This statement may suggest that the Commission assum~ s the primary effect of the review should be to reduce costs for communications companies. On the contrary, however, in today's communications market, a focus on small entiti~ s means that the Commission should consider changes that would make the : rules more responsiv~ to consumers, which mayor may not equate to a reduction of costs for vendors. Given the ex~ ensive consolidation of the last ten years, a far smaller portion of the communications market is now composed of "small entities" than was the case in 1993- 1995 The RF A definition ~f a "small entity" relies on the definitions established for "small business" , by the Small Busin~ ss Administration. See 5 V. S. C. § 601( 6). These definitions classify businesses as "small" lbased on the number of their employees or their annual receipts in millions of dollars. For example, to qualify as a small entity, a cable company must have no more than $12.5 million in ann~ a1 receipts. A wired telecommunications carrier or cellular company may 4 have no more than 11,500 employees. Yet today fewer and fewer citizens are served by providers of this size. The companies remaining in these industry classifications are the winners of significant consolidation battles. The contemporary communications market contains relatively few vendor$ of the size that the RFA was intended to protect. On the other hand, many of the "small entities" subject to the noticed rules are local governments. The RF A defines small governmental jurisdictions as "governments of cities. 4 i 13 C. F. R. § ~21.201 4 7 counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand." s These local governments must also be considered in evaluating the impact of a rule under the RF A. The rules under review affect over 37,000 such small governmental entities. 6 Thus, the predominant consideration in the Commission's RFA review of its rules should be the effect on small communities. And a primary role of the local government in such a community is to protect its citizens from unreasonable or improper treatment by businesses -particularly businesses able to exercise some degree of market power. At the same time, however, customers of small entities should not be afforded less protection than customers of large entities. (For example, the needs of a given consumer in an emergency for which an emergency alert is required do not differ based upon the size of the entity providing service.) Thus, the Commission's review should keep always in mind the effects of its rules on consumers, whether those individuals are dealing with small businesses or with the very large businesses that make up most of the communications sector today. III. EMERGENCY ALERT SYSTEM STANDARDS MUST BE UPHELD FOR SMALL COMMUNITIES AS WELL AS LARGE. Starting at page 9 of the Notice and continuing for three pages, the Commission asks whether there is a continued need for specific Emergency Alert System (" EAS") rules, specifications and testing procedures. In fact there is a greater need today than in earlier years for standards, specifications and testing for emergency communications. Furthermore, the rules must be able to keep up with technological developments and the variety of communications systems now in use. 55 V. S. C. § 601( 5). 5 8 One need not I look back to the devastation of September 11, 2001, as the sole justification for the expanded nee~ for EAS. As these comments are being prepared, the City of New Orleans and its neighbors are I coping with a natural disaster of extraordinary magnitude. These examples underline the generat principle that both small communities and large must be able to rely on EAS alerts to play a ~ole in coping with such events. Thus, there isla continued, ifnot enhanced, need for EAS systems today. Yet it is easy to neglect EAS needs dpnng quiet periods. An EAS is by definition a system that one needs only from time to time -Ibut when it is needed, it is really necessary. Unless the Commission can determine that c° mn1unications providers will have sufficient economic incentives to maintain EAS in good worki* order at all times without regulatory requirements, it will need to retain sufficient requireme, ts to ensure that large and small communities' EAS will be ready to function in an emerg~ ncy, For these re~ ons, EAS rule changes should focus on the most effective and efficient ways to ensure EASI functionality, rather than on minimizing economic impacts to providers. This approach requirfs careful attention to the technical aspects of changing technologies. For example, as recently I as August 2, 2005, NATOA leadership, accompanied by representatives from the National C~ ble & Telecommunications Association (NCTA), met with Commission staff to address spec~ fic technical questions regarding digital cable technology to be used to enhance warnings, ~d how digital cable provides the ability to provide enhanced emergency 6 See U. S. D ~ Partment of Commerce, Economics and Statistics Administration, U. S. Census Bureau, 200 Census of Governments, Vol. 1 Number 1, Government Organization GC02 (1)- 1 at 7- 10, abIes 6 and 7. 6 9 information to the prblic. 7 Such cooperative efforts should result in better and more effective rules. The Commisfion must be wary of special exceptions for small businesses in this area. In are served by small I entities. While the economic impact of regulations may legitimately be taken into account, qe importance of the EAS to those suffering from extraordinary events must carry significant weight with the Commission. IV. THE COMMISSION MUST RESPECT THE NEEDS OF CONSUMERS IN SMALL COMMUNITIES WITH RESPECT TO PART 76 ISSUES. A. Program Access As NATOA ~as noted in other proceedings, 8 cable operators are known to engage in a variety of anticompe~ itive tactics to thwart competition. The use of exclusive contracts to deny competitors access to essential content remains a significant problem and will threaten competition unless s, ch exclusivity is controlled to prevent misuse. 9 The Commission should therefore retain its rutes governing program access, as required by the Act. Further, as NATOA has previously noted, 1 the Commission should launch a comprehensive inquiry to determine the extent, causes, and s9lutions to the anticompetitive tactics of incumbents and should exercise its full authority to elimi~ ate such tactics. 7 See letter fr~ m Elizabeth Beaty, NATOA Executive Director, to Marlene H. Dortch, Secretary, in EB Doc* et No. 04- 296, dated August 3, 2005. 8 See, e. g., ~CM/ NATOA Competition Report Comments, filed July 23, 2004; ACM/ NATOA Compptition Reply Comments, filed Aug. 25, 2004. 9 ACM/ NAT t A Competition Report Comments at 20, filed July 23, 2004. See also Comments of Amen an Cable Association at 3- 6; Comments of Broadband Service Providers Association at 12- 14; Comments of EchoStar at 10- 13; Comments of National Telecommunications ooperative Association at 3; Comments ofRCN at 14. '7 10 In addition, NA TOA and others have described problems relating to the "terrestrial loophole" in the Cable Act's program access provisions and the Commission's rules. lO If the Commission believes it has insufficient authority to close this loophole, the Local Governments suggest that the Commission make a clear recommendation to Congress to do so. B. Signal Carriage Obligations NA TOA was an active participant in the proceedings that resulted in adoption of 47 CFR §§ 76.56 and 76.61.11 NATOA's primary goal was to ensure that public, educational and governmental (" PEG") channels were not sacrificed in the name of other "must The Local Governments reaffinn here the unique nature and importance of PEG obligations. channels and reemphasize that PEG should not be sacrificed to assist other programmers in achieving must- carry status. In developing the Cable Act, which directed the FCC to craft a signal carriage obligation, Congress recognized the unique qualities of PEG. The 1984 House Report stated: Public access channels are often the video equivalent of the speaker's soap box or the electronic parallel to the printed leaflet. They provide groups and individuals who generally have not had access to the electronic media with the opportunity to become sources of information in the electronic marketplace of ideas. PEG channels also contribute to an informed citizenry by brin~ ing local schools into the home, and by showing the public local government at work. 2 The Commission's Chairman has also lauded the kind of localism that PEG programming enhances and promotes: lOId. See a/ so 1992 11 1992 Rate Regulation Comments, filed January 4, 1993 Regulation Reply Comments, filed January 19, 1993. 12 H. R. Rep. No. 98- 934, 98th Cong., 2d Sess. 30 (1984), reprinted in 1984 U. S. C. C. A. N. 4655, 4667. 8 11 Fostering localism is one of the Commission's core missions and one of the three policy goals, along with diversity and competition, which have driven our radio and television broadcast regulation during the last 70 years. 13 These concerns have been more recently enunciated in the comments of the Alliance for Community Media (" ACM") in MM Docket No. 04- 233.14 ACM pointed out that Congress' vision of PEG has become a reality in many communities. "[ I] ndividuals from all walks of life now produce over one million hours of original, non- commercial, local programming each year. This is happening on cable systems from coast to coast, in large cities such as New York City and Chicago and in small communities such as Gennantown, Tennessee and Monterey, California.,, 15 ACM reminded the Commission, however, that small access entities and small communities may have particular difficulty in preserving these programs in the face of increasing industry concentration: "The top three cable MSOs that currently control well over half (almost 40 million) of the cable subscribers in the u. s. -Comcast, Time Warner and Cox-have lengthy track records of actively and ardently opposing efforts by communities to adequately develop and support PEG Access operation.,, 16 The Commission's § 610 review must consider the effect of its rules on small access The entities and small communities, not merely the increasingly rare small cable operator. Commission should thus, among other things, take no actions that might jeopardize the ability of 13 In the Matter of Broadcast Localism, MM Docket No. 04- 233, FCC 04- 129, Statement of Chainnan Michael K. Powell to accompany release of Notice of Inquiry, released July 1, 2004. 14 Comments of the Alliance for Community Media, In the Matter of Broadcast Localism, MM Docket No. 04- 233, filed October 27, 2004. 15 Id at 3 16Id at 5. 9 12 PEG programmers to be carried on the basic tier of cable programming and on an acceptable and accessible channel. 17 c. Customer Service Obligations In Section 76.309, the FCC established a minimum set of consumer protection standards for telephone availability, installations, service calls, and the like. I8 These standards have been implemented and enforced by local franchising authorities, including the kinds of small communities referred to above. Section 76.309 has been effective in ensuring minimum national standards for cable customer service for consumers served by both large and small operators. The Notice asks whether 47 C. F. R. § 76.309 has a continued role to play in protecting consumers. The answer is yes. While competition is the best consumer protection mechanism, it will not necessarily prevent all abuses, particularly where a very limited set of providers choose to compete on grounds other than quality of service. And, contrary to popular belief, communities do not yet have meaningful or truly effective competition in the cable service 19 arena. NATOA was an active participant in MM Docket No. 92- 263, the proceeding resulted in adoption of Section 76.309! O NATOA asserted at that time, and the Local Governments continue to believe, that specific standards are needed to ensure adequate customer 17 See 47 C. F. R. § 76.57. 18 The Cable Act expressly recognizes the authority of local governments to enact and enforce customer service standards for MVPDs. See 47 V. S. C. § 552( a). These provisions reflect the understanding of Congress that both local and national customer service standards are essential to protect consumers from poor service. 19 The Government Accounting Office found in a case study that where actual wireline competition was present, customer service was improved. See U. s. General Accounting Office, Wire- Based Competition Benefited Consumers in Selected Markets, at 4, 13 (Feb. 2004). 20 Consumer Prorection Comments, filed January 11, 1993, at 2. 10 13 service throughout the country regardless of the size of the cable operator serving the community. Moreover, small communities as well as large must be able to develop the standards necessary to target specific abuses and issues that may develop in particular communities, The Notice indicates that the Commission will consider whether small entities have complained about a rule in determining whether that rule should be retained, amended or rescinded. The record already shows, however, that in this area such complaints have not been numerous. In 2002, dismissing a reconsideration petition filed by the National Cable & Telecommunications Association and a Small System Operators Coalition, the FCC found that in the nine years between the filing of the petition and the decision there was a noticeable lack of "objections put forth by petitioners.,, 21 Nor have such objections surfaced in large numbers since 2002. D. Franchise Transfers Cable franchises and local ordinances normally require cable companies, regardless of size, to obtain prior approval from the local franchising authority before transferring control of a local franchise or transferring the franchise itself? 2 Small communities, with more limited resources to devote to monitoring and enforcing franchise requirements, are particularly dependent on the ability to understand and control who owns their cable systems and what practical effects this change may have on the operation of those systems, in a market where increasingly large cable companies exercise increasingly centralized control over local operations. Thus, a community must have a reasonable opportunity to consider whether 21 Implementation of Section 8 of the Cable Television Consumer Protection and Competition Act of 1992: Consumer Protection and Customer Service, 17 FCC Rcd 11,916 (MM Docket No. 92- 263 ) released June 24, 2002, at ~ 1. 22 See generally Charter Communications, Inc. v. County of Santa Cruz, 304 F 3d 927 (9th Cir. 2002). 11 14 approval of a proposed transfer is in the public interest, including a fair chance to resolve any outstanding perfonnance problems or noncompliance issues. Section 76.502 of the Commission's rules appears to require a cable operator to file a complete account of the proposed transaction in order to trigger the statutory 120- day deadline and to respond in good faith to the community's questions. In practice, however, cable operators have taken advantage of alleged ambiguities in the Commission's rules and forms to file patently incomplete transfer applications and to claim that communities have only thirty days to review these incomplete descriptions before they must raise issues and questions with the companies. The Commission should consider amending its rules to eliminate these loopholes and ensure that operators provide all the information a community has indicated to be necessary before commencing the 120- day review process, as the statute requires? 3 The need for an orderly transfer process, regardless of the size of a community or its operator, is just as valid in 2005 as it was in 1993. E. Horizontal and Vertical Cable Ownership Caps The 1992 Cable Act directed the Commission to establish limits on the number of subscribers a cable operator may serve and on the number of channels a cable operator may devote to affiliated programming. The Commission created such limits as a means to foster competition and diversity in the video programming market. See 47 C. F. R. §§ 76.503, 76.504. These rules, however, were vacated in 2001, when the D. C. Circuit detennined that the Commission's prior limits had not been adequately supported and that the Commission had not 23 Ownership Comments, filed February 9, 1993 and August 23, 1993; Ownership Reply Comments, filed September 7, 1993. There, NATOA and other representatives of local communities showed that franchise authorities must have a fair opportunity to approve or disapprove a cable franchisee's request to transfer the franchise. Local governments also showed that the blanket waiver for small systems contemplated in the Commission's initial order in the proceeding was contrary to the intent of Congress. 12 15 sufficiently considered changes in the multichannel video programming distribution market. 24 The Commission has initiated a new proceeding to reinstate the rules in a way that is consistent with the court's ruling. It is not clear to the Local Governments why the pertinent rules, §§ 76.503 and 76.504, are listed in this proceeding. While they were adopted within the time frame outlined in the Notice, by definition neither would apply to a small business entity. Thus, the Local Governments do not see this review as significantly affecting the Commission's reconsideration of its ownership rules in the ongoing proceeding on that subject. F. Cable Rate Regulation NATOA has previously provided comments to the Commission on corrections and improvements to its rate regulation rules! 5 If anything, those comments showed that small communities were unreasonably disadvantaged by the expense and difficulty of enforcing the Commission's rules. Yet Congress intended cable rate rules to protect consumers of both large and small cable operators. The Local Governments incorporate their previous comments by reference and ask that the Commission implement the changes called for in those comments. G. Effective Competition NATOA's previous comments have also shown that the Commission's rulings have essentially gutted the effective competition provisions of the statute, to the detriment of consumers in both large and small communities. Moreover, they have undercut the ability of 24 Time Warner v. FCC, 240 F. 3d 1126 (D. C. Cir. 2001). 25 See, e. g., 2002 Rate Regulation Comments, filed November 4, 2002. 13 16 small entities to compete with larger systems by prematurely unleashing incumbent MSOs to employ anti competitive practices. 26 operators, both large and small, from a number of regulatory constraints in markets where "effective competition" exists. When a cable system is found to be subject to effective competition, not only is basic rate regulation eliminated, but so are the protections of anti- buy-through provisions, which prevent cable operators from forcing subscribers to buy service tiers other than basic to obtain additional programming, and of unifonn rate provisions to ensure a common rate structure for all subscribers in a geographic area. In the absence of real competition, such premature action enables predatory conduct, leads to higher rates, and creates consumer frustration. This banns not only consumers, but also overbuild competitors, some of which may also meet the standard for small entities. 27 A premature finding of "effective competition" gives the MSO incumbent the unfettered ability to undercut a nascent small entity competition and encouraging prices to return to monopoly levels. The Local Governments refer the Commission to NATOA's previous comments with respect to the competition rules. v. EQUAL EMPLOYMENT OPPORTUNTY REQUIREMENTS CANNOT BE DISPENSED WITH FOR SMALL BUSINESSES. The Notice at 17 explains that under § 25.601, satellite services must comply with the equal employment opportunity (" EEO") requirements set forth in part 76 of the Commission's 26 See Competition Report Comments, filed July 23, 2004; 2002 Rate Regulation Comments, filed November 4, 2002, at pp. 26- 36. 14 17 rules. Here the congressional mandate for EEO is instructive. In 1992 Congress not only recognized the importance of EEO policy goals for the nation, but also set a threshold for compliance at companies with five or more full- time employees, rather than the 150 employees referenced in the SBA' s definition of a small business. 28 Thus, the Commission should be careful of claims that it should abandon EEO standards entirely for small businesses. 27 NA TOA has provided the Commission with examples of such predatory practices. See NATOA's 2004 comments cited in n. 2Q above. 28 47 U. S. C. § 554 (d)( 3)( A) provides: "Such (FCC EEO) rules shall require an entity specified in subsection (a) with more than 5 full- time employees to file with the Commission an annual statistical report" on its compliance with the EEO rules; see 47 C. F. R §§ 76.73, 76.75, 76.77. 15 18 VI. CONCLUSION For the foregoing reasons, the Commission's rules outlined in the Notice should be retained or amended where necessary to protect consumers, particularly in small communities, and to address the defects identified by these comments and by NATOA's previous filings. Respectfully submitted, Frederick E. Ellrod III Gerard Lavery Lederer Miller & VanEaton, P .L. L. C. 1155 Connecticut Avenue, N. W., Suite 1000 Washington, D. C. 20036- 4306 202- 785- 0600 Counsel for the National Association of Telecommunications Officers And Advisors and Mt. Hood Cable Regulatory Commission September 1, 2005 16 19 CERTIFICATION PURSUANT TO 47 C. F. R. § 76.6( a)( 4) The below- signed signatory has read the foregoing Comments of the National Association of Telecommunications Officers and Advisors and Mt. Hood Cable Regulatory Commission, and, to the best of my knowledge, information and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law; and it is not interposed for any improper purpose. Respectfully submitted, "'!:; '-- l :,( 2 ~. C£~~ 4~~. I, 2. 00 s-" Date Frederick E. Ellrod III, Esq. Miller & VanEaton, P .L. L. C. 1155 Connecticut Avenue, N. W. Suite 1000 Washington, D. C. 20036- 4306 202- 785- 0600 9430\ 25\ 001.1 1.595. DOC 20