*Pages 1--4 from Microsoft Word - 10371.doc* Federal Communications Commission FCC 01- 201 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Century M. L. Cable Corporation d/ b/ a Cable Television Company of Greater San Juan Petition for Reconsideration ) ) ) ) ) ) MEMORANDUM OPINION AND ORDER Adopted: July 11, 2001 Released: July 20, 2001 By the Commission: I. INTRODUCTION 1. Century M. L. Cable Corporation d/ b/ a Cable Television Company of Greater San Juan (“ Century”) has filed a petition for reconsideration of an Order, Century M. L. Cable Corporation d/ b/ a Cable Television Company of Greater San Juan, 1 in which the Commission denied an application for review of a Cable Services Bureau Order that granted, in part, and denied, in part, Century’s petition for reconsideration of the certification of the Puerto Rico Telecommunications Regulatory Board (“ Board”) to regulate Century’s basic cable rates. 2 The Board filed an opposition to the petition and Century filed a reply. The petition for reconsideration is granted. II. DISCUSSION 2. The factual background and applicable statutory provisions relevant to this matter are set forth in Century I and Century II and need not be repeated here. It is sufficient to state that Century’s petition requests consideration of Census Bureau population data, updated through July 1997, that became available only a month before our release of Century II. 3 Century submits this population data for the purpose of updating the franchise area household projections used in determining whether its San Juan, Puerto Rico area cable franchise is subject to effective competition under the “low penetration” test specified in Section 623( l)( l)( A) of the Communications Act and therefore exempt from regulation by the 1 13 FCC Rcd 22359 (1998) (“ Century II”). 2 Century M. L. Cable Corporation & Century M. L. Cable Venture, 12 FCC Rcd 20192 (CSB 1997) (“ Century I”). 3 Cable operators may rely on 1990 Census data or, provided they carry the burden of providing appropriate supporting documentation, upon more recent data. See Cable Operators’ Petition for Reconsideration of Franchising Authorities’ Certifications to Regulate Basic Cable Rates, 9 FCC Rcd 3656 (1994). The issue addressed in Century I, Century II, and here concerns 1990 Census population and household information that Century projected to 1997. 1 Federal Communications Commission FCC 01- 201 2 Board. 4 Century contends that the method used in this updating of projected households employed the same community- specific methodology approved by the Bureau in Pegasus Cable Television 5 and therefore removes the deficiencies in the household projection information found in Century II. 6 Century states that the updated calculation projects 359,950 franchise households as of July 1, 1997, within its San Juan franchise area; that its 1997 subscribership of 107,447 produces a 29.85% penetration level; and that the 30% penetration level specified in the “low penetration” effective competition test set forth in Section 623( l)( l)( A) is therefore satisfied. 3. The Commission’s rules provide that a reconsideration petition must be supported by facts related to events that occurred since the last opportunity for presenting them or by facts that were unknown, or through ordinary diligence could not have become known, since the last opportunity for presenting them. 7 A reconsideration petition that relies on facts not previously presented to the Commission or designated authority may be granted where consideration of those facts is in the public interest. 8 Because the updated Census information became available just before our release of Century II and was not available during the application for review pleading cycle, we believe that consideration of this information on reconsideration is appropriate. 9 Therefore, we consider the revised projections of franchise household information and subscriber penetration information presented with the petition. 4. Century obtained the 1980 and 1990 Census population and households for each of the Puerto Rico Municipios of Bayamon, Carolina, Guaynabo, San Juan, and Trujillo Alto served by its San Juan cable system. Employing the methodology approved by the Cable Services Bureau in Pegasus, Century compared the 1980 to 1990 population growth for these five communities (6. 53%) with the 1980 to 1990 household growth (17.04%), and determined that the household- to- population growth ratio for the period was 2.61. 10 Century also obtained Census Bureau estimates of the change in population from April 1, 1990 to July 1997 for Bayamon, Carolina, Guaynabo, San Juan, and Trujillo Alto, and determined that the 1990 to July 1997 franchise population growth rate of the five communities was 5.12%. By applying the 2. 61 household- to- population growth factor to the 5. 12% population growth rate, and applying the result to the 317,528 franchise area households reported by the 1990 Census, Century obtained a projected July 1997 franchise area household figure of 359,950. 11 Use of this projected household figure and 4 Section 623( l)( l)( A) provides that a cable operator is subject to “low penetration” effective competition if “fewer than 30 percent of the households in the franchise area subscribe to cable service of the cable system.” 47 U. S. C. § 543( l)( l)( A); see also 47 C. F. R. § 76.905( b)( 1). 5 13 FCC Rcd 18 (CSB 1997) (“ Pegasus”). 6 In Century II, the Commission upheld the Bureau’s determination in Century I that household projection methodology based upon community specific data employed by the Board was more reliable than Century’s projections that were based on Puerto Rico- wide data. See Century II, 13 FCC Rcd at 22362. 7 47 C. F. R. § 1.106( b)( 2). 8 47 C. F. R. § 1.106( c)( 2). 9 The pleading cycle closed during February 1998. The updated Census data became available October 8, 1998, just prior to release of Century II on November 10, 1998. 10 Petition at 5 & Exhibit A. 11 Petition at 5- 6 & Exhibit B. 2 Federal Communications Commission FCC 01- 201 3 Century’s 107,447 franchise area 1997 subscribership produces a penetration rate of 29.85%, which satisfies the “low penetration” effective competition test. 5. In cases where both the cable operator and the franchising authority submit updated household data, it is the cable operator’s burden to demonstrate that its updated data are more accurate and reliable than the updated data submitted by the franchising authority. 12 Century provided updated household data based on census data from each community in its franchise area. It used that data to calculate a household growth ratio for the whole franchise area and developed an estimate of current franchise area households by applying that growth factor to Census population estimates for the period 1990 to 1997. This methodology has previously been found to be reasonable by the Cable Services Bureau in determining current household data. 13 The presence of effective competition is determined on a franchise- by- franchise basis, 14 and the five communities of Bayamon, Carolina, Guaynabo, San Juan, and Trujillo Alto are covered by a single franchise. 15 Therefore, Century’s calculation of a household growth figure for its entire franchise area was appropriate and consistent with the methodology approved in Pegasus. The Board on the other hand submitted no new data. Instead, it contends that a separate 1980 to 1990 growth factor should be calculated for each of the five communities and used to calculate a separate projected 1997 household figure for each community, and that Century’s subscribership figure should be compared with the sum of the resulting household figures for the five communities to obtain the penetration rate. 16 The Board’s contention that Century should have developed a separate calculation for each community is rejected. The data on which Century relied was reasonable given that the data was based on data from each community in its franchise area and Century serves all of the communities pursuant to a single franchise. Century does not serve those communities pursuant to separate individual franchises. 6. The Board also focused on data showing that the population of San Juan decreased for the period 1980 – 1990. 17 The Board argues that this decrease in San Juan’s population can only have the effect of increasing Century’s penetration rate, presumably above the 30 percent low penetration threshold. The Board, however, ignores the population increases in the other municipios containing the majority of the population in Century’s franchise area. 18 Given the evidence presented by Century, we cannot conclude that the population decrease in San Juan, without more, establishes that Century is not subject to effective competition in its franchise area. For these reasons, we find that Century has met its burden of 12 See TCI Cablevision, Inc., 10 FCC Rcd 2925, 2927 (1995). 13 See Pegasus, 13 FCC Rcd at 20- 21. 14 See Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992; First Order on Reconsideration, Second Report and Order, and Third Notice of Proposed Rulemaking, MM Docket No. 92- 266, 9 FCC Rcd 1164, 1180 (1994). See also Prime Cable of Chicago, 10 FCC Rcd 10032, 10036 (CSB 1995). 15 Reply at 2- 3. 16 Opposition at 6- 9, Attachment A. 17 Id. 18 Id. 3 Federal Communications Commission FCC 01- 201 4 demonstrating that its updated data are more accurate and reliable than the updated data submitted by the Board in the prior Commission proceeding. 19 III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED, pursuant to Section 1.106 of the Commission’s rules, that the petition for reconsideration filed by Century M. L. Cable Corporation d/ b/ a Cable Television Company of Greater San Juan IS GRANTED. 20 8. IT IS FURTHER ORDERED that the certification granted to the Puerto Rico Telecommunications Regulatory Board to regulate the basic cable rates of Century M. L. Cable Corporation d/ b/ a Cable Television Company of Greater San Juan in Bayamon, Carolina, Guaynabo, San Juan, and Trujillo Alto, Puerto Rico, IS REVOKED. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary 19 We recognize that Century’s penetration rate (29.85%) is extremely close to the 30% penetration threshold under the low penetration test. The statute, however, does not grant the Commission discretion in close cases. If the penetration rate is below 30%, effective competition as defined by the Communications Act exists. We acknowledge, however, that Century’s subscriber penetration will change over time and that the 2000 Census report will be available in the future. If new data shows our determination of effective competition to be no longer valid, the Board may file a petition for re- certification pursuant to Section 76.916 of our rules. 47 C. F. R. § 76.916. 20 47 C. F. R. § 1.106. 4