Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | CSR 7640-E, CSR 7641-E & CSR |
|                                  | * | 7647-E                       |
| Time Warner Cable San Antonio LP | ) |                              |
|                                  | * | CSR 7650-E, CSR 7651-E, CSR  |
| Time Warner                      | * | 7652-E & CSR 7653-E          |
| Entertainment-Advance/Newhouse   |   |                              |
| Partnership                      | * |                              |
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| Petition for Determination of    | ) |                              |
| Effective Competition in Forty   | * |                              |
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MEMORANDUM OPINION AND ORDER

**Adopted: April 3, 2008 Released: April 4, 2008**

By the Senior Deputy Chief, Policy Division, Media Bureau:

# I. introduction and Background

1.  Time Warner Cable San Antonio LP and Time Warner
    Entertainment-Advance/Newhouse Partnership (collectively "Time
    Warner"), hereinafter referred to as "Petitioner," has filed with
    the Commission seven 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 "Communities." Petitioner alleges that its cable system serving
    the Communities is subject to effective competition pursuant to
    Section 623(1)(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.

# 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 ("MVPD"), 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.[^6] This
    test is otherwise 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.[^7]

5.  Turning to the first prong of this test, it is undisputed that these
    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.[^8]
    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.[^9] We further find that Petitioner has
    provided sufficient evidence of DBS advertising in local, regional,
    and national media that serve the Communities to support their
    assertion that potential customers in the Communities are reasonably
    aware that they may purchase the service of these MVPD
    providers.[^10] 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[^11] and Time Warner indicates that the program
    offerings are available on the websites of both DIRECTV and Dish,
    and we have reviewed their websites and confirmed that their program
    offerings meet the test.[^12] 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.[^13] Accordingly, we find that the
    first prong of the competing provider test is satisfied.

6.  The second prong of the competing provider test requires that the
    number of households subscribing to MVPDs, other than the largest
    MVPD, exceed 15 percent of the households in a franchise area.
    Petitioner asserts that it is the largest MVPD in the
    Communities.[^14] Petitioner sought to determine the competing
    provider penetration in the Communities by purchasing a subscriber
    tracking report from the Satellite Broadcasting and Communications
    Association ("SBCA") that identified the number of subscribers
    attributable to the DBS providers within the Communities on a zip
    code plus four basis.[^15]

7.  Based upon the aggregate DBS subscriber penetration levels that were
    calculated using Census 2000 household data,[^16] 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.

8.  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 

9.  Accordingly, **IT IS ORDERED** that the petitions for a
    determination of effective competition filed in the captioned
    proceeding by Time Warner Cable San Antonio LP, and Time Warner
    Entertainment-Advance/Newhouse Partnership **ARE GRANTED**.

10. **IT IS FURTHER ORDERED** that the certification to regulate basic
    cable service rates granted to any of the Communities set forth on
    Attachment A **IS REVOKED**.

11. This action is taken pursuant to delegated authority pursuant to
    Section 0.283 of the Commission's rules.[^17]

    FEDERAL COMMUNICATIONS COMMISSION

Steven A. Broeckaert

Senior Deputy Chief, Policy Division, Media Bureau

**ATTACHMENT A**

**CSRs 7640-E, 7641-E, 7647-E, 7650-E, 7651-E, 7652-E & 7653-E**

**COMMUNITIES SERVED BY TIME WARNER CABLE SAN ANTONIO LP AND TIME WARNER
ENTERTAINMENT ADVANCE/NEWHOUSE PARTNERSHIP**

**CSR 7640-E**

**TIME WARNER CABLE SAN ANTONIO LP**

**2000 Estimated**

**Census DBS**

## Communities CUID CPR\* Household Subscribers 

Blanco TX2197 57.12% 576 329

## 

## TIME WARNER CABLE SAN ANTONIO LP

## 

## CSR 7641-E

2000. **Estimated**

      **Census DBS**

      **Communities CUIDS CPR\* Household Subscribers**

      Balcones Heights TX0519 16.28% 1437 234

      Bulverde TX2371 53.33% 1292 689

      Bexar County TX0478 22.41% 35903 8045

      China Grove TX0699 56.93% 404 230

      Cibolo TX0491 26.10% 1092 285

      Converse TX0486 21.89% 3837 840

      Elmendorf TX1754 43.36% 226 98

      Fair Oaks Ranch TX2335 26.02% 1683 438

      Garden Ridge TX1092\*\* 23.0% 704 164

      TX2158

      Grey Forrest TX0521 28.49% 179 51

      Helotes TX0936 24.07% 1471 354

      Kirby TX0533 17.75% 2975 528

      La Coste TX1169 25.48% 416 106

      Live Oak TX0490 18.46% 3429 633

      Marion TX1448 45.01% 371 167

      New Braunfels TX0282\*\* 19.45% 13558 2637

      TX1272

      Scenic Oaks(Unincor) TX2205 42.77% 1190 509

      Schertz TX0494 24.95% 6604 1648

      Sequin TX0211\*\* 31.93% 7526 2403

      TX1257

      City of Selma TX0489 21.68% 286 62

      City of Shavano Park TX0528 16.38% 629 103

      City of Somerset TX1110 29.24% 513 150

      City of Windcrest TX0488 17.79% 2232 397

## TIME WARNER CABLE SAN ANTONIO LP

## 

## CSR 7647-E

2000. **Estimated**

      **Census DBS**

      **Communities CUIDS CPR\* Households Subscribers**

      City of Stockdale TX1014 47.28% 497 235

      City of Bandera TX1021\*\* 62.99% 408 257

      TX2155

**TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP**

**CSR 7650-E**

2000. **Estimated**

> **Census DBS**

**Communities CUIDS CPR\* Households Subscribers**

City of Bartlett TX0929\*\* 33.98% 571 194

TX0930

City of Granger TX0931 40.04% 502 201

**TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP**

**CSR 7651-E**

**2000 Estimated**

**Census DBS**

**Communities CUID CPR\* Households Subscribers**

City of Florence TX1078 56.96% 381 217

**TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP**

**CSR 7652-E**

**2000 Estimated**

**Census DBS**

**Communities CUIDS CPR\* Households Subscribers**

City of Fredericksburg TX0063\*\* 41.62% 3784 1575

TX2157

**TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP**

**CSR 7653-E**

**2000 Estimated**

**Census DBS**

**Communities CUIDS CPR\* Households Subscribers**

City of Lockhart TX0291 23.41% 3627 849

City of Luling TX0725 27.36% 1791 490

Town of Martindale TX0896 18.07% 332 60

Village of Wimberley TX0894 41.43% 1576 653

\*CPR = Percent of competitive DBS penetration rate.

\*\* - The communities of Garden Ridge, New Braunfels, Sequin, Bandera,
Bartlett, and Fredericksburg each have two CUIDS that Time Warner
operates as a single franchise area pursuant to an agreement with the
local franchise authorities.

[^1]: *See* 47 U.S.C. § 543(a)(1).

[^2]: 47 C.F.R. § 76.905(b)(2).

[^3]: 47 C.F.R. § 76.906.

[^4]: *See* 47 U.S.C. § 543(l) and 47 C.F.R. § 76.905.

[^5]: *See* 47 C.F.R. §§ 76.906 & 907.

[^6]: 47 U.S.C. § 543(1)(1)(B); *see* also 47 C.F.R. § 76.905(b)(2).

[^7]: 47 C.F.R. § 76.905(b)(2)(i).

[^8]: *See* Petition CSR 7640-E at 4-5; Petition CSR 7641-E at 5-6;
    Petition CSR 7647-E at 4-5; Petition CSR 7650-E at 4-5; Petition CSR
    7651-E at 4-5; Petition CSR 7652-E at 4-5; Petition CSR 7653-E at
    4-5.

[^9]: Mediacom Illinois LLC et al., Eleven Petitions for Determination
    of Effective Competition in Twenty-Two Local Franchise Areas in
    Illinois and Michigan*,* [21 FCC Rcd
    1175](http://commreg.pf.com/showSingleDoc.asp?iName=caseIndex&docID=DA-06-278A1&section=1)
    (2006)*.*

[^10]: 47 C.F.R. § 76.905(e)(2).

[^11]: *See* 47 C.F.R. § 76.905(g). *See also* Petition CSR 7640-E at
    5-6; Petition CSR 7641-E at 6-7; Petition CSR 7647-E at 5-6;
    Petition CSR 7650-E at 5-6; Petition CSR 7651-E at 5-6; Petition CSR
    7652-E at 5-6; Petition CSR 7653-E at 5-6.

[^12]: *See* Petition CSR 7640-E at 6; Petition CSR 7641-E at 7;
    Petition CSR 7647-E at 6; Petition CSR 7650-E at 6; Petition CSR
    7651-E at 6; Petition CSR 7652-E at 6; Petition CSR 7653-E at 6.

[^13]: *See* Petition CSR 7640-E at 7; Petition CSR 7641-E at 6-7;
    Petition CSR 7647-E at 7; CSR 7650-E at 7; CSR 7651-E at 7; CSR
    7652-E at 7; CSR 7653-E at 7.

[^14]: Petition 7640-E at 7-9; Petition CSR 7641-E at 7-8; Petition CSR
    7647-E at 7-8; Petition CSR 7650-E at 7-8; Petition CSR 7651-E at 7;
    Petition CSR 7652-E at 7; Petition CSR 7653-E at 7-8. With regard to
    Petitions CSR 7640-E (Blanco), CSR 7641-E (China Grove and Scenic
    Oaks), CSR 7647-E (Stockdale), and CSR 7650-E (Bartlett), Time
    Warner is unable to determine which MVPD is the largest in these
    communities because the DBS subscribership data obtained from SBCA
    is aggregated and does not break down the individual subscribership
    of each DBS provider. Nevertheless, Time Warner argues that it is
    subject to effective competition because, in addition to DBS
    penetration exceeding 15 percent of the occupied households, the
    number of Time Warner subscribers also exceed 15 percent and the
    Commission has recognized that in such cases the second prong of the
    competing provider test is satisfied..

[^15]: Petition CSR 7640-E at 8-9; Petition CSR 7641-E at 8-9; Petition
    CSR 7647-E at 8-9; Petition CSR 7650-E at 8-9; Petition CSR 7651-E
    at 7-8; Petition CSR 7652-E at 7-8; Petition CSR 7653-E at 4-5. A
    zip code plus four analysis allocates DBS subscribers to a franchise
    area using zip code plus four information that generally reflects
    franchise area boundaries in a more accurate fashion than standard
    five digit zip code information.

[^16]: Petition CSR 7640-E at 8-9 and Exhibit C; Petition CSR 7641-E at
    9 and Exhibit C; Petition CSR 7647-E at 8-9 and Exhibit C; Petition
    CSR 7650-E at 8-9 and Exhibit C; Petition CSR 7651-E at 7-8 and
    Exhibit C; Petition CSR 7652-E at 7-8 and Exhibit C; Petition CSR
    7653-E at 7-8 and Exhibit C.

[^17]: 47 C.F.R. § 0.283.