Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of:                | * | CSR 7060-E                   |
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| Bright House Networks            | ) | CSR 7062-E, 7068-E, 7125-E   |
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| Comcast Cable Communications,    | * |                              |
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MEMORANDUM OPINION AND ORDER

**Adopted: May 31, 2007** **Released: June 1, 2007**

By the Deputy Chief, Policy Division, Media Bureau:

# introduction

1.  This Order considers several petitions which Comcast Cable
    Communications, LLC and Bright House Networks, LLC (collectively
    "the Petitioners" or "operators") filed with the Commission pursuant
    to Sections 76.7, 76.905(b)(2) and 76.907 of the Commission\'s rules
    for a determination that Petitioners are subject to effective
    competition pursuant to Section 623(1) of the Communications Act of
    1934, as amended (\"Communications Act\"),[^1] and the Commission\'s
    implementing rules,[^2] and are therefore exempt from cable rate
    regulation in the communities listed in Attachment A (the
    "Communities"). No opposition to any petition was filed. Finding
    that Petitioners are subject to effective competition in the listed
    Communities, we grant the petitions.

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(1) of the Communications Act of 1934,
    as amended, 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]

# DISCUSSION

**A.** **Competing Provider Effective Competition**

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 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]
    Turning to the first prong of this test, we find that the DBS
    service of DirecTV Inc. ("DirectTV") and DISH Network ("Dish") is
    presumed to be technically available due to its nationwide satellite
    footprint, and presumed to be actually available if households in a
    franchise area are made reasonably aware that the service is
    available.[^7] The two DBS providers' subscriber growth reached
    approximately 26.1 million as of June 2005, comprising approximately
    27.7 percent of all MVPD subscribers nationwide; DirecTV was the
    second largest, and DISH the third largest, MVPD provider during the
    period.[^8] In view of this DBS growth data, and the data discussed
    below showing that more than 15 percent of the households in each of
    the communities listed on Attachment A relating to the competing
    provider test are DBS subscribers, we conclude that the population
    of the communities at issue here may be deemed reasonably aware of
    the availability of DBS services for purposes of the first prong of
    the competing provider test. With respect to the issue of program
    comparability, we find that the programming of the DBS providers
    satisfies the Commission\'s program comparability criterion because
    the DBS providers offer substantially more than 12 channels of video
    programming, including more than one non-broadcast channel.[^9] We
    further find that the operators have demonstrated that these
    communities are served by at least two unaffiliated MVPDs, namely
    the two DBS providers, each of which offers comparable video
    programming to at least 50 percent of the households in the
    franchise area. Therefore, the first prong of the "competing
    provider" test is satisfied.

4.  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. The
    Petitioners 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 basis. Bright House
    asserts that it is the largest MVPD serving the Eufaula franchise
    area.[^10] Comcast asserts that it is the largest MVPD in the
    majority of the Communities because its subscribership exceeds the
    aggregate DBS subscribership for those franchise areas.[^11] With
    respect to the communities of Alexander, Bryant, and Pulaski County,
    Arkansas, Comcast asserts that it cannot determine the largest MVPD
    in these communities because the SBCA aggregates the number of
    subscribers for the DBS subscribers and this number is larger than
    the Comcast subscribers in these communities.[^12] With regard to
    these communities, we are able to conclude that this portion of the
    test is met by analyzing the data submitted. The aggregate
    penetration rate for DBS, as well as the penetration rate for
    Comcast, exceeds 15 percent in each of these franchise areas and
    Comcast's penetration rate exceeds 24 percent in each of these three
    franchise areas.[^13]

5.  With regard to the communities of Channahon, Minooka, Plainfield,
    Romeoville, and Wadsworth, Comcast contends that while it is not the
    largest MVPD in these franchise areas, it still has satisfied the
    second prong of the competing provider test for them.[^14] Comcast
    claims to be subject to competing provider competition in these
    communities because DBS penetration exceeds 15 percent of occupied
    households, and because the number of Comcast subscribers also
    exceeds 15 percent of the occupied households, as reported by the
    2000 Census.[^15] Comcast determined the competing provider
    penetration levels in the franchise areas by applying a five-digit
    zip code allocation method.[^16] To calculate the DBS firms'
    subscribership in each franchise area, Comcast purchased an
    Effective Competition Tracking Report ("ECTR") from the SBCA. The
    SBCA reports the total DBS and DTH subscribers for the relevant zip
    codes in Comcast's franchise area.[^17] To account for differences
    between the zip code boundaries used in the ECTR and the specific
    boundaries of the franchise areas, Comcast multiplied the SBCA zip
    code data by derived allocation percentages to estimate the number
    of DBS and DTH subscribers within the franchise areas.

6.  Based upon the aggregate DBS subscriber penetration levels as
    reflected in Attachment A, calculated using 2000 Census household
    data, we find that Petitioners have 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. Based on the foregoing, we conclude that
    Petitioners Comcast and Bright House have submitted sufficient
    evidence demonstrating that its cable systems serving the
    Communities set forth on Attachment A are subject to effective
    competition under the competing provider analysis.

    **B.** **Low Penetration Effective Competition**

    7\. Section 623(l)(1)(A) of the Communications Act provides that a
    cable operator is subject to effective competition, and therefore
    exempt from cable rate regulation, if "fewer than 30 percent of the
    households in the franchise area subscribe to the cable service of
    the cable system."[^18] Comcast provided information showing that
    less than 30 percent of the households within the Grundy County
    franchise area subscribe to its cable services. Accordingly, we
    conclude that Comcast has demonstrated the existence of "low
    penetration" effective competition in Grundy County pursuant to our
    rules.

# III. ordering clauses {#iii.-ordering-clauses .unnumbered}

8\. Accordingly, **IT IS ORDERED** that the petitions filed by Comcast
Cable Communications, LLC and Bright House Networks, LLC for a
determination of effective competition in the Communities listed thereon
**ARE** **GRANTED**.

9\. **IT IS FURTHER ORDERED** that the certification to regulate basic
cable service rates granted to the local franchising authorities
overseeing Comcast Cable Communications, LLC and Bright House Networks,
LLC **ARE REVOKED**.

10\. This action is taken pursuant to authority delegated under Section
0.283 of the Commission's rules.[^19]

FEDERAL COMMUNICATIONS COMMISSION

Steven A. Broeckaert

Deputy Chief, Policy Division, Media Bureau

**Attachment A**

**[Cable Operators Subject to Competing Provider Effective
Competition]{.underline}**

BRIGHT HOUSE NETWORKS**: 7060-E**

> **2000**

**DBS Census**

**Communities CUIDS CPR\* Subscribers^+^ Household**

Eufaula AL0074 19.82 1079.45 5447

**COMCAST CABLE COMMUNICATIONS, LLC: 7062-E, 7068-E, 7125-E**

> **2000**

**DBS Census**

**Communities CUIDS CPR\* Subscribers^+^ Household**

[CSR 7062-E]{.underline}

Alexander AR0686 48.91% 135 276

Bryant AR0271 51.50% 1,854 3,601

Jacksonville AR0063 22.84% 2,487 10,890

Little Rock AR0191 18.35% 14,193 77,352

North Little Rock AR0069 19.08% 4,874 25,542

Pulaski County AR0202 34.15% 7,027 20,575

AR0147

Sherwood AR0070 29.34% 2,581 8,798

AR0348

[CSR 7068-E]{.underline}

Bolingbrook IL0209 34.35% 5,982 17,416

Braidwood IL0186 42.09% 776 1,843

Channahon IL0317 60.98% 1,390 2,279

IL0629

Coal City IL0187 46.18% 864 1,871

Crest Hill IL0272 19.63% 879 4,478

Diamond IL0283 45.73% 252 551

Joliet IL0039 27.75% 10,042 36,182

Frankfort IL1026 38.30% 1,309 3,418

Lemont IL0573 27.50% 1,216 4,420

Lockport IL0845 33.71% 1,888 5,599

Minooka IL0316 85.50% 1,124 1,315

Mokena IL0450 27.84% 1,309 4,703

Morris IL0050 36.41% 1,759 4,831

New Lenox IL1027 30.05% 1,759 5,853

Plainfield IL1232 69.29% 2,990 4,315

Rockdale IL1233 20.47% 156 762

Romeoville IL0197 55.07% 3,725 6,764

Shorewood IL0932 30.83% 791 2,565

Wilmington IL0185 44.45% 885 1,991

[CSR 7125-E]{.underline}

Waukegan IL0001 43.56% 12,104 27,787

Highwood IL0430 21.99% 342 1,555

Park City IL0469 18.96% 493 2600

Libertyville IL0525 21.03% 1,535 7,298

Mundelein IL0526 24.91% 2,456 9,858

Wauconda IL0527 33.00% 1,192 3,611

Grayslake IL0528 29.02% 1,887 6,503

Deerfield IL0613 19.83% 1,273 6,420

IL1221

Gurnee IL0679 24.37% 2,590 10,629

Winthrop Harbor IL1097 27.43% 650 2,370

Zion IL1098 24.51% 1,851 7,552

Wadsworth IL1111 62.26% 645 1,036

Third Lake IL1196 30.37% 130 428

Green Oaks IL1197 20.38% 220 1,079

Bannockburn IL1318 20.00% 50 250

Lake Forest IL1386 19.59% 1,310 6,687

Kenilworth IL1400 19.31% 153 792

Riverwoods IL1537 19.67% 248 1,261

Beach Park IL1658 24.59% 894 3,636

**[Cable Operator Subject to Low Penetration Effective
Competition]{.underline}**

**COMCAST CABLE COMMUNICATIONS, LLC: CSR 7068-E**

**Communities CUIDS Franchise Area Cable Penetration Households
Subscribers Level**

Grundy County IL1181 3,950 633 16.03%

IL1433

IL1828

\*CPR = Percentage of DBS penetration

\+ = See Cable Operator Petitions

[^1]: 47 U.S.C. § 543(1).

[^2]: 47 C.F.R. § 76.905(b)(4).

[^3]: 47 C.F.R. § 76.906.

[^4]: ^ ?^ *See* 47 U.S.C. § 543(1) 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]: *See MediaOne of Georgia*, 12 FCC Rcd 19406 (1997).

[^8]: *Twelfth Annual Assessment of the Status of Competition in the
    Market for Delivery of Video Programming*, FCC 06-11 at ¶¶ 6, 13,
    72-73, 21 FCC Rcd 2503 (rel. March 3, 2006).

[^9]: *See* 47 C.F.R. § 76.905(g).

[^10]: Bright House Petition at 7-8.

[^11]: Comcast Petitions at 5-6 (for CSRs 7062-E, 7068-E, 7125-E).

[^12]: Comcast Petition (CSR 7062-E) at 5-6.

[^13]: *Id.* *See* Declaration of Peter Feinberg, dated November 13,
    2006.

[^14]: Comcast Petitions(CSR 7068-E) at 6 and (CSR 7125-E) at 5.

[^15]: *Id.*

[^16]: Comcast Petitions (CSR 7062-E, 7068-E, and 7125-E) at 6.

[^17]: Comcast Petitions (CSR 7062-E, 7068-E and 7125-E) at 7.

[^18]: 47 U.S.C § 543(l)(l)(A).

[^19]: 47 C.F.R. § 0.283.