Before the

Federal Communications Commission

Washington, D.C. 20554

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | CSR 7377-E                   |
|                                  | * |                              |
| Time Warner Cable Inc., and Time | ) | CSR 7493-E                   |
| Warner                           | * |                              |
| Entertainment-Advance/Newhouse   | * | CSR 7496-E                   |
| Partnership                      |   |                              |
|                                  | * |                              |
| 3 Petitions for Determination of | * |                              |
| Effective Competition in 52      | ) |                              |
| Communities in the State of New  | * |                              |
| York and the Commonwealth of     | * |                              |
| Pennsylvania                     |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+

MEMORANDUM OPINION AND ORDER

**Adopted: December 16, 2008 Released: December 17, 2008**

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

# I. introduction and Background

1.  Time Warner Cable Inc., and Time Warner
    Entertainment-Advance/Newhouse Partnership, hereinafter referred to
    as "Petitioner," has filed with the Commission petitions pursuant to
    Sections 76.7, 76.905(b)(2), 76.905(b)(1) and 76.907 of the
    Commission's rules for a determination that Petitioner is subject to
    effective competition in the 52 communities listed on Attachment A
    and hereinafter referred to as "Communities."[^1] Petitioner alleges
    that its cable systems serving the communities listed on Attachment
    B and hereinafter referred to as the Attachment B Communities, as
    well as the communities listed on Attachment C and hereinafter
    referred to as the Attachment C Communities, are subject to
    effective competition pursuant to Section 623(1) of the
    Communications Act of 1934, as amended ("Communications Act")[^2]
    and the Commission's implementing rules,[^3] and are 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").

2.  Petitioner also claims to be subject to effective competition
    because of the DBS providers in the Communities listed on Attachment
    D and hereinafter referred to as the Attachment D Communities, but
    has not furnished the data with which we can adjudicate those
    claims. Petitioner has, however, furnished data with which we can
    determine whether Petitioner is exempt from cable rate regulation in
    the Attachment D Communities because it serves fewer than 30 percent
    of the households there. The petitions are unopposed.

3.  In the absence of a demonstration to the contrary, cable systems are
    presumed not to be subject to effective competition,[^4] as that
    term is defined by Section 623(l) of the Communications Act and
    Section 76.905 of the Commission's rules.[^5] 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.[^6] For the reasons
    set forth below, we grant the petitions as to all of the Attachment
    B Communities and the Attachment D Communities, based on our finding
    that Petitioner is subject to effective competition in them; and we
    deny the petitions as to the Attachment C Communities.

# II. DISCUSSION

**A. The Competing Provider Test**

4.  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;[^7] this
    test is otherwise referred to as the "competing provider" test.

5.  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.[^8]

6.  Turning to the first prong of this test, it is undisputed that the
    Attachment B Communities and the Attachment C 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.[^9] 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.[^10] We further find that Petitioner has provided
    sufficient references to DBS promotions in media that serve the
    Attachment B Communities and the Attachment C Communities to support
    its assertion that potential customers in the Attachment B
    Communities and the Attachment C Communities are reasonably aware
    that they may purchase the service of these MVPD providers.[^11] 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[^12] and is
    supported in this petition with citations to the channel lineups for
    both DIRECTV and Dish.[^13] Also undisputed is Petitioner's
    assertion that both DIRECTV and Dish offer service to at least "50
    percent" of the households in the Attachment B Communities and the
    Attachment C Communities because of their national satellite
    footprint.[^14] Accordingly, we find that the first prong of the
    competing provider test is satisfied as to both the Attachment B
    Communities and the Attachment C Communities.

7.  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 most of the
    Attachment B Communities and the Attachment C Communities.[^15]
    Petitioner sought to determine the competing provider penetration in
    these Communities by purchasing a subscriber tracking report from
    the Satellite Broadcasting and Communications Association that
    identified the number of subscribers attributable to the DBS
    providers within these Communities on a five-digit zip code
    basis.[^16]

8.  In the remainder of the Attachment B Communities and the Attachment
    C Communities, the largest MVPD is unable to be identified because
    Petitioner's subscribership is over 15 percent and so is the DBS
    providers', but Petitioner's is less than the DBS providers'.[^17]
    It is possible that the largest MVPD there is Petitioner or either
    of the two DBS providers. In such circumstances, nevertheless, it is
    clear that the second prong of the competing provider test is
    satisfied. If Petitioner is the largest MVPD in a Community, then
    the combined subscribership of the other MVPDs (the DBS providers)
    is greater than 15 percent. Or, if one of the DBS providers is the
    largest MVPD in the Community, then the combined subscribership of
    the other MVPDs (Petitioner and the other DBS provider) is greater
    than 15 percent. Petitioner's data shows that both these
    determinations can be made for all the Attachment B Communities and
    the Attachment C Communities.[^18]

9.  Based upon the aggregate DBS subscriber penetration levels that were
    calculated using Census 2000 household data,[^19] as reflected in
    Attachment B and Attachment C, 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 both the Attachment B and
    Attachment C Communities. Therefore, based on the data in the
    Petitions, the second prong of the competing provider test is
    satisfied for each of the Attachment B and Attachment C Communities.

10. Attachment C, however, lists two Communities in which Petitioner's
    data show that the combined subscriberships of Petitioner and the
    DBS Providers exceed 100 percent of the households. This data is
    obviously inaccurate and unreliable. It may be that the excessive
    subscribership totals result from the combined application of very
    small populations (in both the Attachment C Communities, there are
    only a few hundred households) and five-digit zip codes that cover
    large areas and many households outside the franchise areas.
    Whatever the reason, we cannot disregard these inaccuracies, which
    Petitioner should have corrected before filing or noticed and
    brought to our attention, because they undermine the reliability of
    the five-digit zip code data in these instances. We deny the
    petitions as to the two Attachment C Communities.

11. Based on the foregoing, we conclude that Petitioner has submitted
    sufficient evidence demonstrating that both prongs of the competing
    provider test are satisfied and reliable for purposes of concluding
    that Petitioner is subject to effective competition as to the
    Attachment B Communities. Accordingly, we grant the petitions as to
    the Attachment B Communities.

    **B. The Low Penetration Test**

12. Section 623(l)(1)(A) of the Communications Act provides that a cable
    operator is subject to effective competition if the Petitioner
    serves fewer than 30 percent of the households in the franchise
    area; this test is otherwise referred to as the "low penetration"
    test.[^20]

13. Petitioner alleges that it is subject to competing provider
    effective competition in the Attachment D Communities, and the first
    prong of that kind of effective competition is satisfied in them.
    Petitioner, however, has submitted incomplete or flawed evidence
    about the second prong. In two Attachment D Communities, French
    Creek, New York, and Wayne, Pennsylvania, Petitioner supplied no
    data about DBS subscribership. In the other Attachment D
    Communities, Petitioner's subscribership is very small and, if the
    subscribership of one of the DBS providers is also very small, then
    the subscribership of the MVPDs other than the largest MVPD would
    not exceed 15 percent of the households in the franchise area.[^21]
    Thus, Petitioner cannot satisfy the second prong of the competing
    provider effective competition test in the Attachment D Communities.

14. In all the Attachment D Communities, however, Petitioner's
    subscribership is under 30 percent.[^22] Based upon the subscriber
    penetration level calculated by Petitioner, as reflected in
    Attachment D, we find that Petitioner has demonstrated the
    percentage of households subscribing to its cable service is less
    than 30 percent of the households in the Communities listed on
    Attachment D. Therefore, the low penetration test is satisfied in
    those Communities.

# III. ordering clauses 

15. Accordingly, **IT IS ORDERED** that Petitioner's request that the 20
    communities listed in footnote 1 be withdrawn from consideration in
    this proceeding **IS GRANTED**.

16. **IT IS FURTHER ORDERED** that the petitions for a determination of
    effective competition filed in the captioned proceeding by Time
    Warner Cable Inc., and Time Warner Entertainment-Advance/Newhouse
    Partnership **ARE GRANTED** as to the Communities listed in
    Attachment B and Attachment D and **ARE DENIED** as to the
    Communities listed in Attachment C.

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

18. This action is taken pursuant to delegated authority pursuant to
    Section 0.283 of the Commission's rules.[^23]

    FEDERAL COMMUNICATIONS COMMISSION

Steven A. Broeckaert

Senior Deputy Chief, Policy Division, Media Bureau

**ATTACHMENT A**

**[ALL COMMUNITIES]{.underline}**

**CSR 7377-E, CSR 7493-E, CSR 7496-E**

**COMMUNITIES SERVED BY TIME WARNER CABLE INC., AND TIME WARNER
ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP**

## Communities CUID(S) 

**CSR 7377-E**

Allegany (Town) NY0010

Amity NY0470

Andover (Town) NY0015

Coldspring NY1596

Conewango NY1158

Cuba (Town) NY0913

Franklinville (Town) NY0865

Great Valley NY1523

Hinsdale NY1025

Ischua NY1524

Mansfield NY1154

New Albion NY1159

Olean (City) NY0012

Olean (Town) NY0011

Portville (Town) NY0367

Randolph (Town) NY1152

Scio NY0017

Wellsville (Town) NY0018

Willing NY0020

Ceres PA3273

Eldred (Borough) PA0034

Eldred (Township) PA1531

**CSR 7493-E**

Barton (Town) NY0269

Chemung (Town) NY1076

Nichols (Village) NY1075

Waverly (Village) NY0270

Athens (Township) PA0578

Litchfield (Township) PA3177

Sayre (Borough) PA0593

Ulster (Township) PA0690

**CSR 7496-E**

Brocton (Village) NY1071

Busti (Town) NY0383

Carroll (Town) NY1125

Cherry Creek (Village) NY1695

Clymer (Town) NY1671

Ellery (Town) NY0605

Ellicott (Town) NY0431

Ellington (Town) NY1705

Fredonia (Village) NY0618

French Creek (Town) NY1703

Gerry (Town) NY1201

**Communities CUID(S)**

**CSR 7496-E (continued)**

Harmony (Town) NY1565

Mina (Town) NY1672

North Harmony NY1202

Poland (Town) NY0561

Pomfret (Town) NY0619

Portland (Town) NY1384

South Dayton (Village) NY1526

Stockton (Town) NY0711

Villenova (Town) NY1696

Wolcott (Town) NY1126

Wayne (Township) PA0220

**ATTACHMENT B**

**["COMPETING PROVIDER" COMMUNITIES -- GRANTED]{.underline}**

**CSR 7377-E, CSR 7493-E, CSR 7496-E**

**COMMUNITIES SERVED BY TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE
PARTNERSHIP AND TIME WARNER CABLE INC.**

**2000 Estimated**

**Census DBS**

## Communities CUID(S) CPR\* Households Subscribers+ 

**CSR 7377-E**

Allegany (Town) NY0010 27.22% 2599 707

Amity NY0470 46.69% 885 413

Cuba (Town) NY0913 48.59% 1336 649

Hinsdale NY1025 31.28% 861 269

Olean (City) NY0012 22.28% 6446 1436

Olean (Town) NY0011 22.28% 827 184

Portville (Town) NY0367 28.12% 1545 435

Randolph (Town) NY1152 48.75% 1007 491

Scio NY0017 35.56% 729 259

Wellsville (Town) NY0018 30.17% 3192 963

Willing NY0020 33.79% 538 182

Eldred (Township) PA1531 52.67% 686 361

**CSR 7493-E**

Barton (Town) NY0269 25.34% 3568 904

Chemung (Town) NY1076 16.45% 969 159

Waverly (Village) NY0270 16.66% 1877 313

Athens (Township) PA0578 23.35% 2002 468

Sayre (Borough) PA0593 15.24% 2529 385

**CSR 7496-E**

Brocton (Village) NY1071 22.68% 623 141

Busti (Town) NY0383 15.65% 3210 502

Carroll (Town) NY1125 16.34% 1364 223

Cherry Creek (Village) NY1695 49.02% 198 97

Clymer (Town) NY1671 38.97% 502 196

Ellery (Town) NY0605 17.10% 1852 317

Ellicott (Town) NY0431 15.08% 3818 576

Fredonia (Village) NY0618 17.85% 3641 650

Gerry (Town) NY1201 17.23% 661 114

Mina (Town) NY1672 36.92% 456 168

North Harmony NY1202 33.89% 927 314

Poland (Town) NY0561 36.18% 940 340

South Dayton (Village) NY1526 48.85% 248 121

Stockton (Town) NY0711 25.45% 859 219

Wolcott (Town) NY1126 33.84% 1742 589

\* CPR = DBS penetration or subscribership

\+ See Petition (numbers of DBS subscribers are rounded off)

**ATTACHMENT C**

**["COMPETING PROVIDER" COMMUNITIES -- DENIED]{.underline}**

**CSR 7377-E, CSR 7493-E**

**COMMUNITIES SERVED BY TIME WARNER CABLE INC.**

**2000 Estimated**

**Time-Warner DBS Census DBS**

**Communities CUID(S) Subscribership\* Subscribership\* Households
Subscribers\***

**CSR 7377-E**

Eldred (Borough) PA0034 77.07% 45.14% 362 163

**CSR 7493-E**

Nichols (Village) NY1075 77.46% 29.18% 213 62

\* See Petition (numbers of DBS subscribers are rounded off)

**ATTACHMENT D**

**["LOW PENETRATION" COMMUNITIES -- GRANTED]{.underline}**

**CSR 7377-E, CSR 7493-E, CSR 7496-E**

**COMMUNITIES SERVED BY TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE
PARTNERSHIP**

##  Franchise Area Cable Penetration 

**Community CUID Households Subscribers Percentage**

**CSR 7377-E**

Andover (Town) NY0015 742 48 6.47%

Coldspring NY1596 278 4 1.44%

Conewango NY1158 509 9 1.77%

Franklinville (Town) NY0865 1205 92 7.63%

Great Valley NY1523 843 86 10.20%

Ischua NY1524 345 10 2.90%

Mansfield NY1154 305 18 5.90%

New Albion NY1159 808 4 .50%

Ceres PA3273 381 13 3.41%

**CSR 7493-E**

Litchfield (Township) PA3177 501 27 5.39%

Ulster (Township) PA0690 512 67 13.09%

**CSR 7496-E**

Ellington (Town) NY1705 568 84 14.79%

French Creek (Town) NY1703 332 48 14.46%

Harmony (Town) NY1565 837 111 13.26%

Pomfret (Town) NY0619 5105 580 11.36%

Portland (Town) NY1384 1655 47 2.84%

Villenova (Town) NY1696 415 23 5.54%

Wayne (Township) PA0220 642 12 1.87%

[^1]: The petitions also seek such a determination for 20 additional
    communities. By letters dated November 17, 2008, Petitioner
    requested permission to withdraw them from our consideration. The
    Communities are, in CSR 7377-E, Allegany (Village) NY0009; Andover
    (Village) NY0014; Belmont (Village) NY0016; Cattaraugus (Village)
    NY0860; Cuba (Village) NY0118; East Randolph (Village) NY1153;
    Ellicottville (Town) NY0857; Ellicottville (Village) NY0856;
    Franklinville (Village) NY0864; Portville (Village) NY0366; Randolph
    (Village) NY1151; and Wellsville (Village) NY0019; in CSR 7493-E,
    Nichols (Town) NY1074; Athens (Borough) PA0579; and South Waverly
    (Borough) PA0594; and, in CSR 7496-E, Bemus Point (Village) NY0908;
    Cassadaga (Village) NY0710; Falconer (Village) NY0157; Panama
    (Village) NY1564; and Sinclairville (Village) NY1244. We grant
    Petitioner's request and do not consider these 20 communities
    further herein.

[^2]: *See* 47 U.S.C. § 543(1).

[^3]: 47 C.F.R. § 76.905(b)(2) and 47 C.F.R. § 76.905(b)(1).

[^4]: 47 C.F.R. § 76.906.

[^5]: *See* 47 U.S.C. § 543(l) and 47 C.F.R. § 76.905.

[^6]: *See* 47 C.F.R. §§ 76.906 & 907.

[^7]: 47 U.S.C. § 543(1)(1)(B); *see* *also* 47 C.F.R. § 76.905(b)(2).

[^8]: 47 C.F.R. § 76.905(b)(2)(i).

[^9]: *See, e.g.,* Petition in CSR 7377-E at 3-5*.*

[^10]: 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 (2006)*.*

[^11]: 47 C.F.R. § 76.905(e)(2); *see also* Petition in CSR 7493-E at 4
    n.12.

[^12]: *See* 47 C.F.R. § 76.905(g). *See also, e.g.,* Petition in CSR
    7493-E at 5-6*.*

[^13]: *See, e.g.,* Petition in CSR 7496-E at 6*.*

[^14]: *See, e.g.,* Petition in CSR 7377-E at 3*.*

[^15]: *See, e.g.,* Petition in CSR 7493-E at 7.

[^16]: *See, e.g.,* Petition in CSR 7496-E at 9 n.26.

[^17]: These Communities are, in CSR 7377-E, Allegany (Town), Cuba
    (Town), Eldred (Township), Hinsdale, Randolph (Town), and Wellsville
    (Town); in CSR 7493-E, Barton (Town); and, in CSR 7496-E, Cherry
    Creek (Village), North Harmony (Town), South Dayton (Village), and
    Stockton (Town).

[^18]: *See, e.g.,* Petition in CSR 7496-E at Exhs. A, E & F.

[^19]: *See, e.g.,* Petition in CSR 7377-E at 8 n.26.

[^20]: 47 U.S.C. § 543(l)(1)(A).

[^21]: *See, e.g.,* Petition in CSR 7493-E at 8.

[^22]: *See, e.g.,* Petition in CSR 7496-E at 8-9.

[^23]: 47 C.F.R. § 0.283.