**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the matter of:                | *  |                              |
|                                  | *) |                              |
| Lakedale Telephone Company       | ** |                              |
|                                  |    |                              |
| Certification to Operate an      | *  |                              |
|                                  | *) |                              |
| Open Video System                | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
+----------------------------------+----+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted: April 4, 2003 Released: April 4, 2003**

By the Deputy Chief, Policy Division, Media Bureau:

# introduction

1.  On March 25, 2003, Lakedale Telephone Company (\"Lakedale\") filed
    an application for certification to operate an open video system
    pursuant to Section 653(a)(1) of the Communications Act of 1934
    (\"Communications Act\") and the Commission\'s rules.[^1] Lakedale
    seeks to operate an open video system in Wright County, Minnesota
    (the \"Service Area\").[^2] In accordance with our procedures,[^3]
    the Commission published notice of receipt of the Lakedale
    certification application[^4] and posted the application on the
    Internet.[^5] Sherburne/Wright County Cable Communications
    Commission ("SWCCCC") filed comments.[^6]

2\. Pursuant to Section 653(a)(1) of the Communications Act, any entity
meeting the requirements may obtain certification to operate an open
video system.[^7] In light of the brief period (ten days) for Commission
review of certification filings, the Commission concluded that Congress
intended there to be a streamlined certification process.[^8] Open video
system operators may apply for certification at any point prior to the
commencement of service. Open video system operators must obtain
certification prior to the commencement of service, allowing sufficient
time to comply with the Commission\'s requirements regarding
notifications that applicants must provide to potential programming
providers.[^9]

1.  As part of the certification process, the applicant must acknowledge
    and accept the obligations associated with operation of an open
    video system and must provide certain information regarding its
    proposed system.[^10] To obtain certification, an applicant must
    file FCC Form 1275, which requires, among other things: (a) a
    statement of ownership, including a list of all affiliated
    entities;[^11] (b) a representation that the applicant will comply
    with the Commission\'s regulations under Section 653(b) of the
    Communications Act;[^12] (c) a list of the names of the communities
    the applicant intends to serve; (d) a statement of the anticipated
    type and amount of capacity that the system will provide; and (e) a
    statement as to whether the applicant is a cable operator applying
    for certification within its cable franchise area.

# comments

2.  SWCCC states that it supports robust competition in the provision of
    video programming, welcomes Lakedale's bid to enter the video
    carriage market, and looks forward to working with Lakedale to make
    the arrangements necessary to bring the benefits of video
    competition to its member city, Maple Lake, Minnesota.[^13] SWCCCC,
    however, states that Lakedale's application should be denied due to
    lack of candor and because the application is incomplete.[^14] It
    states Lakesdale's application raises certain issues and it is
    especially concerned about Part C, Question 1 on Form 1275 which
    asks, "If you are a cable operator applying for certification within
    your cable franchise area, are you qualified to operate an open
    video system under 47 C.F.R. § 76.1501?" SWCCC indicates that
    Lakedale marked the box labeled "N/A" for "not applicable." SWCCCC
    asserts that by merely checking the "N/A" without further
    explanation, Lakedale failed to inform the Commission fully
    regarding information that could be material in determining whether
    Lakedale is eligible to be certified as an open video system
    operator.[^15] SWCCCC argues that Lakedale's application raises
    immediate questions about its affiliations and status as a cable
    operator because of Lakedale's affiliation with WH-Link. SWCCCC
    asserts that WH-Link is applying for cable franchises with nearby
    franchising authorities.[^16] SWCCCC asserts that, because of this
    affiliation, Lakedale should not have merely checked the "N/A" box
    on Form 1275 without further explanation. SWCCC also states that
    Lakedale and WH-Link are acquiring their video signals from another
    affiliated company, Broadband Visions, LLC, which also provides
    video signals to Connections Etc.,[^17] which uses the same
    technology as Lakedale and recently obtained a cable franchise from
    Big Lake, Minnesota.[^18] SWCCCC asserts that since Connections Etc.
    held the belief that it was a cable operator and applied for a cable
    franchise, Lakedale should be viewed similarly.[^19]

3.  In addition, SWCCC indicates that Lakedale failed to include on its
    Form 1275 two companies which should have been listed as affiliates,
    and consequently, SWCCC contends that Lakedale's application should
    be considered incomplete.[^20] SWCCCC additionally asserts that
    Lakedale must obtain all necessary authorizations prior to placing
    facilities in the public rights-of-way required in each of the local
    communities.[^21] It states that it expects Lakedale to obtain all
    necessary authorizations and permits governing the use of public
    rights-of-way before using such public property for OVS purposes,
    including taking the steps necessary to acquire a cable
    franchise.[^22] Although SWCCCC asserts that the Commission should
    deny Lakedale's certification, it states that if the Commission
    decides to approve the certification, such approval should be
    subject to the condition that Lakedale obtain any necessary
    authorizations to use public rights-of-way.[^23]

**III. DISCUSSION**

4.  Lakedale has submitted an application on FCC Form 1275 for
    certification to operate an open video system in the Service Area.
    We have reviewed the information contained in Lakedale's
    application. As required by Form 1275, the Lakedale application
    provides the following: company information and a separate statement
    of ownership listing affiliated entities; eligibility and compliance
    representations; and system information and verification statements.
    The certification process, as confined as it is must resolve
    legitimate issues each application presents, and the applicant bears
    the burden of providing a record allowing the Commission to
    determine whether the salient elements of the certification process
    have been met.

5.  In this application, we are presented with the unresolved issues of
    whether Lakedale is a cable operator within the Service Area and the
    completeness and accuracy of Lakedale's application. SWCCCC asserts
    that WH-Link and Lakedale are affiliated companies, that both
    companies share the same President/CEO, that WH-Link has applied for
    cable franchises with nearby franchising authorities, and that the
    status of WH-Link as a cable operation is currently being litigated
    before the Minnesota Court of Appeals. SWCCCC's allegations raise
    questions regarding Lakedale, but the evidence introduced fails to
    definitively indicate that Lakedale, or its affiliate, is a cable
    service provider in the community affected by its open video system
    certification application. A possible explanation for Lakedale
    having marked "N/A" on its Form 1275 is that Lakedale is not a cable
    operator and no further explanation was necessary. However, because
    the brief 10-day period for open video system certification does not
    permit a reply from Lakedale to assist in resolving these issues, we
    cannot assume that SWCCCC's assertions have no basis.

6.  The Commission must have full confidence in the truthfulness of
    representations made to it by applicants for Commission
    authorization to provide a service or operate a facility. As the
    United States Court of Appeals for the District of Columbia Circuit
    has stated, "the Commission must rely heavily on the completeness
    and accuracy of the submissions made to it, and its applicants in
    turn have an affirmative duty to inform the Commission of the facts
    its needs in order to fulfill its statutory mandate."[^24] An
    applicant's failure to come forward with a candid statement of
    relevant facts, whether or not such information is particularly
    elicited by the Commission, is a breach of the applicant's
    obligation to be truthful.[^25] There is an inconsistency between
    SWCCCC's allegations and certain information included in Lakedale's
    Form 1275. We need additional information, particularly from
    Lakedale, in order to conclude that Lakedale has been candid and
    complete in its application filing.

7.  With regard to the public rights-of-way and the franchising issue,
    we note that these concerns do not relate to the adequacy and
    accuracy of Lakedale's application and therefore are beyond the
    scope of the open video system certification process. Nevertheless,
    we note that the Commission has stated that "\[m\]anagement of the
    right-of-way is a traditional local government function. Local
    governments should be able to manage the rights-of-way in their
    usual fashions without the imposition of unique requirements for
    open video systems.[^26] Thus, the Commission has made clear that
    the open video system certification process does not usurp the
    authority of local governments to control use of the public
    rights-of way. With regard to the process of obtaining local
    franchising authority, in the *Order on Remand* of the Fifth
    Circuit's decision in *City of Dallas, Texas v. FCC,* the Commission
    stated that the Fifth Circuit determined that localities retain
    existing franchising authority, but that localities need not
    exercise this authority through the imposition of open video system
    franchises.[^27] The Commission stated that the decision of whether
    to impose a franchise on an open video system operator is committed
    to the discretion of the locality.[^28] In this regard, we note that
    the decision of Connections Etc. to pursue a cable franchise with
    Big Lake, Minnesota is irrelevant to our certification
    determination. As a new entrant to the multichannel video
    programming distribution marketplace, Lakedale was free to seek a
    cable franchise or pursue open video system certification, as it has
    done here.

8.  The Commission must be able to rely on the accuracy and adequacy of
    the representations contained in the Form 1275 certification
    application. In this instance, we believe that SWCCC has raised
    sufficient concern regarding Lakedale's application to require that
    we deny Lakedale's open video system certification. We note that
    denial of an open video system certification application does not
    preclude an applicant from filing a revised certification
    application or from refiling its original submission with a
    statement addressing the issues in dispute.[^29] Such refilings must
    be served on any objecting party or parties and affected local
    communities. Lakedale is free to refile at any time an application
    that addresses the issues raised by SWCCCC.

# Iv. ordering clauses {#iv.-ordering-clauses .unnumbered}

11\. Accordingly, **IT IS ORDERED**, that the application of Lakedale
Telephone Company for certification to operate an open video system in
the Service Area[^30] **IS** **DENIED.**

12\. This action is taken by the Deputy Chief, Policy Division, Media
Bureau, pursuant to the authority delegated by Section 0.283 of the
Commission\'s Rules.[^31]

FEDERAL COMMUNICATIONS COMMISSION

Steven A. Broeckaert

Deputy Chief, Policy Division

Media Bureau

[^1]: 47 U.S.C. § 573(a)(1); 47 C.F.R. § 76.1502.

[^2]: The Service Area for which Lakedale seeks certification in
    Minnesota is Maple Lake, CUID MN 0456.

[^3]: *See* *Implementation of Section 302 of the Telecommunications Act
    of 1996, Open Video Systems, Second Report and Order*, 11 FCC Rcd
    18223, 18247 (1996) (\"*Second Report and Order*\").

[^4]: *See Public Notice*, \"Lakedale Telephone Company Files An
    Application For Open Video System Certification,\" DA 03-0921 (MB,
    rel. March 26, 2003).

[^5]: The Lakedale application is available *via* the Internet at
    http://www.fcc.gov/mb/ovs/csovscer.html.

[^6]: SWCCC indicates that it is a joint powers cable commission under
    the laws of Minnesota, consisting of ten member cities. It states
    that SWCCCC and its member cities are responsible for protecting and
    promoting the health, safety, and welfare of their member cities'
    citizens. SWCCCC Comments at 1-2.

[^7]: *See* 47 U.S.C. § 573(a)(1); 47 C.F.R. § 76.1501. An operator of a
    cable system however, generally may not obtain such certification
    within its service area unless it is subject to \"effective
    competition\" as defined in Section 623(1)(l) of the Communications
    Act, 47 U.S.C. § 543(l)(l). The effective competition requirement
    does not apply to a local exchange carrier that is also a cable
    operator that seeks open video system certification within its cable
    service area.

[^8]: *Second Report and Order*, 11 FCC Rcd at 18243.

[^9]: ^  ?^ *Id.* at 18247; 47 C.F.R. § 76.1502(a). *See also*
    *Implementation of Section 302 of the Telecommunications Act of
    1996: Open Video Systems*, Order on Remand, 14 FCC Rcd 19700, 19705
    (1999)(deleting the pre-construction certification requirement from
    Section 76.1502(a) of our rules).

[^10]: *Second Report and Order*, 11 FCC Rcd at 18245-46.

[^11]: For purposes of determining whether a party is an affiliate, we
    have adopted the definitions contained in the notes to Section
    76.501 of our rules, 47 C.F.R. § 76.501, with certain modifications.
    47 C.F.R. § 76.1500(g). Generally, we will consider an entity to be
    an open video system operator\'s \"affiliate\" if the open video
    system operator holds 5% or more of the entity\'s stock, whether
    voting or non-voting. *Implementation of Section 302 of the
    Telecommunications Act of 1996, Open Video Systems*, *Third Report
    and Order and Second Order on Reconsideration*, 11 FCC Rcd 20227,
    20235 (1996) (\"*Third Report and Order*\"); 47 C.F.R. § 76.1500(g).

[^12]: 47 U.S.C. § 573(b). This provision sets forth the Commission\'s
    requirements regarding non-discriminatory carriage; just and
    reasonable rates, terms and conditions; a one-third capacity limit
    on the amount of activated channel capacity on which an open video
    system operator may distribute programming when demand for carriage
    exceeds system capacity; channel sharing; sports exclusivity,
    network non-duplication and syndicated exclusivity; and
    non-discriminatory treatment in presenting information to
    subscribers. *See* *also* 47 C.F.R. § 76.1502(a).

[^13]: SWCCCC Comments at iii.

[^14]: *Id.*

[^15]: *Id.* at 3.

[^16]: *Id.*

[^17]: Lakedale does not indicate that Connections Etc. is affiliated
    with Lakedale, or any of its affiliates.

[^18]: *Id.* at 4.

[^19]: *See id*.

[^20]: *Id.*

[^21]: *Id.* at 5.

[^22]: *Id.* at 7.

[^23]: *Id.* at 10.

[^24]: *RKO General, Inc. v. FCC,* 670 F.2d 215, 232 (D.C. Cir. 1981),
    *cert. denied*, 456 U.S. 927 and 457 U.S. 1119 (1982).

[^25]: *See Wedgewood Communications Company,* 12 FCC Rcd 19563 (1997);
    12 FCC Rcd 18281 (1997).

[^26]: *See Third Report and Order,* 11 FCC Rcd at 20311.

[^27]: *Open Video Systems,* 14 FCC Rcd 19700, 19704 (1999); *see City
    of Dallas, Texas v. FCC,* 165 F. 3d 341 (5^th^ Cir. 1999), *reh'g
    denied,* Nos. 96-60502, 96-90581 and 96-60844 (5^th^ Cir. May 28,
    1999).

[^28]: *Id.*

[^29]: 47 C.F.R. § 76.1502(d).

[^30]: *See supra* n. 2, listing the community contained within the
    Service Area.

[^31]: 47 C.F.R. § 0.283.