Before the

Federal Communications Commission

Washington, D.C. 20554

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | CSR 6877-E                   |
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| Cox Southwest Holdings, LP       | ) | CSR 6878-E                   |
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| d/b/a Cox Communications West    | * | CSR 6879-E                   |
| Texas                            |   |                              |
|                                  | * | CSR 6880-E                   |
| Ten Unopposed Petitions for      | * |                              |
| Determination of Effective       | ) | CSR 6881-E                   |
| Competition in 17 Local          | * |                              |
| Franchise Areas                  | * | CSR 6882-E                   |
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+----------------------------------+---+------------------------------+

MEMORANDUM OPINION AND ORDER

**Adopted: February 28, 2007** **Released: March 2, 2007**

By the Deputy Chief, Policy Division, Media Bureau:

# introduction

1.  Cox Southwest Holdings, LP ("Cox") has filed ten unopposed petitions
    with the Commission pursuant to Sections 76.7, 76.905(b)(2) and
    76.907 of the Commission\'s rules for a determination that Cox is
    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 is therefore
    exempt from cable rate regulation in the communities listed in
    Attachment A (the "Communities"). No opposition to any petition was
    filed. We grant the petitions finding that the Cox systems are
    subject to effective competition in the Communities listed in
    Attachment A, and deny with respect to two franchising areas, the
    City of Tye, Texas and the Village of Lake Tanglewood, Texas.

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

## 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 fifteen 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. ("DirecTV") 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 has become the second largest, and EchoStar has become the
    third largest, MVPD provider.[^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 in Attachment A 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 Cox has demonstrated that the 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.[^10]
    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. Cox
    sought to determine the competing provider penetration in the
    Communities by purchasing a subscriber tracking report that
    identified the number of subscribers attributable to the DBS
    providers within the Communities on a zip code basis. Cox asserts
    that it is the largest MVPD in the Communities because their
    subscribership exceeds the aggregate DBS subscribership for those
    franchise areas.[^11] Based upon the aggregate DBS subscriber
    penetration levels as reflected in Attachment A, calculated using
    2000 Census household data, we find that Cox 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 listed in Attachment A. Therefore, the
    second prong of the competing provider test is satisfied with
    respect to these Communities. Based on the foregoing, we conclude
    Cox has submitted sufficient evidence demonstrating that their cable
    systems serving the Communities set forth on Attachment A are
    subject to competing provider effective competition.[^12]

5.  With respect to the City of Tye, Texas and Village of Lake
    Tanglewood, Texas, however, we reach a different conclusion. Cox
    provides the requisite 2000 Census total community occupied
    households information for these communities, and provides numbers
    relating to occupied households by zip code, but it does not
    indicate which zip codes pertain to which communities.[^13] Further,
    the 2000 Census information is significantly lower than the
    unidentified zip code information in these communities.[^14] Given
    this discrepancy, and Cox's failure to indicate which zip codes
    correspond to which communities, it is it is impossible for the
    Commission to accurately calculate whether effective competition is
    present in the relevant areas. For this reason, we find that the
    second prong of the competing provider test is not met with regard
    to Tye and Lake Tanglewood. In reaching this conclusion, we do not
    suggest that the calculations provided for Tye and Lake Tanglewood
    are incorrect. Rather, Cox has not provided sufficient information
    to confirm their analysis. Accordingly, we deny the Petition with
    respect to those franchise areas. Our denial with respect to Tye and
    Lake Tanglewood is without prejudice to refiling should Cox later
    choose to provide additional or corrected information.

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

6\. Accordingly, **IT IS ORDERED** that the petitions filed by Cox for a
determination of effective competition in the Franchise Areas **IS
GRANTED IN PART AND DENIED** **IN PART**.

7\. **IT IS FURTHER ORDERED** that the certifications to regulate basic
cable service rates granted to any of the local franchising authorities
in Attachment A overseeing Cox **ARE REVOKED**.

8\. This action is taken pursuant to authority delegated under Section
0.283 of the Commission's rules.[^15]

FEDERAL COMMUNICATIONS COMMISSION

Steven A. Broeckaert

Deputy Chief, Policy Division, Media Bureau

**Attachment A**

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

CSR-6877-E, CSR-6878-E, CSR-6879-E, CSR-6880-E, CSR-6881-E, CSR-6882-E,
CSR-6883-E, CSR-6884-E, CSR-6885-E, CSR-6886-E

**2000** **Census** **DBS**

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

## Clovis NM0015 27.08% 12,458 3374 {#clovis-nm0015-27.08-12458-3374 .unnumbered}

## Texico NM0048 38.41% 381 146 {#texico-nm0048-38.41-381-146 .unnumbered}

Farwell TX0005 37.33% 499 186

Lubbock TX0004 19.46% 77,527 15,090

Shallowater TX2277 32.34% 745 241

Wolfforth TX2278 40.00% 900 360

Floydada TX0447 26.47% 1,304 345

Abilene TX0139 23.72% 41,570 9,860

Snyder TX0129 27.77% 4,068 1,130

Sweetwater TX0136 26.10% 4,545 1,186

Amarillo TX0152 21.75% 67,699 14,727

Canyon TX0371 28.88% 4,802 1,387

Andrews TX0218 15.12% 3,478 526

Big Spring TX0012 17.61% 8,155 1,436

Plainview TX0111 19.54% 7,626 1,490

CPR= Percent DBS penetration

\+ = See Cox Petitions, Exhibit 3.

[^1]: 47 U.S.C. § 543(1).

[^2]: 47 C.F.R. § 76.905(b)(2).

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

[^9]: *See* 47 C.F.R. § 76.905(g).

[^10]: Cox Petition at Exhibit 4.

[^11]: In the Petitions involving Shallowater, Wolfforth and Lubbock,
    Cox was not able to determine the largest MVPD because the DBS
    providers' aggregated subscriber counts were larger than Cox's
    subscriber count, and because of the presence of additional MVPDs.
    In those instances, Cox was able to establish that the competing
    provider test was met because the penetration rate of both the DBS
    providers and Cox exceeded the 15 percent rate required by the
    competing provider test.

[^12]: Given that these Communities are subject to effective competition
    under the competing provider standard, it is not necessary to
    address Cox's arguments regarding LEC effective competition.

[^13]: In fact, Cox does not provide corresponding zip code information
    for any community in its petition. *See* Cox Petition, Exhibits 1,
    3. Yet, the Commission was able to independently verify the
    corresponding zip code information for all communities, except Lake
    Tanglewood and Tye.

[^14]: Cox Petition, Exhibits 1, 3. The 2000 Census information
    indicates that there are 342 total community occupied households in
    Lake Tanglewood, while the total zip code occupied households is
    listed as 4,466. In Tye, the 2000 Census information on total
    community occupied households is 426, whereas the the total zip code
    occupied households is listed as 9,100.

[^15]: 47 C.F.R. § 0.283.