**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the Matter of:                | *  | CSR-5911-E                   |
|                                  | *) |                              |
| ACC Cable Communications FL-VA,  | ** |                              |
| LLC                              |    |                              |
|                                  | *  |                              |
| d/b/a Adelphia Cable             | *) |                              |
| Communications                   | ** |                              |
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| Petition for Determination of    | *  |                              |
| Effective                        | *) |                              |
|                                  | ** |                              |
| Competition in Columbus County,  |    |                              |
| NC (NC0464,                      | *  |                              |
|                                  | *) |                              |
| NC0747, NC0766), Town of Lake    | ** |                              |
| Waccamaw, NC (NC0746), and Town  |    |                              |
| of Tabor City, NC                | *  |                              |
|                                  | *) |                              |
| (NC1015)                         | ** |                              |
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+----------------------------------+----+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted: April 15, 2003 Released: April 17, 2003**

By the Deputy Chief, Policy Division, Media Bureau:

# INTRODUCTION

1.  ACC Cable Communications FL-VA, LLC, d/b/a Adelphia Cable
    Communications ("Adelphia") has filed with the Commission a
    petition, pursuant to Sections 76.7 and 76.905 of the Commission's
    rules, alleging that Adelphia is subject to effective competition
    from competing service providers in unincorporated Columbus County,
    the Town of Lake Waccamaw, and the Town of Tabor City, North
    Carolina (the "Communities").[^1] Adelphia asserts that its cable
    systems serving the Communities are subject to effective competition
    pursuant to Section 623(l)(1)(B) of the Communications Act of 1934,
    as amended ("Communications Act") and Section 76.905(b)(2) of the
    Commission's rules.[^2] Adelphia bases its allegation of effective
    competition on the competing services provided by direct broadcast
    satellite ("DBS") providers, DIRECTV and DISH Network ("Dish"). The
    Town of Lake Waccamaw filed an opposition to the petition and
    Adelphia filed a reply.

# DISCUSSION

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 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. Based on
    the record in this proceeding, Adelphia has met this burden.

3.  Section 623(1)(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 multichannel video
    programming distributors ("MVPDs") 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.[^5]

4.  Turning to the first prong of this test, DBS service is presumed to
    be technically available due to its nationwide footprint, and
    presumed to be actually available if households in a franchise area
    are made reasonably aware that the service is available.[^6]
    Adelphia provides examples of advertisements used by DBS providers
    to promote their services in the Communities.[^7] In addition,
    Adelphia asserts that there are numerous DBS subscribers in the
    Communities who are obviously aware that they can purchase DBS
    service because they have done so. Adelphia contends that neighbors
    of subscribers are then made aware of DBS service given the
    visibility of mounted satellite dishes throughout the
    Communities.[^8] Adelphia further asserts that the programming of
    the DBS providers satisfies the Commission's program comparability
    criterion because the DBS providers offer more than 100 video
    channels, most of which are nonbroadcast services.[^9]

5.  In opposition, Lake Waccamaw argues that Adelphia fails to satisfy
    the first prong of the competing provider test because community
    residents are not "reasonably aware" of the existence of Adelphia's
    DBS competitors and these competitors do not offer "comparable"
    programming.[^10] Lake Waccamaw asserts that one of the
    advertisements submitted by Adelphia is irrelevant because the
    company is out of business and that Radio Shack advertisements are
    inadequate because they do not prove that subscribers are aware of
    DBS service.[^11] In addition, Lake Waccamaw disputes Adelphia's
    contention that DBS subscribers will tell their neighbors about the
    service and contends that the only way to determine whether
    potential subscribers are aware of DBS service is through surveys of
    potential subscribers.[^12] Lake Waccamaw also contends that the
    programming of the Dish Network is not comparable to the programming
    offered by Adelphia.[^13]

6.  In reply, Adelphia argues that Lake Waccamaw misunderstands the
    evidentiary burden required to satisfy the first prong of the
    competing provider test.[^14] In order to demonstrate that potential
    providers are "reasonably aware" of a competing MVPD's programming,
    Adelphia asserts that the Commission has allowed cable operators to
    rely upon, for example, (1) advertising in national, regional or
    local media and through direct mail or other marketing
    materials;[^15] and (2) evidence that the competing MVPD has
    customers in that community.[^16] Adelphia contends that it has
    submitted evidence of both and has satisfied its evidentiary burden
    with respect to this portion of the test.[^17] With regard to the
    issue of whether DBS providers offer "comparable" programming,
    Adelphia cites Section 76.905(g) of the Commission's rules which
    requires that, to provide comparable programming, a competing MVPD
    must offer at least 12 channels of video programming, including at
    least one channel of nonbroadcast service programming.[^18] Adelphia
    asserts that the Commission has repeatedly concluded that the
    programming of DBS providers, such as DIRECTV and Dish, satisfy the
    Commission's programming criterion.[^19]

7.  As discussed above, DBS service is presumed to be technically
    available due to its nationwide footprint, and Adelphia has
    demonstrated that DBS service is actually available to the
    households in the Communities. In order to satisfy its burden that
    DBS service is actually available, Adelphia has submitted local
    advertisements of the availability of DBS service.[^20] It is also
    well settled that because subscribers in the community have signed
    up for an MVPD's service, it must be assumed that other residents
    throughout the area are reasonably aware of that MVPD's service
    offerings.[^21] In this regard, we note that DBS subscribership in
    the Communities ranges from 21 to 54 percent of all households.[^22]
    In addition, Adelphia represents that there exists no regulatory,
    technical or other impediments to households taking DBS service in
    the franchise area.[^23] With regard to the program comparability
    requirement, the Commission has previously concluded that the
    programming of DBS providers satisfies the Commission's programming
    comparability criterion.[^24] Therefore, the first prong of the
    competing provider test is satisfied.

8.  The second prong of the competing provider test requires that the
    number of households subscribing to programming services offered by
    MVPDs, other than the largest MVPD, exceeds 15 percent of the
    households in a franchise area. Lake Waccamaw contends that the
    second prong of the competing provider test is not satisfied because
    the DBS providers themselves did not directly provide Adelphia with
    subscriber penetration information.[^25] Adelphia asserts that it
    has satisfied Section 76.905(b)(2)(ii) of the Commission's rules and
    has demonstrated that DBS providers serve more than 15 percent of
    the franchise area's households by submitting DBS penetration data
    using SkyTRENDS' "zip plus four" methodology.[^26] Adelphia argues
    that use of SkyTRENDS data is fully consistent with Commission
    precedent.[^27]

9.  We find that despite Lake Waccamaw's assertion, Adelphia has acted
    consistently with Commission precedent in using SkyTRENDS to obtain
    aggregate DBS subscriber information.[^28] Adelphia contends that it
    is the largest MVPD in Lake Waccamaw with 268 subscribers out of 529
    households.[^29] There are 113 DBS subscribers in Lake Waccamaw
    resulting in a 21.4 percent penetration rate.[^30] Accordingly, we
    find that Adelphia has submitted sufficient evidence to satisfy the
    second prong of the competing provider test for its Lake Waccamaw
    franchise area.

10. Adelphia contends that it is the largest MVPD in Tabor City with 603
    subscribers out of 1,020 households.[^31] There are 272 DBS
    subscribers in Tabor City resulting in a 26.7 percent penetration
    rate.[^32] Accordingly, we find that Adelphia has submitted
    sufficient evidence to satisfy the second prong of the competing
    provider test for its Tabor City franchise area.

11. Turning to unincorporated Columbus County, Adelphia asserts that the
    DBS providers serve an aggregate total of 8,539 subscribers.[^33]
    Adelphia states that according to Census 2000 there are 15,754
    households in unincorporated Columbus County.[^34] The number of
    Adelphia subscribers does not exceed the aggregate number of DBS
    subscribers in unincorporated Columbus County.[^35] Adelphia states
    that, because SkyTRENDS provides only aggregate totals of DBS
    subscribership for a particular franchise area, it is unable to
    determine the largest MVPD in the unincorporated Columbus County
    franchise area. Adelphia argues that, with an overall DBS
    penetration rate of 54.2 percent, it must be assumed that even the
    DBS provider with the smaller penetration has a considerable number
    of subscribers in unincorporated Columbus County.[^36] Adelphia
    further asserts that it is logical to assume that when the
    subscriber numbers from the DBS provider with the smaller presence
    are combined with Adelphia's 10.14 percent subscriber penetration
    rate,[^37] their combined penetration would exceed the 15 percent
    threshold needed under the second prong of the competing provider
    test.[^38]

12. We agree that Adelphia is subject to effective competition in
    unincorporated Columbus County. Applying the national DBS subscriber
    percentages of DIRECTV and Dish as an approximate breakdown of the
    subscriber percentage in unincorporated Columbus County leads us to
    this conclusion. DIRECTV is the largest DBS provider in the nation
    serving 58.5 percent of DBS subscribers.[^39] Dish serves a slightly
    smaller number of subscribers with a 41.5 percent share of DBS
    subscribers.[^40] Using these percentages, we are able to calculate
    that DIRECTV serves approximately 4,995 subscribers in
    unincorporated Columbus County and that Dish serves approximately
    3,544 subscribers.[^41] Thus, DIRECTV is the largest MVPD in
    unincorporated Columbus County because it has more subscribers than
    Dish and Adelphia, which has 1,598 subscribers. Combining the
    subscribership of Dish and Adelphia, we find that approximately 32.6
    percent of subscribers in unincorporated Columbus County subscribe
    to MVPD services other than those of the largest MVPD.[^42] A figure
    far in excess of the 15 percent required by the statute.
    Accordingly, the second prong of the competing provider test is
    satisfied in unincorporated Columbus County. We note that, because
    Adelphia serves only 10.1 percent of its unincorporated Columbus
    County franchise area, it is also subject to low penetration
    effective competition.[^43]

13. We find that Adelphia has submitted sufficient evidence for us to
    conclude that it is subject to competing provider effective
    competition in its Lake Waccamaw, Tabor City and unincorporated
    Columbus County, North Carolina franchise areas.

# ORDERING CLAUSES

14. Accordingly, **IT IS ORDERED** that the petition for a determination
    of effective competition filed by ACC Cable Communications FL-VA,
    LLC, d/b/a Adelphia Cable Communications **IS GRANTED**.

15. This action is taken pursuant to delegated authority pursuant to
    Section 0.283 of the Commission's rules.[^44]

FEDERAL COMMUNICATIONS COMMISSION

Steven A. Broeckaert

Deputy Chief, Policy Division, Media Bureau

[^1]: 47 C.F.R. §§ 76.7 and 76.905.

[^2]: 47 U.S.C. § 543(1)(1)(B)(i) and (ii); 47 C.F.R. § 76.905(b)(2)(i)
    and (ii).

[^3]: 47 C.F.R. § 76.906.

[^4]: 47 C.F.R. § 76.905.

[^5]: 47 U.S.C. § 543(1)(1)(B)(i) and (ii); 47 C.F.R. § 76.905(b)(2)(i)
    and (ii).

[^6]: *See Implementation of Sections of the Cable Television Consumer
    Protection and Competition Act of 1992 -- Rate Regulation*, 8 FCC
    Rcd 5631, 5660 (1993) ("*Rate Order*").

[^7]: Adelphia Petition at 4 and Exhibit A.

[^8]: *Id.* at 4.

[^9]: *Id.* at 5.

[^10]: Lake Waccamaw Opposition at 1-2.

[^11]: *Id.* at 1.

[^12]: *Id.*

[^13]: *Id.* at 1-2.

[^14]: Adelphia Reply at 3.

[^15]: *See, e.g. Texas Cable Partners, L.P.*, 17 FCC Rcd 6373, 6374 (MB
    2002); *Rate Order*, 8 FCC Rcd at 5657.

[^16]: *See*, *e.g.*, *Kansas City Cable Partners*, 16 FCC Rcd 18751,
    18753 (CSB 2001); *Time Warner Entertainment Company, L.P., d/b/a
    Time Warner Communications*, 16 FCC Rcd 7537, 7540 (CSB 2001).

[^17]: Adelphia Reply at 4.

[^18]: *Id*. at 5, citing 47 C.F.R. § 76.905(g).

[^19]: *See FrontierVision Operating Partners, L.P. et al.*, 16 FCC Rcd
    5228, 5229 (CSB 2001).

[^20]: Adelphia does not dispute Lake Waccamaw's contention that one of
    the retailers used as evidence of advertisement is no longer in
    business. We agree with Adelphia, however, that evidence of DBS
    service is widely available through national print and television
    advertising campaigns.

[^21]: *See supra* n16.

[^22]: *See infra* nn30, 32 and 36.

[^23]: Adelphia Petition at 3.

[^24]: *See Falcon Cable Systems Company II d/b/a Charter
    Communications*, 17 FCC Rcd 4648, 4651 (MB 2002); *Harlingen, Texas
    et al.*, 17 FCC Rcd 6373, 6374 (MB 2002).

[^25]: Lake Waccamaw Opposition at 2.

[^26]: Adelphia Reply at 6.

[^27]: *Id.*

[^28]: *See* e.g., *Falcon Cable Systems Company, II d/b/a Charter
    Communications,* 17 FCC Rcd at 4650; *Vicksburg Video, Inc. d/b/a
    WECHCO Video, Inc.*, DA 02-2167 (MB rel. Sept. 6, 2002).

[^29]: Adelphia Petition at Exhibit E, Adelphia Subscribership Summary
    and Exhibit G, Census 2000 Household Numbers.

[^30]: *Id*. at 8 and Exhibit G, Census 2000 Household Numbers and
    Exhibit I, Summary of DBS Penetration. 113 DBS subscribers ÷ 529
    Waccamaw households = 21.4%.

[^31]: *Id.* at Exhibit E, Adelphia Subscribership Summary and Exhibit
    G, Census 2000 Household Numbers.

[^32]: *Id.* at 8 and Exhibit G, Census 2000 Household Numbers and
    Exhibit I, Summary of DBS Penetration. 272 DBS subscribers ÷ 1,020
    Tabor City households = 26.7%.

[^33]: *Id.* at 7 and Exhibit F, SkyTRENDS DBS Subscribership Summary.

[^34]: *Id.* at 7 and Exhibit H, SkyTRENDS North Carolina County
    Household Statistics.

[^35]: *Id.* at 7. Adelphia has 1,598 subscribers and the aggregate
    number of DBS subscribers is 8,539. *See* Exhibit E and Exhibit F.

[^36]: *Id.* at 7-8 and Exhibit I, Summary of DBS Penetration. 8,539 DBS
    subscribers ÷ 15,754 unincorporated Columbus County households =
    54.2%.

[^37]: *Id.* and Exhibit E, Adelphia Subscribership Summary.

[^38]: *Id.* at 8. Adelphia asserts that regardless of this
    determination, its systems in unincorporated Columbus County are
    still subject to effective competition pursuant 47 C.F.R. §
    76.905(b)(i) because Adelphia serves fewer than 30 percent of the
    households in the unincorporated Columbus County franchise area.
    *See id.,* n27.

[^39]: *See Annual Assessment of the Status of Competition in the Market
    for the Delivery of Video Programming, Ninth Annual Report*, 17 FCC
    Rcd 26901, 26930 (2002) ("*Ninth Annual Report*") (10,700,000
    DIRECTV subscribers ÷ 18,300,000 total DBS subscribers = 58.5%).

[^40]: *Id*. (7,600,000 Dish subscribers ÷ 18,300,000 total DBS
    subscribers = 41.5%).

[^41]: 8,539 total DBS subscribers \* 0.585 = 4,995 DIRECTV subscribers.
    8,539 total DBS subscribers \* 0.415 = 3,544 Dish subscribers.

[^42]: 5,142 Adelphia/Dish subscribers ÷ 15,754 households in
    unincorporated Columbus County = 32.6%.

[^43]: *See* 47 U.S.C. § 543(l)(1)(A). 1,598 Adelphia subscribers ÷
    15,754 households in unincorporated Columbus County = 10.1%.

[^44]: 47 C.F.R. § 0.283.