Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of:                | * | CSR 6351-E; CSR 6359-E; CSR  |
|                                  | * | 6360-E & CSR 6361-E          |
| Cable One, Inc.                  | ) |                              |
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| Petition for Determination of    | * |                              |
| Effective                        |   |                              |
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| Competition in Twenty Two Texas  | * |                              |
| Communities and Texarkana,       | ) |                              |
| Arkansas                         | * |                              |
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MEMORANDUM OPINION AND ORDER

**Adopted: March 1, 2005** **Released: March 7, 2005**

By the Deputy Chief, Policy Division, Media Bureau:

# introduction

1.  Cable One, Inc. has filed with the Commission four petitions for a
    determination of effective competition in the twenty two Texas, and
    one Arkansas, communities listed in Attachment A (the "Communities")
    pursuant to Section 623(a) of the Communications Act of 1934,[^1]
    and the Commission\'s implementing rules.[^2] Cable One alleges that
    its cable systems serving those Communities are subject to effective
    competition pursuant to Section 623(a) of the Communications
    Act,[^3] and the Commission\'s implementing rules,[^4] and are
    therefore exempt from cable rate regulation. More particularly,
    Cable One claims that the presence of effective competition in the
    Communities stems from the competing services provided by two
    unaffiliated direct broadcast satellite (\"DBS\") providers, Direct
    TV and DISH Network. Cable One claims it is subject to effective
    competition in these Communities under the "competing provider"
    effective competition test set forth in Section 623(1)(1)(B) of the
    Communications Act. Cable One also asks for a revocation of any
    certificate to regulate basic cable services issued by the
    Commission to any of the Communities. The petitions are unopposed.

# discussion

2.  In the absence of a demonstration to the contrary, cable systems are
    presumed not to be subject to effective competition,[^5] as that
    term is defined by Section 623(1) of the Communications Act, and
    Section 76.905 of the Commission\'s rules.[^6] 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.[^7] Section 623(l) of
    the Communications Act provides that a cable operator is subject to
    effective competition, if either one of four tests for effective
    competition set forth therein is met.[^8] A finding of effective
    competition exempts a cable operator from rate regulation and
    certain other of the Commission's cable regulations.[^9]

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.[^10] Turning to the first prong of this test, DBS service 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.[^11] The two DBS providers' subscriber growth reached
    approximately 23.16 million as of June 30, 2004, comprising
    approximately 23 percent of all MVPD subscribers nationwide; DirecTV
    has become the second largest, and EchoStar the fourth largest, MVPD
    provider.[^12] 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 are DBS
    subscribers, we conclude that the population of 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.[^13] We
    further find that Cable One 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. 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.[^14]
    Cable One provided 2000 Census data showing the number of households
    for each of the twenty three Communities.[^15] Cable One also
    provided a report by SkyTRENDS, which compared the 2000 Census
    households for each of the Communities with the households in each
    of the U.S. Postal Zip Code areas encompassing each Community, and
    allocated that proportion of the DBS subscribers within each such
    Zip Code to each Community.[^16] The resulting numbers of DBS
    subscribers were then compared to the household numbers for each
    Community to demonstrate that in each Community the DBS providers
    collectively have attained subscriber penetration levels ranging
    from 16 percent in Texarkana, Arkansas, and in Borger, Denison, and
    Texarkana, Texas, to 53 percent in ­­­­Ravenna, Texas, or in excess of
    15% in each of the Communities.[^17] Based on this information, we
    find that Cable One has satisfied the second prong of the competing
    provider test in these twenty three Communities, and conclude that
    Cable One has submitted sufficient evidence demonstrating that its
    cable systems serving the twenty three Communities set forth on
    Attachment A are subject to effective competition.

# ordering clauses

5.  Accordingly, **IT IS ORDERED** that Cable One. Inc.'s petitions for
    a determination of effective competition in the twenty three
    Communities listed on Attachment A **ARE GRANTED**.

6.  **IT IS FURTHER ORDERED** that all certifications to regulate basic
    cable rates issued by the Commission to any of these twenty three
    Communities **ARE HEREBY REVOKED.**

7.  This action is taken pursuant to delegated authority pursuant to
    Section 0.238 of the Commission's rules.[^18]

    FEDERAL COMMUNICATIONS COMMISSION

    Steven A. Broeckaert

    Deputy Chief, Policy Division, Media Bureau

    **ATTACHMENT A**

**File Nos. CSR 6351-E; CSR 6359-E; CSR 6360-E & CSR 6361-E**

**ARKANSAS &TEXAS COMMUNITIES SERVED BY CABLE ONE, Inc.**

**Competing Provider Test**

**2000 Census Zip Code DBS Subs\*\*\* DBS Subs**

## Communities Households\*\* Households Alloc Per Zip Code Allocated DPR\* {#communities-households-households-alloc-per-zip-code-allocated-dpr .unnumbered}

## Texarkana, Arkansas 10,384 14,158 73% 2,310 1,694 16 % {#texarkana-arkansas-10384-14158-73-2310-1694-16 .unnumbered}

Bells, Texas 484 1,259 38% 454 174 36%

Bonham, Texas 2,884 5,183 56% 1,204 670 23%

Borger, Texas 5,591 6,183 90% 1,019 922 16%

Denison, Texas 9,185 13,647 67% 2,195 1,447 16%

Dumas, Texas 4,755 5,919 80% 1,537 1,210 25%

Fritch, Texas 886 2,324 38% 803 300 34%

Howe, Texas 924 1,981 47% 563 257 27%

Knollwood, Texas\*\*\*\* 143 31 22%

Mc Lean, Texas 343 666 52% 231 108 31%

Pampa, Texas 7,387 7,950 93% 1,460 1,329 18%

Pan Handle, Texas 945 1,280 74% 422 305 32%

Ravenna, Texas 86 592 15% 322 46 53%

Savoy, Texas 305 833 37 % 320 115 38%

Sherman, Texas 13,739 17,497 79% 3,036 2,336 17%

Stinnett, Texas 765 1,009 76% 337 250 33%

Sunray, Texas 688 819 84% 216 178 26%

Texarkana, Texas 13,569 23,013 59% 3,770 2,178 16%

Tom Bean, Texas 357 10,120 4% 2,242 77 22%

Van Alstyne 935 2,650 35% 934 323 35%

Wake Village, Texas 2,042 13,682 15% 2,432 356 17%

White Deer, Texas 425 530 80% 136 107 25%

Whitewright, Texas 650 1,786 36% 564 201 31%

\*DBS penetration rates.

\*\*See Cable One Petitions at Exhibits 4, 5, & 6.

\*\*\*These data reduced by 2% to allow for commercial users.

\*\*\*\*The household and penetration data are based on physical
counting. *See* Petition (File No. CSR 6360-E) at 11.

[^1]: 47 U.S.C. § 543(a).

[^2]: ^ ?^47 C.F.R. § 76.905(b).

[^3]: 47 U.S.C. § 543(a).

[^4]: ^ ?^47 C.F.R. § 76.905(b).

[^5]: ^ ?^47 C.F.R. § 76.906.

[^6]: ^ ?^*See* 47 U.S.C. § 543(1) and 47 C.F.R. § 76.905.

[^7]: ^?^*See* 47 C.F.R. §§ 76.906 & 907.

[^8]: *See* 47 U.S.C. § 543(l)(1)(A)-(D).

[^9]: ^?^*See* 47 C.F.R. §76.905.

[^10]: 47 U.S.C. § 543(1)(1)(B); *see also* 47 C.F.R. § 76.905(b)(2).

[^11]: *See MediaOne of Georgia*, 12 FCC Rcd 19406 (1997).

[^12]: *Eleventh Annual Assessment of the Status of Competition in the
    Market for Delivery of Video Programming*, FCC 05-13, at ¶¶ 54-55
    (rel. Feb. 4, 2005).

[^13]: *See* 47 C.F.R. § 76.905(g). *See also* Cable One Petitions at
    6-7 and Exhibits A & B.

[^14]: Based on the DBS penetration data shown on Attachment A, we find
    that Cable One is the largest MVPD provider in each of these
    Communities.

[^15]: *Id.*

[^16]: *Id*.

[^17]: *Id.* at 8-11 and Exhibit E. The penetration rate for each
    Community is set forth on Attachment A.

[^18]: 47 C.F.R. § 0.238.