Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of:                | * | CSR 6422-E, 6423-E, 6454-E,  |
|                                  | * | 6496-E, 6497-E, 6498-E,      |
| Charter Communications           | ) | 6559-E, 6560-E, 6561-E,      |
|                                  | * | 6562-E, 6563-E, 6564-E       |
| Service Electric Company         | * |                              |
|                                  |   | CSR 6405-E                   |
| Thirteen Petitions for           | * |                              |
| Determination of Effective       | * |                              |
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MEMORANDUM OPINION AND ORDER

**Adopted: December 27, 2005** **Released: December 28, 2005**

By the Deputy Chief, Policy Division, Media Bureau:

# introduction

1.  This Order considers thirteen petitions which cable operators (the
    "Cable Operators") have filed with the Commission pursuant to
    Sections 76.7, 76.905(b)(2) and 76.907 of the Commission\'s rules
    for a determination that such operators are 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 are therefore exempt from cable rate
    regulation in the communities listed in Attachment A (the
    "Communities"). No opposition to any petition was filed. Finding
    that the Cable Operators are subject to effective competition in the
    listed Communities, we grant the petitions.

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]

    **II. DISCUSSION**

    **A. 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. ("DirectTV") 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 23.16 million as of June 30, 2004, comprising
    approximately 23 percent of all MVPD subscribers nationwide; DirecTV
    has become the second largest, and DISH the fourth 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 on 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 the Cable Operators have 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. The
    Cable Operators 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. The Cable
    Operators assert that they are the largest MVPD in the Communities
    because their subscribership exceeds the aggregate DBS
    subscribership for those franchise areas. Based upon the aggregate
    DBS subscriber penetration levels as reflected in Attachment A,
    calculated using 2000 Census household data, we find that the Cable
    Operators have 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. Therefore, the second prong of the competing provider
    test is satisfied. Based on the foregoing, we conclude that the
    Cable Operators have submitted sufficient evidence demonstrating
    that their cable systems serving the Communities set forth on
    Attachment A are subject to competing provider effective
    competition.

    **B.** **Low Penetration Effective Competition**

    5\. Section 623(l)(1)(A) of the Communications Act provides that a
    cable operator is subject to effective competition, and therefore
    exempt from cable rate regulation, if "fewer than 30 percent of the
    households in the franchise area subscribe to the cable service of
    the cable system."[^10] The Cable Operator listed on Attachment A
    provided information showing that less than 30 percent of the
    households within the franchise areas subscribe to the cable
    service. Accordingly, we conclude that the Cable Operator has
    demonstrated the existence of low penetration effective competition
    under our rules.

    6\. Based on the foregoing, we conclude that the Cable Operators
    listed on Attachment A have submitted sufficient evidence to
    demonstrate that their cable systems are subject to effective
    competition.

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

7\. Accordingly, **IT IS ORDERED** that the petitions filed by the Cable
Operators listed on Attachment A for a determination of effective
competition in the Communities listed thereon **ARE** **GRANTED**.

8\. **IT IS FURTHER ORDERED** that the certifications to regulate basic
cable service rates granted to any of the local franchising authorities
overseeing the Cable Operators **ARE REVOKED**.

9\. This action is taken pursuant to authority delegated under Section
0.283 of the Commission's rules.[^11]

FEDERAL COMMUNICATIONS COMMISSION

Steven A. Broeckaert

Deputy Chief, Policy Division, Media Bureau

**Attachment A**

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

**CHARTER COMMUNICATIONS: CSR 6422-E, 6423-E, 6454-E, 6496-E, 6497-E,
6498-E, 6559-E, 6560-E, 6561-E, 6562-E, 6563-E, 6564-E**

> **2000**

**Census DBS**

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

Wahoo NE0093 21.6% 1,583 342

Waverly NE0086 28.3% 836 237

Beaver Dam WI0150 15.9% 6,349 1,011

Brunswick WI0956 34.9% 630 220

Benton Cty KY0008 35.25% 1,767 623

Calvert Cty KY0529 26.90% 1,141 307

Mayfield Cty KY0004 34.80% 4,358 1,517

Madisonville KY0002 16.70% 8,077 1,346

Somerset Cty KY0483 21.90% 4,831 1,058

Crossville TN0116 32.35% 3,795 1,228

Sparta TN0044 41.3% 1,952 806

Pulaski TN0039 34.96% 3,455 1,208

Paris TN0034 27.6% 4,394 1,213

Tullahome TN0015 21.6% 7,336 1,582

Blount TN0270 21.7% 41,056 8,893

TN0271

TN0269

TN0674

Madisonville TN0166 37.6% 1,671 628

Sweetwater TN0106 34.2% 2,315 792

**SERVICE ELECTRIC COMPANY: CSR 6405-E**

> **2000**

**Census DBS**

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

Luzerne Cnty See below[^12] 15.65% 60,039 9,395

**[Cable Operator Subject to Low Penetration Effective
Competition]{.underline}**

**CHARTER COMMUNICATIONS: CSR 6564-E**

**Communities CUIDS Franchise Area Cable Penetration Households
Subscribers Level**

Roane County TN0511 11,455 749 6.5%

Hamilton County TN0613 21,915 763 3.5%

CPR= Percent DBS penetration

\+ = See Cable Operator Petitions

[^1]: 47 U.S.C. § 543(1).

[^2]: 47 C.F.R. § 76.905(b)(4).

[^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]: *Eleventh Annual Assessment of the Status of Competition in the
    Market for Delivery of Video Programming*, 20 FCC Rcd 2755, 2793
    (2005).

[^9]: *See* 47 C.F.R. § 76.905(g).

[^10]: 47 U.S.C § 543(l)(l)(A).

[^11]: 47 C.F.R. § 0.283.

[^12]: The CUID numbers for the portions of Luzerne County included in
    the franchise area are: PA1242, PA0521, PA0843, PA0844, PA0845,
    PA0846, PA0847, PA0848, PA0849, PA0850, PA0851, PA1516, PA1722,
    PA2317, PA2520, PA3247.