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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of:                  )
                                   )    Columbus, OH
Coaxial Communications of Central Ohio, Inc. )    CUID No.  OH0170
                                   )                   
Petition for Determination of      )
Effective Competition              )
                                 
                                 

                  MEMORANDUM OPINION AND ORDER

   Adopted:  February 4, 1997           Released:  February 11, 1997

By the Chief, Cable Services Bureau:

I.   INTRODUCTION

     1.   Coaxial Communications of Central Ohio, Inc. ("Coaxial") filed a Petition for
Determination of Effective Competition asserting that it is subject to effective competition in
Columbus, Ohio ("Columbus") because of the presence of Ameritech New Media's cable service in
that City.  This petition is unopposed.

     2.   Section 623(a)(4) of the Communications Act of 1934, as amended
("Communications Act") allows franchising authorities to become certified to regulate basic cable
service rates of cable operators which are not subject to effective competition.  For purposes of the
initial request for certification, local franchising authorities may rely on a presumption that cable
operators within their jurisdiction are not subject to effective competition unless they have actual
knowledge to the contrary.  Certification becomes effective 30 days from the date of filing unless
the Commission finds that the authority does not meet the statutory certification requirements.  In
Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996 ("Cable Act
Reform Order"), the Commission instructed cable operators believing themselves subject to local
exchange carrier ("LEC") effective competition under Section 623(l)(1)(D) of the Communications
Act to file a petition for determination of effective competition pursuant to Section 76.7 of the
Commission's rules.  Section 623(l)(1)(D) of the Communications Act provides that a cable operator
is subject to effective competition where:

          a local exchange carrier or its affiliate (or any multichannel video
          programming distributor using the facilities of such carrier or its affiliate)
          offers video programming services directly to subscribers by any means
          (other than direct-to-home satellite services) in the franchise area of an
          unaffiliated cable operator which is providing cable service in that franchise
          area, but only if the video programming services so offered in that area are
          comparable to the video programming services provided by the unaffiliated
          cable operator in that area.

A successful LEC effective competition petition will exempt a cable operator from rate regulation
as of February 8, 1996, the enactment date of the Telecommunications Act of 1996 (the "1996
Act").

II.  THE PLEADINGS

     3.    Coaxial asserts that it is subject to LEC effective competition in its Columbus, Ohio
franchise area. With regard to the LEC affiliation requirement, Coaxial asserts that Ameritech New
Media ("Ameritech") is a competing franchised cable operator wholly owned by Ameritech
Corporation, a local exchange carrier serving customers in Ohio, Illinois, Indiana, Michigan, and
Wisconsin. 

     4.   With regard to the requirement that the LEC competitor offer video programming
service in the unaffiliated cable operator's franchise area, Coaxial asserts that Ameritech is physically
able to offer service to subscribers in Columbus.  Coaxial asserts that Ameritech has overbuilt nearly
half of Coaxial's franchise area, which encompasses nearly two-thirds of the 93,000 Coaxial homes
passed, and that construction is continuing.  Coaxial adds that Ameritech has heavily marketed the
availability of its cable service and notes that it has experienced subscriber loss since the introduction
of Ameritech's cable service.  Coaxial also asserts there are no regulatory, technical, or other
impediments to households taking service.  The operator states that Ameritech became eligible to
begin service to Columbus residents on June 10, 1996, 60 days after the LEC complied with the
City's requirement to file its proposed rates and services.  
          
     5.   Coaxial asserts that Ameritech offers comparable programming to Columbus
subscribers.  Specifically, Coaxial provides Ameritech's channel line-up which demonstrates that
Ameritech offers almost 80 channels, 6 of which are local television broadcasting signals.  Coaxial
offers 64 channels in Columbus.

     6.   Coaxial adds that since June of 1996, it has made changes in its channel line-
up,service, and pricing to better distinguish itself from the competition.  It specifically states, for
example, that it has continued its plant upgrade by expanding bandwidth and has repackaged and
repriced its CPS and Premium service tiers to give more value to its customers.  Coaxial also asserts
that it has descrambled it CPS tier, in advance of competition, so that it could make subscribers'
cable-ready TV operational features and VCR operations easier to operate.

III. ANALYSIS 

     7.   In the absence of a demonstration to the contrary, cable systems are presumed not to
be subject to effective competition as defined in the Communications Act.  The cable operator
bears the burden of rebutting the presumption that such effective competition does not exist and so
must provide evidence sufficient to demonstrate that effective competition, as defined by Section
76.905 of the Commission's rules, is present in the franchise area.  Coaxial has met this burden.

     8.   With regard to the first part of the LEC effective competition test, which requires that
the alleged competitive service be provided by a LEC or its affiliate (or any multi-channel video
programming distributor ("MVPD") using the facilities of such LEC or its affiliate), we find that
Coaxial has provided sufficient evidence demonstrating that Ameritech New Media is an MVPD
wholly owned by a LEC.  Ameritech is unquestionably a LEC as defined by the Communications
Act, and Ameritech New Media meets the Commission's definition of MVPD.  Therefore, we find
that Coaxial satisfies the affiliation prong of the LEC effective competition test.  Coaxial is
unaffiliated with both Ameritech New Media and Ameritech.

     9.   We also find that Coaxial has submitted sufficient evidence that the programming of
Ameritech is comparable to that which it provides.  The channel information for Ameritech
submitted by Coaxial establishes that Ameritech offers at least 80 channels, including 6 local
broadcast channels; this satisfies the Commission's programming comparability criterion.

     10.  To meet the LEC effective competition test, the alleged competitive service must also
be offered directly to subscribers in the franchise area.  In enacting the LEC test, Congress indicated
that the Commission should apply its preexisting definition of the term "offer" to the new LEC
effective competition test.  Under that definition service is offered:

          (1) When the multichannel video programming distributor is physically able
          to deliver service to potential subscribers, with the addition of no or only
          minimal additional investment by the distributor, in order for an individual
          subscriber to receive service; and (2) When no regulatory, technical or other
          impediments to households taking service exist, and potential subscribers in
          the franchise area are reasonably aware that they may purchase the services
          of the multichannel video programming distributor.     

     11.  Based on the information before us, we find that Ameritech is offering service in
Coaxial's franchise area sufficient to demonstrate the presence of effective competition.   Ameritech's
initial service area lies in the core of the City of Columbus, with current construction expanding
from that point in both a northern and southern direction during the next 15 months.  Coaxial states
that Ameritech's cable system overlaps its own in nearly half of its franchise area, which
encompasses nearly two-thirds of the 93,000 Coaxial homes passed, and asserts that numerous
households have already switched to Ameritech for cable service.  We find Ameritech's presence and
Coaxial's subscriber loss as evidence that Ameritech is physically able to offer service in the cable
community at issue.  While the entire franchise area is still in the process of being wired,
Ameritech's franchise agreement provides for Ameritech to construct its system throughout the City
of Columbus.  Under its franchise, Ameritech is obligated to complete system construction on or
before the third anniversary following its initial system activation.  Ameritech also has a legal
obligation to provide the City with a bond of not less than three million dollars guaranteeing its full
and faithful performance under the terms of the franchise agreement.  We find that expansion of
service is on schedule and investment in the community will continue as it has since Ameritech was
awarded its franchise.

     12.  Ameritech's aggressive marketing efforts, combined with the extensive press coverage
of Ameritech in the local media, ensure that potential subscribers are reasonably aware of the
availability of Ameritech's service.  Within the area that Ameritech has wired, potential subscribers
are able to receive service for only a minimal additional investment and without regulatory, technical
or other impediments.  Subsequent to the introduction of competition, Coaxial has upgraded its
physical plant and reconfigured its prices and services for the benefit of its subscribers.  In the
circumstances, consistent with Congressional intent in adopting Section 623(l)(1)(d) of the
Communications Act, we find "effective competition" to be present.

IV.  ORDERING CLAUSES

     13.  Accordingly, IT IS ORDERED that the Petition for Determination of Effective
Competition filed by Coaxial Communications of Central Ohio, Inc. challenging the certification
of the City of Columbus, in Columbus, Ohio IS GRANTED.

     14.  IT IS FURTHER ORDERED that the certification of the City of Columbus, Ohio
to regulate the basic cable rates of Coaxial Communications of Central Ohio, Inc. in Columbus, Ohio
IS REVOKED.

     15.  This action is taken pursuant to the interim rules adopted in Implementation of Cable
Reform Provisions of the Telecommunications Act of 1996, and is without prejudice to any further
action taken by the Commission in adopting final rules pursuant to the Notice of Proposed
Rulemaking contained therein.

     16.  This action is taken pursuant to delegated authority under Section 0.321 of the
Commission's rules, as amended.

                         FEDERAL COMMUNICATIONS COMMISSION


                         Meredith J. Jones
                         Chief, Cable Services Bureau