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 Federal  Communications  Commission  DA  01-  1355 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of: 
 North  Dakota  Network  Company 
 Petition  for  Special  Relief  Requesting  a  Finding 
 Of  Effective  Competition  in  Various  North 
 Dakota  Communities 


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 MEMORANDUM  OPINION  AND  ORDER 
 Adopted:  June  4,  2001  Released:  June  5,  2001 
 By  the  Deputy  Chief,  Cable  Services  Bureau: 
 1.  North  Dakota  Network  Company  (  NDNC)  filed  a  Petition  for  Special  Relief  1 
 requesting  a  finding  of  effective  competition  in  various  North  Dakota  communities  (the  Communities)  2 
 in  conjunction  with  its  showing  of  compliance  with  Section  21.912  of  the  Commissions  rules.  3  NDNCs 
 petition  is  unopposed. 


 2.  The  Communications  Act  and  the  Commissions  rules  provide  that  only  the  rates  of  cable 
 systems  that  are  not  subject  to  effective  competition  may  be  regulated.  4  One  of  the  bases  by  which  a 
 cable  system  will  be  deemed  subject  to  effective  competition  is  where  a  franchise  area  is:  (i)  served  by  at 
 least  two  unaffiliated  multichannel  video  programming  distributors  each  of  which  offers  comparable 
 programming  to  at  least  50  percent  of  the  households  in  the  franchise  area;  and  (ii)  the  number  of 
 households  subscribing  to  multichannel  video  programming  other  than  the  largest  multichannel  video 
 programming  distributor  exceeds  15  percent  of  the  households  in  the  franchise  area.  5  In  the  absence  of  a 
 demonstration  to  the  contrary,  cable  systems  are  presumed  not  to  be  subject  to  effective  competition.  6 
 The  cable  operator  bears  the  burden  of  rebutting  the  presumption  that  effective  competition  does  not  exist 


 1  See  47  C.  F.  R.    76.  7;  Application  of  Phillip  C  Merrill  to  Transfer  Control  of  MMDS  Station  Licenses  to  North 
 Dakota  Network  Company.  NDNC  filed  an  addendum  to  its  Application  on  May  22,  2001. 
 2  The  Communities  are:  Berthold,  Carpio,  Donnybrook,  Granville,  Lake  Metigoshe,  Sherwood,  and  Westhope, 


 North  Dakota. 
 3  47  C.  F.  R.    21.  912.  Petitioners  must  file  for  special  relief  pursuant  to  Section  76.  7  when  demonstrating  compliance 


 with  Section  21.  912  based  on  the  effective  competition  exception  to  Section  21.912.  See  Letter  dated  January  21,  1998  from  Roy  J.  Stewart,  Chief,  Mass  Media  Bureau  to  Charles  G.  Cline,  Kenneth  W.  Garrard,  BellSouth  Wireless 


 Cable,  Inc.  and  BellSouth  Corporation  (File  Nos.  50849-  CM-  AL(  1)-  97  and  50851-  CM-  AL(  2)-  97). 
 4  47  U.  S.  C.    543(  a)(  2);  47  C.  F.  R.    76.  905(  a). 


 5  47  U.  S.  C.    543(  l)(  1)(  B);  47  C.  F.  R.    76.906(  b)(  2). 
 6  47  C.  F.  R.    76.  906. 
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 with  evidence  that  effective  competition,  as  defined  by  Section  76.905  of  the  Commissions  rules,  is 
 present  within  its  franchise  area.  7  NDNC  has  met  this  burden. 


 3.  NDNC  has  submitted  reliable  evidence  demonstrating  that  the  Communities  are  served 
 by  at  least  two  unaffiliated  multichannel  video  programming  distributors  (  MVPDs)  offering 
 comparable  service  to  more  than  50%  of  the  households  therein.  NDNC  asserts  that  the  service  of  direct 
 broadcast  satellite  providers  satisfy  this  requirement.  8  In  addition  NDNC  asserts  that  its  own  facilities 
 serving  the  Communities  pass  nearly  100%  of  the  households  therein.  9  We  therefore  find  that  NDNC  has 
 submitted  sufficient  evidence  to  satisfy  the  first  prong  of  the  competing  provider  test. 


 4.  NDNC  has  also  submitted  sufficient  evidence  demonstrating  that  the  number  of 
 households  subscribing  to  MVPDs  other  than  the  largest  MVPD  exceeds  15%  of  the  households  in  all  of 
 the  franchise  areas.  Relying  on  its  own  subscribership  information  and  DBS  subscribership  reports 
 obtained  from  SKYTrends,  a  media  research  reporting  and  consulting  firm,  NDNC  submits  evidence  that 
 the  aggregate  subscribership  to  DBS  service  in  the  Communities  exceeds  15%  of  the  households  in  each 
 franchise  area.  10  Although,  NDNC  does  not  indicate  which  MVPD  in  each  franchise  area  is  the  largest 
 MVPD;  we  are,  nevertheless,  able  to  conclude  that  competing  provider  effective  competition  exists  in 
 each  of  the  Communities.  Assuming  that  NDNC  is  the  largest  MVPD  in  each  community,  the  aggregate 
 DBS  subscribership  in  each  community  easily  surpasses  the  15%  threshold.  11  Conversely,  assuming  that 
 a  DBS  provider  is  the  largest  MVPD  in  each  of  the  Communities,  NDNCs  subscribership  in  each 
 community  by  itself  surpasses  the  15%  threshold  of  the  second  prong  of  the  competing  provider  test.  12 
 We  find  that  NDNC  has  submitted  sufficient  evidence  to  satisfy  the  second  prong  of  the  competing 
 provider  test,  thereby  establishing  the  presence  of  effective  competition  in  the  Communities. 


 5.  Accordingly,  IT  IS  ORDERED  that  the  petition  for  special  relief  requesting  a  finding  of 
 effective  competition  in  the  Communities  filed  by  North  Dakota  Network  Company  IS  GRANTED. 


 6.  This  action  is  taken  pursuant  to  delegated  authority  pursuant  to  Section  0.321  of  the 
 Commissions  rules.  13 


 FEDERAL  COMMUNICATIONS  COMMISSION 


 William  H.  Johnson 
 Deputy  Chief,  Cable  Services  Bureau 


 7  47  C.  F.  R.    76.  911(  b)(  1). 
 8  Petition  at  1.  See  Time  Warner  Entertainment    Advance/  Newhouse  Partnership  d/  b/  a  Time  Warner 
 Communications,  15  FCC  Rcd  8852,  8854  (CSB  2000);  Jones  Intercable,  Inc.,  15  FCC  Rcd  7257,  7258  (CSB 
 2000). 
 9  Petition  at  1. 


 10  Id.  at  5.  The  precise  DBS  penetration  rate  for  each  franchise  area  is  set  forth  on  Attachment  A. 
 11  See  Attachment  A. 
 12  Id. 
 13  47  C.  F.  R.    0.  321. 
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 Attachment  A 
 Percentage  of  Households  in  the  Communities  Subscribing  to  MVPDs  Other  than  the  Largest  MVPD 


 Community  NDNC  %  of  Households  DTH  %  of  Households 
 1.  Berthold  28%  70% 
 2.  Carpio  30%  81%  1 
 3.  Donnybrook  20%  79% 
 4.  Granville  19%  64% 
 5.  Lake  Metigoshe  25%  1  37% 
 6.  Sherwood  35%  57% 
 7.  Westhope  50%  50% 


 1  While  the  aggregate  subscribership  information  for  this  franchise  area  totals  more  than  100%,  we  believe  that  this 
 result  most  likely  arises  due  to  individuals  subscribing  to  more  than  one  programming  service. 
 1  Lake  Metigoshe  shares  a  zip  code  with  Bottineau  City.  The  household  number  for  Lake  Metigoshe  was  derived  by 


 subtracting  the  Bottineau  City  2000  Census  household  data  from  the  aggregated  Metigoshe/  Bottineau  City  data 
 supplied  by  SKYTrends. 
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