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 Federal  Communications  Commission  DA  05-  3335 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 

 In  the  Matter  of: 
 MCC  Iowa,  LLC 

 Petition  for  Determination  of  Effective  Competition  in  Carroll,  IA 

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 CSR  6438-  E 

 MEMORANDUM  OPINION  AND  ORDER 
 Adopted:  December  28,  2005  Released:  December  29,  2005 
 By  the  Deputy  Chief,  Policy  Division,  Media  Bureau: 
 I.  INTRODUCTION 
 1.  MCC  Iowa,  LLC  (  Mediacom)  has  filed  with  the  Commission  pursuant  to  Sections  76.7,  76.905(  b)(  2)  and  76.907  of  the  Commission's  rules  for  a  determination  of  effective  competition  in  Carroll, 

 Iowa.  Mediacom  alleges  that  its  cable  system  serving  this  community  is  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,  and  are  therefore  exempt  from  cable  rate  regulation.  More  particularly,  Mediacom  claims  the  presence  of  effective  competition  in  the  Community  stems  from  the 
 competing  services  provided  by  two  unaffiliated  direct  broadcast  satellite  (  DBS)  providers,  DirecTV  and  Dish  Network.  Mediacom  claims  it  is  subject  to  effective  competition  in  this  Community  under  the 
 competing  provider  effective  competition  test  set  forth  in  Section  623(  l)(  1)(  B)  of  the  Communications  Act.  2  The  petition  is  opposed  by  the  City  of  Carroll,  Iowa  (the  City  or  Carroll). 

 II.  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  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 

 1  47  U.  S.  C.    543(  1). 
 2  See  47  U.  S.  C.    543(  l)(  1)(  B). 
 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. 
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 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.  (  DirecTV)  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,  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  Mediacom  has  demonstrated  that  Carroll  is  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.  The  City  also  accepts  that  the  first  prong  of  the  Competing 
 Provider  Test  is  satisfied.  10 
 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.  Mediacom  compared  its  residential  subscriber  number  of  2,951  for  the  franchise  area  against  the  aggregate  total  DBS  providers  subscribership  for  the  franchise  area  and  found  that  it  is  the  largest  MVPD 
 for  the  franchise  area  with  over  50  percent  of  the  households  in  the  franchise  area  subscribing  to  Mediacoms  service.  11  Mediacom  identified  the  number  of  subscribers  attributable  to  the  DBS  providers 
 within  the  City  on  a  zip  code  basis.  12  Mediacom  provided  DBS  subscriber  calculations  developed  by  Media  Business  Corporation  (  MBC),  which  show  that  16.06  percent  of  franchise  area  households 
 subscribe  to  MVPD  services  of  the  two  DBS  providers.  13  MBC  utilized  2000  Census  data  for  the  City.  14  MBC  compared  the  2000  Census  households  for  the  community  with  the  households  in  the  U.  S.  Postal 

 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,  FCC 
 05-  13,  at    54-  55  (rel.  Feb.  4,  2005).  9 
 See  47  C.  F.  R.    76.905(  g).  10 
 Opposition  at  2.  11 
 Mediacom  Petition  at  6.  12 
 Id.  Mediacom  asserts  that  it  totaled  those  subscribers  reported  as  residing  in  the  area  that  was  identified  through  geocoding  and  mapping  of  individual  Zip  Code+  4  exchanges,  as  falling  within  the  Franchise  Area.  See  Exhibit  E- 

 SBCA  DBS  Providerss  Subscriber  Summary;  Exhibit  F-  SBCA  Zip  Code+  4  Competition  Methodology  Used  to  Generate  Report. 
 13  Mediacom  Petition  at  7. 
 14  Id.  at  6.  Exhibit  F. 
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 Zip  Code  areas  encompassing  the  community,  and  allocated  that  proportion  of  the  DBS  subscribers  within  such  zip  code  to  the  community.  15 
 5.  The  City  of  Carroll  argues  that  Mediacom  has  not  met  its  burden  of  demonstrating  that  the  number  of  DBS  subscribers  within  the  City  exceeds  15  percent  of  the  households  in  the  Mediacom 
 franchise  area.  16  It  contends  that  Mediacoms  reference  to  a  report  provided  by  Satellite  Broadcasting  and  Communications  Association  (  SBCA)  identifying  the  number  of  DBS  subscribers  apparently  associated 
 with  nine-  digit  zip  codes  in  the  City  and  Mediacoms  reference  to  2000  Census  calculations  identifying  the  number  of  households  within  the  franchise  area  fails  to  provide  the  Commission  with  sufficient 
 documentation  necessary  to  verify  the  accuracy  of  Mediacoms  conclusions.  17  The  City  also  argues  that  neither  the  Commission  nor  the  City  has  the  ability  to  verify  whether  the  zip  code  information  provided 
 by  Mediacom  to  SBCA  is  accurate  for  the  jurisdictional  boundaries  of  the  City.  18  Moreover,  the  City  points  out  that  Mediacom  attempted  to  identify  the  nine-  digit  zip  codes  for  the  City,  however  the  City 
 asserts  that  Mediacom  provides  no  clarification  regarding  how  it  outlined  the  franchise  area  and  how  it  determined  the  appropriate  nine-  digit  zip  codes  to  provide  to  SBCA  to  appropriately  verify  its 
 calculations.  19  The  City  also  argues  that  Mediacoms  subscriber  totals  may  have  been  miscalculated  and  that  Mediacom  should  not  be  permitted  to  utilize  census  information  which  is  in  excess  of  five  years  old 
 and  compare  it  to  current  DBS  penetration  numbers  because  even  a  minor  increase  in  the  total  number  of  households  in  the  last  five  years  would  serve  to  reduce  the  penetration  level  below  the  15  percent 
 minimum  threshold.  20 
 6.  In  its  Reply,  Mediacom  states  that  the  City  ignores  the  fact  that  the  zip  code  information  provided  by  Mediacom  to  SBCA  only  included  those  zip  codes  that  could  be  determined  with  the 

 strongest  certainty  to  be  within  the  city  boundaries.  21  It  also  states  that  it  is  incumbent  on  the  City  to  come  forward  with  evidence  that  counters  that  submitted  by  Mediacom  and  the  City  has  failed  to  present 
 any  such  evidence.  22  Moreover,  Mediacom  argues  that  the  City  does  nothing  more  than  attempt  to  discredit  Mediacoms  petition  by  asserting  that  the  2000  Census  data  should  not  be  used  because  the 
 information  is  outdated,  but  the  City  presents  no  independent  evidence  of  household  growth.  23  Mediacom  asserts  that  Census  2000  provides  a  reliable,  unbiased,  and  consistent  source  of  household  data  that  is 
 appropriate  for  use  in  connection  with  effective  competition  determinations.  24 
 7.  The  Commission  repeatedly  has  accepted  DBS  subscriber  reports  provided  by  the  SBCA  and  the  Zip  Code+  4  methodology  when  determining  the  number  of  subscribers  to  DBS  providers  within 

 franchise  areas  on  a  franchise-  specific  Zip  Code+  4  basis  in  satisfaction  of  Section  76.907(  c)  of  the 

 15  Id. 
 16  Opposition  at  3. 
 17  Id. 
 18  Id. 
 19  Id.  at  4. 
 20  Id.  at  5. 
 21  Reply  at  1. 
 22  Id.  at  2. 
 23  Id. 
 24  Id. 
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 Commissions  rules.  25  We  find  this  method  of  determining  DBS  subscribers  within  a  franchise  area  to  be  reasonable  and  sufficiently  reliable  for  purposes  of  determining  the  presence  of  effective  competition.  26 
 The  City  offers  unsubstantiated  objections  regarding  the  specific  zip  codes  included  in  Mediacoms  SBCA  DBS  subscriber  report.  Without  more,  we  cannot  discredit  Mediacoms  submission.  The  City  is 
 knowledgeable  of  the  boundaries  of  Mediacoms  franchise  area  and  able  to  determine  the  Zip  Code+  4  exchanges  that  fall  within  those  boundaries.  The  City  failed  to  identify  any  specific  errors  to  the  SBCA 
 report.  With  regard  to  its  concern  that  the  use  of  2000  Census  household  data  is  inappropriate  since  Carroll  is  a  growing  area  and  the  2000  Census  data  may  be  outdated,  we  note  that  the  City  offers  no  data 
 or  documentation  and  fails  to  present  alternative  household  data  than  that  provided  by  Mediacom.  Although  the  Commission  will  accept  more  recent  household  data  that  is  demonstrated  to  be  reliable,  no 
 alternate  showing  of  household  data  was  provided  by  the  City.  We  find  that  Mediacom  has  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  City.  Therefore  the  second  prong  of  the  competing  provider  test  is  satisfied.  Based  on  the  foregoing,  we  conclude  that  Mediacom  has  submitted 
 sufficient  evidence  demonstrating  that  its  cable  system  serving  the  City  is  subject  to  effective  competition. 

 III.  ORDERING  CLAUSES 
 8.  Accordingly,  IT  IS  ORDERED  that  the  petition  for  a  determination  of  effective  competition  filed  by  MCC  Iowa,  LLC  in  Carroll,  Iowa  IS  GRANTED. 

 9.  IT  IS  FURTHER  ORDERED  that  the  certification  to  regulate  basic  cable  service  in  Carroll,  Iowa  IS  REVOKED. 
 10.  This  action  is  taken  pursuant  to  authority  delegated  under  Section  0.283  of  the  Commissions  rules.  27 
 FEDERAL  COMMUNICATIONS  COMMISSION 

 Steven  A.  Broeckaert  Deputy  Chief,  Policy  Division,  Media  Bureau 

 25  See  47  C.  F.  R.    76.907(  c). 
 26  See  Adelphia  Cable  Communications,  20  FCC  Rcd  4979  (MB  2005). 
 27  47  C.  F.  R.    0.283. 
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 Attachment  A 
 Cable  Operator  Subject  to  Competing  Provider  Effective  Competition 
 MCC  IOWA  LLC:  CSR  6438-  E 
 2000  Census  DBS 

 Community  CUIDS  CPR*  Households  +  Subscribers  + 
 Carroll  IA0050  16.06%  4,173  670 

 CPR=  Percent  DBS  penetration 
5