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

In the Matter of:                
                                 
   Metropolitan Fiber Systems/New York Inc.,)      
   d/b/a/ MFS Telecom of New York)
 Certification to Operate an      )
 Open Video System                )
      ) 
 Metropolitan Fiber Systems/McCourt, Inc.)
 Certification to Operate an      )
 Open Video System                )
                                 
                                 
                       CONSOLIDATED ORDER

    Adopted:  December 9, 1996Released:  December 9, 1996

By the Chief, Cable Services Bureau:

   I. INTRODUCTION

      1.By this Order, we consolidate two proceedings into one and rule on the merits in
each.  In deciding this matter, the Cable Services Bureau (the "Bureau") has reviewed all of the
pleadings filed in each of the  proceedings.  We have determined that the two proceedings raise
sufficiently similar issues and involve related petitioners thereby supporting a joint resolution of all
the issues raised by each of the concerned parties in one consolidated proceeding.

      2.On November 27, 1996, Metropolitan Fiber Systems/New York Inc., d/b/a/ MFS
Telecom of New York filed an application for certification to operate an open video system on the
Island of Manhattan, New York City, New York, pursuant to Section 653(a)(1) of the
Communications Act and the Commission's rules.  Also on November 27, 1996, Metropolitan Fiber
Systems/McCourt, Inc. filed an application for certification to operate an open video system in
Boston, Massachusetts, pursuant to Section 653(a)(1) of the Communications Act and the
Commission's rules.  

      3.As provided in its rules, the Commission published notice of receipt of the
certification applications and posted the applications on the Internet.  Comments on the certification
applications were timely filed on December 5, 1996 by Time Warner Cable of New York City and
Paragon Communications ("Time Warner"), the City of Boston ("Boston"), the Massachusetts Cable
Television Commission ("MCTC"), the Alliance for Community Media ("Alliance"), and
Cablevision of Boston, Inc. ("Cablevision").

      4.  Pursuant to Section 653(a)(1) of the Communications Act, any person may obtain
certification to operate an open video system.  In light of the brief period (ten days) for Commission
review of certification filings, the Commission concluded that Congress intended a streamlined
certification process.  Open video system operators may apply for certification at any point prior
to the commencement of service, subject to two conditions.  If construction of new physical plant
is required, the applicant must obtain Commission approval of its certification prior to the
commencement of construction.  If no new construction is required, certification must be obtained
prior to the commencement of service, allowing sufficient time to comply with the Commission's
notification requirements to programming providers.

      5.Despite its streamlined nature, the Commission intended the certification process to
provide purposeful representations regarding the responsibilities of the open video system operator,
by requiring, inter alia, the submission of specified information and that certifications be verified. 
To obtain certification, a party must file FCC Form 1275 which requires, among other things:  (a)
a statement of ownership, including a list of all affiliated entities; (b) a representation that the
applicant will comply with the Commission's regulations under Section 653(b); (c) a general
description of the anticipated communities or areas to be served; (d) a statement on the anticipated
type and amount of capacity that the system will provide.

  II.BACKGROUND

      6. Metropolitan Fiber Systems/New York Inc., d/b/a/ MFS Telecom of New York  and
Metropolitan Fiber Systems/McCourt, Inc. are both wholly-owned subsidiaries of MFS Network
Technologies, Inc., which in turn is a wholly-owned subsidiary of MFS Communications Company,
Inc.  Both Metropolitan Fiber Systems/New York Inc., d/b/a/ MFS Telecom of New York and
Metropolitan Fiber Systems/McCourt, Inc. have made substantially the same representations in their
separate Form 1275 applications.  For the purposes of this order, we will refer to both entities
collectively as "MFS".

      7.On November 5, 1996, MFS filed separate applications for certification to operate
open video systems in Manhattan and Boston.  Also on November 5, 1996, MFS filed an election
to transition its alleged video dialtone system to an open video system and a concurrent motion for
extension of time to accomplish such transition.  The election and motion for extension of time will
be addressed in a separate order.  By consolidated order dated November 15, 1996, the Bureau
denied each of MFS's application for certification.  The Bureau determined that MFS improperly
failed to provide the maximum total anticipated channel capacity of its system as required by Form
1275.  In addition, the Bureau noted that several commenters raised significant issues regarding
MFS's status as a video dialtone provider.    

 III.POSITIONS OF THE PARTIES

      8.In response to the issues raised in the MFS Order, in each of its certification filings,
MFS has represented that, as to anticipated analog capacity, the MFS open video systems will have
330 analog channels.  MFS attaches as Exhibit 2 to each Form 1275 a statement that "the system
design for the [MFS/McCourt or MFS-NY (as applicable)] OVS network has facilities available for
capacity of up to at least 330 analog channels."   

      9.Again, as in its first certification applications, under the category of eligibility and
compliance representations, MFS has checked off the "not applicable" box in response to the
question directed at franchised cable operators seeking to operate open video systems pursuant to
Section 76.1501 of the Commission's rules.  With regard to this representation, MFS attached an
explanation to each Form 1275 stating that "MFS is a non-dominant common carrier that currently
offers, among other telecommunications services, video programming transmission over its fiber
optic telecommunications network in [Boston or New York (as applicable)] on a tariffed common
carrier video dialtone basis."  MFS disputes the allegation that it is operating illegal cable systems
in Boston and New York made by several parties in its previous certification proceeding, the instant
proceeding, and the proceeding involving its open video system election and motion for extension
of time.  MFS asserts that its provision of video programming services is consistent with the
Commission's rules and video dialtone decisions, as well as the United States Court of Appeals for
the District of Columbia Circuit's decision in National Cable Television Ass'n, Inc. v. FCC.  In
addition, MFS argues that the issue of the precise nature of MFS's systems is currently before the
Commission in a separate proceeding.  MFS argues that the RCN Proceeding is the proper forum
for the Commission to consider the issue of MFS's regulatory status.  MFS argues that the instant
proceeding is not the appropriate vehicle to determine MFS's regulatory status, stating that:

          What MFS is seeking herein is a certificate to offer a new OVS service, and
          interjection of legal arguments as to the transition status of MFS current
          service -- which is being considered by the Commission separate and apart
          from this certification -- into this certification process would simply serve to
          frustrate and delay the intent of Congress and the Commission to encourage
          the development of such new competitive OVS services.   

Finally, MFS states that to do otherwise than check off the "not applicable" box to question C1 of
Form 1275 would constitute a possible misrepresentation to the Commission because MFS "would
only be able to answer otherwise if it is 'a cable operator applying for [open video system]
certification within [its] franchise area.'"
 
      10.Time Warner opposes MFS's certification and argues that MFS failed to cure the
defects of its initial application indicated by the Commission in the MFS Order.  Time Warner
asserts that the Commission cannot rely on MFS's unsupported promises to increase channel capacity
to 330.  Time Warner further asserts that the mere fact that MFS has proposed to increase channel
capacity to 330, if demand warrants, does not alter the fact that unaffiliated programmers have no
means to use MFS's network to actually access end-use subscribers.  According to Time Warner,
MFS's affiliated program provider, RCN/Freedom, still has complete control of the drops needed to
access end-user subscribers.  

      11.Time Warner further asserts that MFS is not an authorized video dialtone system and
does not meet the de facto requirements of video dialtone (the facility is closed to other
programmers, MFS violated the Commission's video dialtone programmer affiliation prohibition,
MFS violated the Commission's video dialtone channel occupancy limits, MFS was never certified
pursuant to Section 214, and the requisite tariff was never filed with the Commission).  Instead,
argues Time Warner, MFS and its affiliate RCN/Freedom, constitute a cable operator unlawfully
providing cable service in New York City without a franchise in violation of Section 621(b)(1) of
the Communications Act.  Time Warner requests that the Commission deny the current application
until MFS can guarantee that its facility can provide adequate opportunities for unaffiliated
programmers to access the same subscribers served by MFS's affiliate, RCN/Freedom.  Until that
time, Time Warner states the Commission should order MFS to cease and desist from operating its
illegal cable system.  Furthermore, Time Warner argues that, if MFS seeks open video system status,
it must apply as a new facility and fully conform with the Commission's rules before it is allowed
to recommence service as an open video system operator.

      12.Like Time Warner, Cablevision opposes MFS's certification and argues that MFS has
continued to misrepresent its status as a video dialtone provider.  Cablevision alleges that non-
dominant common carriers (such as MFS) are required to file a video dialtone tariff with the
Commission and that, contrary to MFS's assertion, a video transport tariff is not synonymous with
a video dialtone tariff.  Cablevision also states that, even assuming that MFS need not have obtained
Section 214 authorization or filed a tariff, the fact remains that MFS is not providing, and has never
provided, video dialtone service consistent with the Commission's rules and policy.  Cablevision
cites the following as examples of MFS actions inconsistent with the Commission's video dialtone
rules and policies:  MFS accorded RCN exclusive and preferential access to the alleged video
dialtone system; MFS failed to offer sufficient capacity for multiple programmers; MFS afforded
RCN all of the capacity on its system; MFS impermissibly violated the Commission's rules barring
ownership by the video dialtone operator of video dialtone programmers; and MFS otherwise acted
in a discriminatory and unlawful manner.  

      13.Cablevision argues that MFS's repeated lack of candor regarding the current status
of its video operations in Boston warrants dismissal with prejudice of its application for open video
system certification.  Cablevision further requests that the Commission order MFS to immediately
cease its unlawful cable operations and that the Commission impose additional fines and penalties
for such misconduct.  If the Commission declines to order MFS to cease and desist, Cablevision
argues that, at a minimum, MFS should not be certified as an open video system operator until the
Bureau has made a determination as to whether MFS is currently providing unregulated cable service
in violation of the Commission's rules.  In the alternative, the Bureau should decide that MCTC is
the appropriate regulatory body to decide MFS's status.  Cablevision requests that the Commission
hold MFS's open video system certification in abeyance pending the outcome of MCTC's
determination.

      14.Boston urges the Commission to deny MFS's open video system certification until
MFS's video dialtone status is clarified.  Prior to the MFS Order, Boston asserts that it was under
the impression that MFS's operations complied with the Commission's video dialtone rules and that
the Boston was not entitled to franchise fees, funds or services to support PEG access, or a universal
service plan.  Boston contends that, if in fact MFS has been an unlicensed cable operator for the past
15 months,  MFS's fitness to be a certified open video system operator has been substantially
undermined.  MCTC opposes MFS's open video system certification contending that MFS fails to
address serious questions raised in previous proceedings regarding the regulatory status of its system. 
MCTC requests that the Commission deny MFS's certification application and immediately initiate
a separate factual inquiry on the question of MFS's video dialtone status.  Finally, Alliance argues
that MFS must comply with the open video system rules regarding PEG access before becoming
certified to operate.  Alliance also argues that, until MFS's video dialtone status is resolved, MFS's
open video system application should not be granted. 

  IV.DISCUSSION

      15.We find that MFS has corrected the deficiency in its previous applications relating
to the anticipated analog channel capacity of its system.  In response to Form 1275, Box D3, MFS
responds in each application that its anticipated analog capacity is 330 channels.  This is the type of
specific information that the Commission requires to enable potential programming providers and
the Commission to discern when demand for carriage will exceed the channel capacity of a
prospective open video system applicant's system.  Moreover, if demand for carriage exceeds system
capacity, the Commission and programming providers will be able to discern whether MFS and its
affiliates are confined to their one-third share of the system.  If the actual number of channels
available at the time the system becomes operational differs from that stated in its Form 1275
application, MFS may amend its certification.  Time Warner asserts that the Commission cannot rely
on MFS's "bare statements" that it will, in the future, provide up to 330 channels.  As noted below,
absent evidence that MFS cannot, or will not, provide channel capacity to prospective programmers,
the open video system certification procedure requires us to rely on the verified statements contained
in MFS's Form 1275 application.   

      16. As with MFS's previous application, the issue of MFS's regulatory status has been
raised by Time Warner, Cablevision, Alliance, Boston and MCTC.  In the context of this proceeding,
such arguments indicate that MFS's response to Question C1 on each Form 1275 contains
misrepresentations necessitating the denial of MFS's applications.  Question C1 to Form 1275 states
"If you are a cable operator applying for certification within your cable franchise area, are you
qualified to operate an open video system under 47 C.F.R.  76.1501?"  Question C1 expressly
relates to franchised cable operators.  MFS has stated that it is not a franchised cable operator in
either New York or Boston.  
     
      17.We take no position and specifically reserve for resolution in another proceeding, the
issue of MFS's past or present regulatory status.  The open video system certification process was
intended by Congress to be streamlined and confined to issues relating to activities once the open
video system commences.  Whether MFS is currently a cable system operating without a franchise,
a video dialtone provider, or otherwise, can be reviewed more thoroughly outside the limited
confines of the open video system certification process.  With respect to Time Warner's concerns
relating to obtaining access to end-user subscribers, we note that the Commission's rules define an
"open video system" as "[a] facility consisting of a set of transmission paths and associated signal
generation, reception, and control equipment that is designed to provide cable service which includes
video programming and which is provided to multiple subscribers within a community. . . ."  MFS
has submitted a verified Form 1275 indicating that it qualifies as an open video system, which by
definition includes access to end-user subscribers.  Again, absent evidence that MFS cannot, or will
not, provide video programmers access to end-user subscribers, the open video system certification
 procedure requires us to rely on MFS's verified application.  
      18.With respect to the Alliance's allegation regarding PEG requirements, this issue is
beyond the scope of the certification process.  The certification process was established to examine
the adequacy and accuracy of the information contained in the Form 1275 filing.

      19.In summary, MFS has provided the requisite facts and representations concerning the
open video systems it intends to operate and has certified that it "agrees to comply and remain in
compliance with each of the Commission's regulations" under Section 653(b).  These representations
indicate that MFS's New York and Boston systems satisfy the definition of open video system
contained in the Commission's rules.  If the representations contained in the certification filing prove
to be materially false or materially inaccurate, the Commission retains the authority to revoke an
open video system operator's certification or to impose such other penalties it deems appropriate,
including forfeiture.

   V.ORDERING CLAUSES

      20.Accordingly, IT IS ORDERED that the certification of Metropolitan Fiber
Systems/New York Inc., d/b/a/ MFS Telecom of New York to operate an open video system is
GRANTED.

      21.IT IS FURTHER ORDERED that the certification of Metropolitan Fiber
Systems/McCourt, Inc. to operate an open video system is GRANTED.

      22.This action is taken by the Chief, Cable Services Bureau, pursuant to the authority
delegated by Section 0.321 of the Commission's rules.

     FEDERAL COMMUNICATIONS COMMISSION


     
     Meredith J. Jones
     Chief, Cable Services Bureau