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 Before  the  FEDERAL  COMMUNICATIONS  COMMISSION 
 Washington,  D.  C.  20554 


 RECEIVED  Possible  Revision  or  Elimination  of  Rules  Under  the  Regulatory 
 Flexibility  Act,  5  U.  S.  C.    610  SEP  -I  2005 
 fede!!  1  Communications  Commlssi{)  n 
 OfficeotSecre"  3Ff 


 COMMENTS  OF  THE  NATIONAL  ASSOCIATION  OF  TELECOMMUNICATIONS 
 OFFICERS  AND  ADVISORS  AND  MT.  HOOD  CABLE  REGULA  TORY  COMMISSION 


 Frederick  E.  Ellrod  III 
 Gerard  Lavery  Lederer 
 Miller  &  VanEaton,  P  .L.  L.  C. 
 1155  Connecticut  Avenue,  N.  W.  #  1  000 
 Washington,  D.  C.  20036-  4306 
 202-  785-  0600 


 Counsel  for  the  National  Association  of 
 Telecommunications  Officers  And  Advisors  and  Mt.  Hood  Cable  Regulatory  Commission 


 September  1,  2005 
1
 TABLE  OF  CONTENTS 
 II. 
 III. 


 INTRODUC  ION  1 
 THE  REVI  W'S  FOCUS  ON  "SMALL  ENTITIES"  IMPLIES  INCREASED 
 ATTENTIO  TO  THE  NEEDS  OF  CONSUMERS.  4 


 EMERGEN  Y  ALERT  SYSTEM  STANDARDS  MUST  BE  UPHELD  FOR  SMALL 
 COMMUNI  IES  AS  WELL  AS  LARGE  5 


 THE  CO  ISSION  MUST  RESPECT  THE  NEEDS  OF  CONSUMERS  IN  SMALL 
 COMMUNI  IES  WITH  RESPECT  TO  PART  76  ISSUES  7 
 IV. 


 A.  progrfn  Access  7B. 
 Sign  Carriage  Obligations  8 
 C.  Custo  er  Service  Obligations  D.  Franc  'se  Transfers  '  '..  '.."... 


 E.  Horiz  ntal  and  Vertical  Cable  Ownership  Caps  F.  Cable  Rate  Regulation  G.  Effect  ve  Competition  EQUAL  E  LOYMENT  OPPORTUNTY  REQUIREMENT 


 DISPENSED  WITH  FOR  SMALL  BUSINESSES  CONCLUSI  N 


 10 
 11 
 12 
 13 
 13'S 
 CANNOT  BE 
 14 


 v. 


 VI.  16 
2
 SUMMARY 
 The  Nationaf  Association  of  Telecommunications  Officers  and  Advisors  and  the  Mt. 
 Hood  Cable  Regula~  ory  Commission  reaffinn  their  earlier  comments  related  to  the  rules  under 
 review  and  point  out  that  given  industry  consolidation,  most  of  the  "small  entities"  affected  by 
 the  rules  are  in  fac~  local  governments,  which  means  that  consumers'  interests  must  receive 
 increased  attention  it1  the  Commission's  review. 


 Emergency  ~ert  systems,  and  rules  to  ensure  that  they  are  ready  to  function,  continue  to 
 be  needed  for  small  I  as  well  as  large  communities.  The  program  access  rules  are  required  to 


 prevent  anticompeti,  ive  misuse  of  exclusive  programming  arrangements,  and  the  terrestrial 
 loophole  should  be  ~liminated.  Public,  educational  and  governmental  (pEG)  channels  must  be 
 protected  in  any  re~  ision  of  the  Commission's  carriage  rules.  The  Commission's  customer 
 service  rules,  as  supplemented  by  local  rules,  are  essential  to  protect  consumers,  especially  in 
 small  communities. 
 Cable  franchife  transfer  rules  should  be  improved  to  ensure  that  a  community  receives  all 
 the  infonnation  it  h~  indicated  to  be  necessary  before  commencing  the  120-  day  review  process, 
 as  the  statute  requir~  s.  The  horizontal  and  vertical  ownership  caps  do  not  appear  to  apply  to 
 small  business  entiti~  s.  Local  communities'  concerns  about  the  rate  regulation  and  effective 


 Finally,  equal  competition  rules,  which  have  been  discussed  in  prior  filings,  remain  significant. 
 employment  oppo~  ty  rules  cannot  be  dispensed  with  for  small  businesses  as  that  term  is  used 


 here. 


 ii 
3
 !  Before  the 
 IFEDERAL  COMMUNICATIONS  COMMISSION  Washington,  D.  C.  20554 


 Possible  Revision  Or  ~  liminatiOn  of  Rules  Under  the  R  gulatory 
 Flexibility  Act,  5  U.  .C.    610 


 COMMENTS  O~  THE  NATIONAL  ASSOCIATION  OF  TELECOMMUNICATIONS 
 OFFICERS  AND  ADVISORS 
 AN  MT.  HOOD  CABLE  REGULATORY  COMMISSION 


 I.  INTRODuctION 
 In  a  Public  ~otice  dated  May  31,  2005,  DA-  05-  1524  (the  "Notice"),  the  Commission 


 announced  that  it  waf  seeking  comment  regarding  whether  certain  of  its  rules  adopted  in  1993, 
 1994  and  1995  shoul~  be  continued  without  change,  or  should  be  amended  or  rescinded.  The 
 purpose  of  the  revier,  as  explained  in  the  Notice,  is  "to  minimize  any  significant  economic 
 impact  of  such  rules  upon  a  substantial  number  of  small  entities."  Notice  at  1.  The  Notice  also 
 indicated  that  only  a  s~  ngle  round  of  comments  would  be  entertained  in  this  proceeding. 
 Because  there  Iwill  be  no  opportunity  to  file  reply  comments,  the  National  Association  of 
 Telecommunications  pfficers  and  Advisors  ("  NATOA")  and  the  Mt.  Hood  Cable  Regulatory 
 Commission  (collectiyely,  the  "Local  Governments")  1  file  these  comments  not  only  to  address 


 1  The  Nation  Association  of  Telecommunications  Officers  and  Advisors  (NATOA)  is  a 
 national  association  that  represents  the  communications  needs  and  interests  of  local 
 governments.  The  m  mbership  is  predominantly  composed  of  local  government  agencies,  local 
 government  staff  an  public  officials,  as  well  as  consultants,  attorneys,  and  engineers  who 
 consult  with  local  g  vernments  on  their  communications  needs.  Government  members  have 
 responsibilities  that  r  ge  from  cable  administration,  telecommunications  franchising,  right-  of-way 
 management  and  governmental  access  programming  to  information  technologies  and  I-  Net 
 planning  and  manage  ent.  NATOA's  membership  also  includes  not-  for-  profit  organizations 
4
 certain  of  the  Co~  ission's  rules  directly,  but  also  in  anticipation  of  comments  that  may  be 
 made  by  other  partie~. 
 The  Local  Gpvernments  are  pleased  to  participate  in  this  proceeding  and  applaud  the 
 Commission's  readi,  ess  to  re-  examine  its  regulations  to  detennine  whether  they  continue  to 
 serve  useful  purposefo  It  should  be  noted,  however,  that  the  Notice  does  not  provide  full  notice 
 and  opportunity  to  cfmment  in  the  sense  required  under  the  Administrative  Procedures  Act  for 
 regulatory  actions.  2  ~f  the  Commission  concludes  that  rules  should  be  eliminated  or  revised,  it 
 will  be  necessary  to  ~rovide  public  notice  of  the  proposed  changes  and  provide  interested  parties 
 an  opportunity  to  co~  ent. 
 NA  TOA  and  tts  member  communities  made  numerous  filings  in  the  original  proceedings 
 that  gave  rise  to  the  rfIes  under  review.  These  comments,  and  those  of  other  parties,  contributed 
 to  the  original  ratio~  a1es  for  the  subject  rules  and  should  not  be  ignored  in  reviewing  their 
 continued  applicabili~.  The  Local  Governments  incorporate  these  earlier  filings  by  reference  as 
 part  of  the  answer  to  fhe  question  of  the  continued  need  for  each  of  the  rules  they  will  address  in 
 this  proceeding.  3 


 whose  needs  and  in  erests  are  complementary  to  those  of  NATOA's  government  members; 
 vendors  to  local  gov  rnments;  and  communications  providers  of  all  types  of  services  to  local 
 governments.  The  t.  Hood  Cable  Regulatory  Commission  is  a  governmental  entity  that  administers  cable  fr  chise  agreements  in  Multnomah  County  and  the  Cities  of  Fairview, 


 Gresham,  Portland,  T  outdale  and  Wood  Village,  Oregon. 
 2  See  5  U.  S.  C.  I  553 


 3  Comments  !  the  National  Association  of  Telecommunications  Officers  and  Advisors, 
 National  League  of  ities,  United  States  Conference  of  Mayors  and  National  Association  of 
 Counties,  Implement  tion  of  the  Cable  Consumer  Protection  and  Competition  Act  of  1992, 
 Broadcast  Signal  Carriage  Issues,  MM  Docket  No.  92-  259,  filed  January  4,  1993  ("  1992  Rate 
 Regulation  Comment  ");  Reply  Comments  of  the  National  Association  of  Telecommunications 
 Officers  and  Adviso  s,  National  League  of  Cities,  United  States  Conference  of  Mayors  and 
 National  Association  of  Counties,  Implementation  of  the  Cable  Consumer  Protection  and 
 Competition  Act  of  992,  Broadcast  Signal  Carriage  Issues,  MM  Docket  No.  92-  259,  filed 


 2 
5
 Finally,  thes+  comments  will  of  necessity  focus  on  certain  rules  that  are  of  central 
 importance  from  the  ~oca1  Governments'  point  of  view.  However,  silence  as  to  other  rules  listed 
 in  the  Notice  should  I  not  be  assumed  by  the  Commission  to  mean  that  the  Local  Governments 
 consider  all  such  rulFs  dispensable.  Given  limited  resources  and  the  very  broad  scope  of  the 
 Notice,  the  Local  Gorernrnents  have  chosen  to  address  themselves  to  a  key  subset  of  the  rules  at 
 Issue. 


 January  19,  1993  ('  1992  Rate  Regulation  Reply  Comments");  Comments  of  the  National 
 Association  of  Telec  mmunications  Officers  and  Advisors,  National  League  of  Cities,  United 
 States  Conference  of  Mayors  and  National  Association  of  Counties,  Implementation  of  Section  8 
 of  the  Cable  Televisi  n  Consumer  Protection  and  Competition  Act  of  1992,  Consumer  Protection 
 and  Customer  Servic  ,  MM  Docket  No.  92-  263,  filed  January  11,  1993  ("  Consumer  Protection 
 Comments");  Co  ents  of  the  National  Association  of  Telecommunications  Offices  and 
 Advisors,  the  Natio  al  League  of  Cities,  the  United  States  Conference  of  Mayors  and  the 
 National  Association  of  Counties,  In  the  Matter  of  Implementation  of  Sections  11  and  13  of  the 
 Cable  Television  Co  umer  Protection  and  Competition  Act  of  1992,  Horizontal  and  Vertical 


 Ownership  Limits,  oss-  Ownership  Limitations  and  Anti-  Trafficking  Provisions,  MM  Docket  No.  92-  264,  filed  F  bruary  9,  1993  and  August  23,  1993  ("  Ownership  Comments");  Reply 


 Comments  of  the  ational  Association  of  Telecommunications  Offices  and  Advisors,  the 
 National  League  of  ities,  the  United  States  Conference  of  Mayors  and  the  National  Association 
 of  Counties,  In  the  atter  of  Implementation  of  Sections  11  and  13  of  the  Cable  Television 
 Consumer  Protection  and  Competition  Act  of  1992,  Horizontal  and  Vertical  Ownership  Limits, 
 Cross-  Ownership  Li  itations  and  Anti-  Trafficking  Provisions,  MM  Docket  No.  92-  264,  filed 
 March  3,  1993  ("  0  ership  Reply  Comments");  Anti-  trafficking  Petition  for  Reconsideration  of 
 the  National  Associ  ion  of  Telecommunications  Offices  and  Advisors,  the  National  League  of 
 Cities,  the  United  S  tes  Conference  of  Mayors  and  the  National  Association  of  Counties  filed 
 September  7,  1993  "Anti-  Trafficking  Petition");  Comments  of  the  National  Association  of 
 Telecommunications  fficers  and  Advisors,  the  National  League  of  Cities,  and  the  Miami  Valley 
 Cable  Council,  In  the  Matter  of  Revisions  to  Cable  Television  Rate  Regulation,  MB  Docket  No. 
 02-  144,  MM  Docket  No.  92-  266,  MM  Docket  No.  93-  215,  CS  Docket  No.  94-  28,  CS  Docket 
 No.  96-  157  (Nove  ber  4,  2002)  ("  2002  Rate  Regulation  Comments");  Comments 
 ACM/  NA  TOA,  In  th  Matter  of  Annual  Assessment  of  the  Status  of  Competition  in  the  Market 
 for  the  Delivery  0  Video  Programming,  MB  Docket  No.  04-  227,  filed  July  23,  2004 
 ("  Competition  Repo  Comments");  ACM/  NA  TOA  Reply  Comments,  In  the  Matter  of  Annual 
 Assessment  of  the  St  tus  of  Competition  in  the  Market  for  the  Delivery  of  Video  Prog1'amming, 
 MB  Docket  No.  04-  2  7,  filed  Aug.  25,  2004  ("  Competition  Reply  Comments"). 


 3 
6
 II.  THE  REVIEW'S  FOCUS  ON  "SMALL  ENTITIES"  IMPLIES  INCREASED 
 ATTENTIO~  TO  THE  NEEDS  OF  CONSUMERS. 


 The  Notice,  Qiting  to  Section  610  of  the  Regulatory  Flexibility  Act  ("  RFA"),  5  V.  S.  C.   


 substantial  number  ~f  small  entities."  Notice  at  ~  1.  This  statement  may  suggest  that  the 
 Commission  assum~  s  the  primary  effect  of  the  review  should  be  to  reduce  costs  for 
 communications  companies.  On  the  contrary,  however,  in  today's  communications  market,  a 
 focus  on  small  entiti~  s  means  that  the  Commission  should  consider  changes  that  would  make  the  : 
 rules  more  responsiv~  to  consumers,  which  mayor  may  not  equate  to  a  reduction  of  costs  for 
 vendors. 
 Given  the  ex~  ensive  consolidation  of  the  last  ten  years,  a  far  smaller  portion  of  the 
 communications  market  is  now  composed  of  "small  entities"  than  was  the  case  in  1993-  1995 
 The  RF  A  definition  ~f  a  "small  entity"  relies  on  the  definitions  established  for  "small  business" 
 , 
 by  the  Small  Busin~  ss  Administration.  See  5  V.  S.  C.    601(  6).  These  definitions  classify 


 businesses  as  "small"  lbased  on  the  number  of  their  employees  or  their  annual  receipts  in  millions 
 of  dollars.  For  example,  to  qualify  as  a  small  entity,  a  cable  company  must  have  no  more  than 
 $12.5  million  in  ann~  a1  receipts.  A  wired  telecommunications  carrier  or  cellular  company  may 
 4  have  no  more  than  11,500  employees.  Yet  today  fewer  and  fewer  citizens  are  served  by 


 providers  of  this  size.  The  companies  remaining  in  these  industry  classifications  are  the  winners 
 of  significant  consolidation  battles.  The  contemporary  communications  market  contains 
 relatively  few  vendor$  of  the  size  that  the  RFA  was  intended  to  protect. 
 On  the  other  hand,  many  of  the  "small  entities"  subject  to  the  noticed  rules  are  local 


 governments.  The  RF  A  defines  small  governmental  jurisdictions  as  "governments  of  cities. 


 4  i  13  C.  F.  R.    ~21.201 
 4 
7
 counties,  towns,  townships,  villages,  school  districts,  or  special  districts,  with  a  population  of 
 less  than  fifty  thousand."  s  These  local  governments  must  also  be  considered  in  evaluating  the 


 impact  of  a  rule  under  the  RF  A.  The  rules  under  review  affect  over  37,000  such  small 
 governmental  entities.  6  Thus,  the  predominant  consideration  in  the  Commission's  RFA  review 
 of  its  rules  should  be  the  effect  on  small  communities.  And  a  primary  role  of  the  local 
 government  in  such  a  community  is  to  protect  its  citizens  from  unreasonable  or  improper 
 treatment  by  businesses  -particularly  businesses  able  to  exercise  some  degree  of  market  power. 
 At  the  same  time,  however,  customers  of  small  entities  should  not  be  afforded  less  protection 
 than  customers  of  large  entities.  (For  example,  the  needs  of  a  given  consumer  in  an  emergency 
 for  which  an  emergency  alert  is  required  do  not  differ  based  upon  the  size  of  the  entity  providing 
 service.)  Thus,  the  Commission's  review  should  keep  always  in  mind  the  effects  of  its  rules  on 
 consumers,  whether  those  individuals  are  dealing  with  small  businesses  or  with  the  very  large 
 businesses  that  make  up  most  of  the  communications  sector  today. 


 III.  EMERGENCY  ALERT  SYSTEM  STANDARDS  MUST  BE  UPHELD  FOR  SMALL  COMMUNITIES  AS  WELL  AS  LARGE. 
 Starting  at  page  9  of  the  Notice  and  continuing  for  three  pages,  the  Commission  asks 
 whether  there  is  a  continued  need  for  specific  Emergency  Alert  System  ("  EAS")  rules, 
 specifications  and  testing  procedures.  In  fact  there  is  a  greater  need  today  than  in  earlier  years 
 for  standards,  specifications  and  testing  for  emergency  communications.  Furthermore,  the  rules 
 must  be  able  to  keep  up  with  technological  developments  and  the  variety  of  communications 
 systems  now  in  use. 


 55  V.  S.  C.    601(  5). 


 5 
8
 One  need  not  I  look  back  to  the  devastation  of  September  11,  2001,  as  the  sole  justification 
 for  the  expanded  nee~  for  EAS.  As  these  comments  are  being  prepared,  the  City  of  New  Orleans 
 and  its  neighbors  are  I  coping  with  a  natural  disaster  of  extraordinary  magnitude.  These  examples 
 underline  the  generat  principle  that  both  small  communities  and  large  must  be  able  to  rely  on 
 EAS  alerts  to  play  a  ~ole  in  coping  with  such  events. 
 Thus,  there  isla  continued,  ifnot  enhanced,  need  for  EAS  systems  today.  Yet  it  is  easy  to 
 neglect  EAS  needs  dpnng  quiet  periods.  An  EAS  is  by  definition  a  system  that  one  needs  only 
 from  time  to  time  -Ibut  when  it  is  needed,  it  is  really  necessary.  Unless  the  Commission  can 
 determine  that  c  mn1unications  providers  will  have  sufficient  economic  incentives  to  maintain 
 EAS  in  good  worki*  order  at  all  times  without  regulatory  requirements,  it  will  need  to  retain 
 sufficient  requireme,  ts  to  ensure  that  large  and  small  communities'  EAS  will  be  ready  to 
 function  in  an  emerg~  ncy, 
 For  these  re~  ons,  EAS  rule  changes  should  focus  on  the  most  effective  and  efficient 
 ways  to  ensure  EASI  functionality,  rather  than  on  minimizing  economic  impacts  to  providers. 
 This  approach  requirfs  careful  attention  to  the  technical  aspects  of  changing  technologies.  For 
 example,  as  recently  I  as  August  2,  2005,  NATOA  leadership,  accompanied  by  representatives 
 from  the  National  C~  ble  &  Telecommunications  Association  (NCTA),  met  with  Commission 
 staff  to  address  spec~  fic  technical  questions  regarding  digital  cable  technology  to  be  used  to 
 enhance  warnings,  ~d  how  digital  cable  provides  the  ability  to  provide  enhanced  emergency 


 6  See  U.  S.  D  ~  Partment  of  Commerce,  Economics  and  Statistics  Administration,  U.  S. 
 Census  Bureau,  200  Census  of  Governments,  Vol.  1  Number  1,  Government  Organization 
 GC02  (1)-  1  at  7-  10,  abIes  6  and  7. 


 6 
9
 information  to  the  prblic.  7  Such  cooperative  efforts  should  result  in  better  and  more  effective 
 rules. 


 The  Commisfion  must  be  wary  of  special  exceptions  for  small  businesses  in  this  area.  In 


 are  served  by  small  I  entities.  While  the  economic  impact  of  regulations  may  legitimately  be 
 taken  into  account,  qe  importance  of  the  EAS  to  those  suffering  from  extraordinary  events  must 
 carry  significant  weight  with  the  Commission. 


 IV.  THE  COMMISSION  MUST  RESPECT  THE  NEEDS  OF  CONSUMERS  IN  SMALL  COMMUNITIES  WITH  RESPECT  TO  PART  76  ISSUES. 


 A. 
 Program  Access 
 As  NATOA  ~as  noted  in  other  proceedings,  8  cable  operators  are  known  to  engage  in  a 


 variety  of  anticompe~  itive  tactics  to  thwart  competition.  The  use  of  exclusive  contracts  to  deny 
 competitors  access  to  essential  content  remains  a  significant  problem  and  will  threaten 
 competition  unless  s,  ch  exclusivity  is  controlled  to  prevent  misuse.  9  The  Commission  should 
 therefore  retain  its  rutes  governing  program  access,  as  required  by  the  Act.  Further,  as  NATOA 
 has  previously  noted,  1  the  Commission  should  launch  a  comprehensive  inquiry  to  determine  the 
 extent,  causes,  and  s9lutions  to  the  anticompetitive  tactics  of  incumbents  and  should  exercise  its 
 full  authority  to  elimi~  ate  such  tactics. 


 7  See  letter  fr~  m  Elizabeth  Beaty,  NATOA  Executive  Director,  to  Marlene  H.  Dortch, 
 Secretary,  in  EB  Doc*  et  No.  04-  296,  dated  August  3,  2005. 
 8  See,  e.  g.,  ~CM/  NATOA  Competition  Report  Comments,  filed  July  23,  2004; 
 ACM/  NATOA  Compptition  Reply  Comments,  filed  Aug.  25,  2004. 
 9  ACM/  NAT  t  A  Competition  Report  Comments  at  20,  filed  July  23,  2004.  See  also 
 Comments  of  Amen  an  Cable  Association  at  3-  6;  Comments  of  Broadband  Service  Providers 
 Association  at  12-  14;  Comments  of  EchoStar  at  10-  13;  Comments  of  National 
 Telecommunications  ooperative  Association  at  3;  Comments  ofRCN  at  14. 


 '7 
10
 In  addition,  NA  TOA  and  others  have  described  problems  relating  to  the  "terrestrial 
 loophole"  in  the  Cable  Act's  program  access  provisions  and  the  Commission's  rules.  lO  If  the 
 Commission  believes  it  has  insufficient  authority  to  close  this  loophole,  the  Local  Governments 
 suggest  that  the  Commission  make  a  clear  recommendation  to  Congress  to  do  so. 


 B. 
 Signal  Carriage  Obligations 
 NA  TOA  was  an  active  participant  in  the  proceedings  that  resulted  in  adoption  of  47  CFR 


   76.56  and  76.61.11  NATOA's  primary  goal  was  to  ensure  that  public,  educational  and 
 governmental  ("  PEG")  channels  were  not  sacrificed  in  the  name  of  other  "must 
 The  Local  Governments  reaffinn  here  the  unique  nature  and  importance  of  PEG  obligations. 
 channels  and  reemphasize  that  PEG  should  not  be  sacrificed  to  assist  other  programmers  in 


 achieving  must-  carry  status. 
 In  developing  the  Cable  Act,  which  directed  the  FCC  to  craft  a  signal  carriage  obligation, 
 Congress  recognized  the  unique  qualities  of  PEG.  The  1984  House  Report  stated: 
 Public  access  channels  are  often  the  video  equivalent  of  the  speaker's  soap  box  or  the 
 electronic  parallel  to  the  printed  leaflet.  They  provide  groups  and  individuals  who 
 generally  have  not  had  access  to  the  electronic  media  with  the  opportunity  to  become 
 sources  of  information  in  the  electronic  marketplace  of  ideas.  PEG  channels  also 
 contribute  to  an  informed  citizenry  by  brin~  ing  local  schools  into  the  home,  and  by  showing  the  public  local  government  at  work.  2 


 The  Commission's  Chairman  has  also  lauded  the  kind  of  localism  that  PEG  programming 
 enhances  and  promotes: 


 lOId. 
 See  a/  so  1992  11  1992  Rate  Regulation  Comments,  filed  January  4,  1993 
 Regulation  Reply  Comments,  filed  January  19,  1993. 


 12  H.  R.  Rep.  No.  98-  934,  98th  Cong.,  2d  Sess.  30  (1984),  reprinted  in  1984  U.  S.  C.  C.  A.  N. 
 4655,  4667. 


 8 
11
 Fostering  localism  is  one  of  the  Commission's  core  missions  and  one  of  the  three  policy 
 goals,  along  with  diversity  and  competition,  which  have  driven  our  radio  and  television  broadcast  regulation  during  the  last  70  years.  13 


 These  concerns  have  been  more  recently  enunciated  in  the  comments  of  the  Alliance  for 
 Community  Media  ("  ACM")  in  MM  Docket  No.  04-  233.14  ACM  pointed  out  that  Congress' 
 vision  of  PEG  has  become  a  reality  in  many  communities.  "[  I]  ndividuals  from  all  walks  of  life 
 now  produce  over  one  million  hours  of  original,  non-  commercial,  local  programming  each  year. 
 This  is  happening  on  cable  systems  from  coast  to  coast,  in  large  cities  such  as  New  York  City 
 and  Chicago  and  in  small  communities  such  as  Gennantown,  Tennessee  and  Monterey, 
 California.,,  15  ACM  reminded  the  Commission,  however,  that  small  access  entities  and  small 
 communities  may  have  particular  difficulty  in  preserving  these  programs  in  the  face  of 
 increasing  industry  concentration:  "The  top  three  cable  MSOs  that  currently  control  well  over 
 half  (almost  40  million)  of  the  cable  subscribers  in  the  u.  s.  -Comcast,  Time  Warner  and  Cox-have 
 lengthy  track  records  of  actively  and  ardently  opposing  efforts  by  communities  to 
 adequately  develop  and  support  PEG  Access  operation.,,  16 
 The  Commission's    610  review  must  consider  the  effect  of  its  rules  on  small  access 


 The  entities  and  small  communities,  not  merely  the  increasingly  rare  small  cable  operator. 
 Commission  should  thus,  among  other  things,  take  no  actions  that  might  jeopardize  the  ability  of 


 13  In  the  Matter  of  Broadcast  Localism,  MM  Docket  No.  04-  233,  FCC  04-  129,  Statement 
 of  Chainnan  Michael  K.  Powell  to  accompany  release  of  Notice  of  Inquiry,  released  July  1, 
 2004. 


 14  Comments  of  the  Alliance  for  Community  Media,  In  the  Matter  of  Broadcast 
 Localism,  MM  Docket  No.  04-  233,  filed  October  27,  2004. 
 15  Id  at  3 


 16Id  at  5. 
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 PEG  programmers  to  be  carried  on  the  basic  tier  of  cable  programming  and  on  an  acceptable  and 
 accessible  channel.  17 


 c. 
 Customer  Service  Obligations 
 In  Section  76.309,  the  FCC  established  a  minimum  set  of  consumer  protection  standards 


 for  telephone  availability,  installations,  service  calls,  and  the  like.  I8  These  standards  have  been 
 implemented  and  enforced  by  local  franchising  authorities,  including  the  kinds  of  small 
 communities  referred  to  above.  Section  76.309  has  been  effective  in  ensuring  minimum  national 
 standards  for  cable  customer  service  for  consumers  served  by  both  large  and  small  operators. 
 The  Notice  asks  whether  47  C.  F.  R.    76.309  has  a  continued  role  to  play  in  protecting 
 consumers.  The  answer  is  yes.  While  competition  is  the  best  consumer  protection  mechanism,  it 
 will  not  necessarily  prevent  all  abuses,  particularly  where  a  very  limited  set  of  providers  choose 
 to  compete  on  grounds  other  than  quality  of  service.  And,  contrary  to  popular  belief, 
 communities  do  not  yet  have  meaningful  or  truly  effective  competition  in  the  cable  service 
 19  arena. 


 NATOA  was  an  active  participant  in  MM  Docket  No.  92-  263,  the  proceeding 
 resulted  in  adoption  of  Section  76.309!  O  NATOA  asserted  at  that  time,  and  the  Local 
 Governments  continue  to  believe,  that  specific  standards  are  needed  to  ensure  adequate  customer 


 17  See  47  C.  F.  R.    76.57. 
 18  The  Cable  Act  expressly  recognizes  the  authority  of  local  governments  to  enact  and 
 enforce  customer  service  standards  for  MVPDs.  See  47  V.  S.  C.    552(  a).  These  provisions 
 reflect  the  understanding  of  Congress  that  both  local  and  national  customer  service  standards  are 
 essential  to  protect  consumers  from  poor  service. 


 19  The  Government  Accounting  Office  found  in  a  case  study  that  where  actual  wireline 
 competition  was  present,  customer  service  was  improved.  See  U.  s.  General  Accounting  Office, 
 Wire-  Based  Competition  Benefited  Consumers  in  Selected  Markets,  at  4,  13  (Feb.  2004). 


 20  Consumer  Prorection  Comments,  filed  January  11,  1993,  at  2. 


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 service  throughout  the  country  regardless  of  the  size  of  the  cable  operator  serving  the 
 community.  Moreover,  small  communities  as  well  as  large  must  be  able  to  develop  the  standards 
 necessary  to  target  specific  abuses  and  issues  that  may  develop  in  particular  communities, 
 The  Notice  indicates  that  the  Commission  will  consider  whether  small  entities  have 
 complained  about  a  rule  in  determining  whether  that  rule  should  be  retained,  amended  or 
 rescinded.  The  record  already  shows,  however,  that  in  this  area  such  complaints  have  not  been 
 numerous.  In  2002,  dismissing  a  reconsideration  petition  filed  by  the  National  Cable  & 
 Telecommunications  Association  and  a  Small  System  Operators  Coalition,  the  FCC  found  that  in 
 the  nine  years  between  the  filing  of  the  petition  and  the  decision  there  was  a  noticeable  lack  of 
 "objections  put  forth  by  petitioners.,,  21  Nor  have  such  objections  surfaced  in  large  numbers  since 


 2002. 
 D.  Franchise  Transfers 
 Cable  franchises  and  local  ordinances  normally  require  cable  companies,  regardless  of 


 size,  to  obtain  prior  approval  from  the  local  franchising  authority  before  transferring  control  of  a 
 local  franchise  or  transferring  the  franchise  itself?  2  Small  communities,  with  more  limited 
 resources  to  devote  to  monitoring  and  enforcing  franchise  requirements,  are  particularly 
 dependent  on  the  ability  to  understand  and  control  who  owns  their  cable  systems  and  what 
 practical  effects  this  change  may  have  on  the  operation  of  those  systems,  in  a  market  where 
 increasingly  large  cable  companies  exercise  increasingly  centralized  control  over  local 


 operations.  Thus,  a  community  must  have  a  reasonable  opportunity  to  consider  whether 


 21  Implementation  of  Section  8  of  the  Cable  Television  Consumer  Protection  and 
 Competition  Act  of  1992:  Consumer  Protection  and  Customer  Service,  17  FCC  Rcd  11,916  (MM 
 Docket  No.  92-  263  )  released  June  24,  2002,  at  ~  1. 


 22  See  generally  Charter  Communications,  Inc.  v.  County  of  Santa  Cruz,  304  F  3d  927 
 (9th  Cir.  2002). 
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 approval  of  a  proposed  transfer  is  in  the  public  interest,  including  a  fair  chance  to  resolve  any 
 outstanding  perfonnance  problems  or  noncompliance  issues. 
 Section  76.502  of  the  Commission's  rules  appears  to  require  a  cable  operator  to  file  a 
 complete  account  of  the  proposed  transaction  in  order  to  trigger  the  statutory  120-  day  deadline 
 and  to  respond  in  good  faith  to  the  community's  questions.  In  practice,  however,  cable  operators 
 have  taken  advantage  of  alleged  ambiguities  in  the  Commission's  rules  and  forms  to  file  patently 
 incomplete  transfer  applications  and  to  claim  that  communities  have  only  thirty  days  to  review 
 these  incomplete  descriptions  before  they  must  raise  issues  and  questions  with  the  companies. 
 The  Commission  should  consider  amending  its  rules  to  eliminate  these  loopholes  and  ensure  that 
 operators  provide  all  the  information  a  community  has  indicated  to  be  necessary  before 
 commencing  the  120-  day  review  process,  as  the  statute  requires?  3 
 The  need  for  an  orderly  transfer  process,  regardless  of  the  size  of  a  community  or  its  operator, 
 is  just  as  valid  in  2005  as  it  was  in  1993. 


 E.  Horizontal  and  Vertical  Cable  Ownership  Caps 
 The  1992  Cable  Act  directed  the  Commission  to  establish  limits  on  the  number  of 


 subscribers  a  cable  operator  may  serve  and  on  the  number  of  channels  a  cable  operator  may 
 devote  to  affiliated  programming.  The  Commission  created  such  limits  as  a  means  to  foster 
 competition  and  diversity  in  the  video  programming  market.  See  47  C.  F.  R.    76.503,  76.504. 
 These  rules,  however,  were  vacated  in  2001,  when  the  D.  C.  Circuit  detennined  that  the 
 Commission's  prior  limits  had  not  been  adequately  supported  and  that  the  Commission  had  not 


 23  Ownership  Comments,  filed  February  9,  1993  and  August  23,  1993;  Ownership  Reply 
 Comments,  filed  September  7,  1993.  There,  NATOA  and  other  representatives  of  local 
 communities  showed  that  franchise  authorities  must  have  a  fair  opportunity  to  approve  or 
 disapprove  a  cable  franchisee's  request  to  transfer  the  franchise.  Local  governments  also  showed 
 that  the  blanket  waiver  for  small  systems  contemplated  in  the  Commission's  initial  order  in  the 
 proceeding  was  contrary  to  the  intent  of  Congress. 


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 sufficiently  considered  changes  in  the  multichannel  video  programming  distribution  market.  24 
 The  Commission  has  initiated  a  new  proceeding  to  reinstate  the  rules  in  a  way  that  is  consistent 
 with  the  court's  ruling. 
 It  is  not  clear  to  the  Local  Governments  why  the  pertinent  rules,    76.503  and  76.504,  are 
 listed  in  this  proceeding.  While  they  were  adopted  within  the  time  frame  outlined  in  the  Notice, 
 by  definition  neither  would  apply  to  a  small  business  entity.  Thus,  the  Local  Governments  do  not 
 see  this  review  as  significantly  affecting  the  Commission's  reconsideration  of  its  ownership  rules 
 in  the  ongoing  proceeding  on  that  subject. 


 F.  Cable  Rate  Regulation 
 NATOA  has  previously  provided  comments  to  the  Commission  on  corrections  and 


 improvements  to  its  rate  regulation  rules!  5  If  anything,  those  comments  showed  that  small 
 communities  were  unreasonably  disadvantaged  by  the  expense  and  difficulty  of  enforcing  the 
 Commission's  rules.  Yet  Congress  intended  cable  rate  rules  to  protect  consumers  of  both  large 
 and  small  cable  operators.  The  Local  Governments  incorporate  their  previous  comments  by 
 reference  and  ask  that  the  Commission  implement  the  changes  called  for  in  those  comments. 


 G.  Effective  Competition 
 NATOA's  previous  comments  have  also  shown  that  the  Commission's  rulings  have 


 essentially  gutted  the  effective  competition  provisions  of  the  statute,  to  the  detriment  of 
 consumers  in  both  large  and  small  communities.  Moreover,  they  have  undercut  the  ability  of 


 24  Time  Warner  v.  FCC,  240  F.  3d  1126  (D.  C.  Cir.  2001). 
 25  See,  e.  g.,  2002  Rate  Regulation  Comments,  filed  November  4,  2002. 


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 small  entities  to  compete  with  larger  systems  by  prematurely  unleashing  incumbent  MSOs  to 
 employ  anti  competitive  practices.  26 


 operators,  both  large  and  small,  from  a  number  of  regulatory  constraints  in  markets  where 
 "effective  competition"  exists.  When  a  cable  system  is  found  to  be  subject  to  effective 
 competition,  not  only  is  basic  rate  regulation  eliminated,  but  so  are  the  protections  of  anti-  buy-through 
 provisions,  which  prevent  cable  operators  from  forcing  subscribers  to  buy  service  tiers 
 other  than  basic  to  obtain  additional  programming,  and  of  unifonn  rate  provisions  to  ensure  a 
 common  rate  structure  for  all  subscribers  in  a  geographic  area.  In  the  absence  of  real 
 competition,  such  premature  action  enables  predatory  conduct,  leads  to  higher  rates,  and  creates 
 consumer  frustration.  This  banns  not  only  consumers,  but  also  overbuild  competitors,  some  of 
 which  may  also  meet  the  standard  for  small  entities.  27  A  premature  finding  of  "effective 
 competition"  gives  the  MSO  incumbent  the  unfettered  ability  to  undercut  a  nascent  small  entity 


 competition  and  encouraging  prices  to  return  to  monopoly  levels. 
 The  Local  Governments  refer  the  Commission  to  NATOA's  previous  comments  with 
 respect  to  the  competition  rules. 


 v.  EQUAL  EMPLOYMENT  OPPORTUNTY  REQUIREMENTS  CANNOT  BE  DISPENSED  WITH  FOR  SMALL  BUSINESSES. 
 The  Notice  at  17  explains  that  under    25.601,  satellite  services  must  comply  with  the 
 equal  employment  opportunity  ("  EEO")  requirements  set  forth  in  part  76  of  the  Commission's 


 26  See  Competition  Report  Comments,  filed  July  23,  2004;  2002  Rate  Regulation 
 Comments,  filed  November  4,  2002,  at  pp.  26-  36. 


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 rules.  Here  the  congressional  mandate  for  EEO  is  instructive.  In  1992  Congress  not  only 
 recognized  the  importance  of  EEO  policy  goals  for  the  nation,  but  also  set  a  threshold  for 
 compliance  at  companies  with  five  or  more  full-  time  employees,  rather  than  the  150  employees 
 referenced  in  the  SBA'  s  definition  of  a  small  business.  28  Thus,  the  Commission  should  be 
 careful  of  claims  that  it  should  abandon  EEO  standards  entirely  for  small  businesses. 


 27  NA  TOA  has  provided  the  Commission  with  examples  of  such  predatory  practices.  See 
 NATOA's  2004  comments  cited  in  n.  2Q  above. 
 28  47  U.  S.  C.    554  (d)(  3)(  A)  provides:  "Such  (FCC  EEO)  rules  shall  require  an  entity 
 specified  in  subsection  (a)  with  more  than  5  full-  time  employees  to  file  with  the  Commission  an 
 annual  statistical  report"  on  its  compliance  with  the  EEO  rules;  see  47  C.  F.  R    76.73,  76.75, 
 76.77. 


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 VI.  CONCLUSION 
 For  the  foregoing  reasons,  the  Commission's  rules  outlined  in  the  Notice  should  be 


 retained  or  amended  where  necessary  to  protect  consumers,  particularly  in  small  communities, 
 and  to  address  the  defects  identified  by  these  comments  and  by  NATOA's  previous  filings. 


 Respectfully  submitted, 


 Frederick  E.  Ellrod  III  Gerard  Lavery  Lederer 
 Miller  &  VanEaton,  P  .L.  L.  C.  1155  Connecticut  Avenue,  N.  W.,  Suite  1000 
 Washington,  D.  C.  20036-  4306 
 202-  785-  0600 


 Counsel  for  the  National  Association  of  Telecommunications  Officers  And  Advisors  and 
 Mt.  Hood  Cable  Regulatory  Commission 
 September  1,  2005 


 16 
19
 CERTIFICATION  PURSUANT  TO  47  C.  F.  R.    76.6(  a)(  4) 
 The  below-  signed  signatory  has  read  the  foregoing  Comments  of  the  National  Association  of 
 Telecommunications  Officers  and  Advisors  and  Mt.  Hood  Cable  Regulatory  Commission,  and, 
 to  the  best  of  my  knowledge,  information  and  belief  formed  after  reasonable  inquiry,  it  is  well 
 grounded  in  fact  and  is  warranted  by  existing  law  or  a  good  faith  argument  for  the  extension, 
 modification  or  reversal  of  existing  law;  and  it  is  not  interposed  for  any  improper  purpose. 


 Respectfully  submitted, 


 "'!:;  '--  l  :,(  2  ~.  C~~  4~~.  I,  2.  00  s-" 
 Date  Frederick  E.  Ellrod  III,  Esq. 
 Miller  &  VanEaton,  P  .L.  L.  C. 
 1155  Connecticut  Avenue,  N.  W. 
 Suite  1000 
 Washington,  D.  C.  20036-  4306 
 202-  785-  0600 


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