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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of )
Mediacom Southeast LLC ) CSR
6893-E
Petition for Determination of Effective Competition in )
Various Alabama Communities
)
)
MEMORANDUM OPINION AND ORDER
Adopted: February 24, 2009 Released: February 25, 2009
By the Senior Deputy Chief, Policy Division, Media Bureau:
I. introduction and Background
1. Mediacom Southeast LLC ("Mediacom") , hereinafter referred to as
"Petitioner," has filed with the Commission a petition pursuant to
Sections 76.7, 76.905(b)(2), 76.905(b)(1) and 76.907 of the
Commission's rules for a determination that Petitioner is subject to
effective competition in those communities listed on Attachment A and
hereinafter referred to as "Communities." Petitioner alleges that its
cable system serving the Communities is subject to effective
competition pursuant to Section 623(1) of the Communications Act of
1934, as amended ("Communications Act") and the Commission's
implementing rules, and is therefore exempt from cable rate regulation
in the Communities because of the competing service provided by two
direct broadcast satellite ("DBS") providers, DirecTV, Inc.
("DirecTV") and Dish Network ("Dish"). Petitioner alternatively
claims to be exempt from cable rate regulation in Baldwin County
listed on Attachment B because the Petitioner serves fewer than 30
percent of the households in the franchise area. The petition is
opposed by Baldwin County.
2. In the absence of a demonstration to the contrary, cable systems are
presumed not to be subject to effective competition, as that term is
defined by Section 623(l) of the Communications Act and Section 76.905
of the Commission's rules. 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. For the reasons set forth below, we grant the
petition based on our finding that Petitioner is subject to effective
competition in the Communities listed on Attachments (A and B).
II. DISCUSSION
A. The Competing Provider Test
3. Section 623(l)(1)(B) of the Communications Act provides that a cable
operator is subject to effective competition if the 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 15 percent of the households in the franchise area; this test
is otherwise referred to as the "competing provider" test.
4. The first prong of this test has three elements: the franchise area
must be "served by" at least two unaffiliated MVPDs who offer
"comparable programming" to at least "50 percent" of the households in
the franchise area.
5. Turning to the first prong of this test, it is undisputed that these
Communities are "served by" both DBS providers, DIRECTV and Dish, and
that these two MVPD providers are unaffiliated with Petitioner or with
each other. A franchise area is considered "served by" an MVPD if that
MVPD's service is both technically and actually available in the
franchise area. DBS service is presumed to be technically available
due to its nationwide satellite footprint, and presumed to be actually
available if households in the franchise area are made reasonably
aware of the service's availability. The Commission has held that a
party may use evidence of penetration rates in the franchise area (the
second prong of the competing provider test discussed below) coupled
with the ubiquity of DBS services to show that consumers are
reasonably aware of the availability of DBS service. We further find
that Petitioner has provided sufficient evidence of DBS advertising in
local, regional, and national media that serve the Communities to
support their assertion that potential customers in the Communities
are reasonably aware that they may purchase the service of these MVPD
providers. The "comparable programming" element is met if a competing
MVPD provider offers at least 12 channels of video programming,
including at least one channel of nonbroadcast service programming and
is supported in this petition with copies of channel lineups for both
DIRECTV and Dish. Also undisputed is Petitioner's assertion that both
DIRECTV and Dish offer service to at least "50 percent" of the
households in the Communities because of their national satellite
footprint. Accordingly, we find that the first prong of the competing
provider test is satisfied.
6. 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.
Petitioner asserts that it is the largest MVPD in the Communities.
Petitioner sought to determine the competing provider penetration in
the Communities by purchasing a subscriber tracking report from the
Satellite Broadcasting and Communications Association ("SBCA") that
identified the number of subscribers attributable to the DBS providers
within the Communities on a zip code plus four basis.Based upon the
aggregate DBS subscriber penetration levels that were calculated using
Census 2000 household data, as reflected in Attachment A, we find that
Petitioner 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 Communities. Therefore,
the second prong of the competing provider test is satisfied for each
of the Communities.
7. Based on the foregoing, we conclude that Petitioner has submitted
sufficient evidence demonstrating that both prongs of the competing
provider test are satisfied and Petitioner is subject to effective
competition in the Communities listed on Attachment A.
B. The Low Penetration Test
8. Section 623(l)(1)(A) of the Communications Act provides that a cable
operator is subject to effective competition if the Petitioner serves
fewer than 30 percent of the households in the franchise area; this
test is otherwise referred to as the "low penetration" test.
Petitioner alleges that it is subject to effective competition under
the low penetration effective competition test because it serves less
that 30 percent of the households in the franchise area.
9. Based upon the subscriber penetration level calculated by Petitioner,
as reflected in Attachment B, we find that Petitioner has demonstrated
the percentage of households subscribing to its cable service is less
than 30 percent of the households in the Communities listed on
Attachment B. Therefore, the low penetration test is also satisfied as
to the Communities.
III. ordering clauses
10. Accordingly, IT IS ORDERED that the petition for a determination of
effective competition filed in the captioned proceeding by Mediacom
Southeast LLC IS GRANTED.
11. IT IS FURTHER ORDERED that the certification to regulate basic cable
service rates granted to any of the Communities set forth on
Attachment A and B IS REVOKED.
12. This action is taken pursuant to delegated authority pursuant to
Section 0.283 of the Commission's rules.
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau
ATTACHMENT A
CSR 6893-E
COMMUNITIES SERVED BY MEDIACOM SOUTHEAST LLC
2000 Estimated
Census DBS
Communities CUID(S) CPR* Household Subscribers
Loxley AL0316 21.53% 562 121
Robertsdale AL0377 24.45% 1779 353
Silverhill AL0378 20.33% 241 49
*CPR = Percent of competitive DBS penetration rate.
ATTACHMENT B
CSR 6893-E
COMMUNITIES SERVED BY MEDIACOM SOUTHEAST LLC
Franchise Area Cable Penetration
Communities CUID(S) Households Subscribers Percentage
Baldwin County AL0407 28675 1,560 5.44%
Gulf Shores AL0679
Lillian AL0346
Orange Beach AL0369
See 47 U.S.C. S: 543(a)(1).
47 C.F.R. S: 76.905(b)(2) and 47 C.F.R. S: 76.905(b)(1).
Mediacom filed a Motion for Leave and Extension of Extension of Pleading
Cycle to submit an attachment that was omitted from Mediacom's Reply to
Opposition due to an alleged clerical error. Mediacom's Motion for an
Extension of Time is granted. Baldwin County filed a Response to
Mediacom's Reply to Opposition and Mediacom filed a Motion to Strike it.
Mediacom's Motion to Strike Baldwin County's Response to Mediacom's Reply
to Opposition is granted because it was outside of the pleading cycle.
Baldwin County filed an Opposition to Mediacom's claim that it satisfied
the competing provider effective competition test. However, Mediacom had
alternatively claimed that it was subject to effective competition under
the low penetration competing provider test. Baldwin County's Opposition
does not contest Mediacom's claim of low penetration effective
competition. Because Mediacom has established that it is subject to
effective competition under the low penetration test, we need not address
the County's arguments under the competing provider test.
47 C.F.R. S: 76.906.
See 47 U.S.C. S: 543(l) and 47 C.F.R. S: 76.905.
See 47 C.F.R. S:S: 76.906 & 907.
47 U.S.C. S: 543(1)(1)(B); see also 47 C.F.R. S: 76.905(b)(2).
47 C.F.R. S: 76.905(b)(2)(i).
See Petition at 4-5 and Exhibit A.
Mediacom Illinois LLC et al., Eleven Petitions for Determination of
Effective Competition in Twenty-Two Local Franchise Areas in Illinois and
Michigan, 21 FCC Rcd 1175 (2006).
47 C.F.R. S: 76.905(e)(2).
See 47 C.F.R. S: 76.905(g). See also Petition at 5.
See Petition at 5 and Exhibits B and D.
See Petition at 6.
Id.
Petition at 7 and Exhibit E and Erratum.
Id. and Exhibit G.
47 U.S.C. S: 543(l)(1)(A).
47 C.F.R. S: 0.283.
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Federal Communications Commission DA 09-436
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Federal Communications Commission DA 09-436