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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of: ) ) MEDIAONE OF GEORGIA, INC. ) CUID No. GA0222 ) Petition for Revocation ) of the Certification of ) Gwinnett County, Georgia ) to Regulate Basic Cable Service Rates) in Unincorporated Gwinnett County ) MEMORANDUM OPINION AND ORDER Adopted: March 14, 1997 Released: March 17, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1. MediaOne of Georgia, Inc. ("MediaOne") filed a petition for revocation challenging the certification of Gwinnett County, Georgia to regulate MediaOne's basic cable service and associated equipment rates in Unincorporated Gwinnett County. Gwinnett County did not file an opposition to MediaOne's petition. 2. Section 623(a)(4) of the Communications Act of 1934, as amended ("Communications Act"), allows franchising authorities to become certified to regulate the basic cable service rates of cable operators which are not subject to effective competition. For purposes of the initial request for certification, a franchising authority may rely on the presumption that cable operators within its jurisdiction are not subject to effective competition, unless the franchising authority has actual knowledge to the contrary. Such certification becomes effective thirty days from the date of filing, unless the Commission finds that the franchising authority does not meet the statutory certification requirements. Cable operators may file petitions for reconsideration of the franchising authority's certification within thirty days from the date such certification becomes effective. Rate regulation is automatically stayed pending review of a timely filed petition for reconsideration alleging effective competition. After the thirty-day deadline for filing petitions for reconsideration has elapsed, cable operators may challenge the franchising authority's certification by filing a petition for revocation. However, regardless of its grounds, a petition for revocation does not automatically trigger a stay of the franchising authority's power to regulate basic rates. DISCUSSION A. MediaOne's Petition 3. MediaOne argues that it is, and has been since January 1, 1996, subject to effective competition in Unincorporated Gwinnett County. MediaOne contends that it meets the definition of effective competition set forth under the competing provider test. MediaOne claims that it and various direct broadcast satellite ("DBS") providers offer comparable programming to at least 50% of the households in Unincorporated Gwinnett County. MediaOne further alleges that the number of households receiving multichannel video programming from providers other than the largest multichannel video programming distributor ("MVPD"), in this case MediaOne, exceeds 15% of the households in Unincorporated Gwinnett County. 4. MediaOne claims that there are 96,662 households (i.e., occupied housing units) in Unincorporated Gwinnett County. MediaOne indicates that it derived the 96,662 household figure through a series of calculations based on figures obtained from the 1990 Census. MediaOne contends that there are 30,309 households within the incorporated municipalities of Gwinnett County. MediaOne explains that it subtracted this figure from 126,971, which, according to the 1990 Census, represents the total number of households in all of Gwinnett County (incorporated and unincorporated areas combined). MediaOne contends that the resulting figure of 96,662 (126,971 - 30,309 = 96,662) represents the total number of households in Unincorporated Gwinnett County. MediaOne states that it currently provides cable service to over 74,000 households in Unincorporated Gwinnett County, which represents more than 50% of the 96,662 households. MediaOne further alleges that, as of January 1, 1996, it served more than 69,000 subscribers in Unincorporated Gwinnett County, which also amounts to more than 50% of the 96,662 households. 5. MediaOne asserts that the video programming services of television receive-only earth station ("TVRO") and direct broadcast satellite ("DBS") operators, including DirectTV/USSB and PrimeStar, have been available and marketed in Unincorporated Gwinnett County since prior to January 1, 1996. MediaOne states that currently DirectTV/USSB, PrimeStar, AlphaStar, and EchoStar each market their multichannel video programming services throughout Gwinnett County through local, regional and national advertisements. MediaOne further claims that since prior to January 1, 1996, DBS operators have marketed their services throughout the Atlanta metropolitan area, including Unincorporated Gwinnett County. MediaOne submits advertisements from the Gwinnett County yellow pages, the City of Atlanta yellow pages, and Atlanta area newspapers demonstrating the availability of DBS services. In addition, MediaOne includes Effective Competition Tracking Reports from SkyTRENDS which, according to MediaOne, indicate that residents in Unincorporated Gwinnett County actually subscribe to DBS and TVRO services. Furthermore, MediaOne avers that there are no local laws in effect in Unincorporated Gwinnett County which would prohibit the use of satellite dishes to receive DBS service. 6. MediaOne contends that it, DBS and TVRO operators offer comparable programming as defined by the Commission for purposes of the competing provider test. MediaOne states that, as of January 1, 1996, and as of the conclusion of September, 1996, MediaOne's cable system serving Gwinnett County offered at least 60 channels of video programming, at least 47 of which consisted of nonbroadcast programming. MediaOne also asserts that DBS operators such as DirectTV/USSB and PrimeStar as well as TVRO operators serving Gwinnett County offer more than 12 channels of video programming, including many nonbroadcast channels. MediaOne maintains, therefore, that it satisfies the first prong of the competing provider test which requires that at least two unaffiliated MVPDs offer comparable programming to more than fifty percent of occupied households in the franchise area. 7. MediaOne states that beginning prior to January 1, 1996, and continuing to the present, MediaOne has provided multichannel video programming service to more subscribers in Unincorporated Gwinnett County than has any other MVPD providing service in the County. Although MediaOne asserts that it is the largest MVPD serving the County, MediaOne contends that another MVPD, Rifkin & Associates, Inc./Cable Equities of Colorado, LTD d/b/a N.E. Gwinnett CableVision ("Rifkin"), has provided service to more than 15% of the households in Unincorporated Gwinnett County since January 1, 1996. MediaOne states that Rifkin served 18,545 residential subscribers in Unincorporated Gwinnett County as of January 1, 1996 and 19,915 residential subscribers in Unincorporated Gwinnett County as of September 30, 1996. MediaOne points out that 15% of the 96,662 households in Unincorporated Gwinnett County equals 14,499. According to MediaOne, therefore, Rifkin has served more than 15% of Unincorporated Gwinnett County since at least January 1, 1996. MediaOne also notes that Rifkin provides more than 12 channels of video programming, including channels of nonbroadcast video programming. B. Analysis 8. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition, as defined by Section 76.905 of the Commission's Rules, is present within its franchise area. MediaOne has met this burden by satisfying the competing provider test for effective competition. 9. The first prong of the competing provider test requires that the franchise area be served by at least two unaffiliated MVPDs, each of which offers comparable programming to at least 50% of the households in the franchise area. MediaOne asserts that there are 96,662 households in Unincorporated Gwinnett County based on 1990 Census data. MediaOne derived the 96,662 figure by subtracting 30,309, the total number of households for all incorporated municipalities located within Gwinnett County according to MediaOne's calculations, from 126,971, the total number of households for the entire County (incorporated and unincorporated areas). We accept MediaOne's count of 96,662 households in Unincorporated Gwinnett County. We also accept MediaOne's claim that it served 74,000 or 76.5% of subscribers in Unincorporated Gwinnett County as of September, 1996 and 69,000 or 71% of subscribers as of January 1, 1996. Additionally, MediaOne has provided evidence that TVRO and DBS operators currently offer, and offered as of January 1, 1996, service to more than 50% of the households in Unincorporated Gwinnett County. With respect to the issue of programming comparability, we also find that the programming of MediaOne, DirectTV/USSB, and PrimeStar is comparable. We note that these providers satisfy the Commission's programming comparability criterion because they offer at least 12 channels of video programming, including at least one non-broadcast channel. We find, therefore, that MediaOne has satisfied the first prong of the competing provider test. 10. The second prong of the competing provider test for effective competition requires a demonstration that more than 15% of the households in the franchise area subscribe to multichannel video programming services other than from MediaOne, the largest MVPD. MediaOne has submitted evidence indicating that Rifkin served 18,545 subscribers or 19% of the 96,662 households in Unincorporated Gwinnett County as of January 1, 1996 and 19,915 subscribers or over 20% of the 96,662 households as of September 30, 1996. The evidence further indicates that Rifkin's subscribership level did not drop below the January 1, 1996 level at any time subsequent to January 1, 1996 and that Rifkin offers comparable programming to subscribers in Unincorporated Gwinnett County. We conclude, therefore, that MediaOne has satisfied the 15% subscribership requirement of the competing provider test. 11. MediaOne has submitted sufficient evidence demonstrating that its cable system serving Unincorporated Gwinnett County is subject to effective competition under the competing provider test. Its petition is hereby granted. ORDERING CLAUSES 12. Accordingly, IT IS ORDERED that the petition for revocation filed by MediaOne of Georgia, Inc. challenging the certification of Gwinnett County, Georgia to regulate basic cable service rates in Unincorporated Gwinnett County IS GRANTED. 13. IT IS FURTHER ORDERED that the certification of Gwinnett County, Georgia to regulate the basic cable service rates of MediaOne of Georgia, Inc. IS REVOKED. 14. This action is taken pursuant to delegated authority pursuant to Section 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau