NEWSReport No. CC-95-14 COMMON CARRIER ACTION February 7, 1995 BELLSOUTH VIDEO DIALTONE TRIAL APPLICATION GRANTED The Common Carrier Bureau has granted the application of BellSouth Telecommunications, Inc. (BST) to conduct an 18-month technical and market trial of video dialtone service that will pass 12,000 homes outside Atlanta. BST proposed to construct a broadband fiber optic-coaxial cable network for video and telephony, initially offering each subscriber 70 analog channels and approximately 240 digital video channels. According to BST, this network will be capable of providing a variety of programming services, including traditional television programming, enhanced pay-per-view, video-on-demand, and interactive educational, home shopping, and health care services. The Bureau conditioned this approval on BST's compliance with strict safeguards, which are designed to protect the interests of video programmers, video dialtone subscribers, and telephone ratepayers. In addition, BST will be required to comply with any additional safeguards the Commission might adopt in current applicable rulemakings. In its amended application, BST reserved the right to provide video programming directly to subscribers over its video dialtone platform. Consistent with the decision of the U.S. District Court for the Northern District of Alabama to enjoin the Commission from applying the cross- ownership provisions of the 1984 Cable Act to BST and its affiliates and the Commission's decision in the Bell Atlantic Market Trial Order, the Order permits BST to provide video programming directly to subscribers over its own video dialtone platform during this trial. Pending the completion of a rulemaking that will address the issues raised by telephone company provision of video programming, BST's provision of video programming directly to subscribers will be subject to interim safeguards. In addition, the Bureau requires that, to the extent BST establishes an enrollment period for video programmers to request channels, it must be at least 30 days in length, and BST must take reasonable steps to inform potential customer-programmers of any such enrollment period. If there is channel capacity available at the end of the enrollment period, BST must either initiate an additional enrollment period or offer this capacity on a first-come, first-served basis. In addition, BST may not assign more than 50 percent of analog capacity to a single customer- programmer during the trial. (over) - 2 - Consistent with previous trial authorizations, to protect telephone customers, video programmers, and video dialtone subscribers, the Bureau imposed several conditions on BST's authorization. BST must make available sufficient capacity to serve multiple video programmers; must notify the FCC in the event of any capacity shortfall; limit the trial to no more than 12,000 residential and business subscribers and to a period not to exceed 18 months; inform participants that this is a trial and that BST may or may not offer video dialtone service after the conclusion of this trial; file all revisions to its Cost Allocation Manuals within 30 days after the release of the Order and 60 days before providing non-regulated products or services related to video dialtone; create two sets of accounting records to capture dedicated video dialtone costs and shared costs and file summaries of these records on a quarterly basis with the Commission; and submit written reports to the FCC on the status of the trial at six month intervals. Action by the Chief, Common Carrier Bureau, by Order and Authorization (DA 95-181) adopted February 7. -FCC- News media contact: Susan Lewis Sallet at (202) 418-1500. Common Carrier Bureau contact: Todd F. Silbergeld at (202) 418-1513.