WPCu 2BJ Z Courier#|x2x6X@`7X@HP LaserJet 4_230_1HPLAS4.PRS 4x  @\oe@26F#|xCourierCourier BoldiptHPLA4MPC.PRSx  @\}[@CourierCourier Bold2AXE[FZ<?xxx,2x6X@`7X@?xxx,)x `7X<R&HHH,,H6X@`7h@t\1vaclist@`7X@ 12s 3'3'Standard3'3'StandardHPLAS4.PRS 4x     $//Section 214 Authorization DA 95376$// $/63.09 provisions for projects under rural exemption$/ $/63.58 rural exemption to cable/telco crossownership ban$/ l  Before the  ?<0  FEDERAL COMMUNICATIONS COMMISSION ă  xx-DA 95376 Washington, D.C. 20554  ?@<In re the Application of )  xx- X(#(#` ` hh, ) NEW ULM TELECOM, INC. ) File No. WPC6877 ) For authority to construct and operate,) through an affiliate, cable television ) facilities in Sanborn, Minnesota which ) is within its affiliate's telephone ) service area. )  ?<  MEMORANDUM, OPINION AND ORDER ă Adopted: February 28, 1995 Released: March 6, 1995 By the Chief, Common Carrier Bureau:  ?< h(I. Introduction ă  ?<  @<1.` ` On August 2, 1993, New Ulm Telecom, Inc. (New Ulm) filed   <an application for authority to construct and operate cable   <television facilities through its wholly owned subsidiary, Western   <Telephone Company (WTC), for the City of Sanborn, Minnesota, which  ?8<  <lies within WTC's telephone service area.8q ?<  <ԍ Section 214 of the Communications Act of 1934, as amended,   h<requires that a telephone company proposing to construct or operate   h<cable facilities through which it will provide broadcast television   <programming to file an application for authority to do so. Part 63   <of the Commission's rules sets forth the rules with which the application must comply. Although the   <Communications Act of 1934, as amended ("Act") generally prohibits   <telephone companies from owning and operating cable facilities   <within their local service areas, the statute creates an exception   <from the general prohibition for telephone companies serving rural  ? <  <areas. @q ?#<  <ԍ 47 U.S.C.  533(b)(3). Several courts, however, have found  ?$<  x<the ban unconstitutional. See e.g., Chesapeake & Potomac Tel. Co.  ?%<  <v. U.S., 830 F.Supp. 909 (E.D. Va., 1993), aff'd, No. 932340 (4th  ?H&<  h<Cir., Nov. 21, 1994): US West, Inc. v. U.S., 855 F.Supp. 1184 (W.D.  ?'<  <Wash., 1994), aff'd, No. 9335775 (9th Cir., Jan. 3, 1995);  ?'<  <BellSouth Corp. v. U.S., No.CV93B2661S (N.D. Ala., Sept. 23,"'0*(((" 1994). In its application, New Ulm asserted that the proposed" X0*((!" cable system would fall within the rural exception."X 0*(( "Ԍ"X 0*(( "Ԍ ?X<  p<2.` ` New Ulm also filed a Request for Special Temporary"X 0*(( "   @<Authority (STA), in accordance with Section 63.04 of the   <Commission's rules, 47 C.F.R.  63.04, to commence construction of   <its proposed cable facilities during the pendency of its Section   <214 application. The Chief of the Domestic Facilities Division of   <the Common Carrier Bureau granted the STA without prejudice to  ?<future Commission action on New Ulm's Section 214 application.i ?@<  {<ԍ See letter dated August 5, 1993 from Chief, Domestic   <Facilities Division, Common Carrier Bureau, Federal Communications   <Commission, to Robert M. Jackson, Esq., granting Special Temporary   <Authority to New Ulm Telecom, Inc., to begin construction of cable   <television distribution facilities in Sanborn, Minnesota, File No. WPC6877.  ?x<  p<3.` ` Mark Twain Cablevision, L.P., (Mark Twain) filed a   <petition to deny the Section 214 application and a request for   <revocation of the STA. New Ulm filed oppositions to both these   <pleadings. Mark Twain filed a reply to the opposition to its   h<petition to deny the Section 214 application. New Ulm subsequently   <amended its application to include a copy of a cable franchise,   <which was granted to WTC on September 28, 1993, by the City of Sanborn.  ? <` `  II. Contentions ` ` hh,  ?<  P<4.` ` In its Section 214 application, New Ulm certified that   h<the City of Sanborn was a "rural area," as defined by Section 63.58   <of the Commission's Rules, 47 C.F.R.  63.58. New Ulm claimed,   <therefore, that it was exempt from the cabletelephone cross  h<ownership restrictions of Section 613 of the Act, 47 U.S.C.  553,   h<and Section 63.54 of the Commission's Rules, 47 C.F.R.  63.54. New   <Ulm further asserted that it is entitled to simplified Section 214   <consideration of its application under Section 63.09 of the   x<Commission's Rules, 47 C.F.R.  63.09. New Ulm acknowledged that,   <as of the date it filed its Section 214 application, WTC had not   <been franchised to provide cable service, as required by 47   <C.F.R.  63.09. New Ulm stated, however, that the City of Sanborn   h<had indicated that it would approve a franchise for WTC at the City   x<Council's August 3, 1993 meeting. New Ulm stated its intention to   <provide the Commission with evidence of the franchise agreement  ?<after the Council acted.=@i ?!<ԍ Application at 23.=  ?X<  <5.` ` In its petition to deny New Ulm's Section 214   <application, Mark Twain contends that, without the franchise   <agreement in hand, New Ulm's application fails to satisfy the   <express requirements of Section 63.09(5) of the Commission's Rules   <and that construction of cable facilities without a franchise"x0*(($"  ?<  <violates Section 621(b)(1) of the Act. i ?X<  [<ԍ Section 63.09(5) of the Commission's Rules, 47 C.F.R.    <63.09(5), requires an applicant to present "[c]ertification that   <[the] Applicant is franchised to provide the service pursuant to   h<Title VI of the Communications Act, and date of franchise." Section   x<621(b)(1) of the Act, 47 U.S.C.  541(b)(1), states that "a cable operator may not provide cable service without a franchise."  Furthermore, Mark Twain  x<states that New Ulm had no reasonable basis for predicting that it  x <would be granted a franchise on August 3 and, therefore, has  x<"misstated material facts" in its application in violation of  ? < x<Section 1.17 of the Commission's Rules, 47 C.F.R.  1.17.@ @i ? <ԍ Petition to Deny at 5.@ Mark  x<Twain alleges further that although New Ulm must have known that  xh<the franchise in fact was not approved at the August 3 meeting, New  xh<Ulm failed to inform the Commission that the franchise had not been  ?@< x<granted,9@i ?<ԍ Id. at 6.9 contrary to Section 1.65 of the Commission's Rules, 47  x0<C.F.R.  1.65. This section requires applicants to correct  x<inaccurate information contained in applications promptly. Mark  x<Twain argues that, under Commission precedent, the need to deter  x<such violations justifies denial of New Ulm's Section 214  ?( < xK<application. ( ` i ?< x[<ԍ Id. at 89. Mark Twain asserts that the following cases  ?< x`<support denial of New Ulm's application: Re Colonial  ?< x <Communications, Inc., 4 FCC Rcd. 5969, (ALJ, August 3, 1989)  xh<(disqualification of one of several mutually exclusive applications  x<for an FM station construction permit because of material and  ?< x0<intentional violation of Section 1.65); Re Algreg Cellular  ?< xh<Engineering, 7 FCC Rcd. 8686, 8750 (ALJ, December 22, 1992) (denial  x<of cellular applications for "deliberate and egregious" violations  x<of Section 1.65 that caused the Commission to process thousands of  ? < x<applications unnecessarily); Augusta Radio Fellowship Institute, 6  x<FCC Rcd. 340, 345 (ALJ, January 18, 1991) (revocation of radio  x<license for deliberate and repeated violation of Section 1.65 in  x<order to avoid inquiry into matters that licensee knew were  ?@<relevant PJ toPJ  its license qualifications). Mark Twain proffers these same arguments in support  ? <of its request to revoke New Ulm's STA.t  i ?!< xK<ԍ Informal Request to Revoke Special Temporary Authority at 25.t  ? < ` `<x6.` ` New Ulm replies that during the Sanborn City Council  x<meeting held on July 13, 1993, the Council did give New Ulm a  x<reasonable basis for believing that it would approve New Ulm's  x<franchise at the August 3, 1993 meeting. Moreover, New Ulm argues  x<that a franchise may be a precondition to providing cable services  xh<under Section 621(b)(1) of the Act, but it is not a precondition to"hp 0*(("  xh<construction of cable facilities in anticipation of providing cable  ?< x<services under that section.N i ? <ԍ Opposition to Petition to Deny at 3.N New Ulm, therefore, denies that its  x<STA under Section 214 violates Section 621(b)(1). New Ulm  xx<acknowledges that a franchise is required for construction, under  xx<the terms of 47 C.F.R.  63.09, but asserts that, under 47 C.F.R.  xh< 63.50, it may amend its application as a matter of right prior to  ?< x<the date the Commission takes final action on that application.9 Xi ?<ԍ Id. at 2.9  x0<New Ulm further asserts that Mark Twain has no standing to  x <challenge its STA because the STA does not harm Mark Twain's  xh<position as a provider of cable service in Sanborn, and because the  x<Commission rule providing for the granting of a STA, 47 C.F.R.   x <63.04, makes no provision for comment or opposition from the  x <public. Finally, New Ulm certifies that it was franchised on  xh<September 28, 1993 to provide cable service in the City of Sanborn.  ? <,  III. Discussion  ?H < ` P< x7.` ` Mark Twain has provided no basis for denying New Ulm's  x<application for Section 214 authority. Section 214 of the Act  x<governs construction of interstate lines by carriers. The  x<implementing regulations for that Section, which appear in Part 63  x<of the Commission's rules, require that a carrier seeking  x<construction authorization for a cable system under the rural  x<exemption certify that it is franchised to provide cable service  x <pursuant to Title VI of the Act. A separate provision within  x<Section 214 empowers the Commission to authorize, on a special  x<temporary basis, the supplementPJ ingPJ  of facilities without regard to  x<the Section's other provisions. On August 5, 1993, the Domestic  x<Facilities Division of the Common Carrier Bureau granted New Ulm a  x<STA to begin construction of its cable system. New Ulm's STA was  xh<not conditioned on New Ulm receiving a franchise on a date certain.  x0<The prospective franchise date specified by New Ulm in its  xh<application was not mentioned in the STA authorization. Any further  x<question as to the validity of the STA, in the absence of a  x <franchise agreement, is mooted here byPJ  the fact that New Ulm  x<entered into a franchise agreement on September 28, 1993,PJ  a few weeks later than New Ulm had originally anticipated.  ?< ` @<x8.` ` We have not been persuaded that carrier construction of  x<a cable system under the rural exemption and pursuant to Special  x<Temporary Authority prior to the obtaining of a franchise violates  x<the franchise requirements of Section 621(b) of the Act if there  ? < x<was no provision of service at the time. Mark Twain cites In re  ?!< x<CompetitionPJ g !i ?'<ԍ PJ  5 FCC Rcd. 362 (1989).PJ  gPJ  in support of this proposition. PJ Specifically, Mark  x<Twain points to the Commission's statement that a "PJ firm seeking to"`"x 0*((@)"  xx<construct and operate a cable television system must first obtain  ?< x<a franchise...."PJ a i ? <ԍ PJ  Id. at 366.PJ aPJ  The question of whether a franchise is required  x<prior to construction was not at issue in the cited case, which  xx<was, in fact, a Notice of Inquiry, not an adjudication. Moreover,  xh<the cited statement would have to include a disjunction ("construct  ?< x<or operate") to require the interpretation given to it by Mark  xh<Twain. Finally, Section 621(b) prohibits on its face only provision  x<of cable service prior to receiving a franchise, and there is no  x<allegation that New Ulm was providing service prior to September  x<28, 1993. This finding is not inconsistent with the proposition  x<that franchising authorities retain jurisdiction to award franchises.  ?( < ` <x9.` ` The question remains whether New Ulm violated the  x<Commission's Rules by initially misrepresenting and subsequently  xx<failing to correct material statements of fact in its Section 214  xx<application and whether such misrepresentation warrants denial of  ?H < x<the application. New Ulm clearly indicated in its application that  x<it did not have a franchise to operate in Sanborn. It stated its  x<intention to amend its application by forwarding to the Commission  xh<a copy of the franchise agreement when one was obtained. At no time  x<did New Ulm misinform the Commission about the absence of a  xh<franchise. We find that New Ulm's somewhat optimistic prediction as  x<to the date on which the Sanborn City Council would approve a  x<franchise does not constitute significant misrepresentation. At no  x<point was the Commission misinformed as to the existence of a  x<franchise. Furthermore, there is no indication of deceptive  ?< x<intent. Xi ?< x<ԍ See Fox River Broadcasting, Inc., 93 FCC 2d 127, 129 (1983)  x<(there was no significant misrepresentation in a single  x<misstatement in dealings before the Commission pursuant to an FM  ?X< x<application because there was no deceptive intent); Arizona Mobile  ? < xx<Telephone Co., 93 FCC 2d 1147, 1158 (1983) (failure to inform the  x<Commission of matters pertinent to applications for land mobile  x<radio stations in violation of 47 C.F.R.  1.65 did not justify  xx<disqualification because there was no attempt to conceal facts or mislead the Commission).  Rather, the evidence shows that New Ulm did have reason  ?< x><to think the franchise would be approved in August,2 ( i ?!< x<ԍ See Opposition to Informal Request to Revoke Special  x0<Temporary Authority, Exhibit B, Affidavit of James Jensen,  xx<President of New Ulm, and Exhibit C, Letter of Gerald C. Woodley, Mayor of the City of Sanborn.2 and the  x<franchise was, in fact, granted in September. Nor is there any  x<pattern of repeated violations or other circumstances reflecting"p0*(( "  ?< x<significant carelessness on the part of New Ulm.xi ?X< x<ԍ See Merrimack Valley Broadcasting, Inc., 55 Radio Reg. 2d  ? < x<23(1983)(Merrimack), modified 99 FCC 2d 681, 68384 n.9 (1984),  x<(inquiry into a Section 1.65 reporting violation and assessment of  xh<comparative demerits is only justified where unreported matters are  x<of decisional significance, an intent to conceal is present or a  x<pattern of repeated violations or other circumstances reflect  ?<significant carelessness or inattentiveness). Ē The Commission  ?<will not reject an application for trivial reporting failures.Li ?` <ԍ  Merrimack at 25.L  ?X< IV. Conclusion ă  ?< ` `<x 10.` ` For the reasons stated above, we find that New Ulm's  x<amended application meets the requirements of Sections 63.09 and  x<63.58 of the Commission's Rules, 47 C.F.R.  63.09 and 63.58.  xh<New Ulm has now provided all necessary information and has complied  x0<with all procedures required under the special application  xx<provisions of Section 63.09. New Ulm has correctly certified that  xh<it has been awarded a franchise by the City of Sanborn and that the  xx<City of Sanborn is a "rural area" according to the Census Bureau.  x<We further find that granting New Ulm authority to construct and  xh<operate its proposed cable system will serve the public convenience  x<and necessity by promoting the growth and development of cable  x<systems and competition in cable communications in conformity with  ?H < x<the purposes of Title VI of the Communications Act.=H i ?p<ԍ 47 U.S.C.  521.= New Ulm is  xh<therefore entitled, under the provisions of Section 214 of the Act,  xx<47 U.S.C.  214, to construct and operate, through its affiliate,  xh<WTC, cable television facilities in the City of Sanborn, Minnesota.  xx<We also find that Mark Twain's Informal Request to Revoke Special Temporary Authority is moot.  ?<x` ` hh V. Ordering Clause s  ?P< ` "<x 11.` ` Accordingly, IT IS ORDERED that the application of New  ?< x<Ulm Telecom, Inc. under Section 214 of the Communications Act of  x<1934, as amended, to construct and operate cable television  ?<facilities in the City of Sanborn, Minnesota, IS GRANTED .  ?8< ` #<x 12.` ` IT IS FURTHER ORDERED that, pursuant to 47 C.F.R.  1.103(a), this order is effective upon adoption.  PJ   PJ "( 0*((#"Ԍ ?< ` <x 13.` ` New Ulm Telecom, Inc. is granted thirtyone days from the  x<release date of this order to decline this authorization. Failure  x<to respond within that period will constitute formal acceptance of  ?X<this authorization. x` ` hhFEDERAL COMMUNICATIONS COMMISSION  ?< hhKathleen M.H. Wallman  ?` < hhChief, Common Carrier Bureau  ?( < hh