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Cablevision Systems Corp Effective Competition Petition

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Released: November 22, 2013

Federal Communications Commission

DA 13-2245

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
MB Docket No. 12-54, CSR 8591-E
)
MB Docket No. 12-55, CSR 8592-E
Cablevision Systems Corp.
)
MB Docket No. 12-56, CSR 8593-E
)
MB Docket No. 12-57, CSR 8594-E
Petitions for Determination of Effective
)
MB Docket No. 12-58, CSR 8595-E
Competition in 23 New York Communities
)
MB Docket No. 12-59, CSR 8596-E

MEMORANDUM OPINION AND ORDER

Adopted: November 22, 2013

Released: November 22, 2013

By the Senior Deputy Chief, Policy Division, Media Bureau:

I.

INTRODUCTION AND BACKGROUND

1.
Cablevision Systems Corporation, hereinafter referred to as “Petitioner,” has filed with
the Commission petitions pursuant to Sections 76.7, 76.905(b)(2) 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 the “Communities.” Petitioner alleges that its cable system
serving the Communities is subject to effective competition pursuant to Section 623(l)(1)(B) of the
Communications Act of 1934, as amended (“Communications Act”),1 and the Commission’s
implementing rules,2 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”). The petitions are unopposed.
2.
In the absence of a demonstration to the contrary, cable systems are presumed not to be
subject to effective competition,3 as that term is defined by Section 623(l) of the Communications Act and
Section 76.905 of the Commission’s rules.4 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.5 For the reasons set forth below, we grant the petitions based on our
finding that Petitioner is subject to effective competition in the Communities listed on Attachment A.6


1 See 47 U.S.C. § 543(l)(1)(B).
2 47 C.F.R. § 76.905(b)(2).
3 47 C.F.R. § 76.906.
4 See 47 U.S.C. § 543(l)(1); 47 C.F.R. § 76.905(b).
5 See 47 C.F.R. §§ 76.906-.907(b).
6 Petitioner discloses in note 2 on pages 2-3 of each petition that its rates in some Communities are regulated by the
New York State Public Service Commission (“the PSC”) and that its rates in other Communities have never been
regulated by any authority. Our grants herein terminate regulation by the PSC in the former Communities and
prohibit it by any authority in the latter Communities under current conditions. See, e.g., Bresnan Commc’ns, LLC,
26 FCC Rcd 6137, ¶ 1, n.3 (2011); Subsidiaries of Cablevision Systems Corp., 25 FCC Rcd 4786, ¶ 1, n.3 (2010).

Federal Communications Commission

DA 13-2245

II.

DISCUSSION

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 (“MVPDs”), 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.7 This test is 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.8 It is undisputed that the 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.9 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.10 We further find that Petitioner has provided
sufficient evidence of DBS advertising in media that serve the Communities to support its assertion that
potential customers in the Communities are reasonably aware that they may purchase the service of these
MVPD providers.11 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,12 and is supported in these petitions with copies of channel lineups for both DIRECTV and
DISH.13 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.14
Accordingly, we find that the first prong of the competing provider test is satisfied.
5.
The second prong of the competing provider test requires that the number of households
subscribing to MVPDs, other than the largest MVPD, exceeds 15 percent of the households in a franchise
area. Petitioner asserts that in some Communities it is the largest MVPD, with over 15 percent of the
households subscribing to its cable service, and in other Communities, assuming that one of the DBS
providers is the largest MVPD in the community, the combined subscribership of Petitioner and any one
DBS provider exceeds 15 percent.15 In these conditions, whichever MVPD is the largest, the remaining
competitors have subscribership of over 15 percent.16 Petitioner sought to determine the competing


7 47 U.S.C. § 543(l)(1)(B); 47 C.F.R. § 76.905(b)(2).
8 47 U.S.C. § 543(l)(1)(B)(i); 47 C.F.R. § 76.905(b)(2)(i).
9 See, e.g., Petition in CSR-8591-E at 3-4.
10 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006).
11 47 C.F.R. § 76.905(e)(2).
12 See 47 C.F.R. § 76.905(g); see also, e.g., Petition in CSR-8592-E at 6.
13 See, e.g., Petition in CSR-8593-E at Ex. 4.
14 See, e.g., Petition in CSR-8594-E at 3.
15 See, e.g., Petition in CSR-8595-E at 7; id., Ex. 1, Declaration of Paul Jamieson, Vice President, Legal &
Regulatory Affairs for Petitioner, at ¶ 3 (Feb. 22, 2012).
16 See, e.g., Bresnan Commc’ns, LLC, 26 FCC Rcd 6122, 6123-24, ¶5 (2011); Time Warner Cable Inc., 25 FCC Rcd
14422, 14424, ¶ 6 (2010); Charter Commc’ns, 21 FCC Rcd 1208, 1210, ¶ 5 (2006).
2

Federal Communications Commission

DA 13-2245

provider penetration in the Communities by purchasing a subscriber tracking report from the Satellite
Broadcasting and Communications Association that identified the number of subscribers attributable to
the DBS providers within the Communities on a five-digit zip code basis.17
6.
Based upon the aggregate DBS subscriber penetration levels that were calculated using
the most recent available decennial Census data,18 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.
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.

III.

ORDERING CLAUSES

7.
Accordingly,

IT IS ORDERED

that the petitions for a determination of effective
competition filed in the captioned proceeding by Cablevision Systems Corporation

ARE GRANTED

.
8.

IT IS FURTHER ORDERED

that the certification to regulate basic cable service rates
granted to or on behalf of any of the Communities set forth on Attachment A

IS REVOKED

.
9.
This action is taken pursuant to delegated authority pursuant to Section 0.283 of the
Commission’s rules.19
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau


17 See, e.g., Petition in CSR-8596-E at Ex. 6.
18 See, e.g., Petition in CSR-8591-E at 7-8 & n.26 (noting that for two Communities, in which Petitioner’s franchise
areas are small parts of municipalities, the most recent household numbers of sufficient granularity are in the 2000
Census).
19 47 C.F.R. § 0.283.
3

Federal Communications Commission

DA 13-2245

ATTACHMENT A

MB Dockets No. 12-54 through 12-59, CSRs 8591-E through 8596-E

COMMUNITIES SERVED BY CABLEVISION SYSTEMS CORPORATION

Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

MB Docket No. 12-54, CSR 8591-E

Amenia
NY0657
17.86
1741
311
Clinton
NY1676
21.79
1602
349
Dover
NY0213
20.87
3259
680
East Fishkill
NY0275
16.20
9512
1541
Kent
NY1897
16.67
18
3
Marlborough
NY0306
21.28
141
30
Millbrook
NY1142
20.69
691
143
Millerton
NY1143
35.35
396
140
North East
NY1141
23.51
1259
296
Pine Plains
NY1462
47.57
1007
479
Union Vale
NY1461
21.49
1708
367
Stanford
NY1475
24.13
1496
361
Plattekill
NY0307
16.96
3861
655
Washington
NY0658
15.24
1956
298

MB Docket No. 12-55, CSR 8592-E

Atlantic Beach
NY0932
17.27
857
148
Old Westbury
NY1096
21.99
1073
236

MB Docket No. 12-56, CSR 8593-E

Greenville
NY1694
17.15
1504
258
Minisink
NY1355
22.56
1485
335
Unionville
NY1354
29.00
231
67
Florida
NY0674
19.50
1031
201

MB Docket No. 12-57, CSR 8594-E

Bellport
NY0581
17.59
921
162

MB Docket No. 12-58, CSR 8595-E

Greenport
NY0176
21.46
820
176

MB Docket No. 12-59, CSR 8596-E

Tuxedo Park
NY0939
16.94
248
42

*CPR = Percent of competitive DBS penetration rate.
4

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