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Comcast Cable Petition For Effective Competition, Ohio

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Released: April 29, 2013

Federal Communications Commission

DA 13-949

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Comcast Cable Communications, LLC
)
MB Docket No. 12-199, CSR-8684-E
)
MB Docket No. 12-248, CSR-8700-E
Petitions for Determination of Effective
)
Competition in 24 Communities in Ohio
)
)

MEMORANDUM OPINION AND ORDER

Adopted: April 29, 2013

Released: April 29, 2013

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

I.

INTRODUCTION AND BACKGROUND

1.
Comcast Cable Communications, LLC, on behalf of its subsidiaries and affiliates,
hereinafter referred to as “Petitioner,” has filed with the Commission two 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
“Attachment A Communities.” Petitioner alleges that its cable system serving the Attachment A
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 those Communities because of the competing service
provided by two direct broadcast satellite (“DBS”) providers, DIRECTV, Inc. (“DIRECTV”), and DISH
Network (“DISH”). Petitioner additionally claims to be exempt from cable rate regulation in the
communities listed on Attachment B and hereinafter referred to as “Attachment B Communities,”
pursuant to Section 623(l)(1)(A) of the Communications Act3 and Section 76.905(b)(1) of the
Commission’s rules,4 because the Petitioner serves fewer than 30 percent of the households in the
franchise area. 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,5 as that term is defined by Section 623(l) of the Communications Act and
Section 76.905 of the Commission’s rules.6 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.7 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 Attachments A and
B.


1 See 47 U.S.C. § 543(l)(1)(B).
2 47 C.F.R. § 76.905(b)(2).
3 See 47 U.S.C. § 543(l)(1)(A).
4 47 C.F.R. § 76.905(b)(1).
5 47 C.F.R. § 76.906.
6 See 47 U.S.C. § 543(l)(1); 47 C.F.R. § 76.905(b).
7 See 47 C.F.R. §§ 76.906-.907(b).

Federal Communications Commission

DA 13-949

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 (“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.8 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.9 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.10 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.11 We further find that Petitioner has
provided sufficient evidence to support its assertion that potential customers in the Attachment A
Communities are reasonably aware that they may purchase the service of these MVPD providers.12 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,13 and is
supported in the petitions with copies of channel lineups for both DIRECTV and DISH.14
Also
undisputed is Petitioner’s assertion that both DIRECTV and DISH offer service to at least “50 percent” of
the households in the Attachment A Communities because of their national satellite footprint.15
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 sought to determine the competing provider DBS penetration in the Attachment A
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 zip code plus four basis.16 Petitioner asserts that it is the largest MVPD in


8 47 U.S.C. § 543(l)(1)(B); 47 C.F.R. § 76.905(b)(2).
9 47 U.S.C. § 543(l)(1)(B)(i); 47 C.F.R. § 76.905(b)(2)(i).
10 See Petitions at 3-5.
11 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006).
12 47 C.F.R. § 76.905(e)(2).
13 See 47 C.F.R. § 76.905(g); see also Petitions at 5.
14 See Petitions at Exhibit 2.
15 See Petitions at 3.
16 Petitions at 6-7. A zip code plus four analysis allocates DBS subscribers to a franchise area using zip code plus
four information that generally reflects franchise area boundaries in a more accurate fashion than standard five digit
zip code information.
2

Federal Communications Commission

DA 13-949

the Columbiana, East Liverpool, East Palestine, Leetonia, Liverpool, New Waterford, St. Clair, and
Wellsville franchise areas.17 With respect to the communities of Madison, Middleton, Springfield, Short
Creek, Smith, and Yellowcreek, Petitioner asserts that it serves in excess of 15 percent of the households
in those franchise areas, while competing providers serve an aggregate of more than 15 percent of the
communities.18

6.
Based upon the aggregate DBS subscriber penetration levels that were calculated using
Census 2010 household data,19 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 Columbiana, East Liverpool, East Palestine,
Leetonia, Liverpool, New Waterford, St. Clair, and Wellsville. With regard to the communities of
Madison, Middleton, Springfield, Short Creek, Smith, and Yellowcreek, we are able to conclude that this
portion of the test is met by analyzing the data submitted for both the Petitioner and its MVPD
competitors. If the subscriber penetration for both the Petitioner and the aggregate competing MVPD
information each exceed 15 percent in the franchise area, the second prong of the competing provider test
is satisfied.20 In Madison, the Petitioner’s penetration rate is in excess of 15 percent and the combined
competing MVPD provider penetration rate is 56.21 percent, while in Middleton, the Petitioner’s
penetration rate is in excess of 15 percent and the combined competing MVPD provider penetration rate
is 51.78 percent. 21 In Springfield, the Petitioner’s penetration rate is in excess of 15 percent and the
combined competing MVPD provider penetration rate is 29.29 percent,22 while in Short Creek, the
Petitioner’s penetration rate is in excess of 15 percent and the combined competing MVPD provider
penetration rate is 30.5 percent.23 Finally, in Smith, the Petitioner’s penetration rate is in excess of 15
percent and the combined competing MVPD provider penetration rate is 48.39 percent,24 while in
Yellowcreek, the Petitioner’s penetration rate is in excess of 15 percent and the combined competing
MVPD provider penetration rate is 43.58 percent.25 Therefore, the second prong of the competing
provider test is satisfied for each of the Attachment A 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.

B.

The Low Penetration Test

7.
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 referred to as the “low penetration” test.26 Petitioner alleges that it is subject to effective
competition under the low penetration effective competition test because it serves less that 30 percent of


17 See CSR-8684-E Petition at 7.
18 CSR-8684-E and CSR-8700-E Petitions at 7.
19 Petition at Exhibits 5-6.
20 Charter Communications, 21 FCC Rcd 1208, 1210 (MB 2006); Time Warner Entertainment Advance/Newhouse
Partnership
, 17 FCC Rcd 23587, 23589 (MB 2002).
21 CSR-8684-E Petition at 7.
22 Id.
23 CSR-8700-E Petition at 7.
24 Id.
25 CSR-8684-E Petition at 7.
26 47 U.S.C. § 543(l)(1)(A).
3

Federal Communications Commission

DA 13-949

the households in the Attachment B Communities.27
8.
Based upon the subscriber penetration level calculated by Petitioner, as reflected in
Attachment B, we find that Petitioner has demonstrated that the percentage of households subscribing to
its cable service is less than 30 percent of the households in the Attachment B Communities. Therefore,
the low penetration test is satisfied as to the Attachment B Communities.

III.

ORDERING CLAUSES

9.
Accordingly,

IT IS ORDERED

that the petitions for a determination of effective
competition filed in the captioned proceeding by Comcast Cable Communications, LLC

ARE
GRANTED

.
10.

IT IS FURTHER ORDERED

that the certification to regulate basic cable service rates
granted to any of the Communities set forth on Attachments A and B

IS REVOKED

.
11.
This action is taken pursuant to delegated authority pursuant to Section 0.283 of the
Commission’s rules.28
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau


27 See Petitions at Exhibit 8.
28 47 C.F.R. § 0.283.
4

Federal Communications Commission

DA 13-949

ATTACHMENT A

MB Docket No. 12-199, CSR-8684-E
MB Docket No. 12-248, CSR-8700-E

COMMUNITIES SERVED BY COMCAST CABLE COMMUNICATIONS LLC

2010 Census

DBS

Communities

CUID

CPR*

Households

Subscribers

Columbiana
OH0817
22.09%
2,852
630
East Liverpool
OH0023
16.47%
4,601
758
East Palestine
OH0245
22.55%
1,898
428
Leetonia
OH0186
38.24%
748
286
Liverpool
OH2236
18.41%
1,744
321
Madison
OH1695
56.21%
1,272
715
Middleton
OH0435
51.78%
1,375
712
New Waterford
OH0280
24.56%
513
126
Short Creek
OH1693
30.50%
459
140
Smith
OH2266
48.39%
622
301
Springfield
OH1092
29.29%
2,694
789
St. Clair
OH1054
23.82%
3,325
792
Wellsville
OH0024
20.88%
1,475
308
Yellowcreek
OH1696
43.58%
872
380

*CPR = Percent of competitive penetration rate of DBS
5

Federal Communications Commission

DA 13-949

ATTACHMENT B

MB Docket No. 12-199, CSR-8684-E
MB Docket No. 12-248, CSR-8700-E

COMMUNITIES SERVED BY COMCAST CABLE COMMUNICATIONS LLC

Franchise Area

Cable

Penetration

Communities

CUID

Households

Subscribers

Percentage

Fairfield
OH0226
4,122
516
12.52%
Goshen
OH2432
1,292
4
0.31%
Mead
OH2265
2,613
53
2.03%
Mount Pleasant
OH1406
1,010
154
15.25%
Pease
OH0018
6,267
351
5.60%
OH2734
Pultney
OH2264
3,718
348
9.36%
OH2605
Richland
OH0153
5,247
1,554
29.62%
OH2267
Smithfield
OH0581
1,448
16
1.10%
Unity
OH0594
3,942
473
12.00%
OH2232
Warren
OH0596
2,439
136
5.58%
6

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