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Comcast Cable Petition For Effective Competition, Pennsylvania

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Released: April 16, 2013

Federal Communications Commission

DA 13-719

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Comcast Cable Communications, LLC
)
CSR 8544-E
)
Petition for Determination of Effective
)
Competition in Six Pennsylvania Communities
)

MEMORANDUM OPINION AND ORDER

Adopted: April 16, 2013

Released: April 16, 2013

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

I.

INTRODUCTION AND BACKGROUND

1.
Comcast Cable Communications, LLC, hereinafter referred to as “Petitioner,” has filed
with the Commission a petition 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 community listed on Attachment B and hereinafter referred
to as the Attachment B Community, 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 petition is 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 petition 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); 47 C.F.R. § 76.905.
7 See 47 C.F.R. §§ 76.906-.907(b).

Federal Communications Commission

DA 13-719

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 Attachment A 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 those 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
this petition 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, exceed 15 percent of the households in a franchise
area. Petitioner asserts that it is the largest MVPD in the three of the five Attachment A Communities
(Mahaffey, Ridgway Borough, and South Bethlehem); and that, in the other two Attachment A
Communities (Ridgway Township and Rose), the DBS providers combined and Petitioner by itself each
serve in excess of 15 percent of the households.16 The Commission has recognized that in the latter
conditions, whichever MVPD is the largest, the remaining MVPDs have subscribership of over 15


8 47 U.S.C. § 543(l)(1)(B); see also 47 C.F.R. § 76.905(b)(2).
9 47 C.F.R. § 76.905(b)(2)(i).
10 See Petition at 3.
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 Petition at 5.
14 See Petition at Exh. 1.
15 See Petition at 3.
16 See id. at 7.
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Federal Communications Commission

DA 13-719

percent.17 Petitioner sought to determine the competing provider penetration there 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 Attachment A
Communities on a zip code plus four basis.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 Attachment A Communities. 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
Attachment A Communities.

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.20 Petitioner alleges that it is subject to effective
competition under the low penetration effective competition test because it serves less that 30 percent of
the households in the Attachment B Community.
8.
Based upon the subscriber penetration level calculated by Petitioner, as reflected in
Attachment B, we find that Petitioner has demonstrated the percentage of households subscribing to its
cable service is less than 30 percent of the households in the Attachment B Community. Therefore, the
low penetration test is satisfied as to the Attachment B Community.


17 If Petitioner is the largest MVPD, then MVPDs other than the largest one are the DBS providers, which have a
combined share of over 15%. On the other hand, if one of the DBS providers is the largest MVPD, then Petitioner
(which alone has over 15%) and the other DBS provider combined have over 15%. See, e.g., Comcast Cable
Commc’ns, LLC
, 26 FCC Rcd 10967, 10968-69, ¶ 5 (2011); Comcast Cable Commc’ns, LLC, 26 FCC Rcd 4901,
4903, ¶ 5 (2011); Time Warner Cable Inc., 25 FCC Rcd 14422, 14424, ¶ 6 (2010).
18 Petition 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.
19 Petition at 8 n.27.
20 47 U.S.C. § 543(l)(1)(A).
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Federal Communications Commission

DA 13-719

III.

ORDERING CLAUSES

9.
Accordingly,

IT IS ORDERED

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

IS 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.21
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau


21 47 C.F.R. § 0.283.
4

Federal Communications Commission

DA 13-719

ATTACHMENT A

CSR 8544-E

COMMUNITIES SERVED BY COMCAST CABLE COMMUNICATIONS, LLC


2010 Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

Mahaffey
PA2960
35.46
141
50
Ridgway Borough
PA0465
42.06
1,783
750
Ridgway Township
PA1925
38.26
1,035
396
Rose
PA3037
34.77
486
169
South Bethlehem
PA0263
42.72
206
88

*CPR = Percent of competitive DBS penetration rate.
5

Federal Communications Commission

DA 13-719

ATTACHMENT B

CSR 8544-E

COMMUNITY SERVED BY COMCAST CABLE COMMUNICATIONS, LLC

Franchise Area

Cable

Penetration

Community

CUID

Households

Subscribers

Percentage

Limestone
PA3507
732
20
2.73
6

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