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Comcast, Effective Competition, Pennsylvania

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Released: April 25, 2013

Federal Communications Commission

DA 13-866

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Comcast Cable Communications, LLC
)
MB Docket No. 12-13, CSR 8576-E
)
Petition for Determination of Effective
)
Competition in 14 Pennsylvania Franchise Areas
)

MEMORANDUM OPINION AND ORDER

Adopted: April 24, 2013

Released: April 25, 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 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 13-866

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
the 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 all of the Attachment A Communities, with the
exception of Lykens Township, Mifflin Township, and Upper Mahantongo Township.16 Petitioner sought


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 Exhibit 2.
15 See id. at 3.
16 See id. at 7 and attached Declaration of Warren Fitting, Senior Director of Regulatory Accounting for Comcast Cable
Communications, LLC (November 7, 2011) and Exhibit 7. Comcast asserts that in the Lykens Township, Mifflin
Township, and Upper Mahantongo Township franchise areas, Comcast serves in excess of 15% of the households,
while DBS Providers serve in excess of 41%, 37%, and 50% of the households, respectively. Id. The Commission has
recognized that where “the subscriber penetration rate for both [the cable operator] and the aggregate DBS information
(continued....)
2

Federal Communications Commission

DA 13-866

to determine the competing provider 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 Attachment A
Communities on a zip code plus four basis.17
6.
Based upon the aggregate DBS subscriber penetration levels that were calculated using
2010 Census household 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 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.19 Petitioner alleges that it is subject to effective
competition under the low penetration effective competition test because it serves less than 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.

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.20
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau


(...continued from previous page)
each exceed 15 percent in the franchise area, the second prong of the competing provider test is satisfied.” See Charter
Communications
Seven Local Franchise Areas in Missouri, 21 FCC Rcd 1208, 1210 at ¶ 5 (2006).
17 Petition at 7-8.
18 Id. at 8 and Exhibit 7.
19 47 U.S.C. § 543(l)(1)(A).
20 47 C.F.R. § 0.283.
3

Federal Communications Commission

DA 13-866

ATTACHMENT A

CSR 8576-E

COMMUNITIES SERVED BY COMCAST CABLE COMMUNICATIONS, LLC


2010 Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

Berrysburg Borough
PA1837
40.13%
152
61
Elizabethville Borough
PA0359
23.51%
638
150
Hegins Township
PA0361
32.69%
1,493
488
Hubley Township
PA0362
22.67%
344
78
Lykens Borough
PA0363
31.78%
774
246
Lykens Township
PA1274
41.87%
504
211
Mifflin Township
PA1838
37.14%
245
91
Porter Township
PA1727
21.68%
927
201
Tower City Borough
PA1726
18.20%
566
103
Upper Mahantongo Township
PA1285
50.57%
265
134
Washington Township
PA0365
29.58%
889
263
Williams Township
PA0368
29.72%
461
137
Williamstown Borough
PA0367
33.16%
567
188

*CPR = Percent of competitive DBS penetration rate.
4

Federal Communications Commission

DA 13-866

ATTACHMENT B

CSR 8576-E

COMMUNITY SERVED BY COMCAST CABLE COMMUNICATIONS, LLC

Franchise Area

Cable

Penetration

Community

CUID

Households

Subscribers

Percentage

Upper Paxton
Township
PA1286
1,607
70
4.35%
5

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