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Comcast, Effective Competition, Pennsylvania

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Released: July 8, 2013

Federal Communications Commission

DA 13-1480

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Comcast Cable Communications, LLC
)
MB Docket No. 12-288, CSR 8720-E
)
Petition for Determination of Effective
)
Competition in Five Pennsylvania Franchise Areas )

MEMORANDUM OPINION AND ORDER

Adopted: June 27, 2013

Released: July 8, 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 "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 petition is 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 petition based on our
finding that Petitioner is subject to effective competition in the Communities listed on Attachment A.

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.6 This test is referred to as the "competing provider" test.


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 47 U.S.C. 543(l)(1)(B); 47 C.F.R. 76.905(b)(2).

Federal Communications Commission

DA 13-1480

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.7 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.8 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.9 We further find that Petitioner has provided
sufficient evidence to support its assertion that potential customers in the Communities are reasonably
aware that they may purchase the service of these MVPD providers.10 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,11 and is supported in this petition
with copies of channel lineups for both DIRECTV and DISH.12 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.13 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. Further, as Petitioner asserts, the Commission's rules provide that once the first prong of the
competing provider test is satisfied, as it is with the DBS offerings in this case, the subscribers of all
qualifying MVPDs count toward the 15 percent penetration figure necessary for a determination of
effective competition, even if they are not available themselves to more than 50 percent of households.14
Therefore, Petitioner notes that the competing provider penetration figures for the communities of Lower
Merion Township, Lower Moreland Township, Lower Pottsgrove Township, and West Pottsgrove
Township include subscribers from Verizon as well as from the two DBS providers.15 Petitioner sought


7 47 U.S.C. 543(l)(1)(B)(i); 47 C.F.R. 76.905(b)(2)(i).
8 See Petition at 3-4.
9 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, 3 (2006).
10 47 C.F.R. 76.905(e)(2).
11 See 47 C.F.R. 76.905(g); see also Petition at 5.
12 See Petition at Exhibit 2.
13 See Petition at 3-4.
14 See Petition at 5-6; see also 47 C.F.R. 76.905(f); Time Warner Entertainment Co., L.P. et al. v. FCC, 56 F.3d
151, 189 (D.C. Cir. 1995).
15 See Petition at 6. Petitioner has requested that we treat as confidential certain data that was supplied by its
competitor Verizon and that shows Verizon activity in some of the Communities. Petition at 6-9, Exhibits 5, 9.
Businesses typically protect such data from disclosure, and no one has objected to confidential treatment.
Accordingly, we grant the Petitioner's request. We believe that by combining Verizon's subscriber figures in the
relevant Communities with the direct broadcast satellite figures provided by the Satellite Broadcasting and
Communications Association, we will sufficiently protect the confidentiality of Verizon's subscriber figures. See,
e.g.
, CoxCom, Inc., 22 FCC Rcd 4384 (MB 2007). We reserve the right, if another party requests access to the
confidential data, to engage in a more formal process for their evaluation, protection, and limited disclosure. See,
e.g.
, Adelphia Communications Corp., 20 FCC Rcd 20073 (MB 2005); Sprint Petition for Pricing Flexibility for
Special Access and Dedicated Transport Services
, Protective Order, 20 FCC Rcd 19882 (WCB 2005).
2

Federal Communications Commission

DA 13-1480

to determine the competing provider DBS 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 zip code plus four
basis.16 Petitioner asserts that it is the largest MVPD in each of the Communities listed on Attachment
A.17
6.
Based upon the aggregate competing provider subscriber penetration levels that were
calculated using Census 2010 household data, 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. 18 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 petition for a determination of effective
competition filed in the captioned proceeding by Comcast Cable Communications, LLC

IS GRANTED

.
8.

IT IS FURTHER ORDERED

that the certification to regulate basic cable service rates
granted to 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


16 Petition at 6-8. 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.
17 See Petition at 8.
18 Petition at 8-9, Exhibits 8-9.
19 47 C.F.R. 0.283.
3

Federal Communications Commission

DA 13-1480

ATTACHMENT A

MB Docket No. 12-288, CSR 8720-E

COMMUNITIES SERVED BY COMCAST CABLE COMMUNICATIONS, LLC

2010 Census

Estimated Non-Comcast

Communities

CUIDs

CPR*

Households

MVPD Subscribers

Lower Merion Township
PA1992
30.63%
22,473
6,884
Lower Moreland Township PA2014
42.74%
4,548
1,944
Lower Pottsgrove Township PA1647
16.72%
4,497
752
Pottstown Borough
PA1650
15.33%
9,321
1,429**
West Pottsgrove Township
PA1649
27.82%
1,524
424

*CPR = Percent of competitive penetration rate of both DBS and, where applicable, Verizon.
** = only includes DBS subscribers
4

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