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Comcast Petition For Effective Competition, Illinois

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Released: June 12, 2013

Federal Communications Commission

DA 13-1356

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Comcast Cable Communications, LLC
)
MB Docket No. 12-96, CSR 8613-E
)
Petition for Determination of Effective
)
Competition in Ten Illinois Communities
)

MEMORANDUM OPINION AND ORDER

Adopted: June 7, 2013

Released: June 12, 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 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


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).

Federal Communications Commission

DA 13-1356

households in the franchise area.6 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.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. Petitioner asserts that it is the largest MVPD in nine of the ten Communities; and that, in the other
Community (Poplar Grove), Petitioner and the DBS providers combined each serve in excess of 15
percent of the households.14 The Commission has recognized that in the latter conditions, whichever
MVPD is the largest, the remaining MVPDs have subscribership of over 15 percent.15
6.
Petitioner sought to determine the competing 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


6 47 U.S.C. 543(l)(1)(B); 47 C.F.R. 76.905(b)(2).
7 47 U.S.C. 543(l)(1)(B)(i); 47 C.F.R. 76.905(b)(2)(i).
8 See Petition at 3.
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 Ex. 2.
13 See id. at 3.
14 Id. at 7; id., Declaration of Warren Fitting, Petitioner's Senior Director of Regulatory Accounting, at 3 (March 5,
2012).
15 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).
2

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DA 13-1356

zip code plus four basis.16
7.
Based upon the aggregate DBS subscriber penetration levels that were calculated using
Census 2010 household data,17 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

8.
Accordingly,

IT IS ORDERED

that the petition for a determination of effective
competition filed in the captioned proceeding by Comcast Cable Communications, LLC, on behalf of its
subsidiaries and affiliates,

IS GRANTED

.
9.

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

.
10.
This action is taken pursuant to delegated authority pursuant to Section 0.283 of the
Commission's rules.18
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau


16 Petition at Exs. 5-6. 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 Petition at Ex. 6.
18 47 C.F.R. 0.283.
3

Federal Communications Commission

DA 13-1356

ATTACHMENT A

MB Docket No. 12-96, CSR 8613-E

COMMUNITIES SERVED BY SUBSIDIARIES AND AFFILIATES OF

COMCAST CABLE COMMUNICATIONS, LLC

2010 Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

Belvidere
IL0199
30.42
8,803
2,678
Byron
IL0236
23.73
1,433
340
Loves Park
IL0124
22.04
9,831
2,167
Machesney Park
IL0591
26.52
8,893
2,358
Mount Morris
IL0235
20.93
1,295
271
Oregon
IL0234
21.84
1,630
356
Polo
IL0238
32.19
988
318
Poplar Grove
IL1829
51.02
1,623
828
Rockford
IL0108
20.97
59,973
12,576
Stillman Valley
IL0237
24.88
430
107

*CPR = Percent of competitive DBS penetration rate.
4

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