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Media Bureau Granted Petition Filed By Time Warner Cable Inc., CA

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Released: April 15, 2013

Federal Communications Commission

DA 13-711

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Time Warner Cable Inc.
)
CSR 8556-E
)
CSR 8557-E
Petitions for Determination of Effective
)
Competition in Port Hueneme and Seal Beach,
)
California
)

MEMORANDUM OPINION AND ORDER

Adopted: April 12, 2013

Released: April 15, 2013

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

I.

INTRODUCTION AND BACKGROUND

1.
Time Warner Cable Inc., hereinafter referred to as “Petitioner,” has filed with the
Commission 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 “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 petitions are 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 petitions 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 13-711

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 the petitions
with citations to the 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 the Communities.14 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 zip code plus four basis.15
6.
Based upon the aggregate DBS subscriber penetration levels that were calculated using
Census 2010 household data,16 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


6 47 U.S.C. § 543(l)(1)(B); see also 47 C.F.R. § 76.905(b)(2).
7 47 C.F.R. § 76.905(b)(2)(i).
8 See, e.g., Petition in CSR 8556-E 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, e.g., Petition in CSR 8557-E at 5.
12 See, e.g., Petition in CSR 8556-E at 4 n.12; id. at 5.
13 See, e.g., Petition in CSR 8557-E at 6.
14 See Petitions in CSR 8556-E and CSR 8557-E at 6.
15 See, e.g., Petition in CSR 8557-E at Exh. C. 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.
16 See, e.g., Petition in CSR 8556-E at 7.
2

Federal Communications Commission

DA 13-711

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 petitions for a determination of effective
competition filed in the captioned proceeding by Time Warner Cable Inc.,

ARE 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.17
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau


17 47 C.F.R. § 0.283.
3

Federal Communications Commission

DA 13-711

ATTACHMENT A

CSRs 8556-E 8557-E

COMMUNITIES SERVED BY TIME WARNER CABLE INC.

2010 Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

CSR 8556-E

Port Hueneme
CA0397
20.49
7,080
1,451

CSR 8557-E

Seal Beach
CA0499
15.70
13,017
2,044

*CPR = Percent of competitive DBS penetration rate.
4

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