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Time Warner Cable Inc.

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Released: June 10, 2013

Federal Communications Commission

DA 13-1337

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Time Warner Cable Inc.
)
MB Docket No. 12-27, CSR 8581-E
)
MB Docket No. 12-28, CSR 8582-E
Petitions for Determination of Effective
)
MB Docket No. 12-29, CSR 8583-E
Competition in 18 Communities in Kentucky and
)
Ohio
)

MEMORANDUM OPINION AND ORDER

Adopted: June 7, 2013

Released: June 10, 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 "Attachment A Communities." Petitioner alleges that its
cable systems serving the Attachment A Communities are 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 are 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"), and, in one Attachment A
Community, AT&T. Petitioner additionally claims to be exempt from cable rate regulation in the
communities listed on Attachment B and hereinafter referred to as Attachment B Communities, 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 areas. The
petitions are unopposed.5


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 Time Warner filed two letters requesting that the following communities be deleted from consideration in this
proceeding: the Village of Centerville (OH3047), the City of Waverly (OH0128), Groton Township (OH2981), and
Webster Township (OH3033). Time Warner states that these communities have already been determined to be
subject to effective competition in DA 11-491. See Time Warner Cable Inc., 26 FCC Rcd 3816 (2011). Time
Warner also notes that the Media Bureau's Order improperly listed Centerville as a township when it is in fact a
village, the City of Waverly as a township when it is in fact a city, and the City of Waverly's CUID as OH0192
when it is actually "OH0182." See Letter from Craig A. Gilley, Attorney for Time Warner to Marlene H. Dortch,
Secretary, Federal Communications Commission, re: CSR 8581-E, MB Docket No. 12-27 (April 1, 2013). Because
of an inconsistency reflected in the City of Waverly's CUID in the previously noted letter, Time Warner filed
another letter verifying that the City of Waverly's CUID is OH0128. See Letter from Craig A. Gilley, Attorney for
Time Warner to Marlene H. Dortch, Secretary, Federal Communications Commission, re: CSR 8581-E, MB Docket
No. 12-27 and CSR 8582-E, MB Docket No. 12-28 (May 29, 2013). Time Warner also notes that Groton
Township's CUID number was incorrectly listed as OH2891 instead of OH2981 and Webster Township's CUID
(continued....)

Federal Communications Commission

DA 13-1337

2.
In the absence of a demonstration to the contrary, cable systems are presumed not to be
subject to effective competition, 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 petitions based on our
finding that Petitioner is subject to effective competition in the Communities listed on Attachments A and
B.

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 citations to the channel lineups for both DIRECTV and DISH.14 Also undisputed is


(...continued from previous page)
number was incorrectly listed as OH3034 instead of OH3033. See Letter from Craig A. Gilley, Attorney for Time
Warner to Marlene H. Dortch, Secretary, Federal Communications Commission, re: CSR 8582-E, MB Docket No.
12-28 (May 24, 2013). We acknowledge Time Warner's letters requesting the deletions of the above-noted
communities from this proceeding and note the corrections regarding those communities.
6 See 47 U.S.C. 543(l); 47 C.F.R. 76.905.
7 See 47 C.F.R. 76.906-.907(b).
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, e.g., Petition in CSR 8581-E at 2-3.
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, e.g., Petition in CSR 8582-E at 5.
2

Federal Communications Commission

DA 13-1337

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 Attachment A Communities.16 Petitioner sought
to determine the competing provider penetration in the Attachment A Communities by purchasing
subscriber tracking reports 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 Petitioner obtained AT&T's subscriber number in Findlay
City directly from that competing provider.18
6.
Based upon the aggregate competing provider 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 Communities.
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 Communities. Therefore, the
low penetration test is satisfied as to the Attachment B Communities.


(...continued from previous page)
14 See, e.g., Petition in CSR 8583-E at 4 n.12; id. at 5.
15 See, e.g., Petition in CSR 8581-E at 6.
16 See, e.g., Petition in CSR 8582-E at 6-7.
17 See, e.g., Petition in CSR 8583-E at Ex. C.
18 Petition in CSR 8582-E at 7 and Ex. D. Time Warner combines AT&T's subscriber count with the DBS
Providers count to arrive at the Estimated Competing Provider Subscriber number reflected in Attachment A for the
City of Findlay.
19 See, e.g., Petition in CSR 8581-E at Ex. B.
20 47 U.S.C. 543(l)(1)(A).
3

Federal Communications Commission

DA 13-1337

III.

ORDERING CLAUSES

9.
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

.
10.

IT IS FURTHER ORDERED

that the certification to regulate basic cable service rates
granted to or on behalf of 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 13-1337

ATTACHMENT A

MB Docket No. 12-27, CSR 8581-E
MB Docket No. 12-28, CSR 8582-E
MB Docket No. 12-29, CSR 8583-E

COMMUNITIES SERVED BY TIME WARNER CABLE INC.


2010 Census Estimated Competing

Communities

CUIDs

CPR*

Households Provider Subscribers

MB Docket No. 12-27, CSR 8581-E

Deerfield Township
OH2779
27.05
403
109
Jeffersonville Township
OH0990
26.69
502
134
Sabina Village
OH0591
24.32
1032
251
South Shore City
KY0137
26.42
492
130

MB Docket No. 12-28, CSR 8582-E

Arcadia Village
OH1246
29.49
217
64
Findlay City
OH0033
19.23
17,354
3,338
Mount Blanchard Village
OH2020
16.39
183
30
Sycamore Village
OH1257
15.92
358
57
Van Buren Village
OH1034
18.49
119
22

MB Docket No. 12-29, CSR 8583-E

Cumberland Village
OH2894
41.67
132
55
Granville Village
OH0702
20.06
1441
289
Granville Township
OH0655
16.08
2996
477
Hanover Village
OH0600
34.06
323
110
Newark City
OH0224
20.59
19840
4086
Newark Township
OH0654
30.36
840
255

*CPR = Percent of competitive DBS penetration rate.
5

Federal Communications Commission

DA 13-1337

ATTACHMENT B

MB Docket No. 12-28, CSR 8582-E

COMMUNITIES SERVED BY TIME WARNER CABLE INC.

Franchise Area

Cable

Penetration

Communities

CUIDs

Households

Subscribers Percentage

MB Docket No. 12-28, CSR 8582-E

Gorham Township
OH3046
900
3
0.33
Marseilles Township
OH2991
177
1
0.56
Milton Township
OH3031
384
2
0.52
6

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