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Time Warner Cable Inc., Effective Competition, Indiana and Kentucky

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Released: March 27, 2013

Federal Communications Commission

DA 13-562

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Time Warner Cable Inc.
)
MB Docket No. 12-136, CSR 8634-E
)
MB Docket No. 12-141, CSR 8639-E
Petitions for Determination of Effective
)
Competition in Communities in Indiana and
)
Kentucky
)

MEMORANDUM OPINION AND ORDER

Adopted: March 26, 2013

Released: March 27, 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 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 communities listed on Attachment B and hereinafter
referred to as the “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 area. 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,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 find that Petitioner is subject to
effective competition in the Communities listed on Attachments A and B, with the exception of one of the
Attachment A Communities—the City of Taylorsville, Kentucky. Except for that community, the
petitions are granted.


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 Id. § 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 13-562

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 multichannel 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
these petitions with citations to the 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 the Attachment A Communities.16 Petitioner sought
to determine the competing provider penetration there 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


8 47 U.S.C. § 543(l)(1)(B); 47 C.F.R. § 76.905(b)(2).
9 47 U.S.C. § 543(l)(1)(B)(i); 47 C.F.R. § 76.905(b)(2)(i).
10 See Petitions at 3-5.
11 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006).
12 47 C.F.R. § 76.905(e)(2); see Petitions at 4-5.
13 See 47 C.F.R. § 76.905(g). See also Petitions at 5-6.
14 See Petitions at 6 & n.17.
15 See id. at 6.
16 Id. at 7.
17 See id. at 7-8.
2

Federal Communications Commission

DA 13-562

6.
Based upon the aggregate DBS subscriber penetration levels that were calculated using
Census 2010 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 all but one of the Attachment A Communities.
7.
In the City of Taylorsville, Petitioner claims to be subject to competing provider effective
competition based on evidence of 49 DBS subscribers and 325 households.19 Using those numbers,
Petitioner claims DBS subscribership of 15.08 percent.20 Although a chart provided by Petitioner
indicates that there are 325 occupied housing units in the City of Taylorsville, Kentucky,21 data on the
U.S. Census Bureau website reflects that there are 330 occupied housing units in this locality.22 Using the
correct figure for occupied housing units, our calculations show DBS subscribership in the City of
Taylorsville to be 14.85 percent. This level of subscribership is below the 15 percent statutory minimum
for competing provider effective competition. Accordingly, we deny the petitions as to the City of
Taylorsville, Kentucky.
8.
In sum, the second prong of the competing provider test is satisfied for each of the
Attachment A Communities except for the City of Taylorsville. 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 with the
exception of the City of Taylorsville.

B.

The Low Penetration Test

9.
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.23 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 Communities.24
10.
Based upon the subscriber penetration level calculated by Petitioner, as reflected in
Attachment B, we find that Petitioner has demonstrated that 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.


18 Id. at 8 & Exhs. B, C; Letter from Craig A. Gilley, Counsel for Time Warner Cable Inc., to Marlene H. Dortch,
Secretary, FCC, at 1 and Attachment (Nov. 14, 2012) (“Nov. 14 Supplement”) (attaching page 8 of the Petition in
CSR 8634-E).
19 See Petition in CSR 8634-E at 8; Nov. 14 Supplement.
20 Id.
21 See Petition in CSR 8634-E at Exh. B.
22 See U.S. Census Bureau, 2010 Census Interactive Population Search for KY - Taylorsville city, available at
http://www.census.gov/2010census/popmap/ipmtext.php?fl=2175810.
23 47 U.S.C. § 543(l)(1)(A).
24 See Petition in CSR 8634-E at 9; Petition in CSR 8639-E at 8-9.
3

Federal Communications Commission

DA 13-562

III.

ORDERING CLAUSES

11.
Accordingly,

IT IS ORDERED

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

ARE DENIED

for the City of
Taylorsville, Kentucky, and

ARE GRANTED

for all the other Attachment A and B Communities.
12.

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, except for the City of Taylorsville,
Kentucky,

IS REVOKED

.
13.
This action is taken pursuant to delegated authority pursuant to Section 0.283 of the
Commission’s rules.25
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau


25 47 C.F.R. § 0.283.
4

Federal Communications Commission

DA 13-562

ATTACHMENT A

COMMUNITIES SERVED BY TIME WARNER CABLE INC.

MB Docket No. 12-136, CSR 8634-E

2010 Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

Town of Austin
IN0243
17.03
1,674
285
City of Bedford
KY1016
39.57
230
91
Town of Campbellsburg
IN0938
32.89
228
75
City of Crestwood
KY0576
16.05
1,626
261
City of Milton
KY1042
32.80
250
82
Town of New Pekin
IN0640
17.23
563
97
City of Orchard Grass Hills
KY0636
22.64
508
115
City of Salem
IN0056
25.10
2,622
658
Town of Saltillo
IN0939
45.24
42
19
Town of Scottsburg
IN0244
21.24
2,768
588
City of Shelbyville
KY0427
24.30
5,235
1,272
KY0428
City of Simpsonville
KY1258
26.31
935
246
City of Taylorsville
KY0730
14.85
330
49

MB Docket No. 12-141, CSR 8639-E

2010 Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

Town of Borden
IN0636
29.28
321
94
City of Charlestown
IN0083
20.28
2,884
585
Town of Clarksville
IN0085
15.85
9,175
1,454
Town of Corydon
IN0101
21.40
1,341
287
Town of Georgetown
IN0255
20.96
1,088
228
Town of Greenville
IN0256
32.42
219
71
Town of Lanesville
IN0792
33.20
241
80
Monroe Township
IN1073
46.53
1,975
919
City of New Albany
IN0194
15.59
15,575
2,428
Town of Palmyra
IN0791
19.85
388
77
City of Radcliff
KY0396
15.54
8,660
1,346
Town of Sellersburg
IN0084
26.44
2,443
646
Town of Utica
IN0652
17.07
328
56
City of West Point
KY0657
17.16
338
58
*CPR = Percent of competitive DBS penetration rate.
5

Federal Communications Commission

DA 13-562

ATTACHMENT B

COMMUNITIES SERVED BY TIME WARNER CABLE INC.

MB Docket No. 12-136, CSR 8634-E

Franchise Area

Cable

Penetration

Communities

CUIDs

Households

Subscribers

Percentage

Spencer County (Uninc.)
KY0729
5,835
218
3.74
KY0876
Trimble County (Uninc.)
KY1001
2,940
355
12.07
KY1171

MB Docket No. 12-141, CSR 8639-E

Franchise Area

Cable

Penetration

Communities

CUIDs

Households

Subscribers

Percentage

Hardin County (Uninc.)
KY0330
16,517
358
2.17
6

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