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Time Warner Cable Inc., Effective Competition, Kentucky

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Released: March 21, 2013

Federal Communications Commission

DA 13-533

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Time Warner Cable Inc.
)
MB Docket No. 12-137, CSR 8635-E
)
MB Docket No. 12-140, CSR 8638-E
Petitions for Determination of Effective
)
Competition in Communities in Kentucky
)

MEMORANDUM OPINION AND ORDER

Adopted: March 21, 2013

Released: March 21, 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. An opposition was filed by the Telecommunications
Board of Northern Kentucky (“TBNK”), requesting that we reject the petition in CSR 8635-E with
respect to the City of Kenton Vale, Kentucky.5
2.
After filing the petitions, Petitioner requested that it be permitted to withdraw the
community of Bellevue, Kentucky from consideration in this proceeding.6 We grant Petitioner’s request.
3.
In the absence of a demonstration to the contrary, cable systems are presumed not to be


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 Telecommunications Board of Northern Kentucky Opposition to Time Warner Cable’s Petition for Special Relief
(“TBNK Opposition”). TBNK does not dispute Petitioner’s claim that effective competition exists in the City of
Lakeside Park, Kentucky. Id. at 1, 3.
6 Letter from Craig A. Gilley, Counsel for Time Warner Cable Inc., to Marlene H. Dortch, Secretary, FCC, at 1
(June 27, 2012).

Federal Communications Commission

DA 13-533

subject to effective competition,7 as that term is defined by Section 623(l) of the Communications Act and
Section 76.905 of the Commission’s rules.8 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.9 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 Kenton Vale, Kentucky, and one of the Attachment B
Communities, the City of Fairview, Kentucky. Except for those two communities, the petitions are
granted.

II.

DISCUSSION

A.

The Competing Provider Test

4.
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.10 This test is referred to as the “competing provider” test.
5.
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.11 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.12 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.13 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.14 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,15 and is supported in
these petitions with citations to the channel lineups for both DIRECTV and DISH.16 Also undisputed is
Petitioner’s assertion that both DIRECTV and DISH offer service to at least “50 percent” of the


7 47 C.F.R. § 76.906.
8 See 47 U.S.C. § 543(l); 47 C.F.R. § 76.905.
9 See 47 C.F.R. §§ 76.906-.907(b).
10 47 U.S.C. § 543(l)(1)(B); 47 C.F.R. § 76.905(b)(2).
11 47 U.S.C. § 543(l)(1)(B)(i); 47 C.F.R. § 76.905(b)(2)(i).
12 See Petitions at 3-5.
13 Mediacom Illinois LLC, 21 FCC Rcd 1175, 1176, ¶ 3 (2006).
14 47 C.F.R. § 76.905(e)(2); see Petitions at 4-5.
15 See 47 C.F.R. § 76.905(g). See also Petitions at 5-6.
16 See Petitions at 5-6 & n. 17.
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Federal Communications Commission

DA 13-533

households in the Attachment A Communities because of their national satellite footprint.17 Accordingly,
we find that the first prong of the competing provider test is satisfied.
6.
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.18 Petitioner sought
to determine the competing provider penetration there by purchasing a subscriber tracking report from the
Satellite Broadcasting and Communications Association (“SBCA”) that identified the number of
subscribers attributable to the DBS providers within the Attachment A Communities on a zip code plus
four basis.19
7.
Based upon the aggregate DBS subscriber penetration levels that were calculated using
Census 2010 household data,20 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.
8.
In the City of Kenton Vale, Petitioner claims to be subject to competing provider
effective competition based on evidence of nine DBS subscribers and 45 households.21 Using those
numbers, Petitioner claims DBS subscribership of 20 percent.22 Although the SBCA tracking report
provided by Petitioner indicates that there are nine DBS subscribers in the City of Kenton Vale,23 TBNK
submitted a more recent SBCA tracking report providing data current through May 31, 2012, which
reflects six DBS subscribers in this community.24 We have held that we will accept more recent numbers
presented by a franchise authority, if the authority shows them to be at least as accurate as the cable
operator’s numbers.25 Using the more recent data submitted by TBNK, our calculations show DBS
subscribership in the City of Kenton Vale to be 13.33 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 Kenton Vale, Kentucky.
9.
In sum, the second prong of the competing provider test is satisfied for each of the
Attachment A Communities except for the City of Kenton Vale. 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 Kenton Vale.


17 See id. at 6.
18 Id. at 7.
19 See id. at 7-8.
20 Petitions 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) (supplementing the Petition in CSR 8635-E to provide
an SBCA subscriber tracking report for the City of Falmouth, Kentucky).
21 See Petition in CSR 8635-E at 8.
22 Id.
23 See id. at Exh. C. The SBCA tracking report for Kenton Vale, Kentucky provided by Petitioner provides data
current through March 31, 2012. Id.
24 See TBNK Opposition at 4 & Exh. A.
25 See, e.g., Time Warner Entertainment-Advance/Newhouse Partnership, 26 FCC Rcd 3840, 3844, ¶ 12 (2011).
Given that TBNK submitted an effective competition tracking report prepared by SBCA—the same evidence
provided by Petitioner to demonstrate DBS subscribership, we find that the more recent data submitted by TBNK is
as accurate as that submitted by Petitioner.
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Federal Communications Commission

DA 13-533

B.

The Low Penetration Test

10.
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.26 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.27
11.
With respect to the City of Fairview, Petitioner provided conflicting data for the number
of occupied households. Specifically, the petition in CSR 8635-E indicates that there are 114 occupied
households in the City of Fairview,28 but the chart listing 2010 Census data cited to support this figure
and appended at Exhibit B to the petition indicates that there are 60 occupied housing units in this
community.29 Based on evidence of 31 subscribers to Petitioner’s cable service, Petitioner claims that its
cable penetration in the City of Fairview is 27.19 percent.30 However, using the correct figure of 60
occupied housing units, as listed on the U.S. Census Bureau website,31 our calculations show Petitioner’s
cable penetration in the City of Fairview to be 51.67 percent, which is well over the statutory maximum
of 30 percent for low penetration effective competition. Accordingly, we deny the petitions as to the City
of Fairview, Kentucky.
12.
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 except for the
City of Fairview. Therefore, the low penetration test is satisfied as to the Attachment B Communities
with the exception of the City of Fairview.


26 47 U.S.C. § 543(l)(1)(A).
27 See Petition in CSR 8635-E at 8-9; Petition in CSR 8638-E at 8.
28 See Petition in CSR 8635-E at 9.
29 See id. at Exh. B.
30 See id. at 9.
31 See U.S Census Bureau, 2010 Census Interactive Population Search for KY – Fairview city, available at
http://www.census.gov/2010census/popmap/ipmtext.php?fl=2126236.
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DA 13-533

III.

ORDERING CLAUSES

13.
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
Kenton Vale, Kentucky and the City of Fairview, Kentucky, and

ARE GRANTED

for all the other
Attachment A and B Communities.
14.

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 Kenton Vale,
Kentucky and the City of Fairview, Kentucky,

IS REVOKED

.
15.
This action is taken pursuant to delegated authority pursuant to Section 0.283 of the
Commission’s rules.32
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Senior Deputy Chief, Policy Division, Media Bureau


32 47 C.F.R. § 0.283.
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Federal Communications Commission

DA 13-533

ATTACHMENT A

COMMUNITIES SERVED BY TIME WARNER CABLE INC.

MB Docket No. 12-137, CSR 8635-E

2010 Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

City of Crittenden
KY0870
18.20
1,302
237
City of Erlanger
KY0675
16.31
7,092
1,157
City of Falmouth
KY0857
22.29
875
195
City of Kenton Vale
KY0681
13.33
45
6
City of Lakeside Park
KY0682
16.60
1,181
196
City of Union
KY0692
28.42
1,661
472
City of Walton
KY0710
15.96
1,291
206
City of Warsaw
KY0539
17.13
648
111

MB Docket No. 12-140, CSR 8638-E

2010 Census

Estimated DBS

Communities

CUIDs

CPR*

Households

Subscribers

City of Cold Spring
KY0666
17.91
2,607
467
City of Dayton
KY0672
15.20
2,052
312
City of Melbourne
KY0686
39.84
128
51
City of Mentor
KY1226
26.67
75
20
*CPR = Percent of competitive DBS penetration rate.
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DA 13-533

ATTACHMENT B

COMMUNITIES SERVED BY TIME WARNER CABLE INC.

MB Docket No. 12-137, CSR 8635-E

Franchise Area

Cable

Penetration

Communities

CUIDs

Households

Subscribers

Percentage

City of Fairview
KY0747
60
31
51.67
Gallatin County (Uninc.)
KY1237
2,284
9
0.39
Grant County (Uninc.)
KY0868
5,074
1,477
29.11
Pendleton County (Uninc.)
KY1110
3,057
288
9.42

MB Docket No. 12-140, CSR 8638-E

Franchise Area

Cable

Penetration

Communities

CUIDs

Households

Subscribers

Percentage

City of Woodlawn
KY0695
89
26
29.21
7

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