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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of: ) ) Metropolitan Fiber Systems/New York, Inc. ) d/b/a MFS Telecom of New York ) ) Election of Open Video System Option ) and Motion for Extension of Time to ) Complete Open Video System Transition ) ) Metropolitan Fiber Systems/McCourt, Inc. ) ) Election of Open Video System Option ) and Motion for Extension of Time to ) Complete Open Video System Transition ) CONSOLIDATED ORDER Adopted: February 27, 1997 Released: February 27, 1997 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. By this Order, we consolidate the above-captioned proceedings and rule on the merits in each. On November 5, 1996, Metropolitan Fiber Systems/New York, Inc. d/b/a MFS Telecom of New York and Metropolitan Fiber Systems/McCourt, Inc. (jointly referred to as "MFS") each filed an election to transition its alleged video dialtone system to an open video system and a concurrent motion for extension of time to accomplish such transition. Also on November 5, 1996, MFS filed separate applications for certification to operate open video systems in Manhattan and Boston pursuant to Section 653(a)(1) of the Communications Act. By consolidated order (the "MFS Order") dated November 15, 1996, the Cable Services Bureau (the "Bureau") denied each of MFS' applications for certification. The Bureau determined that MFS improperly failed to provide the maximum total anticipated channel capacity of its system as required by Form 1275. In addition, the Bureau noted that several commenters raised significant issues regarding MFS' status as a video dialtone provider. Thereafter, on November 27, 1996, MFS refiled applications for certification to operate an open video system in Manhattan and Boston. By consolidated order, dated December 9, 1996, the Bureau granted each of MFS' open video system applications finding that MFS had corrected the deficiency indicated by the Bureau in the MFS Order, and that the other issues raised by the commenters were not appropriately addressed as part of the open video system certification process. 2. We now address MFS' Election of Open Video System and Motion for Extensions of Time to transition to an open video system. MFS filed the notice of election and extension of time pursuant to Implementation of Section 302 of the Telecommunications Act of 1996, First Order on Reconsideration ("Transition Order"). In the Transition Order we provided authorized video dialtone operators 90 days, from August 8, 1996, in which to elect and to effect a transition to one of the four options for providing video programming services: radio based, common carrier, traditional cable, or open video. The Commission acknowledged in the Transition Order that it might not be possible in all circumstances for video dialtone operators to complete the transition in 90 days, and that, in such instances, we would consider reasonable extensions of time based upon a showing of good cause. 3. In this Order, we deny MFS' request for an extension of time to transition to an open video system pursuant to the Commission's Transition Order. Although we first examine the availability of video dialtone service to MFS and whether MFS was required to file for Section 214 authorization, we do not base our decision on these issues. Rather, our decision is premised on our determination that MFS did not operate a video dialtone system under the rules established by the Commission. Under these rules, MFS was required to: (1) give notice to the Commission and interested programmers; (2) establish a basic common carrier platform to reach end-user subscribers; (3) provide sufficient capacity to serve multiple customer programmers; and (4) offer service on a non-discriminatory basis to all programmers. After reviewing the record in this proceeding and the video dialtone proceedings, we conclude that MFS' video dialtone system did not satisfy these criteria. II. POSITIONS OF THE PARTIES A. MFS' Filings 4. In its notice of election, MFS states that it is a non-dominant common carrier that currently offers video programming over its fiber optic telecommunications network in New York and Boston on a common carrier video dialtone basis, and advises that it is electing to provide video programming transmission services as an open video system operator. MFS also requests an extension of time, until June 1, 1997, in which to make the transition to an open video system. As support for its requested extension, MFS states that it must conclude negotiations with the Cities of New York and Boston concerning the terms, prices and conditions for public, educational and governmental ("PEG") access channels, which are required to be made available to subscribers as part of an open video system platform. Because the open video system rules are being implemented for the first time, MFS states that these negotiations present issues of first impression and will therefore require substantial consideration and discussion by the parties. MFS also asserts that a grant of its requested extension is necessary to ensure that subscribers served by MFS will continue to receive video programming services. B. Oppositions 5. Several commenters opposed MFS' election and motion for extension on the grounds that MFS is not authorized to provide video dialtone service, is not providing video dialtone service, and therefore is not entitled to the transition relief under the Commission's Transition Order. The National Cable Television Association ("NCTA") states that the Commission's video dialtone regulations applied only to "dominant" and "traditional local exchange carriers" and that because MFS did not satisfy these criteria, it could not qualify as a video dialtone operator. Time Warner Cable of New York City and Paragon Communications ("Time Warner") and Cablevision of Boston, Inc. ("Cablevision") claim that MFS never obtained the requisite Section 214 video dialtone authorization, and assert that MFS' facilities have not met the requirements of a video dialtone system because they are closed to other programmers, and have violated the video dialtone programmer affiliation and channel capacity limits. Time Warner also alleges that MFS does not qualify as a video dialtone system, or an open video system distributor because its system ends at the curb. 6. Opponents also argue that, because MFS is not authorized to provide video dialtone pursuant to Section 214 and MFS's tariff is inconsistent with the Commission's video dialtone regulations, MFS is actually operating under a non-dominant carrier interstate tariff for video transport. Opponents further allege that this type of common carrier offering, unlike video dialtone, does not permit MFS' affiliated programmer, Residential Communications Network ("RCN"), to transmit programming of its own choosing. Commenters argue that the evidence shows that MFS is unlawfully operating a cable system without a franchise. As a result, they urge the Commission to take immediate enforcement action against MFS and RCN, its affiliated programmer, or commence an investigation of the circumstances under which MFS has been offering video service, and to direct MFS to cease and desist if MFS is operating without lawful authority. 7. The Massachusetts Cable Television Commission ("MCTC") opposes MFS' motion for extension on four grounds. First, MCTC argues that the motion runs counter to Congress' intent to effectuate a swift transition from video dialtone to an open video system. Second, MCTC contends that MFS's purported reason for the extension -- time to negotiate PEG access issues -- does not warrant an additional 30 week extension to complete a transition process which should have begun with the Commission's Transition Order issued July 23, 1996. Third, MCTC states that it has an interest in ensuring that MFS is subject to a well-defined regulatory framework which would be delayed by MFS' extension. Finally, MCTC argues that prompt resolution of MFS's open video system transition will end the period during which MFS is not subject to any meaningful regulation, as well as end the needless legal costs associated with MCTC's investigation of MFS. MCTC suggests an extension of no more than 90 days from November 6, 1996, the original video dialtone transition deadline. 8. The Boston Community Access and Programming Foundation ("BCAPF") comments that MFS has not yet seriously pursued negotiations with BCAPF, the City of Boston, or MCTC regarding its PEG access obligations. BCAPF requests that any extension granted to MFS be conditioned upon MFS providing payments in support of PEG access as of the date on which MFS would have been certified to operate as an open video system had it made a timely and proper certification request. In any event, BCAPF argues that MFS should be granted an extension of no more than 120 days. 9. The City of Boston ("Boston") also suggests a 120 day extension with leave to file for additional extensions. The remainder of Boston's comments request Commission guidance on three issues not directly addressed in the Commission's Open Video Systems Report and Orders. First, Boston asserts that there is no clear statement of when an open video system operator must commence payment to the city in lieu of a franchise fee, or when an open video system operator becomes subject to PEG access requirements. Second, Boston states that it would like to reach an agreement with MFS which is coterminous with the current cable television franchise (December 15, 1997). In the event that Boston and the cable franchisee are unable to reach an agreement, Boston believes that it would then be entitled to rely on the remedies outlined in the Commission's rules for determining MFS's payment and PEG access obligations. Finally, Boston asks whether open video system providers should be expected to provide data to local authorities regarding homes passed, homes served, miles of plant, and annual operating statements. 10. The City of New York ("New York") states that because MFS's system is currently operating, it should be required to meet certain open video system obligations during any transition extension granted by the Commission. These requirements include the payment of fees for use of rights-of-way, and providing PEG access channels and facilities. New York states it does not oppose the motion for extension assuming New York and MFS reach a final agreement on these issues. C. MFS' Reply 11. MFS replies that it is a legally authorized video dialtone operator. MFS states that, over a decade ago, in Policy and Rules for Competitive Carrier Services and Facilities Authorizations Therefor, Fifth Report and Order ("Fifth Competitive Carrier Order"), the Commission amended its rules to relieve all non-dominant common carriers, such as MFS, from filing Section 214 applications for any domestic, interstate services, or for construction, acquisition, or operation of any transmission line. MFS asserts that as a non-dominant common carrier it was not required to seek Section 214 approval before constructing any of its domestic interstate common carrier facilities, regardless of the type of services eventually transmitted over those facilities. According to MFS, the rules adopted in the Fifth Competitive Carrier Order, which relieved non- dominant carriers from Section 214 obligations, also relieved it of the requirement to receive Section 214 certification prior to operating its video dialtone systems. MFS argues that the Fifth Competitive Carrier Order relieves all non-dominant common carriers, such as MFS, from filing for Section 214 authorization for any domestic, interstate services to any domestic point or for construction, acquisition, or operation of any transmission line. In support of its argument, MFS cites the Fifth Competitive Carrier Order, and 47 C.F.R.  63.07(a), which states that "[a]ny party that would be a non-dominant domestic interstate communications common carrier is authorized to provide domestic, interstate services to any domestic point and to construct, acquire, or operate any transmission line as long as it obtains all necessary authorizations from the Commission for use of radio frequencies." MFS states that no precedent following the Fifth Competitive Carrier Orderrequires a non-dominant carrier to file for Section 214 authorization. 12. MFS maintains that the Commission's video dialtone proceedings did not modify this long-standing policy. MFS also asserts that it provides non-discriminatory access to all video programmers, and that no programmer using the MFS platform to deliver video programming has exclusive or discriminatory access to MFS's common carrier facilities. MFS also asserts that it is not subject to any affiliation prohibitions relevant to its video dialtone service because of the Commission's ruling that non-dominant common carriers were not subject to the telephone-cable cross-ownership rules. In response to Time Warner's allegations that MFS' system ends at the curb, MFS states that there is no authority for the premise that open video systems must physically extend, in every case, to end-user premises. 13. In response to commenters' claims that MFS actually provides video transport service, rather than video dialtone service, MFS contends that the tariff it filed with the Commission includes all the video dialtone attributes required by the Commission's rules. MFS states that it adopted the service name, "Video Transport Service," under the tariff, noting there is no legal requirement that it be called "video dialtone service." MFS asserts that it is not a "cable operator" providing "cable service" and is therefore not required to obtain a franchise in New York or Boston. 14. With regard to comments concerning PEG access obligations and fees, MFS states that it is currently working with New York in arranging for MFS to pay a gross receipt fee on video revenues, and to make PEG contributions and channel capacity available during the transition period between certification and full open video system implementation. MFS states that it "does not object in principle to reaching a similar arrangement with the City of Boston." III. DISCUSSION 15. In 1991, the Commission, in Telephone Company-Cable Television Cross-Ownership Rules, Sections 63.54-63.58 ("First Report and Order"), began implementing the regulatory process known as video dialtone, permitting local exchange carriers ("LECs"), to make available to multiple service providers, on a nondiscriminatory common carrier basis, a basic platform for delivery of video programming and other services to end users. Prior to the implementation of video dialtone, LECs were prohibited from providing video programming directly to subscribers in their telephone service areas as a result of the cable-telephone cross-ownership restriction. The Commission developed video dialtone to allow LECs to provide video programming to subscribers consistent with the cable-telephone cross-ownership restriction, thereby encouraging development of an increasingly competitive video marketplace in the United States. The basic platform was envisioned as a common carriage transmission service coupled with the means by which consumers can access any or all video program providers making use of the platform. 16. At the outset of our discussion, we note that, except for the transition periods specifically authorized by the Commission under the Transition Order, video dialtone service is no longer a permissible regulatory option for any entity. Congress repealed the Commission's video dialtone regulations as part of the Telecommunications Act of 1996 (the "1996 Act"). We must resolve MFS' status under the rules governing video dialtone service for purposes of transitioning to an open video system because only authorized video dialtone providers are entitled to transition to open video systems under the Transition Order. Our inquiry must therefore address the following issues: (1) was video dialtone a regulatory option available to MFS; (2) must MFS have obtained Section 214 authorization from the Commission in order to be considered an authorized video dialtone operator under the Commission's Transition Order; and (3) was the service provided under the tariff relied upon by MFS video dialtone service. A. Availability of Video Dialtone to MFS 17. We first examine whether video dialtone service was an option available to MFS. NCTA argues that video dialtone service was an option available exclusively to LECs and that MFS was not a LEC when it began offering video service. The Cable Communications Policy Act of 1984 prohibited LECs from providing video programming directly to subscribers in their telephone service areas. The Commission's video dialtone rules were established to increase competition for video programming service by permitting LEC participation in the video programming marketplace in a manner not inconsistent with the statutory telephone-cable cross-ownership ban. The First Report and Order refers to video dialtone as "an enriched version of video common carriage under which LECs will offer various non-programming services in addition to the underlying video transport." Similarly, the Commission, in Telephone Company-Cable Television Cross-Ownership Rules, Sections 63.54 - 63.58, Second Report and Order, Recommendation to Congress, and Second Further Notice of Proposed Rulemaking ("Second Report and Order") stated that video dialtone will "enable local telephone companies" to participate in the video marketplace. Finally, Telephone Company-Cable Television Cross-Ownership Rules, Memorandum Opinion and Order on Reconsideration and Third Further Notice of Proposed Rulemaking ("Video Dialtone Reconsideration Order") states that "in 1991 and 1992, the Commission adopted policies and rules to permit an expanded role by local exchange carriers (LEC's) in the provision of video services in their telephone service area." In this regard, the video dialtone orders repeatedly refer to video dialtone as a service offering available specifically to LECs. Although the video dialtone orders do not expressly limit the service to LECs, there is also no indication that the Commission intended that video dialtone be available to other entities, such as competitive access providers ("CAPs"). 18. We note that MFS has not provided record evidence that it is certified as a competitive LEC in Boston or New York. For purposes of this order, we assume that MFS was not a LEC when it began offering its alleged video dialtone service in these jurisdictions. Moreover, current publicly available information suggests that MFS' status was that of a CAP, rather than a LEC. For example, MFS identifies itself on the Internet as a ". . . provider of competitive access and local private line telecommunications services. . . ." MFS also states that it "leads all other Competitive Access Providers in the four most significant levels of measurement . . . ." Because it does not appear that MFS was a LEC when it began providing video programming, and MFS itself avers that the telephone-cable cross-ownership rules did not apply to it, it is questionable whether the video dialtone framework was available to MFS at the time MFS initiated its video service. Indeed, non-LECs, such as MFS, were not subject to the telephone-cable cross ownership ban, and thus MFS could have applied for a cable franchise for video programming service in New York and Boston. However, we cannot definitively state that the Commission would have barred MFS from providing video dialtone, had MFS presented the question to the Commission at the time it initiated service. Although we take into account MFS' identity as a CAP, rather than a LEC, this alone is an insufficient ground to rest our determination. We next examine whether MFS' failure to obtain Section 214 authorization from the Commission for its service provides a sufficient basis for a decision as to MFS' status as an authorized video dialtone provider. B. Section 214 Requirement 19. NCTA, Time Warner and Cablevision have argued that MFS cannot be considered an authorized video dialtone operator, and is therefore ineligible to transition to an open video system, because MFS never obtained authorization to operate a video dialtone system pursuant to Section 214 of the Communications Act of 1934, as amended ("Communications Act"). We note that in adopting the rules applicable to video dialtone, the Commission repeatedly emphasized the importance of the Section 214 authorization process in ensuring that video dialtone served the public interest, stating ". . . as local telephone companies devise specific video dialtone proposals, we intend to evaluate compliance with our rules and public interest policies during the Section 214 certification process." Indeed, the Commission acknowledged that: We are aware, however, that video dialtone facilities may be deployed in varying configurations and that we may need to address the extent of our jurisdiction depending upon the particular configuration. We believe, however, that to delay the adoption of video dialtone until all such issues are resolved would not serve the public interest, especially given the uncertain nature of how such facilities and services will develop. Such issues can be addressed in the context of Section 214 applications, for example. The Commission envisioned that particular video dialtone configurations could have different jurisdictional impacts. Notably, the Commission continued to rely on the Section 214 certification process. 20. In the Video Dialtone Reconsideration Order, the Commission addressed various petitions for reconsideration of the Second Report and Order, including arguments that the Section 214 certification process for video dialtone should be streamlined or eliminated. The Commission rejected these petitions stating that "[b]ecause video dialtone is based upon new and evolving technologies, the Section 214 process is critical to our ability to ensure that video dialtone is implemented in a manner that best serves the public interest." With regard to suggestions that the Section 214 process be streamlined or simplified for certain established video dialtone services, or architectures, the Commission affirmatively restated the significance of the Section 214 requirement. In both the Second Report and Order and the Video Dialtone Reconsideration Order, the Commission emphasized the importance of the Section 214 process and refused to abrogate or streamline this process with regard to the authorization of any video dialtone system. 21. MFS, however, asserts that, as a non-dominant carrier, it did not need to obtain Section 214 authorization to provide any domestic service, including video dialtone, citing the Commission's rulemaking in Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations Therefor, First Report and Order ("Competitive Carrier"). We note that Competitive Carrier appears to apply to interexchange carriers, as evidenced by theNotice of Inquiry and Proposed Rulemaking preceding Competitive Carrier ("Competitive Carrier NOI"), as well as the Fourth Competitive Carrier Order and the Fifth Competitive Carrier Order. The Competitive Carrier NOI clearly contemplated application to "the current and potential suppliers of interstate services," such as interstate Message Telecommunications Service and Wide Area Telecommunications Service ("MTS/WATS"). MFS' video transport service is not MTS/WATS. Likewise, the Fourth Competitive Carrier Order repeatedly and explicitly states that Competitive Carrier applies to "interstate, domestic, interexchange telecommunications services," such as "MTS/WATS, private line, and public switched record." Furthermore, the Fourth Competitive Carrier Order enumerates the providers it applies to: miscellaneous common carriers, domestic satellite carriers, domestic satellite resellers, domestic operations of Western Union, international record carriers, other record carriers, and interexchange telephone companies. MFS does not fall clearly within one of these enumerated categories. Similarly, the Fifth Competitive Carrier Ordernotes that the Competitive Carrier proceeding applies to "nondominant suppliers of domestic, interstate, interexchange telecommunications common carrier services." 22. In its reply, MFS cites language from the Fourth Competitive Carrier Order as evidence that the Commission intended Competitive Carrier to apply to video communication services. MFS notes that the Commission stated that "increasingly, customers purchase bandwidth capacity, not a service for a specific type of transmission or a service provided by a specific transmission medium. Many carriers offer integrated voice/data/facsimile/video communication services." MFS seems to infer from this language that video services offered by non-dominant carriers, such as MFS, were expressly contemplated in the Fourth Competitive Carrier Order. We are not convinced that the mere mention that "many carriers offer integrated voice/data/facsimile/video communication services" is evidence that the Commission intended that Competitive Carrier would apply prospectively to vitiate the Section 214 certification requirement with regard to video dialtone services not in existence at the time of the Fourth Competitive Carrier Order. 23. Even if we were to find that Competitive Carrier did apply to MFS' provision of video services, we cannot reconcile MFS' argument that it did not need a Section 214 authorization to be considered an authorized video dialtone provider in view of the repeated, express statements of the Commission regarding the necessity of Section 214 authorization for video dialtone. In interpreting a general provision or regulation that conflicts with a specific statutory or regulatory provision, the United States Supreme Court has stated that the general rule of statutory construction is that "where there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of the enactment." In this context, we believe that the more recent, particularized video dialtone Section 214 authorization requirement would take precedence over the earlier, more generalized regulatory forbearance considerations of Competitive Carrier for purposes of deciding this case. In reaching this conclusion, not all of the Commission's stated reasons for requiring Section 214 authorization regarding video dialtone apply to a non- dominant common carrier such as MFS. For example, the Commission's concern over cross- subsidization of video dialtone with local exchange revenues does not apply to MFS because it was not an incumbent LEC. The Commission's concerns regarding the need to impose additional safeguards tailored to specific video dialtone proposals, and the evolving nature of video dialtone, however, apply equally to MFS's alleged video dialtone network and traditional, dominant local exchange carriers offering video dialtone service. 24. As with the issue of whether video dialtone was available to non-LECs, the issue of whether the Commission would have required MFS to obtain a Section 214 authorization in 1995 was never presented to the Commission and cannot now be definitely answered. MFS' lack of Section 214 authorization, standing alone, is not dispositive of whether it is an authorized video dialtone operator. Rather, we find dispositive an examination of the nature of MFS' tariffed Video Transport Service. C. MFS' Service and Tariff 25. While MFS argues that the Competitive Carrier decisions relieve it of a filing obligation under Section 214, these decisions did not relieve MFS of the obligation to conduct its alleged video dialtone operations in compliance with the Commission's rules. MFS represents that its service, as well as the tariff it filed on November 7, 1995, are consistent with the Commission's guidelines for video dialtone service. We examine MFS's service and tariff to determine whether each is consistent with the Commission's video dialtone rules and policies. 26. To qualify as an authorized video dialtone operator under our rules, MFS must have satisfied the requirements set forth in our Second Report and Order and Video Dialtone Reconsideration Order. In addition, specific video dialtone requirements were developed in the course of the Commission's review of individual LECs' Section 214 proceedings. Indicia of video dialtone service includes the provision of: (1) notice to the Commission and interested programmers; (2) a basic common carrier platform to reach end-user subscribers; (3) sufficient capacity to serve multiple customer programmers; and (4) service offered on a non-discriminatory basis to all programmers. 27. We first address whether MFS provided sufficient notice to the Commission and interested programmers that it would construct and operate a video dialtone platform. The Commission's video dialtone regime was designed to provide notice of a video dialtone system so that the common carrier and nondiscriminatory requirements of such platform could be enforced. It was equally important that interested programmers had notice so that they could inquire about obtaining capacity for their programming on the video dialtone platform. For example, in authorizing BellSouth's video dialtone trial, the Commission, responding to concerns regarding the lack of awareness of BellSouth's trial among potential programmers, held that BellSouth "must take reasonable measures to inform potential customer-programmers of any enrollment period, such as by placing an announcement in industry trade journals." MFS has provided no evidence that it provided any notice to the Commission or to interested programmers that it was operating a video dialtone system until after the repeal of video dialtone in the 1996 Act. According to Time Warner, MFS' first public pronouncement expressly stating that it was providing "video dialtone service" came in June 1996, in reply to a programmer's answer to a program access complaint filed by RCN. In any event, MFS' filing of a responsive pleading in an unrelated Commission proceeding cannot be said to constitute notice to the Commission that MFS had instituted video dialtone service. 28. The tariff MFS filed for "Video Transport Service," and the accompanying transmittal letter do not support MFS' claim that MFS is operating a video dialtone system. While MFS correctly points out that nowhere in the Commission's regulations is there a requirement that MFS name its service "Video Dialtone Service," this does not obviate MFS' responsibility to give the Commission and interested programmers clear notice that it intended to provide video dialtone service. Although we found in the First Report and Order that independent programmers providing programming on a video dialtone platform would not be providing cable service, and therefore would not be subject to the provisions of Title VI of the Communications Act, we have made no such finding with respect to independent programmers providing programming on a video transport service platform. Notice that MFS intended to provide video dialtone service would therefore have been material to potential independent programming providers. While we do not expressly hold, as we did with BellSouth's video dialtone trial, that MFS was required to advertise its alleged video dialtone system to comply with the Commission's video dialtone rules, we find the lack of any notice by MFS to the Commission and interested programmers to be inconsistent with both the spirit and letter of our video dialtone rules, and to militate against MFS' contention that it was an authorized video dialtone operator under the Transition Order. 29. The Commission's rules required video dialtone service to include, at a minimum, a basic common carrier platform available to multiple video programmers on a non-discriminatory basis, and a means by which end-user subscribers could access any and all of the video programming offered. In examining whether MFS provided a basic platform through which end-user subscribers can access any and all of the video programming offered, we interpret this requirement as necessitating that video dialtone operators provide an uninterrupted conduit for all customer programmers from the head-end to the end-user subscriber. We note that MFS' tariff obligates the customer to obtain and maintain all rights of way and conduit necessary for the installation of cable and equipment used to provide network services to the customer from the cable building entrance or property line to the location of the equipment space. Time Warner argues that MFS' alleged video dialtone system is deficient in this regard and asserts that in many instances MFS' system ends at the curb and does not reach end-user subscribers. In its reply, MFS admits there are instances where it does not provide facilities directly to a customer's premises, stating: In those instances where MFS does not provide facilities directly to the customer's premises, any video programmer will be able to extend its own cable from the point of presence [in a particular building] to its own end- users pursuant to whatever technical methodology and physical arrangements it may be able to utilize -- just as RCN has done and must continue to do in the future. . . . And to the extent that it may be necessary for one video programmer to utilize the cable of RCN or some other video programmer to reach end users, each video programmer will be required by MFS to make such facilities available. 30. First, we find the above statement acknowledging that MFS does not provide facilities directly to the customer's premises to be inconsistent with the Commission's intent that video dialtone be provided as an end-to-end service. Second, MFS provides no evidence that it made any arrangements to enable potential programmers to utilize RCN's facilities to reach end-user subscribers. MFS defends this system configuration relying on the Commission's decision authorizing New York Telephone's ("NYT") video dialtone trial. In that proceeding, Time Warner asserted that NYT was proposing "fiber-to-the-curb" service, rather than video dialtone service to end users, because NYT intended to use Liberty Cable's ("Liberty") coaxial cable drops to provide end-to-end video dialtone service. The Commission found that NYT's use of Liberty's coaxial drops was "an acceptable means of complying with the Commission's video dialtone rules during a limited, one-year trial." In addition, Liberty guaranteed that all video programmers would have access to coaxial facilities installed to each apartment at the trial sites at no extra charge. This conflicts significantly with MFS's system, which, at least in some cases, ends at the point of presence within a building. Thereafter it is up to the individual programmer to negotiate with RCN for use of its facilities, or install and maintain its own facilities to serve end-user subscribers. That RCN has constructed facilities from MFS' point of presence within buildings to end-user subscribers also indicates that MFS was not providing video dialtone service to RCN, because this configuration does not provide "[f]ull and fair access to . . . end users, by multiple programmers. . . . " Nor can MFS guarantee that the facilities installed by customer programmers to reach end-user subscribers will enable such subscribers to "access any and all of the video programming offered" on MFS' system. Although it repeatedly refused to endorse or require particular equipment or architecture in the various authorized video dialtone trials and commercial applications, the Commission required that all video dialtone systems provide a basic platform through which multiple video programmers would receive uninterrupted service from the headend to end-user subscribers. Because it fails to provide such a basic platform, we find that MFS' alleged video dialtone system is inconsistent with the Commission's regulations, and is inconsistent with MFS' claim to be an authorized video dialtone operator for purposes of the Transition Order. 31. A further requirement of the Commission's video dialtone regulations was that the basic platform must provide "sufficient capacity to serve multiple video programmers." In the Bell Atlantic Order, we stated that in applying the capacity requirement, we would review each proposed video dialtone facility application on a case-by-case basis, taking into consideration: (1) the initial capacity available; (2) the ability to expand this capacity; and (3) the demand for capacity. We find that MFS allocated the majority of its 110 analog channels to one programmer at the inception of its service. We are unable to determine adequately the demand for capacity on MFS' system, given that MFS has failed to provide or initiate procedures by which video programmers could request channel capacity. Indeed, MFS has provided no information that programmers other than RCN have sought carriage on its system. We find that MFS' allocation of the majority of its initial capacity to RCN constitutes a failure to offer sufficient capacity to support multiple customer programmers. This is additional evidence of the inconsistencies between MFS' service and authorized video dialtone service. 32. A further essential element of video dialtone was that the service be offered on a non- discriminatory basis. The Commission's video dialtone rules precluded a video dialtone operator from assigning more than fifty-percent of its analog capacity to a single customer programmer. Where there was excess analog capacity available, a customer programmer could exceed the fifty- percent limitation, provided the customer programmer agreed to relinquish the capacity in excess of the fifty-percent limitation if necessary to meet future demand. RCN, as sole programmer in New York and Boston, consistently occupied more than fifty-percent of MFS' channel capacity. Cablevision argues that its programming affiliate, Rainbow Programming, received no response to its inquiry regarding obtaining capacity on MFS' system. In its reply, MFS states that it answered Rainbow's inquiries regarding access but that its correspondence was returned as undeliverable, and that in any event, it would have been reasonable to deny Rainbow carriage on its Boston platform because Cablevision is a competing in-region cable operator. 33. We do not consider MFS' difficulty in sending correspondence to an established business located within the same city a justified excuse for not providing the requested information concerning access. More importantly, the Video Dialtone Reconsideration Order expressly permitted in-region cable operators to participate as programmers in video dialtone platforms. One of the purposes of video dialtone was to guarantee "multiple service providers to obtain equal access on a non-discriminatory basis." Instead, MFS allocated RCN nearly all of the capacity on its system and failed to offer sufficient capacity for multiple programmers as required by our video dialtone rules. Again, we find this inconsistent with the requirements of video dialtone. In the Video Dialtone Reconsideration Order, the Commission stated that "one of the more significant actions" was to reaffirm that operators offering video dialtone could not allocate all or substantially all analog capacity to a single "anchor programmer." Moreover, the Commission stated that it would expressly guard against "a telephone company . . . seeking to present ordinary common carrier channel service to a single video programmer and claiming that such a construct is a sufficient video dialtone 'platform' to enable it to provide to video programmers unregulated enhanced services related to video programming." 34. Finally, we believe MFS' tariff offers further evidence of the disparity between the service offered by MFS and authorized video dialtone service. The tariff filed by MFS contains the following service description: Video Transport Service ("VTS") provides transmission capacity to video programmers and information service providers ("customer programmers") for the delivery of their programming services to end user subscribers. Through VTS, multiple customer programmers are able to deliver their service to end user subscribers. . . . While MFS was not required to call its service "Video Dialtone Service," we do not believe that its tariff is consistent with the policies underlying video dialtone and the tariffs filed with the Commission pursuant to its rules. 35. Based on our review of MFS' service and tariff, video dialtone precedents and the record in this matter, we find that MFS was not a video dialtone operator authorized pursuant to the Commission's rules during the period from November 1995 to December 9, 1996 (the date of MFS' open video system certification). The Transition Order addressed only converting from a video dialtone system to an open video system. Prior to enactment of the 1996 Act (February 8, 1996), MFS' provision of video distribution facilities to RCN appears to be more in the nature of traditional common carrier channel service rather than video dialtone service. Channel service is the provision by a telephone company of video distribution facilities and services to franchised cable operators on a common carrier basis. We note, however, that channel service provides for service from the cable operator's head-end to the subscriber's premises, which MFS' system does not appear to do. Moreover, the 1996 Act eliminated video dialtone as a common carrier offering and set out four options for video programming services provided by telephone companies. Telephone common carriers such as MFS may (1) provide video programming to subscribers through radio communication under Title III of the Communications Act; (2) provide transmission of video programming on a common carrier basis under Title II of the Communications Act; (3) provide video programming as a cable system under Title VI of the Communications Act; or (4) provide video programming by means of an open video system under new Section 653 of the Communications Act. Whether MFS' activities since February 1996 are encompassed within the Section 651(a)(2) common carrier transmission of video programming alternative is beyond the scope of this proceeding. IV. CONCLUSION 36. Our review of MFS' election and motion for extension of time and the circumstances under which MFS claims to have provided video dialtone service to its affiliated programmer, RCN, leads us to conclude that MFS was not an authorized video dialtone operator eligible to transition to an open video system under the Commission's Transition Order. Although there can be debate regarding MFS' right to provide video dialtone service as a competitive access provider and the regulatory process MFS needed to satisfy in order to provide such service, MFS was required to operate its system in compliance with the Commission's rules. At a minimum video dialtone service required: (1) notice to the Commission and interested programmers; (2) a basic common carrier platform to reach end-user subscribers; (3) sufficient capacity to serve multiple customer programmers; and (4) service offered on a non-discriminatory basis to all programmers. MFS' system did not satisfy any of these criteria and is ineligible for relief under the Transition Order. 37. This Order addresses only whether MFS is entitled to the election and relief requested pursuant to the Transition Order. We decline to address comments by the City of Boston raising issues concerning certain obligations of open video system operators as beyond the scope of this proceeding. We do not address comments by the City of New York requesting that we condition any transition extension upon MFS meeting certain obligations of open video system operators because this Order denies MFS' Notice of Election and Motion for Extension of Time. Because we limit our decision today to the issue of whether MFS is entitled to the election and relief requested pursuant to the Transition Order, we need not address commenter's arguments that MFS is unlawfully operating a cable system without a franchise, or commence an investigation resulting in additional enforcement action. V. ORDERING CLAUSES 38. Accordingly, IT IS ORDERED that the Notice of Election and Motion for Extension of Time filed by Metropolitan Fiber Systems of New York, Inc. d/b/a MFS Telecom of New York is DENIED. 39. It is FURTHER ORDERED that the Notice of Election and Motion for Extension of Time filed by Metropolitan Fiber Systems/McCourt, Inc. is DENIED. 40. This action is taken by the Chief, Cable Services Bureau, pursuant to the authority delegated by Section 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Deputy Chief, Cable Services Bureau