******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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: ) ) RIFKIN & ASSOCIATES, INC./CABLE ) EQUITIES OF COLORADO, LTD. D/B/A ) N.E. GWINNETT CABLEVISION ) CUID No. GA0276 ) Petition for Revocation ) of the Certification of ) Gwinnett County, Georgia ) to Regulate Basic Cable Service Rates) in Unincorporated Gwinnett County ) MEMORANDUM OPINION AND ORDER Adopted: February 2, 1998 Released: February 5, 1998 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. Rifkin & Associates, Inc./Cable Equities of Colorado, Ltd., d/b/a N.E. Gwinnett CableVision ("Rifkin"), filed a petition for revocation challenging the certification of Gwinnett County, Georgia to regulate Rifkin's basic cable service and associated equipment rates in Unincorporated Gwinnett County. Gwinnett County did not file an opposition to Rifkin's petition. 2. Section 623(a)(4) of the Communications Act of 1934, as amended ("Communications Act"), allows franchising authorities to become certified to regulate the basic cable service rates of cable operators which are not subject to effective competition. For purposes of the initial request for certification, a franchising authority may rely on the presumption that cable operators within its jurisdiction are not subject to effective competition, unless the franchising authority has actual knowledge to the contrary. Such certification becomes effective thirty days from the date of filing, unless the Commission finds that the franchising authority does not meet the statutory certification requirements. Cable operators may file petitions for reconsideration of the franchising authority's certification within thirty days from the date such certification becomes effective. Rate regulation is automatically stayed pending review of a timely filed petition for reconsideration alleging effective competition. After the thirty-day deadline for filing petitions for reconsideration has elapsed, cable operators may challenge the franchising authority's certification by filing a petition for revocation. However, regardless of its grounds, a petition for revocation does not automatically trigger a stay of the franchising authority's power to regulate basic rates. 3. One of the bases on which a cable system may be deemed subject to effective competition is the competing provider test. Under the competing provider test, a cable system is subject to effective competition if the franchise area is (1) served by at least two unaffiliated multichannel video programming distributors ("MVPD") each of which offers comparable programming to at least 50 percent of the households in the franchise area; and (2) the number of households subscribing to multichannel video programming other than the largest MVPD exceeds 15 percent of the households in the franchise area. II. SUMMARY OF PETITIONER'S ARGUMENTS 4. Rifkin argues that it is subject to effective competition in Unincorporated Gwinnett County under the competing provider test and is, therefore, exempt from rate regulation. Rifkin contends that the Cable Services Bureau's decision in a related case, MediaOne of Georgia, Inc. ("MediaOne"), in which a cable operator serving Unincorporated Gwinnett County was found subject to effective competition, compels a finding that Rifkin, too, faces effective competition. Rifkin argues that based on the evidence presented in MediaOne and the conclusion reached in that case, Rifkin satisfies the competing provider test and its petition for revocation should, therefore, be granted. Rifkin claims that MediaOne and various direct broadcast satellite ("DBS") providers offer comparable programming to at least 50% of the households in Unincorporated Gwinnett County. Rifkin further alleges that it serves more than 15% of the households in Unincorporated Gwinnett County. III. ANALYSIS 5. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition, as defined by Section 76.905 of the Commission's rules, is present within its franchise area. Rifkin has met this burden by satisfying the competing provider test for effective competition based on evidence presented in the MediaOne case. 6. In MediaOne, the Bureau granted the cable operator's petition for revocation, finding that MediaOne, the largest multichannel video programming distributor ("MVPD") in Unincorporated Gwinnett County, faced effective competition from Rifkin and from direct broadcast satellite ("DBS") and television receive-only earth station ("TVRO") operators under Section 76.905(b)(2) of the Commission's rules. The instant case involves the same franchise area of Unincorporated Gwinnett County that was considered in MediaOne as well the same MVPDs. We agree with Rifkin, therefore, that the household and competing provider figures that were used in our effective competition analysis in MediaOne are equally applicable here. The first prong of the competing provider test requires that the franchise area be served by at least two unaffiliated MVPDs, each of which offers comparable programming to at least 50% of the households in the franchise area. In MediaOne, we accepted the petitioner's count of 96,662 households (i.e., occupied housing units) in Unincorporated Gwinnett County. We also determined that MediaOne served 74,000, or 76.5%, of subscribers in Unincorporated Gwinnett County as of September, 1996 and that DBS and TVRO operators offered service to more than 50% of the households in Unincorporated Gwinnett County. We further found that these providers satisfy the Commission's program comparability criteria because they offer at least 12 channels of programming, including at least one non-broadcast channel. Applying these findings to the instant case, we determine that Rifkin satisfies the first prong of the competing provider test. 7. The second prong of the competing provider test for effective competition requires a demonstration that more than 15% of the households in the franchise area subscribe to multichannel video programming services from distributors other than the largest MVPD, in this case, MediaOne. In MediaOne we relied on evidence indicating that Rifkin served 19,915 subscribers, or over 20% of the 96,662 households, as of September 30, 1996 and that Rifkin offers comparable programming to subscribers in Unincorporated Gwinnett County. Considering these figures, we conclude that Rifkin satisfies the 15% subscribership requirement of the competing provider test. 8. We find that the evidence considered by the Bureau in MediaOne demonstrates that Rifkin's cable system serving Unincorporated Gwinnett County is subject to effective competition under the competing provider test. Rifkin's petition for revocation is hereby granted. IV. ORDERING CLAUSES 9. Accordingly, IT IS ORDERED that the petition for revocation filed by Rifkin & Associates, Inc./Cable Equities of Colorado, Ltd., d/b/a N.E. Gwinnett CableVision, challenging the certification of Gwinnett County, Georgia to regulate basic cable service rates in Unincorporated Gwinnett County IS GRANTED. 10. IT IS FURTHER ORDERED that the certification of Gwinnett County, Georgia to regulate the basic cable service rates of Rifkin & Associates, Inc./Cable Equities of Colorado, Ltd., d/b/a N.E. Gwinnett CableVision, IS REVOKED. 11. This action is taken pursuant to delegated authority pursuant to Section 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau