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Rec. S14608-09 (Sept. 22, 1992) (statement of Senator Inouye). "[G]reater unbundling  xof offerings leads to more subscriber choice and greater competition among program services. Through unbundling,  x<subscribers have greater assurance that they are choosing only those program services they wish to see and are not paying for programs they do not desire." S.Rep. No. 102, 102d Cong., 2d Sess. 77 (1992). 6 which provides as follows:  S8( (8) Buy-through of other tiers prohibited.-- (  ` ` ` (A) Prohibition.--A cable operator may not require the subscription to any tier other than  xVthe basic service tier [as defined in the statute] as a condition of access to video programming offered on  xa per channel or per program basis. A cable operator may not discriminate between subscribers to the  xbasic service tier and other subscribers with regard to the rates charged for video programming offered  SH (on a per channel or per program basis.  ` ` ` (B) Exception; limitation.--The prohibition in subparagraph (A) shall not apply to a cable  xVsystem that, by reason of the lack of addressable converter boxes or other technological limitations, does  x8not permit the operator to offer programming on a per channel or per program basis in the same manner required by subparagraph (A). This subparagraph shall not be available to any cable operator after--   pX` `  ,(i) the technology utilized by the cable system is modified or improved in a way that eliminates such technological limitation; or   p` `  ,(ii) 10 years after the date of enactment of the Cable Television Consumer Protection and Competition Act of 1992, subject to subparagraph (C).  ` p` ` (C) Waiver.--If, in any proceeding initiated at the request of any cable operator, the  xCommission determines that compliance with the requirements of subparagraph (A) would require the  xtcable operator to increase its rates, the Commission may, to the extent consistent with the public interest,  x$grant such cable operator a waiver from such requirements for such specified period as the Commission  S(determines reasonable and appropriate.g@n yO(#X\  P6G; QwP#э47 U.S.C. 543(b)(8).g  SP(  B.` ` The Commission's Rulemaking s  S( ` 5.` ` The Commission adopted an implementing rule that (1) prohibits discrimination between  xsubscribers of the basic service tier and other subscribers with regard to rates charged for video  x programming offered on a per-channel or per-program basis; (2) forbids any retiering of channels or"0*&&II"  xservices intended to frustrate the purpose of the tier buy-through provision; and (3) defines when cable  S(systems are not technically capable of complying with this requirement. n {O@( x#X\  P6G; QwP#эSee Tier Buythrough Order, 8 FCC Rcd 2274. The regulations implementing the Commission's tier buythrough mandates are found in 47 C.F.R.  76.921, and are as follows:   (a) No cable system operator, other than an operator subject to effective competition, may require the  xsubscription to any tier other than the basic service tier as a condition of subscription to video programming offered  xon a per channel or per program charge basis. A cable operator may, however, require the subscription to one or  x$more tiers of cable programming services as a condition of access to one or more tiers of cable programming services.    (b) A cable operator not subject to effective competition may not discriminate between subscribers to the  xbasic service tier and other subscribers with regard to the rates charged for video programming offered on a per-channel or per- program charge basis.   (c) With respect to cable systems not subject to effective competition, prior to October 5, 2002, the  x(provisions of paragraph (a) of this section shall not apply to any cable system that lacks the capacity to offer basic  x4service and all programming distributed on a per channel or per program basis without also providing other intermediate tiers of service:  ` ` ` (1) By controlling subscriber access to nonbasic channels of service through addressable equipment electronically controlled from a central control point; or  ` ,` ` (2) Through the installation, noninstallation, or removal of frequency filters (traps) at the premises  x~of subscribers without other alteration in system configuration or design and without causing degradation in the technical quality of service provided.   (d) With respect to cable systems not subject to effective competition, any retiering of channels or services  xthat is not undertaken in order to accomplish legitimate regulatory, technical, or customer service objectives and that  xPis intended to frustrate or has the effect of frustrating compliance with paragraphs (a) through (c) of this section is prohibited.  S( ` F 6.` ` The Commission held that there are two kinds of operations to which the tier buythrough  xrequirement may reasonably be applied. First, there are systems that are addressable with respect to all  x`nonbasic services, have the capacity to shut off intermediate tiers, and offer subscribers the basic service  S( x~plus pay channel option without additional equipment expense. :n {O( xl#X\  P6G; QwP#эSee 8 FCC Rcd at 2276. The House Report, in another context, makes reference to systems whose  x"configuration permits changes in service tier selection to be effected solely by coded entry on a computer terminal  xor other similarly simple method." H.R.Rep. No. 4850, 102d Cong., 2d Sess. 84 (1992) (discussing downgrading  x>charges). Although this discussion did not involve the buy-through provision, it does reflect congressional understanding regarding addressable system technology. Second, there are certain systems that  xcontrol access to programming with traps and have the ability to provide the buy-through option by" 0*&&II"  S( xadding, not adding, or removing traps.a n yOh(#X\  P6G; QwP#э8 FCC Rcd at 2276.a Under one trap scenario, the buy-through option can be made  x:available by installing positive traps if a scrambling carrier is used or by removing or not installing  xnegative traps if the pay service to which subscription is sought is within the block of frequencies over  S( x which basic service is delivered.X Xn {O(#X\  P6G; QwP#эId.X Thus, for example, if channels 2 through 13 encompass the basic  xservice tier, all channels are distributed in an unscrambled mode, and a pay service is on channel 6, it is  x8possible to deliver basic service plus the pay service by simply not installing or by removing the negative  xtrap that would normally control access to channel 6. The other trap scenario involves a system so  xconfigured that the intermediate tier or tiers of service are distributed over a single contiguously located  S( xblock of channels that may be trapped out in bulk by band pass or band stop filters.X n {OJ (#X\  P6G; QwP#эId.X Depending to some  x>extent on the number of channels involved and the frequency spectrum they occupy within the cable  x$system, it may be possible with a single block trap to remove the tier (or tiers) of service and so provide subscribers with the option of purchasing the channels that are not deleted by the trap.  S ( ` 7.` ` In order to accommodate these different situations, the Commission defined systems  xsubject to compliance during the 10-year transition period as all systems that have the capacity to offer  xbasic service and all programming distributed on a per channel or per program basis without also  xproviding other intermediate tiers of service either: (1) by controlling subscriber access to nonbasic  xchannels of service through addressable equipment electronically controlled from a central control point  xor (2) through the installation, noninstallation, or removal of frequency filters (traps) at the premises of  x8subscribers without other alteration in system configuration or design and without causing degradation in  S(the technical quality of service provided.a|n {O(#X\  P6G; QwP#эId. at 2277.a  S( ` 8.` ` The Commission believed that this approach was consistent with the statutory objective  xof providing consumers with the option of subscribing to basic and pay service without the need to  xsubscribe to intervening service tiers and without triggering rate increases or requiring premature system  S( x.upgrading.Xn {O(#X\  P6G; QwP#эId.X The Commission recognized that certain system configurations may allow the buy-through  xoption to operate only with respect to certain individual pay or pay-per-view channels and that other  S( xjchannels, trapped or controlled in a different fashion, may be unavailable without intermediate tiers.^n {O!(#X\  P6G; QwP#эId. ^ In  xorder to avoid disparity of treatment between the channels involved, a system is not capable of  xcompliance, and thus subject to the buy-through requirement, unless access to all per channel and per  SP( xVprogram charge channels can be provided without intermediate tiers.^P2 n {O"%(#X\  P6G; QwP#эId. ^ Where access can be provided to"P 0*&&II$"  xsome, but not all per channel or per program charge channels without intermediate service tiers, the cable  S(operator may do so on a voluntary basis.n {O@( x8#X\  P6G; QwP#эId.  "In order to avoid disparity of treatement between the channels involved, we will not regard a system as  {O ( xjcapable of compliance and thus subject to the buythrough requirement unless access to all per channel and per  xprogram charge channels can be provided without intermediate tiers. Where access can be provided to some, but not  xFall per channel or per program charge channels without intermediate service tiers, the cable operator may do so on a voluntary basis."  S( `  9.` ` The Commission also addressed whether systems that are capable of compliance only with  xrespect to portions of the geographical area they serve must comply with the requirement, i.e., whether  S8( xcompliance is required after only 10 years or whether compliance to the extent possible is required now.^8|n {OT (#X\  P6G; QwP#эId. ^  xThe Commission has previously noted that there are likely to be systems that are addressable only in part  xof the area they serve, either within a franchise area or in some, but not all, of the franchise areas of a  S( xtechnically integrated system.^n {On(#X\  P6G; QwP#эId. ^ The Commission recognized that this may result, for example, from a  xstaged reconstruction of portions of a system, the integration of two or more previously separate systems,  Sp( xor because of different technical configurations that relate to franchise requirements.^pn {O(#X\  P6G; QwP#эId. ^ With respect to  xsuch operations, the Commission reasoned that there is no reason why compliance should not be required  S (as the necessary equipment is put in place and other services are offered using it.^ 2 n {O(#X\  P6G; QwP#эId. ^  S (  S ( ` t10.` ` After the release of the Tier Buythrough Order, the Commission clarified that the tier  xbuy-through provision of the 1992 Cable Act "only precludes operators from conditioning access to  S ( xprogramming offered on a per-channel or per-program basis on purchasing intermediate tiers." n {O( x"#X\  P6G; QwP#эImplementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate  {O(Regulation, ("Rate Order"), 8 FCC Rcd at 5741, n. 435.  xTherefore, the provision does not prohibit operators from requiring the purchase of an intermediate tier  S2( x$of cable programming services in order to obtain access to another tier of cable programming services.2 n {O(#X\  P6G; QwP#эId. See also 47 C.F.R. 76.921(a).  S ( x &"X Moreover, in response to the U.S. Court of Appeals for the District of Columbia Circuit's decision in Time" 0*&&II"  S( xjWarner Entertainment Co. v. FCC,ln yOh(#X\  P6G; QwP#э56 F.3d 151 (D.C. Cir. 1995).l the Commission modified Section 76.921 to state that the tier buy S(through rule does not apply to cable systems subject to effective competition.7Xn {O( x6#X\  P6G; QwP#эSee Implementation of the Cable Television Consumer Protection and Competition Act of 1992, Memorandum Opinion and Order, 11 FCC Rcd 20206, 20211 (1996)(rule changes required because of the D.C. Circuit's opinion).7  S(  S( III.FACTUAL CONTEXT  S:( `   11.` ` Petitioners explain that Cox is the fifth largest cable operator in the country, selling cable  S( xtelevision service to more than 850,000 subscribers in California alone.dn yOd (#X\  P6G; QwP#эPutnam petition at 1.d They further state that Cox leads  xother cable operators in building stateoftheart cable systems, that the operator has repeatedly proclaimed  S( xits cable systems are technically advanced , and that at the end of 1996, the operator proclaimed that  S( x"100% of its cable television subscribers were served by addressable technology."K"Bn {O|( x#X\  P6G; QwP#эId. at 12, 13 citing Cox Communications, Inc. SEC Form 10K for period ending December 31, 1996 (attached  x to Petition as Exhibit H). According to Cox's statements in its 10K, its fully addressable cable systems enable it  xFto electronically control the services delivered to each customer and allow it to upgrade, downgrade or disconnect services delivered to customers immediately, and without dispatching a technician to the customer's home.K Petitioners assert that  xdespite these claims, Cox requires each of its customers throughout California to pay an additional $15  xpto $20 per month for its cable program service tier before it will agree to sell them cable services on a  S" ( xperchannel or perprogram basis, such as HBO or payperview movies .X" , n {O(#X\  P6G; QwP#эId.X Petitioners state that Cox has  xnever applied for, or received a waiver, of the tier buythrough prohibition from the Commission, nor can  xit reasonably argue that it is excused from compliance with the prohibition because of any technological  S ( xlimitations in its cable system.X n {O(#X\  P6G; QwP#эId.X Petitioners request that the Commission order Cox to cease and desist  xfrom violating the tier buythrough prohibition, require Cox to provide information sufficient to  xjdemonstrate the geographical areas in which they are capable of complying with Section 623(b)(8) of the  xCommunications Act, and order Cox to forfeit the sum of $25,000 per day, up to and including $250,000,  S (for their continuing violations of the Act.b P n {O(#X\  P6G; QwP#эId. at 1718.b  S( ` 12.` ` In its opposition, Cox states that the San Diego system it operates has provided cable  xtelevision service to communities in southern San Diego County since the 1960s, in what currently"0*&&II"  S( xcomprises its "South branch." Xn yOh( x#d6X@`7Oe@##X\  P6G; QwP#эCox Opposition at 7. The South branch currently provides service to Imperial beach, San Diego City, Chula  xVista, National City, Lemon Grove, La Mesa, El Cajon, Santee, Poway, and several unincorporated areas of South San Diego County. The South branch currently serves approximately 351,500 subscribers and  xVeach of the Petitioners is a customer of the South Branch of the system. In February, 1995, as part of a  xbroader acquisition of Times Mirror, Cox acquired a cable system serving communities in northern San  S( xDiego County, now known as its "North branch."!n {O( xt#X\  P6G; QwP#эId. at 8. The North branch serves subscribers in Camp Pendleton, Oceanside, Vista, San Marcos, Encinitas, Solano Beach, and several unincorporated areas of North San Diego County. The North branch currently serves approximately  x141,750 subscribers. Prior to the acquisition of the North branch, the San Diego North and South  xbranches operated as separate, standalone systems, with different management, channel lineup  S( xconfigurations, programming and operating philosophies.^"Bn {O (#X\  P6G; QwP#эId. at 8.^ Since the acquisition, the San Diego system  S( xhas integrated certain management, administrative and technical operations in the two branches.#"n yO\( x#X\  P6G; QwP#эCox notes that the North and South Branches are now managed by the same General Manager and they share  x`a call center to handle customer inquiries. In 1998, Cox installed a fiber trunk connecting the two systems to a  xncentral location that now sends programming feeds to all of the San Diego system's headends in San Diego County.  {O(Id. at n. 13. Cox  xBstates that when adding new program services, the San Diego system has worked to minimize disruption  xand inconvenience to its subscribers by maintaining, to the extent possible, continuity within its two  Sp( xchannel lineups.X$p n {O(#X\  P6G; QwP#эId.X Cox further states that the North and South branches currently retain separate channel  xlineups, they are separated geographically by a distance of approximately 40 miles, and they are served  S (by different teams of field, installation and technical support personnel.X% P n {O(#X\  P6G; QwP#эId.X  S ( ` z13.` ` Cox states that both the North and South branches offer three tiers of cable service:  xlimitedbasic, expandedbasic, and premium (i.e., per channel or per program) service. Cox explains that,  xlike many cable systems, the North and South systems employ a "hybrid" of addressable and  SX( xnonaddressable technology to provide these services.E&Xn {O( xd#X\  P6G; QwP#эId. at 9. Cox defines "addressability" as the ability of a cable operator to control electronically, from a remote  {O(centralized location, the selection of services received by individual customers. Id.E Cox states that in an addressable system, some or  xall of the nonbasic programming offered by a cable operator is "scrambled" at the system headend before  xit is transmitted through the cable plant; to view the scrambled signals, customers must rent from the cable  xjoperator an addressable set top box for each cable outlet in their homes on which they wish to view non S( xbasic channels.X'>n {O$(#X\  P6G; QwP#эId.X According to Cox, the system's headend electronically commands these addressable"'0*&&II:"  x8decoders to selectively "unscramble" only those signals for which the subscriber has paid. To the extent  xVa system relies upon "nonaddressable technology," it does not scramble programming signals at the cable  xheadend before they are transmitted throughout the system; rather, to control the selection of services  xBreceived by the individual customers, the cable operator must install passive traps and filters in customer  S`( xpremises to prevent the viewing of unauthorized channels.^(`n {O(#X\  P6G; QwP#эId. at 9.^ Cox then states that the San Diego system  xTtransmits limitedbasic and expandedbasic channels to subscribers' homes via nonaddressable  S( x technology.X)Zn {O (#X\  P6G; QwP#эId.X According to Cox, the San Diego system technicians install passive traps and filters in  xLsubscriber residences to prevent the viewing of expandedbasic channels by customers who do not order  x>this tier of service. However, the San Diego system uses addressable technology to deliver premium  S(channels._*n {O$ (#X\  P6G; QwP#эId. at 10._  SH ( ` 14.` ` Cox asserts that, notwithstanding Petitioners' unsupported allegations to the contrary, the  x San Diego system has voluntarily offered subscribers in its South branch the option to purchase per S ( xchannel and perprogram services, without any intermediate service tiers, since March 1991.X+ ~n {O(#X\  P6G; QwP#эId.X Cox states  xthat prior to April 1991, the South branch of the San Diego system offered its customers two levels of  xservice: basic and premium; thus basic subscribers could purchase premium services without the need for  S ( xpurchasing any other tier of service.Y, n {O0(#X\  P6G; QwP#эId. Y Cox then explains that in April 1991, the San Diego system decided  xto unbundle its basic programming into two tiers: a limitedbasic tier and an expandedbasic tier; to  xminimize disruption to its then basic service subscribers, the South branch also concurrently decided to  xtoffer its new limitedbasic subscribers the option of purchasing premium channels without requiring them  S( xto purchase the expanded basic service tier.W-n {O"( x#X\  P6G; QwP#эId. Cox notes that since 1991, the San Diego system's customer service representatives have been trained to  {O(advise customers that they can purchase premium and expandedtier services on an unbundled basis. Id. at n. 15.W Cox states that the system used filters to make the premium  xLchannels available, but by doing so, two expandedbasic channels would bleed through. Cox asserts that  xsince 1991, the South Branch has continuously offered limited basic customers the option to purchase  xpremium services by reconfiguring its traps and filters as necessary when making minor changes to its  xtchannel lineup; however, to minimize signal degradation, each of these historical trap configurations was  S( xadjusted to allow for the bleedthrough of unauthorized expandedbasic channels._. n {O!(#X\  P6G; QwP#эId. at 11._ According to Cox, the  xNorth branch has not offered its customers the option of purchasing premium and expandedbasic services" .0*&&II""  xfon an unbundled basis. Cox states that its predecessor, TimesMirror, never offered this option to its  S(subscribers.X/n {O@(#X\  P6G; QwP#эId.X  S( ` F15.` ` Cox states that the San Diego System has experienced very little customer demand for the  S`( xoption of purchasing premium and expandedbasic channels on an unbundled basis._0`Zn {OZ(#X\  P6G; QwP#эId. at 12._ Initially,  x approximately 100 customers in the South branch opted to subscribe to limitedbasic and premium services  xVwithout purchasing the intermediate programming tier. Cox asserts that approximately 240 limitedbasic  xsubscribers in the South branch currently enjoy this combination of services, including the expandedbasic  S(channels they necessarily receive for free.X1n {OL (#X\  P6G; QwP#эId.X  Sp( ` .16.` ` Cox reiterates that all of the Petitioners " Lynn Putnam, Jerry Williams, and Raphael  xVLevens " reside in communities in southern San Diego County and receive their cable television service  S ( x8from the South branch of the San Diego System._2 ~n {O>(#X\  P6G; QwP#эId. at 12._ Cox states that Petitioners allege that they requested  x the San Diego System to provide perchannel and perprogram cable services in combination with the most  xjbasic level of cable service. Cox further states that Petitioners claim they were told that this combination  xof services was unavailable, or that it was not technologically feasible for the San Diego System to  xprovide it to them. Cox asserts, however, that Petitioners provide no details (i.e., dates, times, the names  x*of customer service representatives with whom they spoke, etc.) regarding these alleged requests for  S0( x*service.X30n {O(#X\  P6G; QwP#эId.X Cox further asserts that only one of the three Petitioners (Williams) has filed a declaration  S(actually affirming that he requested premium services unbundled from expandedbasic tier service.X4n {OJ(#X\  P6G; QwP#эId.X  S( ` 17.` ` Cox asserts that in December of 1997, counsel for the San Diego System advised  xPetitioners' counsel that these customers and all subscribers similarly situated in the South County, are  Sh( xeligible to purchase premium channels with Cox Limited Basic service.X5h4 n {O<(#X\  P6G; QwP#эId.X According to Cox, its counsel  x>expressly invited Petitioners to identify which premium channels they desired to order and offered to  xarrange for the San Diego System to change their respective service and billing arrangements according  S( x0to their wishes.X6 n {OV#(#X\  P6G; QwP#эId.X Cox states that Petitioners' attorneys declined this unequivocal offer to provide" X 60*&&II""  S( xjPetitioners with the service combination that is the subject of this Petition, perhaps in an effort to protect  S(Petitioners' status as putative class representatives in the pending litigation.}7n {O@(#X\  P6G; QwP#эId. This litigation is discussed below.}  S( ` 18.` ` Cox notes that Petitioners are served only by two of the franchises located in what is  x4known as the South Branch of its San Diego system. As such, Cox argues that they lack standing to  S8( xchallenge the practices of other franchises comprising Cox's California cable systems.^88Zn {O2(#X\  P6G; QwP#эId. at 3.^ According to  xCox, only "interested persons" may petition the Commission for issuance of an order to show cause against  S( x`a cable operator.j9n yOt (#X\  P6G; QwP#э47 C.F.R.  76.9 (1997).j With regard to the buythrough requirements, the Petitioners are "interested persons"  S( xonly with respect to those franchises providing cable service to them._:|n {O (#X\  P6G; QwP#эId. at 14._ Cox asserts that it is undisputed  xVthat Petitioners receive cable service from only two of the franchises comprising the South branch of the  Sp(San Diego System " La Mesa and the City of San Diego.X;pn {O(#X\  P6G; QwP#эId.X  S ( ` 19.` ` Cox argues that the trap configurations necessary to comply with the buythrough  S ( xprovision in the North branch cause unacceptable signal degradation._< n {O8(#X\  P6G; QwP#эId. at 39._ Cox asserts that since its  xacquisition of the North branch, the San Diego System has not attempted to use trapping technology to  xoffer the sort of unbundled service option provided in the South branch because it would be impracticable  S ( x:to do so.X= 2 n {OR(#X\  P6G; QwP#эId.X Cox states that in order to abide by the buythrough provision, the San Diego System  xtheoretically would have had to install traps with four filters to unbundle premium and expandedbasic  xservices and block unauthorized channels. Moreover, to ensure compliance with the Commissions actual  xminimum signal quality standards, the North Branch would have been required to sacrifice seven expanded  S( xbasic channels in all homes and additional four channels in many homes._> n {OD(#X\  P6G; QwP#эId. at 40._ According to Cox, this  xVsituation has persisted up to the present day. For example, as of October 15, 1997, a trap with six filters  xVwas theoretically necessary to unbundle premium and expandedbasic services in the North branch while  xBcontrolling access to unauthorized channels; however, to offer this combination of unbundled services in  xHaccordance with the Commission's signal quality standards, the San Diego system would have had to  xinstall this six filter trap configuration in a manner that would allow approximately twentythree  S( xunauthorized expanded basic channels to bleed through.X?V n {O$(#X\  P6G; QwP#эId.X Cox adds that on October 15, 1998, the North" ?0*&&II@"  xfbranch slightly changed its lineup. Since October 15th, a trap with four filters theoretically would be  xrequired to unbundle premium and expandedbasic service in the North branch while preventing access  xto unauthorized programming; Cox asserts, however, that to comply with minimum signal performance  xstandards on all authorized channels, these four filters would have to be positioned to allow the "bleed  S`(through" of fifteen channels of expandedbasic programming.b@`n {O(#X\  P6G; QwP#эId. at 4041.b  S( ` 20.` ` Cox asserts that the introduction of digital service should permit it to easily implement  S( xthe buythrough rule in both the San Diego North and South branches in 1999._AZn {O (#X\  P6G; QwP#эId. at 42._ Beginning in early 1999,  xthe system at issue will offer digital cable service to subscribers throughout the San Diego area. Operating  xin the 550750 MHz frequency range, Cox states that this new digital cable service will enable subscribers  xto receive approximately one hundred new channels of programming. All digital channels will be  xscrambled in this new technology environment, including premium digital channels. Cox states that  xsubscribers to digital service will be required to rent a digital converter box to unscramble programming  S ( xtransmitted on the digital spectrum.XB n {O(#X\  P6G; QwP#эId.X Digital channels will be cablecast on frequencies higher than the  xexisting analog channels and will not be affected by existing passive traps and filters. According to Cox,  S ( xthe digital spectrum will support many new services (e.g., HBO 18), but will also duplicate traditional  xanalog premium channels. Cox states that the deployment of digital technology will allow subscribers in  xRboth its South and North branches to purchase premium services separately from the expandedbasic  S2( xservice tier.XC2~n {OP(#X\  P6G; QwP#эId.X Cox further states that subscribers will receive their limited basicchannels via analog  xtechnology and their premium channels via digital technology. No additional traps or filters will be  xemployed, and customers subscribing only to the limitedbasic or to the limitedbasic and intermediate  x4service tiers, will continue to receive their cable television service without the need for any converter  xBboxes. Cox notes that unlike existing analog decoders, the new digital boxes will also facilitate consumer  Sj( xuse of electronic equipment features such as pictureinpicture and VCR recording._Djn {O(#X\  P6G; QwP#эId. at 43._ Cox asserts that the  x~introduction of digital cable service will resolve all of the technical issues presented in this proceeding and  S(moot Petitioners' request to show cause.XEn {O\(#X\  P6G; QwP#эId.X  S( `  21.` ` In reply, Petitioners first discuss the manner by which this matter came before the  xCommission and why the Commission should investigate Cox's practices throughout California. They  xexplain that the matter were referred to the FCC by the San Diego court after Petitioners filed a lawsuit  xseeking to establish Cox's violation of California antitrust and consumer protection statutes in its service"R 4 E0*&&II$"  S( xareas throughout California.aFn yOh(#X\  P6G; QwP#эPutnam Reply at 7.a Upon Cox's motion, the San Diego court ruled that the Commission had  xprimary jurisdiction for the sole purpose of determining whether Cox was technologically capable of  S( xpcomplying with the buythrough prohibition in the service areas addressed by the complaint.XGXn {O(#X\  P6G; QwP#эId.X As the  xcourt stated, "[t]his action shall be suspended and referred to the Federal Communications Commission  S`( xDfor its consideration of the alleged violations of the 1992 Cable Act."H`n {O(#X\  P6G; QwP#эId. citing Telephonic Ruling at 1 (attached as Exhibit D to Petition for Order to Show Cause). Petitioners' counter Cox's  x0contention that its cable systems outside San Diego County were excised from the case when the  xCalifornia court referred this matter to the Commission. They argue that the court clearly referred the  xentire action, not only those aspects that addressed Cox's violations in San Diego, to the Commission;  xnowhere, either prior to or in its referral order, did the court carve San Diego County out of petitioners'  xraction. Petitioners also argue as the regulatory body with authority over the cable industry, the  xLCommission has an obligation to ensure that cable operators, such as Cox, obey Congress's laws and the  xCommission's regulations. According to Petitioners, the Commission clearly may, and based on the  xcourt's Order and its own regulatory duties must, determine whether Cox has violated the buythrough  S (prohibition in all of its California service areas.^I |n {O(#X\  P6G; QwP#эId. at 9.^   S ( ` 22.` ` The Petitioners also address the standing issue raised by Cox. Petitioners state that they  xRhave standing in the California court to challenge Cox's violations in all of its California service areas.  xAs discussed in their court action, Petitioners' claims are based in part on California's Unfair Practices  x Statute and California Business and Professions Code  17200, which allows citizens to bring suit as  S( xX"private attorneys general" on behalf of the general public of the State of California.Jn {O(#X\  P6G; QwP#эId. citing Hernandez v. Atlantic Finance Co., 105 Cal. App. 3d 65, 72 (1980), attached hereto as Ex.5. In order to  xchallenge Cox's conduct in the California court, Petitioners argue that they need not have purchased cable  S( xservices from Cox in any of its service areas, let alone in the particular service areas at issue.aKn yO(#X\  P6G; QwP#эPutnam Reply at 8.a The  xPetitioners also argue that the standing rules for raterelated actions are inapplicable here because the buy x8through prohibition is not a rate provision: "[t]he tier buythrough provision is in a stand alone paragraph  S@( xof Section 623(b) that, unlike many of the other paragraphs of that section, does not deal with rate  S( xregulation."^L0 n {O (#X\  P6G; QwP#эId. at 9.^ Contrary to Cox's arguments, Petitioners conclude they have standing to challenge Cox's  xviolation of the buythrough prohibition in areas outside San Diego County, and the Commission clearly  S(has the power and authority to resolve all of the factual issues referred to it by the San Diego court.XM n {O*$(#X\  P6G; QwP#эId.X " T M0*&&II"Ԍ S( ` 23.` ` Petitioners recognize that Cox claims that it has been capable of complying with the buy S( xVthrough prohibition in its South branch operations since 1991._Nn {O@(#X\  P6G; QwP#эId. at 10._ Thus, with respect to the South branch,  S( xJPetitioners state there is nothing for the Commission to decide.XOZn {O(#X\  P6G; QwP#эId.X Whether that capability was  xappropriately made available to subscribers is a matter for the San Diego court, not the Commission, to  S`( xdecide.XP`n {O(#X\  P6G; QwP#эId.X However, Petitioners argue that Cox fails to demonstrate why its North branch is not  S8( xtechnologically capable of complying with the buythrough rules._Q8~n {OV (#X\  P6G; QwP#эId. at 11._ Petitioners assert that Cox provides  xlittle or no technological information on its system design or configuration from which its technical  xcapacity can be determined. According to Petitioners, the only excuses that Cox offers are that:  x(1)customers do not like the settop analog decoder boxes necessary in fully addressable systems; and  S( x(2)customers do not like changes in established channel lineups.XRn {OH(#X\  P6G; QwP#эId.X Petitioners argue that neither of these excuses justifies Cox's refusal to comply with the buythrough requirement.  S ( ` j24.` ` Throughout the entire relevant period, Petitioners state that Cox could have used traps,  xpwith little difficulty, to comply with the buythrough prohibition. Petitioners discount Cox's argument  xthat the use of traps and filters in the various channel lineups it has used since 1992 in the North branch,  xwould have diminished the signal quality of channels purchased by subscribers or permit too many  S ( xunpurchased channels to "bleed through."_S n {O(#X\  P6G; QwP#эId. at 12._ Petitioners assert that the shortcoming in this argument is that  SX( xXit only considers Cox's  existing channel array.XTX4 n {O,(#X\  P6G; QwP#эId.X Petitioners also assert that Cox fails to provide a  xtechnical description of its cable system; without that information, neither the Commission nor petitioners  S(can evaluate Cox's assertions.XU n {On(#X\  P6G; QwP#эId.X   S( ` `25.` ` Petitioners state that Cox provides little or no rationale and no technical support for the  S( xNorth Branch channel array.XVX n {O!(#X\  P6G; QwP#эId.X Petitioners refer to the findings made by their expert witness, Mr.O.D.  xLPage, P.E., who lists over 15 technical details that Cox should be required to provide to the Commission  S@( xand to Petitioners to allow a reasonable determination of its technical capability.XW@n {O$(#X\  P6G; QwP#эId.X According to"@|W0*&&II"  xPetitioners, their expert was able to design a conceptual channel array that would allow Cox to comply  S( x with the buythrough prohibition using only one trap and two filters.XXn {O@(#X\  P6G; QwP#эId.X The Petitioners state that this  xtechnical arrangement is more economical than Cox's current system, eliminates Cox's professed problems  xof signal degradation and bleedthrough, and is consumer friendly; in addition, using this system or one  S`( xsimilar to it, only two or three channels would be compromised by bleedthrough.XY`Zn {OZ(#X\  P6G; QwP#эId.X Petitioners assert that  xthis proposed retiering could have been implemented at any time in conjunction with any of Cox's channel  xrealignments in the North Branch; the costs would have been minimal and would have entailed merely  S(a reconnection of existing equipment at the headends and use of a single, dual filter trap.XZn {Ot (#X\  P6G; QwP#эId.X  S( ` $26.` ` Petitioners assert that Cox's only excuse for not undertaking such a realignment is that  Sp( xconsumers do not like to have their channels moved._[p~n {O(#X\  P6G; QwP#эId. at 15._ According to Petitioners, this certainly is not a  x"technical limitation" that excuses noncompliance as prescribed either by the 1992 Cable Act or the  S ( xCommission's regulations.X\ n {O(#X\  P6G; QwP#эId.X Petitioners also argue that Cox may not avoid compliance by arguing that  xreconfiguring its channel lineups and installing traps and filters will increase its costs. They assert that  xsuch arguments are appropriately directed at obtaining a costwaiver from the Commission, a request that  S (Cox admittedly has not and cannot now make to excuse its past violations._] n {O(#X\  P6G; QwP#эId. at 16._  SX( `  27.` ` Petitioners also argue that Cox could employ the addressable technology it already  S0( xpossesses to comply with the buythrough prohibition, even though it may be more complicated._^04 n {O(#X\  P6G; QwP#эId. at 17._  xtPetitioners assert that Cox does not dispute that its cable systems employ addressable technology and the  xoperator acknowledges that its San Diego systems use addressable technology to deliver PayPerChannel  S( xLand PayPerView services.__ n {O(#X\  P6G; QwP#эId. at 18._ Petitioners state that Cox never asserts that the hardware used in its cable  x:systems is incapable of sending a fully addressable signal that could comply with the buythrough  Sh( xprequirement.X`hX n {O`"(#X\  P6G; QwP#эId.X Petitioners comment that the Commission has warned cable operators that "deliberate  xreconfiguration of an addressable system in order to preclude compliance with the buythrough prohibition"@`0*&&II"  S( x is an evasion of the prohibition."yan {Oh(#X\  P6G; QwP#эId. citing 8 FCC Rcd. at 2280.y Petitioners allege that Cox's refusal to implement the addressable  S(capabilities of its system is hardly different.XbZn {O(#X\  P6G; QwP#эId.X  S( ` 28.` ` Petitioners claim that Cox's argument regarding the costs of providing decoder boxes now  S`( x8is irrelevant.Xc`n {O(#X\  P6G; QwP#эId.X They note that had the decoder boxes been provided over the seven years since the buy xthrough prohibition was enacted, as new subscribers and channels came online, the costs would not have  S( xbeen prohibitive.Xd~n {O. (#X\  P6G; QwP#эId.X Petitioners state that they are not asking that Cox retrofit at this point, especially in  xblight of Cox's upcoming conversion to digital technology. They argue that the question before the  x`Commission is whether, since 1992, Cox had the technology available to comply with Section 623(b)(8).  Sp( IV.DISCUSSION  S ( ` 29. ` ` This case concerns the application of Section 623(b)(8) of the Communications Act and  x<the associated Commission tier buythrough rules to systems owned and operated by Cox Communications.  x4Petitioners request that the Commission investigate Cox's compliance with the rules generally, and in  xRparticular, with regard to its California cable systems. Cox urges that petitioners Lynn Putnam, Jerry  xWilliams, and Raphael Levens only have standing to seek Commission relief with respect to the system to which they subscribe.  S( ` 30.` ` We find that Cox has complied with the Commission's tier buythrough requirements in  x`its Southern San Diego operations where petitioners are subscribers. The operator has shown that, since  x1991, it has offered its South branch basic cable subscribers the ability to purchase premium and payper xview programming in accordance with the Section 628(b)(8) requirement. In addition, Cox has  xdemonstrated that it will easily be able to comply with the tier buythrough requirement, without the need  S@( xfor traps, once the South branch is fully upgraded to digital.e@n yO( xZ#X\  P6G; QwP#эWe note that this upgrade will also allow basic cable subscribers served by the North branch system to access premium and payperview programming. Petitioners appear to concede that, with  xrespect to the South branch operation, there is nothing for the Commission to decide. Thus, as we find  xfthat Cox did not violate the Commission's rules in this instance, there is no basis for the imposition of any penalty.  Sx( ` 31.` ` We also conclude that there is no basis, relying on the pleading before us, to consider  xmore generally whether Cox, throughout the nation or in its other California operations, has violated the  S(( xSection 623(b)(8) requirement. Petitioners originally filed their complaint against Cox in California"(h e0*&&II"  S( xSuperior Court, San Diego.fn {Oh( x#X\  P6G; QwP#эSee Class Action Complaint for Damages and Injunctive relief (S.D. Super. Ct., filed October 9, 1997) (attached to Petition as Exhibit A).  Subsequently, in response to a request from Cox, the Commission through  xits General Counsel, wrote a letter to Cox's Counsel Peter Feinberg, stating that "it is the Federal  xCommunications Commission's position that it has primary jurisdiction over Plaintiff's claims to the extent  S( xLthey implicate Section 543(b)(8) [Communications Act Section 623(b)(8)]."g"n {OJ( x#X\  P6G; QwP#эSee Petition at 5, Letter to Peter Feinberg, Esq. from Daniel Armstrong, Associate General Counsel, FCC, January 30, 1998. In response to this letter,  x4and noting the Commission's expertise in technical matters, the San Diego Superior Court suspended  S8( xLPetitioners' action and referred it to the Commission "for its consideration of the alleged violations of the  S( x\1992 Cable Act."h\|n {O, ( x#X\  P6G; QwP#эSee Telephonic Ruling in Putnam, et. al. v. Cox Communications, Inc., et. al., February 6, 1998 (attached to  {O ( x~Petition as Exhibit D); Minute Order in Putnam, et. al. v. Cox Communications, Inc., et. al., February 17, 1998 (attached to Petition as Exhibit E). The pleadings before us indicate that there is an unresolved dispute between the  xparties concerning the extent, if at all, to which these Petitioners can challenge in the California court case  xzCox's alleged violations of the Act's tier buythrough provisions on systems to which these Petitioners  S( x do not themselves subscribe.in {O(#X\  P6G; QwP#эCompare Cox's Opposition at 7, 1718 and n. 29 with Petitioner's Reply at 8 and nn. 1516. This is a dispute for the California court to resolve if the Petitioners decide to pursue their claims there.  S ( ` 32.` ` Despite the history of this controversy in the state court system, our decision here is  xcontrolled by the standing requirements applicable to buythrough complaints lodged with the Commission.  xNSection 76.9 of the Commission's rules provide that: "Upon petition by any interested person, the  xCommission may: Issue an order requiring a cable television operator to show cause why it should not  S ( xbe directed to cease and desist from violating the Commission's rules."bj 2 n yOR(#X\  P6G; QwP#э47 C.F.R. 76.9.b There is nothing before us to  xfsuggest that Petitioners are "interested persons" within the meaning of this Section outside of the area  S0( xwhere they are subscribers.8k$0 n yO( x4#X\  P6G; QwP#эOur conclusion comports with Commission precedent in the mass media context. To have standing to  xparticipate in a petition to deny proceeding involving a broadcast licensee, the Commission has required that a party  {O"( x<must be able to listen or view the station at issue and reside within the station's service area. In re Applications of  {O(Maumee Valley Broadcasting, Inc., 12 FCC Rcd 3487 (1997).8 As such, we will apply the law to the facts insofar as the South branch  xsystem is concerned and need not act nor consider Petitioners' request for discovery visavis the North  S( xbranch system or other Cox systems in California.ZlXn yO."( x~#X\  P6G; QwP#эWe note that Cox acquired control of the North branch system in 1995. Thus, even if we were to consider  xthe merits of Petitioners' arguments with regard to this cable system, the inquiry would be limited to the timeframe of 19951999.Z This decision to dismiss the petition, however, is"l0*&&IIT"  x8without prejudice to any further Commission action which may be appropriate in light of the Petitioners' course of action in the California state court.  S( V.ORDERING CLAUSES  S`( ă  S8( `  33.` ` Accordingly, IT IS ORDERED , pursuant to Section 623(b)(8) of the Communications  xAct of 1934, as amended (47 U.S.C.  543(b)(8)), that the petition filed by Lynn Putnam, Jerry Williams,  S(and Raphael Levens, IS DISMISSED .  S( ` 34.` ` This action is taken pursuant to authority delegated under Section 0.321 of the Commission's rules. ` `  ,hFEDERAL COMMUNICATIONS COMMISSION ` `  ,hDeborah A. Lathen  S0(` `  ,hChief, Cable Services Bureau  S( ` `  ,  Sh(