WPC2 2EB;U@Z3|PT) yO-#C\  P6QP#"5@^.7O]]x(77Aa.7..]]]]]]]]]]77aaafxxxxofx.]xfxoxofxooof7.7a]7]f]f]7ff..].ffffA]7f]]]SA/Aa.7777CE7\fx]x]x]x]x]x]o]o]o]o]........xfffffxfxfxfxfo]x]xfffo]xfofx]x]x]x]x]x]o]o]o]ffffxfxfCf7f77.f]x]f.fExfxffxAxEo]o]N:.]]7f]]]]]>=]7{{]7..SS]77]].S77t7\[[\aee*C`a.wR]]n[Cfx`xWlRx[][ceIfIs`Wx[rriwge}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}.7O]]x(77Aa.7..]]]]]]]]]]77aaafxxxxofx.]xfxoxofxooof7.7a]7]f]f]7ff..].ffffA]7f]]]SA/Aa}}}.]S]]7o7}}}}..SS:]7]7}}o.7]]]]/]7{>]a7{\C\777`].77=]fxxxxxxxoooo....xxaxxxxoof]]]]]]]]]]]....fffffff\fffff]fHP LaserJet 4/4MtScript ROOM 224HPLAS4.WRSSP2p NQ,,P2s ;w)@X yO-#C\  P6QP#Arial (Bold) (TT)Times New Roman (TT)"5@^*7DSS77S^*7*.SSSSSSSSSS..^^^Jxooxf]xx7Axfxx]xo]fxxxxf7.7NS7JSJSJ7SS..S.SSSS7A.SSxSSJP!PZ*7777CE7SSxJxJxJxJxJooJfJfJfJfJ7.7.7.7.xSxSxSxSxSxSxSxSxSxSxJxSxSxSxSxS]SxSxJxJoJoJoJfJfJfJxSxSxxSxSxSxSCS7S777SAxSf.fExSxSxSxo7oE]A]AN:*LS7JSSSSS.4}}S2S}277JJS77SS7J72t7[[[[^ee*C`^.wRSSn[Cfx`xWlRx[][ceIfIs`Wx[rriwge*7DSS77S^*7*.SSSSSSSSSS..^^^Jxooxf]xx7Axfxx]xo]fxxxxf7.7NS7JSJSJ7SS..S.SSSS7A.SSxSSJP!PZ7SJSS7]777JJ:S7A7xx*7SSSS!S7.S^7SC[227`L*724S}}}Jxxxxxxoffff7777xxxxxxx^xxxxxx]SJJJJJJoJJJJJ....SSSSSSS[SSSSSSS>'P8.XP2p NQy.C8*XC\  P6QP&&&&&&&&&&&&&&&&&&&&   Font Pg 1 Ln 5.47" Pos 1" 2  @ R ZG 3|P"5@^2CRdd$CCdq2C28dddddddddd88qqqYzoCNzoozzC8C^dCYdYdYCdd88d8ddddCN8ddddY`(`l2CC!CCPRCddYYYYYYzYzYzYzYC8C8C8C8ddddddddddYdddddoddYYYYYzYzYzYddddddPdCdCCCdNdz8zRdddCRoNoNNF2[dCYddddd7>d<d<CCYYdCCddCYCdYzzzzCCCCqodYYYYYYYYYYY8888dddddddndddddddTimes New Roman (TT)Times New Roman (Bold) (TT)Times New Roman (Italic) (TT)HP LaserJet 4/4MtScript ROOM 224HPLAS4.WRSSXw PE37,,PXP2&E @XXv X-#Xj\  P6G; DXP#"5@^2Coddȧ8CCdr2C28ddddddddddCCrrrdzNdzoȐC8CtdCdoYoYCdo8Co8odooYNCodddYO,Oh2CC!CCPRCdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYYddddooPoNoNCNodo8RoodȐYYoNoNNF2ldCddddddd<d<CCoodCCddCoCddzzzzzzzzzzCCCCozdddddddYYYYY8888dddddddndddddYd21 $// MO&O, Ector Cable, T.V., SMATVCable CrossOwnership, DA 941596 //$ $/ 300.533 Ownership Restriction /$ $/ 76.501 CrossOwnership /$ ///newjob/// $///DA 941596,1/13/95///$ DA 941596  X -  #Xw PE37 DXP#*2 Before the ă  X -  FEDERAL COMMUNICATIONS COMMISSION ă  X - Washington, D.C. 20554 ă  X-In the Matter of hh@h) x` `  hh@h)  Xb-Application of hh@h)  XK-ECTOR CABLE T.V. hh@h)ppFile No. CSR4275 x` `  hh@h)  X-For Waiver of Section 76.501(d)hh@h)  X-of the Commission's Rules,hh@h)  X-47 C.F.R. 76.501(d)hh@h)  X-|  MEMORANDUM OPINION AND ORDER ă Adopted: December 21, 1994 Released: January 19, 1995 By the Chief, Cable Services Bureau:  X-x` ` 1. On June 24, 1994, Ector Cable T.V. ("Ector"), filed a petition for special relief, requesting a waiver of the Commission's rules, to permit the sale of two satellite master antenna television ("SMATV") systems owned and operated by Ector to PostNewsweek  X!-Cable, Inc. ("PNC").v!P X&$-ԍxEctor states that it seeks a waiver of the threeyear holding period requirement of Section 76.502 of the Commission's rules, 47 C.F.R. 76.502, implementing Section 617 of the Communications Act of 1934, as amended ( the "Communications Act"), 47 U.S.C. 537. However, upon review of the request, we have determined that the relief sought is actually a wavier of the Commission's SMATVcable crossownership rules, 47 C.F.R. 76.501(d)(e), which implement Section 613 of the Communications Act, 47 U.S.C. 533(a)(2). "(0*0*0*("  X-Consequently, we will, sua sponte, treat the filing as a request for wavier of the SMATVcable crossownership rules. Ector supplemented its request on October 28, 1994. Ector's SMATV"!d0*0*0* " systems serve Sunset Apartments and Trestles Apartments in the city of Odessa in Ector County, Texas. PNC provides franchised cable service in the city of Odessa. Ector's waiver request is unopposed.   X-x` ` 2. Legal and Regulatory Framework. Sections 76.501(d) and (e) of the  X-Commission's RulesdP X -ԍx47 C.F.R. 76.501(d)(e). These rules are referred to as the SMATVcable crossownership rules. implement Section 613(a)(2) of the Communication's Act.JP X> -ԍx47 U.S.C. 533(a)(2).J That section of the Communications Act prohibits a cable operator from offering SMATV service separate and apart from any franchised cable service in any portion of the franchise area served by that  XJ-cable operator's cable system. In the First Report and Order adopting rules implementing the statutory crossownership provisions, the Commission determined that Congress intended a  X -narrow restriction with respect to SMATVcable crossownership. P X~-ԍxImplementation of Sections 11 and 13 of the Cable Television Consumer Protection and Competition Act of 1992 (Horizontal and Vertical Ownership Limits, CrossOwnership  XR-Limitations and AntiTrafficking Provisions) MM Docket No. 92264, First Report and Order  X=-(hereinafter First Report and Order), 6, 8 FCC Rcd 6828, 6829 (1993), recon. pending. Accordingly, the Commission adopted rules that prohibit franchised cable operators from acquiring existing SMATV facilities within the franchised cable operators' actual service areas for the purpose of  X -providing cable service.d ! P X-ԍxId. 6, 123, 8 FCC Rcd at 6829, 6846.d x` ` 3. However, as the Commission observed, the statutory provision does not prohibit all SMATVcable crossownerships within a cable operator's franchise area or even  X}-within its actual service area.X} P X-ԍxId. 119, 8 FCC Rcd at 6845. X A cable operator is permitted to construct a standalone or integrated SMATV system within its actual service area, provided that service from that facility is offered in accordance with the terms and conditions of the cable franchise  X8-agreement.g8P Xp#-ԍxId. 6, 122, 8 FCC Rcd at 6829, 684546.g In addition, in the unserved portions of the franchise area, a cable operator is permitted to build or acquire a standalone SMATV system, provided such cableowned SMATV system is operated in accordance with the terms and conditions of the cable  X-franchise agreement.d:P X'-ԍxId. 6, 127, 8 FCC Rcd at 6829, 6846.d "0*0*0*"Ԍ Y!-x` ` 4. Factual Background. According to the information provided in the petition and supplement, Lennel H. (Herman) Kincaid, the sole owner of Ector, operates two SMATV systems located in the City of Odessa in Ector County, Texas. Ector serves 76  Y-subscribers in the Trestles apartment complex, a 280unit complex located on the eastern  Y-edge of Odessa, and 71 subscribers in the Sunset apartment complex, a 264unit complex"Q0*0*0*"  Y-located on the north edge of Odessa.J 4 Yy-ԍxWaiver Supplement at 12.J Ector states that the SMATV systems were installed in the complexes in the early 1980's when new construction outpaced PNC's ability to extend  Y-service to the outskirts of town.; y4 Y-ԍxId. ; Ector represents that PNC's coaxial cable lines do not pass  Y-either the Trestles or the Sunset complex.: ,4 Y-ԍxId.:  Y-x` ` 5. Ector represents that Mr. Kincaid acquired the two SMATV systems in April of 1993 as a result of the former owner's default on a loan guaranteed by Mr.  Y_-Kincaid.G _4 Y -ԍxWaiver Request at 12.G Ector represents that at the time it acquired the SMATV systems, PNC expressed  YH-an interest in purchasing the systems, but was unable to obtain access to the buildings from  Y1-the complex owners.E 14 Yr-ԍxWaiver Request at 2.E According to Ector, both complexes have new owners, each of  Y -whom has expressed a preference that PNC, rather than Ector, provide multichannel video  Y -programming service to their tenants.: A 4 Y-ԍxId.: Ector states that PNC has indicted its continuing interest in purchasing the SMATV systems, and that the apartment owners have indicated  Y -their interest in providing the requisite access to PNC.: 4 Yz-ԍxId.: x` ` 6. Ector states that since its initial acquisition of the SMATV systems, it has  Y-attempted to locate an appropriate buyer.E 4 Y-ԍxWaiver Request at 2.E Ector represents that it has run advertisements in newspapers in Odessa and Midland, Texas, written letters to all local cable operators, and contacted several cable brokers and wireless companies, but has been unsuccessful in  YK-attracting a prospective purchaser other than PNC.TKX4 YT!-ԍxId.; Waiver Supplement at 1. T  Y-x` ` 7. Ector's Arguments. Ector asserts that it never intended to hold the SMATV systems as an investment, and that it has endeavored to sell the systems since it  Y-"involuntarily" became the owner of the systems.E 4 Y&-ԍxWaiver Request at 3.E Ector further asserts that the tenants of the buildings will be better served by PNC than by Ector. In support, Ector states that it"0*((" only offers one level of programming service comprised of eleven or twelve channels at a monthly rate of $15.50, compared with PNC's fortynine channels and three levels of monthly service offered at rates of twelve channels for $6.19, fortytwo channels for $21.66,  Y-and seven premium channels at varying rates.:4 Y4-ԍxId.: Ector contends that updating the SMATV systems is not a viable alternative because upgrading would require: (1) the expenditure of $75,000 to increase the systems' capacity by just eight channels; (2) the expenditure of an  Yv-additional $35,000 to $45,000 on each system to add a single payperview channel; and (3)  Y_-an increase in subscriber rates to $22.00 per month just for cost recovery.:_{4 Y -ԍxId.: Finally, Ector notes that the local newspaper lists PNC's channel lineup, but not Ector's, rendering the  Y1-systems' subscribers unable to use the local newspaper to select viewing choices.:1.4 Y-ԍxId.:  Y -x` ` 8. Discussion. Ector currently operates its two SMATV systems in Odessa, Texas, without competition from any other multichannel video distributor. Although the two  Y -systems are in PNC's franchise area, it appears that they are not served by PNC. The Commission's rules permit a cable operator to construct or acquire SMATV facilities within  Y -its franchise area in areas not served by the cable system. 4 Y;-ԍx47 C.F.R. 76.501(e)(2). See also, Clearview Cable TV, Inc., (Application for  Y&-Waiver of Section 76.501(d)), DA 941172, 9 FCC Rcd ___ (CSB 1994). Indeed, the Commission expressly stated that "if a cable operator has not wired its entire franchise area, the crossownership ban does not prevent the operator from building or acquiring a standalone  Yd-SMATV system."kd4 Y-ԍx First Report and Order 127, 8 FCC Rcd at 6846.k The Commission's rules state that the "term `area served by a cable  YM-system' shall mean any area actually passed by a cable system and which can be connected  Y6-for a standard connection fee."c62 4 Y-ԍx47 C.F.R. 76.501(e)(2)(ii). The term "standard connection fee" is not defined in  Y-the statute or in the Commission's rules. However, in Implementation of Section 8 of the Cable Television Consumer Protection and Competition Act of 1992 (Consumer Protection  Y -and Customer Service), (MM Docket 92263), First Report and Order, 8 FCC Rcd 2892, 2905 (1993), the Commission defined standard installation in the context of the customer service standards as an installation that is located up to 125 feet from the existing distribution system. 47 C.F.R. 76.309(c)(2)(i). x` ` 9. We need not decide the precise distance that must exist between a SMATV system and a franchised cable operator's cable plant in order to resolve Ector's petition. Ector represents in its unopposed petition that its two SMATV systems are located in"]0*((" apartment complexes situated on the edges of Odessa and that PNC does not pass either complex. We conclude that Ector has established that the two SMATV systems are in areas of the franchise which are not served by the franchised cable operator. Accordingly, the crossownership restriction does not preclude their acquisition by PNC. x` `  10. For the reasons specified above, we conclude that the proposed acquisition of Ector by PNC falls within the parameters of Section 76.501(e)(2) of our rules. We therefore grant Ector's request, conditioned upon PNC's operation of the acquired SMATV systems pursuant to all of the terms and conditions of PNC's franchise agreement with the city of Odessa, Texas. x` `  11. In view of the foregoing, IT IS ORDERED that, pursuant to 47 C.F.R. 0.321, and in accordance with 47 C.F.R. 76.501(e)(2), we hereby GRANT Ector Cable TV's request for a waiver of the SMATVcable crossownership rules, conditioned upon PostNewsweek Cable, Inc.'s operation of the acquired SMATV systems pursuant to all of the terms and conditions of its franchise agreement with the city of Odessa, Texas. x` `  FEDERAL COMMUNICATIONS COMMISSION x` `  Meredith J. Jones x` `  Chief, Cable Services Bureau