$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 95-176//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 95-176 ) AMERICABLE INTERNATIONAL ) ARIZONA INC., ) ) Petition for Reconsideration ) ) of Certification of ) Mohave County, Arizona, ) Board of Supervisors to Regulate ) Basic Cable Service Rates ) FCC Community ID No. (AZ0295) ) MEMORANDUM OPINION AND ORDER Adopted: February 7, 1995 Released: February 8, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On December 20, 1994 Americable International Arizona, Inc., ("Americable") filed a petition for reconsideration challenging the certification of the Mohave County Arizona Board of Supervisors ("the County") to regulate Americable's rates for basic cable service and associated equipment. In addition, Americable submitted a supplement to its petition containing supporting documentation pursuant to a recent Commission Order. In addition, Americable later filed a response to the Bureau's request for clarifying information. Mohave County did not file an opposition to Americable petition. 2. Section 623(a)(4) of the Communications Act of 1934, as amended, allows franchising authorities to become certified to regulate basic cable service rates of cable operators which are not subject to effective competition as defined by the Communications Act of 1934. For purposes of the initial request for certification, local franchising authorities may rely on a presumption that cable operators within their jurisdiction are not subject to such effective competition unless they have actual knowledge to the contrary. Such certification becomes effective 30 days from the date of filing unless the Commission finds that the authority does not meet the statutory certification requirements. Cable operators may file petitions for reconsideration of the franchising authority's certification within 30 days of the date such certification becomes effective. Rate regulation is automatically stayed pending review of a timely filed petition for reconsideration alleging effective competition as defined by the Communications Act of 1934. II. DISCUSSION Petitioner's Contentions 3. Americable bases its challenge on the competing provider test for effective competition set forth in the 1992 Cable Act and our rules. This test requires Americable to show that its system serving certain unincorporated areas of Mohave County, its franchise area, is subject to effective competition because its franchise area is: 1) served by itself and American Cable Television d/b/a Dimension Cable Services ("Dimension"), an unaffiliated multichannel video programming distributor ("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 the programming services offered by MVPDs other than the largest MVPD exceeds 15 percent of the households in the franchise area. As an alternative, Americable states that it meets the low penetration effective competition test because it serves fewer than 30 per cent of the "households" in its franchise area. 4. Americable states that there are a total of 5,478 "households" (that is, occupied housing units) in its Fort Mohave franchise area. Americable calculates its household data by dividing its franchise area into northern and southern portions. In order to calculate the number of households in the southern portion, Americable relies upon 1990 Census data reflecting "occupied housing units" for the southern portion of its Fort Mohave franchise area (i.e. Mohave Valley and Willow Valley). According to that data there are 2,549 occupied housing units in Mohave Valley and 190 occupied housing units in Willow Valley for a total of 2,739 occupied housing units in the southern portion of the franchise area. In order to determine the number of households in the northern portion of the franchise area, Americable attempts to estimate the number of households by assuming that it offers to serve an equal distribution of households in both the northern and southern portions of its franchise area. Thus, Americable assumes that the northern portion of the franchise area has the same number of households as are located in the southern portion. Based on these assumptions, Americable estimates that its franchise area consists of 5,478 occupied housing units (i.e. 2,739 for the southern portion and 2,739 for the northern portion). Census data is not available for the northern portion of the franchise area. 5. Americable states that it offers to serve approximately 84.5 per cent, or 4,629 of the estimated total number of households in its franchise area. In addition, Americable claims that it actually serves 23.7 per cent, or 1,298 of the estimated total number of households in the franchise area. As supporting documentation Americable provides a computer printout which illustrates the number of "homes" passed and the number of subscribers served by Americable Mohave County system. Americable also provides maps of the franchise area, and a copy of the franchise agreement for the Fort Mohave area. In addition, Americable submits a copy of its channel line-up which indicates that Americable offers a total of 59 channels, including more than 30 non-broadcast channels. 6. With respect to Dimension, Americable's asserted competitor in its Fort Mohave franchise area, Amerciable states that Dimension passes 71.1 per cent, or 3,894 of the estimated total number of households in Americable's franchise area. In addition, Americable states that Dimension serves 23.3 per cent, or 1,276 of the estimated total number of households in Americable's franchise area. As supporting documentation, Americable refers to information contained in a petition for reconsideration filed by Dimension concerning the County's certification. Americable also provides a copy of Dimension's channel line-up which indicates that Dimension offers a total of 45 channels, including more than 30 non-broadcast channels. 7. 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. Based on the evidence, we find that Americable has not met its burden. Disposition of Dimension's Direct Effective Competition Challenge 8. With respect to determining whether Americable is subject to effective competition under the competing provider test, we find that Americable does not provide the appropriate household data necessary to determine that it meets the test. Americable calculates its household data by dividing its franchise area into northern and southern portions. Americable provides census data which shows that there are 2,739 households in the southern portion of Americable's franchise area. However, in the northern portion of the franchise area, Americable bases its household data on the assumption that it serves an equal distribution of households in both the northern and southern portions of its franchise area. Thus, Americable assumes that the northern portion of the franchise area also has 2,739 households. Considering the fact that census data is not available for the northern portion of Americable's franchise area, we would accept a reliable estimate for that area, whether from other reliable, objective sources, or from a reasonably accurate methodology employed by the operator. However, we can not accept the household data based on the evidence provided by Americable. We find no basis to conclude that an equal distribution of households in the northern and southern portion of a franchise area is a reasonably accurate method for calculating the total number of households in the franchise area. Accordingly, we are not able to find that Americable is subject to effective competition under the competing provider test. 9. With respect to the low penetration test, Americable argues that it serves 1,298 of the 5,478 households, or 23.7 per cent of the total number of households in its franchise area. However, as we find that Americable has not submitted reliable evidence regarding the number of households in its franchise area, we can not find that Americable serves fewer than 30 per cent of the households in its Fort Mohave franchise area. 10. As Americable has not submitted sufficient evidence demonstrating that its cable system serving certain unincorporated areas of Mohave County is subject to effective competition under either the competing provider test or the low penetration test, its petition is denied. III. ORDERING CLAUSES 11. Accordingly, IT IS SO ORDERED that the petition for reconsideration filed by Americable International Arizona, Inc. challenging the certification of Mohave County, Arizona to regulate basic cable rates IS DENIED. 12. IT IS FURTHER ORDERED that the automatic stay imposed by Section 76.911(c) of the Commission's Rules, as amended, 47 C.F.R.  76.911(c) IS TERMINATED. 13. IT IS FURTHER ORDERED that Americable SHALL FILE the required rate justifications on the appropriate forms with Mohave County, AZ within thirty (30) days of the release date of this Memorandum Opinion and Order or within thirty (30) days of receipt of notice from the franchising authority that it is regulating Americable's rates, whichever is later. 14. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's rules, as amended, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau