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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $//MO&O Granting RMG's waiver request DA 95-2322//$ $/300.537 Anti-trafficking/$ $/76.502(a) Anti-trafficking Waivers/$ $/76.7 Petitions for Special Relief/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-2322 In re: ) ) Robin Media Group, Inc. ) CSR- 4588-T ) Petition for Waiver of Section 76.502 ) of the Commission's Rules ) MEMORANDUM OPINION AND ORDER Adopted: November 8, 1995 Released: November 24, 1995 By the Deputy Chief, Cable Services Bureau: 1. Robin Media Group, Inc. ("RMG") in the above captioned proceeding, has requested a waiver of 47 C.F.R. 76.502, the Commission's anti-trafficking rule, for its cable systems in Tennessee and Georgia. RMG seeks this waiver to assure that a corporate restructuring resulting in a transfer of control of cable systems held less than three years will not violate the anti-trafficking rule. RMG submits that a waiver is warranted because more than two-thirds of the subscribers are served by systems which have been owned or controlled by RMG for more than three years. The request is unopposed. 2. Section 76.502 of the Commission's rules implements Section 617 of the Communications Act, as amended, that, with certain exceptions, restricts the ability of a cable operator to sell or otherwise transfer ownership in a cable system within a 36 month period following either the acquisition or initial construction of the system. The Commission has broad discretion to grant waivers of the holding requirement. 3. The three-year holding requirement rule, and the underlying statutory provision, are aimed at restricting transactions and other transfers that are likely to adversely affect cable rates or service in the local franchise area, and are not intended to inhibit investment in the cable industry or delay or disrupt legitimate transactions. The Commission has stated that unless a transaction raises serious concerns on its face or any objections filed provide other public interest bases for concern, requests for waiver of the three-year holding requirement will generally be looked on favorably. The Commission also has determined that waiver applications will be looked upon favorably if two-thirds or more of the MSO's subscribers are served by systems owned for three years or more, and if the MSO transfers several systems in a single transaction in which two-thirds of the subscribers of the systems being transferred are served by systems the MSO owned for three or more years. 4. RMG states the following facts in support of its petition. RMG owns and operates cable television systems serving approximately 184,299 subscribers in middle and eastern Tennessee and northeastern Georgia. RMG is wholly-owned by Robin Media Holdings Inc. ("Holdings"), a Nevada corporation. Holdings, in turn, is wholly-owned by Robin Cable Systems II, L.P. ("RCS-II"), a California limited partnership. Mitgo Corp. ("Mitgo"), a Delaware corporation, is the sole General Partner of RCS-II. The sole Limited Partner of RCS-II is Intermedia Partners V, L.P. ("IP-V"), a California limited partnership. In the proposed transaction, IP-V will purchase Mitgo's general partnership interest in RCS-II. As a result of the buy-out of the General Partner, RCS-II will dissolve and IP-V will own 100% of Holdings. The completion of this transaction will result in a change in the ultimate ownership of Holdings, although Holdings will continue to own 100% of RMG. 5. RMG requests that the Commission waive the anti-trafficking rules with respect to the systems previously identified. RMG explains that in July 1989, RMG's previous owner entered into an agreement to sell all of RMG's cable television systems to a consortium lead by Intermedia and Mitgo. These sales were completed in separate transactions by December 31, 1991, except for certain systems located in middle and east Tennessee. By April 1992, RMG was serving approximately 75,000 subscribers. In June, July, and October 1992, RMG acquired additional cable systems in Tennessee and Georgia serving approximately 26,000 subscribers. Throughout 1993, RMG acquired another 9 cable systems in the region. Today, RMG states that its holdings are comprised of nearly 30 separate systems serving approximately 184, 299 subscribers in 74 franchise areas. With respect to the systems held for three years or more, RMG states that it is in the process of submitting FCC Forms 394 to the appropriate franchising authorities. As for the systems held less than three years and serving approximately 44,312 subscribers, RMG submits that a waiver is justified because this amount is less than 1/3 of the 184,299 total number of subscribers presently served. Moreover, of these 9 systems, 2 serve less than 1,000 subscribers, and therefore fall within the Commission's blanket waiver for small systems. Finally, RMG submits that the corporate restructuring, although not pro forma, does not raise any "profiteering" concerns. 6. We will grant RMG's waiver request with respect to the 9 cable systems in Georgia and Tennessee. RMG has sufficiently demonstrated that two-thirds or more of its subscribers subject to the proposed transaction will have been held for more than three years. We believe that the grant of the waiver and the transfer would not adversely affect the policies underlying the anti-trafficking rule and are not expected to adversely affect cable rates or services in the affected franchise areas. Moreover, no oppositions have been filed against the waiver or concerning the proposed transaction. The waiver is therefore granted conditioned upon the approval of the transfer by the relevant local franchising authorities, to the extent that is required by the franchise agreement. 7. In view of the above, IT IS ORDERED that, the captioned request for waiver of 47 C.F.R. 76.502 filed by Robin Media Group, Inc. IS CONDITIONALLY GRANTED upon approval of the transfers by the relevant local franchising authorities. 8. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau