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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** FOR FCC RECORD ONLY $//MO&O Granting Multimedia's waiver request, DA 95-2410//$ $/300.537 Anti-trafficking/$ $/76.502(a) Anti-trafficking Waivers/$ $/76.7 Petitions for Special Relief/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-2410 In re: ) ) Multimedia, Inc. ) CSR- 4570-T ) Request for Waiver of Section 76.502 ) of the Commission's Rules ) MEMORANDUM OPINION AND ORDER Adopted: November 28, 1995 Released: December 1, 1995 By the Deputy Chief, Cable Services Bureau: 1. Multimedia, Inc. ("Multimedia"), 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 Indiana, Kansas, North Carolina, and Oklahoma. Multimedia seeks this waiver to assure that the consummation of a transaction with Gannett Co., Inc. involving the cable systems that it has controlled for less than three years, will not violate the anti-trafficking rule. Multimedia submits that a waiver is warranted because more than two-thirds of the subscribers of the systems to be sold are served by systems which, at the time of closing, will have been owned or controlled by Multimedia 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. Multimedia states the following facts in support of its petition. Multimedia through wholly-owned subsidiaries, owns and operates cable systems serving in the aggregate approximately 439,372 subscribers. Multimedia has entered into an agreement and "Plan of Merger" with Gannett and a wholly-owned subsidiary of Gannett, providing for merger of the Gannett subsidiary with and into Multimedia, Inc. Multimedia, Inc. will survive the merger as a wholly-owned subsidiary of Gannett. Thus, through the merger, controlling ownership of the cable systems in question will be transferred from the current shareholders of Multimedia, Inc. to Gannett Co., Inc. The parties currently intend to consummate the transactions during the fourth quarter of 1995. 5. Multimedia submits that a waiver of the holding period is warranted because, at closing, cable systems serving more than two thirds of all subscribers served by the properties to be sold will have been owned by Multimedia for more than three years. As of May 31, 1995, Multimedia owned cable systems serving 439,372 subscribers. Approximately 354,275 subscribers, or 80.6% of the total base, are served by systems which were acquired on or before October 1, 1992. Because the transaction will not occur until October 1, 1995 at the earliest, more than three years will have passed since acquisition of systems serving in excess of two-thirds of the total number of subscribers involved in the proposed transaction. 6. We will grant Multimedia's waiver request with respect to the cable systems in Indiana, Kansas, North Carolina, and Oklahoma. Multimedia 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 upon the date of closing. We believe that the grant of the waiver 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. 7. In view of the above, IT IS ORDERED that, the captioned request for waiver of 47 C.F.R. 76.502 filed by Multimedia, Inc. IS GRANTED. 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