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XP# Federal Communications Commission`*(# DA 962094 ă  yxdddy )v3 #C\  P6QpP#Before the Federal Communications Commission  yO Washington, D.C. 20554 X01Í ÍX01Í  Í҃  X -#Xj\  P6G; XP#In the Matter of:#X\  P6G;pP#R#Xj\  P6G; XP#)  X -R)hppClearwater, FL  X-Time Warner EntertainmentR)hppCUID No. FL0492  X-Advance/Newhouse PartnershipR)hpp  xx 0  X-R)hpp  xx Petition for Determination ofR) Effective CompetitionR) T T  X: -|  MEMORANDUM OPINION AND ORDER TP  X -X` hp x (#%'0*,.8135@8:physically able to offer service to subscribers in Clearwater.8 X yO-ԍPetition at 56.8 Time Warner attaches a map  X- x<prepared by Time Warner employees, and based on their personal observations, that outlines the  X- xLEC's construction plan.@  {OT-ԍId. and Exhibit B.@ Time Warner states that this map shows that GTE has already  X- xcompleted construction in virtually all of the City. Time Warner also asserts that, as of June 20,  X- xZ1996, there are no regulatory, technical, or other impediments to households taking service.7 z {O -ԍId. at 6.7 The  xoperator states that GTE became eligible to begin service to Clearwater residents on that date.  X_- xTime Warner also asserts that potential subscribers in the franchise area are "reasonably aware"  XH- xjthat they may purchase GTE's service.1 H  {O-ԍId.1 Time Warner states that GTE has generated extensive  X1- xpublicity about its new Clearwater cable service through news releases, newspaper articles, and  X -other marketing materials.7  {Oi-ԍId. at 7.7  X -  X - ` x5.` ` Time Warner asserts that GTE offers comparable programmingTz 0  yO- xZԍThe Commission observed that Congress specified a different definition of comparable programming for the  x LEC effective competition test from that adopted for the first three effective competition tests enacted as part of the  x1992 Cable Act. Although soliciting comment as to the revised definition, the Commission on an interim basis  xydetermined that it will apply this new comparable programming standard which "includes access to at least 12  xchannels of programming, at least some of which are television broadcasting signals" to the LEC effective  {O- xcompetition test. See Cable Act Reform Order at 12 (quoting 1996 Act Conference Report, S. Rep. 104230 at 170 (Feb. 1, 1996)).T to Clearwater  X - xsubscribers. Specifically, Time Warner provides GTE's channel lineup which demonstrates that  X - xGTE offers 77 channels of programming, 11 of which are local television broadcasting signals.D r yO-ԍPetition at 7 and Exhibit F.D  X -Time Warner points out that its system offers 70 channels in Clearwater.E  {OZ!-ԍId. at 8 and Exhibit G.E  X-  Xy- III.xANALYSIS  XK- ` x6.` ` In the absence of a demonstration to the contrary, cable systems are presumed not  X4- xto be subject to effective competition as defined in the Communications Act.=4 yOy'-ԍ47 C.F.R. 76.906.= The cable"4$,N(N(ZZ"  xoperator bears the burden of rebutting the presumption that such effective competition does not  X- xexist and so must provide evidence sufficient to demonstrate that effective competition, as defined  X- xby Section 76.905 of the Commission's rules, is present in the franchise area.C yOK-ԍ47 C.F.R. 76.911(b)(1).C Time Warner has met this burden.  X- ` x7.` ` With regard to the first part of the LEC effective competition test, which requires  xthat the alleged competitive service be provided by a LEC or its affiliate (or any multichannel  X_- xzvideo programming distributor ("MVPD") using the facilities of such LEC or its affiliate), we  xLfind that Time Warner has provided sufficient evidence demonstrating that GTE New Media is  xan MVPD wholly owned by a LEC. GTE is unquestionably a LEC as defined by the  X - xjCommunications Act,Z@ X yO# -ԍThe Communications Act defines the term "local exchange carrier" as:  ` pXxX` ` any person that is engaged in the provision of telephone exchange service or exchange  ` paccess. Such term does not include a person insofar as such person is engaged in the  ` p3provision of a commercial mobile service under Section 332(c), except to the extent that the Commission finds that such service should be included in the definition of such term. ` Communications Act 3(26), 47 U.S.C. 153(26).Z and GTE Media Ventures meets the Commission's definition of MVPD.  xTherefore, we find that Time Warner satisfies the affiliation prong of the LEC effective competition test. Time Warner is unaffiliated with both GTE Media Ventures and GTE.  X - ` x8.` ` We also find that Time Warner has submitted sufficient evidence that the  xprogramming of GTE is comparable to that which it provides. The channel lineup for GTE  x.submitted by Time Warner establishes that GTE offers 77 channels of programming, including 11 local broadcast channels; this satisfies the Commission's programming comparability criterion.  XK- ` x9.` ` To meet the LEC effective competition test, the alleged competitive service must  xalso be offered directly to subscribers in the franchise area. In enacting the LEC test, Congress  x=indicated that the Commission should apply its preexisting definition of the term "offer" to the new LEC effective competition test. Under that definition service is offered:  ` pXxX` ` (1) When the multichannel video programming distributor is physically  ` pable to deliver service to potential subscribers, with the addition of no or  ` p6only minimal additional investment by the distributor, in order for an  X- ` prindividual subscriber to receive service; and (2) When no regulatory,  ` ptechnical or other impediments to households taking service exist, and  ` ppotential subscribers in the franchise area are reasonably aware that they"e` ,N(N(ZZ"  ` pmay purchase the services of the multichannel video programming  X-distributor. {Ob- xԍ47 C.F.R. 76.905(e); see Cable Act Reform Order at 9 (citing 1996 Act Conference Report, S. Rep. 104230 at 170 (Feb. 1, 1996)). `  X- ` x 10.` ` Based on the information before us, we find that GTE is offering service in  X- xClearwater sufficient to demonstrate the presence of effective competition. Time Warner has  xprovided GTE's construction schedule (as found in its franchise agreement with the City) and  Xv- xmaps of wired areasZXv" yOI - xZԍWe recognize that Time Warner, and not GTE, provided the construction maps. Since these maps were not  xproduced by a disinterested third party, or out of an obligation to the City, we will view this evidence as probative but not conclusive evidence of construction progress.Z demonstrating actual and planned offering of service by GTE. GTE has  xwired more than 75 percent of the City of Clearwater, with construction to be completed in three  XH- xyears.$HB {O;- xxԍAccording to the trade press, about 85 percent of GTE's network in Clearwater is in place. See Multichannel  {O- xNews, July 1, 1996 at p. 42. See also, Multichannel News, November 25, 1996 at p. 78 (GTE's "Clearwater hybrid  xfiber and coaxial cable system passes 96,000 homes. . . . [and GTE] plans to offer video and cable modem services to 500,000 homes in the Tampa area by 1998.") While the entire franchise area is still in the process of being wired, GTE's franchise  x!agreement appears to provide that GTE will construct its system throughout the City of  X - xClearwater.Z .  {O- xԍSee GTE's franchise agreement with the City of Clearwater at Sections 3 and 4 (attached as Exhibit D to Time  xWarner's Petition for Special Relief) (GTE has an obligation to wire the "franchise area"; this term means the area consisting of the corporate limits of the City of Clearwater, as its border may be changed from time to time.) Under its 10 year franchise, GTE is obligated to complete system construction  X - xthree years after the date of the franchise grant.W P  {O-ԍSee id. at Appendix A2e.  W GTE also has a legal obligation to pay $50,000  xto reimburse the City for the costs incurred in connection with the award of the franchise,  xmaintain a performance bond of $100,000, provide the City with free cable service at police  X -stations, fire stations, and courthouses, and abide by rigorous customer service standards.t  {OQ-ԍId. at subsections 6E, 7F, 8F and Appendix D, respectively. t  X- ` x 11.` ` GTE's aggressive marketing efforts, combined with the extensive press coverage  x=of GTE in the local media, ensure that potential subscribers are well aware of the availability of  x[GTE's service. According to the documents attached to Time Warner's petition, in those areas  xwired and marketed by GTE, potential subscribers need only contact GTE to activate service.  x=Moreover, subscribers are able to receive service for only a minimal additional investment and  xwithout regulatory, technical or other impediments. We note that Time Warner has upgraded its  X- x<cable plant to 750 megahertz and has moved the Disney Channel to its expanded basic package.at {O+&-ԍSee Multichannel News, July 1, 1996 at p. 2. a  xIn the circumstances, consistent with Congressional intent in adopting Section 623(l)(1)(d) of the",N(N(ZZ " Communications Act, we find "effective competition" to be present.  X- IV.xORDERING CLAUSES  X- ` x 12.` ` Accordingly, IT IS ORDERED that the Petition for Determination of Effective  xxCompetition filed by Time Warner EntertainmentAdvance/Newhouse Partnership challenging the  Xv-certification of the City of Clearwater, in Clearwater, Florida IS GRANTED.  XH- ` `x 13.` ` IT IS FURTHER ORDERED that the certification of the City of Clearwater,  xkFlorida to regulate the basic cable rates of Time Warner EntertainmentAdvance/Newhouse  X -Partnership in Clearwater, Florida IS REVOKED .  X - ` ~x14.` ` This action is taken pursuant to the interim rules adopted in Implementation of  X - xiCable Reform Provisions of the Telecommunications Act of 1996, and is without prejudice to any  xifurther action taken by the Commission in adopting final rules pursuant to the Notice of Proposed  X -Rulemaking contained therein.i  {O$-ԍCable Act Reform Order, 11 FCC Rcd at 59385945, 59615964.i  X-  X}- ` ox15.` ` This action is taken pursuant to delegated authority under Section 0.321 of the  Xf-Commission's rules, as amended.;fZ yOq-ԍ47 C.F.R 0.321.; x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau