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A. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdy.X80,X\  P6G;P7jC:,9Xj\  P6G;XP 7nC:,|Xn4  pG;Xa$G,',G\  P6G;PpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""-@.Itoc 6toc 6/` hp x (#44` hp x (#toc 7toc 70 toc 8toc 81` hp x (#44` hp x (#toc 9toc 92` hp x (#44` hp x (#2R3K4M5O6Qindex 1index 13` hp x (#4 4 ` hp x (#index 2index 24` hp x (#4 4 ` hp x (#toatoa5` hp x (#` hp x (#captioncaption6;1#XP\  P6QXP##C\  P6QP#2@X7R8S9XTKT_Equation Caption_Equation Caption711#XP\  P6QXP##C\  P6QP#endnote referenceendnote reference844#XP\  P6QXP##C\  P6QP#footnote referencefootnote reference94#XP\  P6QXP#"i~'^:DTddDDDd4D48ddddddddddDDd||||DXp||dp||ppL8LTdDddXdX8dd88X8ddddLL8dXXXLP8PlD4lTDDD4DDDDDDdDd8|d|d|d|d|dX|X|X|X|XD8D8D8D8dddddddddpX|ddddpXd|d|d|d|dXXlXx|X|X|X|XdddldldD8DdDDDddllXp8pHpDp@p8dtdddd|L|L|LdLdLdLllpHp8pTddddddplpLpLpLdpDddLpDpdx4ddC,CWddddddddddddddddddddddddddddddddddddddddNHxxHhdLdddddd8@d<@d<DDppdDDxddzHxxHkddDpd<"dxtldxxd\={,W80,%?W*f9 xr G;X\5hC:,%Xh*f9 xr G;XXialogDelete item ^0 from the list?Window registration failed!Cannot register cli2\rX/W[y.X80,X\  P6G;P7jC:,9Xj\  P6G;XP 7nC:,|Xn4  pG;X a$G,',G\  P6G;P y.\80,T\4  pG; W!@(#,h@\  P6G;hP H5!,i,5\  P6G;,P\{,W80,%0W*f9 xr G;X\5hC:,%2Xh*f9 xr G;XX          yO- X   ( X-w #Xj\  P6G;9XP# Federal Communications Commission`(#=DA 97861 ă  yxdddy (Qd aE#G\  P6G;P#QvK Before the Federal Communications Commission  yO}"Washington, D.C. 20554 ă  X -#Xj\  P6G;9XP#In the Matter of:l)ppCSR 4955E  X -l)pp  X-Falcon Cablevisionl)ppThousand Oaks, CA  X-l)ppCUID No. CA0850xx- X(#(#` `  hh,V)  X-Petition for Determination ofl)  X-Effective Competitionl)  XQ -  MEMORANDUM OPINION AND ORDER lU  X# - Adopted: April 17, 1997hh,V  ppReleased: April 24, 1997 By the Chief, Cable Services Bureau:  X- I.INTRODUCTION  X-  A1.` ` Falcon Cablevision has filed a Petition for Determination of Effective Competition   asserting that it is subject to effective competition in Thousand Oaks, California ("Thousand   Oaks") because of the presence of GTE Media Venture's ("GTE") cable service in that City. This petition is unopposed.  X&-  d2.` ` Section 623(a)(4) of the Communications Act of 1934, as amended   Z("Communications Act") allows franchising authorities to become certified to regulate basic cable  X-  service rates of cable operators which are not subject to effective competition.b yOq-ԍCommunications Act 623(a)(4), 47 U.S.C. 543(a)(4).b 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 effective competition unless they have  X-  actual knowledge to the contrary.OX yO-ԍ47 C.F.R. 76.906, 76.910(b)(4).O Certification becomes effective 30 days from the date of filing   ?unless the Commission finds that the authority does not meet the statutory certification  X-  requirements. {O#-ԍ47 C.F.R. 76.910(e); 47 C.F.R. 76.910(b); see also Communications Act 623(a)(4), 47 U.S.C. 543(a)(4). In Implementation of Cable Act Reform Provisions of the Telecommunications Act  Xp-  /of 1996 ("Cable Act Reform Order"),|pz yO%-ԍOrder and Notice of Proposed Rulemaking, FCC 96154, at 17 (rel. April 9, 1996).| the Commission instructed cable operators believing   themselves subject to local exchange carrier ("LEC") effective competition under Section   |623(l)(1)(D) of the Communications Act to file a petition for determination of effective"D  ,p(p(ZZ"  X-  \competition pursuant to Section 76.7 of the Commission's rules.; yOy-ԍ47 C.F.R. 76.7.; Section 623(l)(1)(D) of the Communications Act provides that a cable operator is subject to effective competition where:   #XX` ` a local exchange carrier or its affiliate (or any multichannel video   #programming distributor using the facilities of such carrier or its affiliate)   #qoffers video programming services directly to subscribers by any means   #(other than directtohome satellite services) in the franchise area of an   #unaffiliated cable operator which is providing cable service in that   #&franchise area, but only if the video programming services so offered in   #that area are comparable to the video programming services provided by  X -the unaffiliated cable operator in that area.h X yO# -ԍCommunications Act 623(l)(1)(D), 47 U.S.C. 543(l)(1)(D).h `  X - II.THE PLEADINGS  X -  3.` ` Falcon asserts that it is subject to LEC effective competition in its Thousand Oaks,  X -  California franchise area.BX  yO@-  ,ԍFalcon notes that prior to the entry of GTE into the market there were already two franchised cable operators,   Falcon and TCI of Ventura County, each serving generally separate areas of the City. Falcon serves 4000 subscribers in its franchise area.B With regard to the LEC affiliation requirement, Falcon asserts that   GTE is a competing franchised cable operator wholly owned by the GTE Corporation, a local  Xy-exchange carrier serving customers in California and throughout the United States.yy yO2-ԍThe City of Thousand Oaks awarded a cable franchise to GTE on February 6, 1996. y  XK-  P4.` ` With regard to the requirement that the LEC competitor offer  K yO-  ԍIn implementing the LEC effective competition test on an interim basis, the Commission determined that its pre  existing definition of the term "offer" as used in the three effective competition definitions set forth in the 1992  {O$-  Cable Act would apply to the LEC test. Communications Act, 623(l), 47 U.S.C. 543(l); Cable Act Reform Order   iat 8. The Commission previously determined that service of a multichannel video programming distributor will be deemed offered:   #CXX` ` (1) When the multichannel video programming distributor is physically able to deliver   #5service to potential subscribers, with the addition of no or only minimal additional   #investment by the distributor, in order for an individual subscriber to receive service; and   #(2) When no regulatory, technical or other impediments to households taking service exist,   #and potential subscribers in the franchise area are reasonably aware that they may purchase the services of the multichannel video programming distributor. ` 47 C.F.R. 76.905(e).  video programming   service in the unaffiliated cable operator's franchise area, Falcon asserts that GTE has submitted"4R ,N(N(ZZ*"   [a map to the City detailing its cable system construction schedule. Falcon states that GTE has  X-  activated its plant in the City and is providing service to an increasing number of subscribers.  yOb-ԍFalcon also states that it has received 200 disconnect orders so far, 100 of which have been effectuated.  X-  Falcon's entire franchise area is now said to have been overbuilt by GTE.c X yO-ԍStatement by Falcon's counsel in response to staff inquiry.c Falcon states that   GTE has heavily marketed the availability of its cable service through the local media and it has   Mbeen made aware that GTE has begun a telemarketing campaign aimed at Falcon's customer  X-  base.| \ {O& -  ԍFalcon states that there have been fifteen articles appearing in either the Los Angeles Times or the Thousand  {O -  Oaks Star and News Chronicle, which indicate and detail that GTE will be providing cable service to City residents. These articles are attached to the Petition as Exhibit F.| Falcon asserts there are no regulatory, technical, or other impediments to households taking service from GTE. XX` ` `  XH-  _5.` ` Falcon also asserts that GTE offers comparable programmingT zH  yO-  ԍThe Commission observed that Congress specified a different definition of comparable programming for the   LEC effective competition test from that adopted for the first three effective competition tests enacted as part of the   1992 Cable Act. Although soliciting comment as to the revised definition, the Commission on an interim basis   ydetermined that it will apply this new comparable programming standard which "includes access to at least 12   channels of programming, at least some of which are television broadcasting signals" to the LEC effective  {O-  competition test. See Cable Act Reform Order at 12 (quoting 1996 Act Conference Report, S. Rep. 104230 at 170 (Feb. 1, 1996)).T to Thousand Oaks   ysubscribers. Specifically, Falcon provides GTE's channel lineup which demonstrates that GTE   zoffers over 80 channels, 21 of which are local television broadcasting signals. Falcon offers nearly 60 channels of programming on its Thousand Oaks cable system.  X -  6.` ` Falcon asserts that it has slashed its service prices and increased its service   zofferings since GTE has entered the market. Falcon states that it has reduced the cost of its  X -  [expanded basic tier by 93 percentuZ N  yO-  ;ԍFalcon's Satpac service, increased to twelve channels while the price of the same service substantially declined.  {On-  See Miguel Helft, Falcon To Cut Rates for Premium Channels, Los Angeles Times, November 22, 1996 (attached as Exhibit F to Falcon's petition for special relief).u and has added several new channels of cable programming   to meet GTE's competitive challenge. Falcon also asserts that it plans to cut the rates it charges   /for premium channels such as HBO, Showtime, and The Movie Channel from $9.95 to $5.00  Xb-each. Finally, Falcon notes that its competitive reactions may "lead to a rate war with GTE."rbp {O"-ԍSee Linda Haugsted, Multichannel News, December 9, 1996 at 64.r  X4- III.ANALYSIS  X-  7.` ` In the absence of a demonstration to the contrary, cable systems are presumed not",N(N(ZZ "  X-  to be subject to effective competition as defined in the Communications Act.= yOy-ԍ47 C.F.R. 76.906.= The cable   operator bears the burden of rebutting the presumption that such effective competition does not   exist and so must provide evidence sufficient to demonstrate that effective competition, as defined  X-  by Section 76.905 of the Commission's rules, is present in the franchise area.CX yO-ԍ47 C.F.R. 76.911(b)(1).C Falcon has met this burden.  Xv-  8.` ` With regard to the first part of the LEC effective competition test, which requires   that the alleged competitive service be provided by a LEC or its affiliate (or any multichannel   zvideo programming distributor ("MVPD") using the facilities of such LEC or its affiliate), we   find that Falcon has provided sufficient evidence demonstrating that GTE is an MVPD wholly  X -  owned by a LEC. GTE is a LEC as defined by the Communications Act,Z@  yO-ԍThe Communications Act defines the term "local exchange carrier" as:   #XX` ` any person that is engaged in the provision of telephone exchange service or exchange   #access. Such term does not include a person insofar as such person is engaged in the   #3provision 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 meets the   Commission's definition of MVPD. Therefore, we find that Falcon satisfies the affiliation prong   of the LEC effective competition test. Falcon is unaffiliated with both GTE Media Ventures and GTE.  X -  9.` ` We also find that Falcon has submitted sufficient evidence to show that the   programming of GTE is comparable to the programming which it provides. The channel   Linformation for GTE submitted by Falcon establishes that GTE offers more than 80 channels of   programming, including over 20 local broadcast channels. This satisfies the programming comparability criterion.  X-  10.` ` In addition, we find that based on the information before us, GTE is offering   service in Falcon's franchise area sufficient to demonstrate the presence of effective competition.   .Falcon has provided maps and other demonstrations of GTE's offering of service. Falcon has   .stated that its entire franchise area has been overbuilt by GTE, which has a ten year franchise  X-  commitment to provide video service to the City of Thousand Oaks.  yOb#-  xԍGTE's franchise is attached as Exhibit A to Falcon's petition for special relief. Under the franchise, (1) GTE   will upgrade its system to 77 video programming choices plus 20 additional programming options by December 31,   x2000; (2) GTE agrees to substantial completion of construction of its cable system within 18 to 36 months after   xconstruction begins; (3) GTE is required to cooperate with interested businesses for the provision of cable service   in commercial areas; (4) GTE agrees to furnish and maintain with the City a nonrevocable performance and payment   bond in the amount of $100,000 to ensure the faithful performance of all provisions of the franchise; and (5) GTE"J',N(N('" agrees to pay the City up to $500 per day for violations of its franchise commitments. We note that GTE's"X,N(N(ZZS"   =substantial marketing efforts and the extensive press coverage in the local media, ensures that   potential subscribers are reasonably aware of the availability of GTE's service. Subscribers in   =Falcon's franchise area are able to receive service for only a minimal additional investment and   without regulatory, technical or other impediments. We also note that Falcon has lowered its   zrates and added several new channels, all for the benefit of its subscribers. Consistent with   kCongressional intent in adopting Section 623(l)(1)(d) of the Communications Act, under the circumstances we find effective competition to be present.  XH- IV.ORDERING CLAUSES  X1-  X -  11.` ` Accordingly, IT IS ORDERED that the Petition for Determination of Effective   .Competition filed by Falcon Cablevision, challenging the certification of the City of Thousand  X -Oaks, in Thousand Oaks, California IS GRANTED.  X -  12.` ` IT IS FURTHER ORDERED that the certification of the City of Thousand Oaks,   =California to regulate the basic cable rates of Falcon Cablevision in Thousand Oaks, California  X- IS REVOKED .  Xb-  ~13.` ` This action is taken pursuant to the interim rules adopted in Implementation of  XM-  iCable Reform Provisions of the Telecommunications Act of 1996, and is without prejudice to any   ifurther action taken by the Commission in adopting final rules pursuant to the Notice of Proposed  X!-Rulemaking contained therein.i!X {O*-ԍCable Act Reform Order, 11 FCC Rcd at 59385945, 59615964.i  X-  o14.` ` This action is taken pursuant to delegated authority under Section 0.321 of the  X-Commission's rules, as amended.; yOw-ԍ47 C.F.R 0.321.; ` `  hh,FEDERAL COMMUNICATIONS COMMISSION ` `  hh,Meredith J. Jones ` `  hh,Chief, Cable Services Bureau"L