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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of: )CSR 5008-E ) ) Falcon Telecable )Mesquite, NV d/b/a Falcon Cable TV )CUID No. NV0091 ) ) Petition for Determination of ) Effective Competition ) MEMORANDUM OPINION AND ORDER Adopted: July 10, 1997Released: July 14, 1997 By the Chief, Cable Services Bureau: I. INTRODUCTION 1.Falcon Telecable, d/b/a Falcon Cable TV ("Falcon") filed a Petition for Determination of Effective Competition asserting that it is subject to effective competition in Mesquite, Nevada ("Mesquite") because of the presence of Rio Virgin Cable TV ("Rio Virgin") a cable operator also serving Mesquite. This petition is unopposed. 2.Section 623(a)(4) of the Communications Act of 1934, as amended ("Communications Act") allows franchising authorities to become certified to regulate basic cable service rates of cable operators which are not subject to effective competition. For purposes of the initial request for certification, local franchising authorities may rely upon a presumption that cable operators within their jurisdiction are not subject to effective competition unless they have actual knowledge to the contrary. Certification becomes effective 30 days from the date of filing unless the Commission finds that the authority does not meet the statutory certification requirements. In Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996 ("Cable Act Reform Order"), 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 competition pursuant to Section 76.7 of the Commission's rules. Section 623(l)(1)(D) of the Communications Act provides that a cable operator is subject to effective competition where: a local exchange carrier or its affiliate (or any multichannel video programming distributor using the facilities of such carrier or its affiliate) offers video programming services directly to subscribers by any means (other than direct-to- home 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 the unaffiliated cable operator in that area. II. THE PLEADINGS 3. Falcon asserts that it is subject to LEC effective competition from Rio Virgin in its Mesquite, Nevada cable franchise area. The City of Mesquite awarded to Rio Virgin a franchise to provide cable television service in that City. With regard to the LEC affiliation requirement, Falcon asserts that Rio Virgin is an affiliate of a local exchange carrier, Rio Virgin Telephone Company, which provides local exchange service to the residents of Mesquite. 4.With regard to the requirement that the LEC competitor offer video programming service in the unaffiliated cable operator's franchise area, Falcon asserts that the Rio Virgin's cable overbuild passes almost all of the 2,500 residential addresses in Mesquite. Further, Falcon asserts that Rio Virgin has completed construction of its cable plant and currently provides cable services to its subscribers throughout Mesquite. Falcon also states that Rio Virgin has publicized the availability of its cable service through various advertising materials distributed to Mesquite residents. Moreover, Falcon claims there are no regulatory, technical, or other impediments to households taking service from Rio Virgin. 5.Falcon asserts that Rio Virgin offers comparable programming to Mesquite subscribers. Specifically, Falcon has submitted Rio Virgin's current channel line-up that offers over 58 channels, including numerous local television broadcast stations and non-broadcast programming services. Falcon offers nearly 62 channels of programming on its Mesquite cable system. III. ANALYSIS 6.As defined in the Communications Act, cable systems are presumed not to be subject to effective competition. The cable operator carries the burden of providing sufficient evidence to demonstrate that effective competition, as defined by Section 76.905 of the Commission's rules, is present in the franchise area. We find that Falcon has met this burden. 7.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 multi-channel video programming distributor ("MVPD") using the facilities of such LEC or its affiliate), we find that Falcon has provided sufficient evidence demonstrating that: 1) Rio Virgin meets the Commission's definition of MVPD; and 2) Rio Virgin also is an affiliate of Rio Virgin Telephone, a LEC as defined by the Communications Act. We conclude that Falcon satisfies the affiliation prong of the LEC effective competition test. Furthermore, Falcon is unaffiliated with either Rio Virgin or Rio Virgin Telephone. 8.We also find that Falcon has submitted sufficient evidence to show that the programming of Rio Virgin is comparable to that provided by Falcon. The channel information for Rio Virgin submitted by Falcon establishes that Rio Virgin offers 58 channels of programming, including broadcast and non- broadcast channels. 9.In addition, we find that based on the information before us, Rio Virgin is offering service in Falcon's franchise area sufficient to demonstrate the presence of effective competition. Falcon has stated that its entire franchise area has been overbuilt by Rio Virgin, which has a twenty (20) year franchise commitment to provide video service to the City of Mesquite. We note that Rio Virgin's substantial marketing efforts should ensure that potential subscribers are reasonably aware of the availability of Rio Virgin's service. Subscribers in Falcon's franchise area also are able to receive Rio Virgin's service for only a minimal additional investment and without regulatory, technical or other impediments. Therefore, consistent with Congressional intent in adopting Section 623(l)(1)(d) of the Communications Act, we find that effective competition is present. IV. ORDERING CLAUSES 10.Accordingly, IT IS ORDERED that the Petition for Determination of Effective Competition filed by Falcon Cable TV, challenging the certification of the City of Mesquite, in Mesquite, Nevada IS GRANTED. 11.IT IS FURTHER ORDERED that the certification of the City of Mesquite, Nevada to regulate the basic cable rates of Falcon Cable TV in Mesquite, Nevada IS REVOKED. 12.This action is taken pursuant to the interim rules adopted in Implementation of Cable Reform Provisions of the Telecommunications Act of 1996, and is without prejudice to any further action taken by the Commission in adopting final rules pursuant to the Notice of Proposed Rulemaking contained therein. 13.This action is taken pursuant to delegated authority under Section 0.321 of the Commission's rules, as amended. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau