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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 Re University of Arizona )CSR-5017 ) Petition for Special Relief ) Requesting Waiver of 47 C.F.R.  76.501(a),) or in the Alternative, Clarification of) of Definition of "Cable System" ) ORDER Adopted: July 28, 1997Released: July 30, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1.The University of Arizona ("University") has filed the captioned petition requesting a waiver of the cable television broadcast television station cross-ownership rules or, in the alternative, clarification of the "cable system" definition contained in the Commission's rules. This petition is unopposed. BACKGROUND 2.The University of Arizona ("University") is a public land grant institution located in Tucson, Arizona. Its undergraduate, graduate, and professional programs approximately enroll 35,000 students. The University plans to construct a video distribution system for the residence halls on campus. As designed and constructed, the university system would provide the University with the ability to directly distribute University-originated academic programming to all the campus residents. 3.The University is also the licensee of two public television stations whose broadcast signals cover the Tucson campus area. It is the ownership of these broadcast stations that present regulatory obstacles to the University's video distribution plans. The Commission's cross-ownership rules prohibit the common ownership of a broadcast station and a cable system if they have overlapping service areas. Therefore, Commission approval by way of waiver is necessary for the University to operate a broadcast television station while simultaneously operating the video distribution system as envisioned. 4. In the alternative, the University maintains that its planned video distribution system is not a "cable system" under the statutory definition, because it has no subscribers. Apart from this contention, the University has not settled on the content of its programming tiers or its method of subscription. Initially, it appears that the University plans two tiers of programming. The first tier will consist of all local channels and University originated programming and will be offered to all residents free of charge. The second tier will be offered as an option to those residents willing to pay a certain charge. It will consist of "a suite of traditional cable entertainment programming" obtained from third-party contracts. The University, however, indicated that it might choose to fold the second tier of paid entertainment programming into the rental rates paid by all residents and thereby make the whole system's offerings available to all residents for no additional charge. DISCUSSION 5. In view of the uncertain aspects of the operation of this facility, we are hesitant to rule on whether the University planned video distribution system is in fact a "cable system" at this time. In any event, we need not reach the issue, because we believe that a waiver of the cross-ownership rules is appropriate in this instance. 6.The Commission's cross-ownership rule 47 C.F.R.  76.501(a) reads in relevant part: No cable television system . . . shall carry the signal of any television broadcast station if such a system directly or indirectly owns, operates, controls, or has an interest in a TV broadcast station whose predicted grade B contour . . . overlaps in whole or in part the service area of such system . . . The policy goals of Section 76.501(a) are to increase competition in the economic marketplace and in the marketplace of ideas. In cases where enforcement of the ban on cross-ownership does not promote these goals, a waiver of these rules will be entertained by the Commission. 7.In the instant case, we believe the stated policy objectives of the cross-ownership rules would not be impaired by granting a waiver and allowing the University to simultaneously own and operate a broadcast station and campus video distribution system. With regard to economic competition, the University contends that waiving the cross-ownership restrictions would have no adverse impact in the Tucson media market. The University's two public television stations are non-commercial. As such, they do not compete economically with the other broadcast stations in the same market. Thus, the University does not have the same incentives to engage in anti-competitive conduct as a commercial operator might, since its broadcast channel does not compete with the other local broadcast channels for advertising revenue. Accordingly, waiver of the television cable cross-ownership rule is particularly appropriate where the television stations involved are non-commercial, because "they are not engaged in economic competition vis-a-vis other media" in the area the cable system will serve. Furthermore, the University's video distribution system will not be available outside of the confines of the University. This limits substantially the potential to undermine competition of media services in the Tucson market. 8.Operation of the facility in question would have the beneficial effect of increasing programming choices available to students residing on campus. The University video distribution system enables students to receive instructional and educational programming, in addition to all local Tucson broadcast stations. This video distribution system, moreover, ensures a clear reception of all channels which is virtually impossible in the student rooms at present. Moreover the facility functions as a integral internal part of the University's education function with the students being the primary beneficiaries of the video distribution system. The circumstances of this case warrant a waiver of the Commission's cross-ownership rules. ORDERING CLAUSES 9.Accordingly, IT IS ORDERED, that the captioned petition for special relief filed by the University of Arizona IS GRANTED to the extent indicated above and otherwise IS DENIED. 10.This action is taken pursuant to authority delegated by Section 0.321 of the Commission's Rule's, 47 C.F.R. 0.321 (1996). FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau