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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 Wedgewood Communications Company ) ) Certification To Operate ) An Open Video System ) ORDER Adopted: November 7, 1997 Released: November 7, 1997 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On October 30, 1997, Wedgewood Communications Company ("Wedgewood") filed an application for certification to operate an open video system pursuant to Section 653(a)(1) of the Communications Act of 1934 ("Communications Act") and the Commission's rules. In accordance with our procedures, the Commission published notice of receipt of the certification application and posted the application on the Internet. The City of Chicago, Illinois ("Chicago"), and 21st Century Cable TV, Inc. ("21st Century"), filed timely comments opposing the application on November 4, 1997. For the reasons stated below, we deny Wedgewood's application for certification. 2. Pursuant to Section 653(a)(1) of the Communications Act, any person may obtain certification to operate an open video system. An operator of a cable system, however, generally may not obtain such certification within its cable service area unless it is subject to effective competition. In light of the brief period for Commission review of certification filings, the Commission concluded that Congress intended a streamlined certification process. To keep the open video system certification process from erecting barriers to entry and potential for delay, Congress sought to avoid pre-certification submissions or approvals. Open video system operators may apply for certification at any point prior to the commencement of service, subject to two conditions. If construction of new physical plant is required, the applicant must obtain Commission approval of its certification prior to the commencement of construction. If no new construction is required, certification must be obtained prior to the commencement of service, allowing sufficient time to comply with the Commission's requirements regarding notifications that must be provided to programming providers. 3. Despite the streamlined nature of the certification process, the Commission intended it to provide purposeful representations regarding the responsibilities of the open video system operator by requiring that applicants verify their certifications and provide specified information. To obtain certification, an applicant must file FCC Form 1275, which requires, among other things: (a) a statement of ownership, including a list of all affiliated entities; (b) a representation that the applicant will comply with the Commission's regulations under Section 653(b); (c) a list of the names of the communities the applicant anticipates it will serve; (d) a statement of the anticipated type and amount of capacity that the system will provide; and (e) a representation as to whether the applicant is a cable operator applying for certification within its cable franchise area. II. WEDGEWOOD'S APPLICATION 4. Wedgewood indicates in its application that it intends to provide 240 channels of analog service to subscribers in Chicago, Illinois. As required by Form 1275, Wedgewood provides a separate statement of ownership; makes the required eligibility and compliance representations; and provides the required system information, system capacity, list of communities to be served, and verification statements. In response to the question on Form 1275 asking whether the applicant is a cable operator applying for certification within its cable franchise area, Wedgewood responded that the question was not applicable. III. COMMENTS 5. Chicago argues that Wedgewood's application is deficient and should be rejected because Wedgewood falsely represented on its Form 1275 that it is not a cable operator. Chicago states that Wedgewood is a cable operator because it provides "cable service" over a "cable system," as those terms are defined in the Communications Act. As evidence of Wedgewood's status as a cable operator, Chicago attaches to its opposition a copy of a letter dated September 25, 1997 ("September 25 Letter"), that it received from Wedgewood in which Wedgewood stated that it "intends to file an application for a cable franchise with the City of Chicago for the areas in which it is now operating." Chicago argues that this constitutes an admission by Wedgewood that it is a cable operator, since cable operators are required by the Communications Act to obtain a franchise. Chicago claims that the Commission's anticipated ruling in Motion of Entertainment Connections, Inc. for Declaratory Ruling, DA 97-353 ("ECI"), will likely be dispositive as to Wedgewood's status as a cable operator. Chicago urges the Commission to prohibit Wedgewood from refiling its application until its status as a cable operator is resolved. 6. Chicago also claims that Wedgewood may have provided an invalid verification because the individual who verified the Form 1275 under the title "President" may not actually be Wedgewood's president. Chicago notes that the September 25 Letter attached to its opposition is signed by a different individual as Wedgewood's "President." Chicago argues that the discrepancy between the September 25 Letter and the Form 1275 suggests that the signatory of the Form 1275 may have falsely represented that he is the president of Wedgewood. In addition, Chicago adds that Wedgewood correspondence dated as late as October 22, 1997, is signed as president by the signatory of the September 25 Letter. 7. Chicago further asserts that the Commission's procedural rules governing open video system certifications deny interested parties a meaningful opportunity to comment on applications and therefore violate the constitutional right to due process. Chicago claims that the Commission's five-day comment period "does not afford a municipality a sufficient time in which to reasonably prepare legitimate objections." 8. 21st Century, like Chicago, asserts that Wedgewood is a cable operator and therefore misrepresented its status as such on the Form 1275. In addition, 21st Century contends that Wedgewood is in violation of the Commission's requirements regarding the timing of open video system certification filings because Wedgewood commenced operations before it sought open video system certification. In support of its argument, 21st Century cites Section 76.1502(a) of the Commission's rules, which directs applicants intending to construct facilities to seek certification before construction is commenced, and directs all other applicants to seek certification before they initiate service. IV. DISCUSSION 9. Part C, Question 1 on Form 1275 asks, "If you are a cable operator applying for certification within your cable franchise area, are you qualified to operate an open video system under 47 C.F.R.  76.1501?" Wedgewood marked the box labelled "N/A" for "not applicable." Chicago and 21st Century strenuously argue that Wedgewood is a cable system operating without a franchise. Chicago provides a recent letter in which Wedgewood states that it "intends to file an application for a cable franchise with the City of Chicago for the areas in which it is now operating." There are a range of allegations made, not all of which can be resolved in the limited scope of the certification process. The certification process was established to examine the adequacy and accuracy of the information contained in the Form 1275 filing. 10. The commenters' allegations and Wedgewood's statements, both in its Form 1275 and its correspondence with Chicago, raise legitimate questions regarding Wedgewood's candor in responding to Part C, Question 1 on Form 1275. By merely checking the box "N/A" without further explanation, Wedgewood has failed to inform the Commission fully regarding information that could be material in determining whether Wedgewood is eligible to be certified as an open video system operator. The Commission must have full confidence in the truthfulness of representations made to it by applicants for Commission authorization to provide a service or operate a facility. As the United States Court of Appeals for the District of Columbia Circuit has stated, "the Commission must rely heavily on the completeness and accuracy of the submissions made to it, and its applicants in turn have an affirmative duty to inform the Commission of the facts it needs in order to fulfill its statutory mandate." An applicant's failure to come forward with a candid statement of relevant facts, whether or not such information is particularly elicited by the Commission, is a breach of the applicant's obligation to be truthful. 11. The Communications Act allows the Commission only 10 days to review an open video system application and determine whether the applicant has met the statutory requirements. The Commission affords commenters five days to present their views. The time constraints imposed on the Commission and commenters heighten the importance of full disclosure of all relevant facts by open video system applicants. To fulfill its statutory mandate, the Commission must have all information necessary to allow an analysis of the applicant's qualifications to operate an open video system. The applicant, as the filing party, is in control of the timing of its filing and should not file its application unless and until it is able to provide accurate and complete responses to all Form 1275 questions. 12. The statutory 10-day time limit imposed upon the Commission and the limited pleading cycle does not permit us to adequately address Wedgewood's appropriate regulatory status. The Commission must be able to rely on the accuracy and adequacy of the representations contained in the Form 1275 certification application. In this instance, we believe that the commenters have raised sufficient concern regarding Wedgewood's candor in completing its application to require that we deny Wedgewood's open video system certification. 13. We note that denial of an open video system certification application does not preclude an applicant from filing a revised certification application or from refiling its original submission with a statement addressing the issues in dispute. Such refilings must be served on any objecting party or parties and affected local communities. V. ORDERING CLAUSES 14. Accordingly, IT IS ORDERED that the certification of Wedgewood Communications Company to operate an open video system IS DENIED. 15. This action is taken by the Chief, Cable Services Bureau, pursuant to the authority delegated by Section 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau