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S -  (#7.` ` With regard to the first part of the LEC test, which requires that the alleged competitive  c)service be provided by a LEC or its affiliate (or any multichannel video programming distributor using  c)kthe facilities of such LEC or its affiliate), Marcus has provided sufficient evidence demonstrating that  SX- c)PBVS is LECaffiliated under the Commission's interim rules.jX - {O-ԍCable Act Reform Order, 11 FCC Rcd at 59385945, 59615964. j The corporate relationships that exist  S0- c)between PBVS, PTE, PTG, and SBC establish PBVS's LEC affiliation.n0 - yOV-ԍWe note that PTG merged with SBC Communications Inc. in April of 1997.n Additionally, we find that Marcus is unaffiliated with PBVS, PTE, PTG or SBC.  S- (# 8.` ` We also find that Marcus has submitted sufficient evidence demonstrating that PBVS  c)provides programming comparable to Marcus' channel lineup in Whittier. PBVS's most basic service  c)kconsists of 49 channels of video programming, including 13 local television broadcast channels, which satisfies the programming comparability criteria.  S-  (#Q9.` ` As to the requirement that the LEC competitor "offer" service, Marcus has not met its  c)\burden. Marcus has failed to establish that PBVS "offers" service because Marcus has not presented  c)>sufficient evidence that subscribers in Whittier are reasonably aware that they may take service from  c)jPBVS. Cable operators seeking to prove that they are subject to effective competition from a LEC or its  c)affiliate must not only show that the competitor is physically able to deliver service free of any regulatory,"P,`(`(88"  c)technical or other impediments but that subscribers are "reasonably aware" that they may purchase the  S- c)competitor's service.N- {O@-ԍSee 47 C.F.R.  76.905(e)(2).N Consumer awareness of a competing service is an essential element of the offer requirement of the LEC effective competition test.  S`- (#10.` ` We have stated that potential subscribers may be made reasonably aware of the availability  S8- c)of a competing service through, for example, advertising in the media or direct mail.V8Z- {O2-ԍCable Act Reform Order, 11 FCC Rcd 5942.V We have also  c)stated that cable operators seeking to prove that they face effective competition may rely on marketing  S- c)kinformation to demonstrate consumer awareness of the competing service.V- {Ot -ԍCable Act Reform Order, 11 FCC Rcd 5942.V In this instance, Marcus  c)/submits examples of PBVS's direct mail marketing materials. Marcus does not present evidence that PBVS has engaged in any type of mass media marketing.  SH - (#11.` ` The direct mail materials submitted by Marcus are not sufficient to demonstrate that  c)potential subscribers in Whittier are aware of PBVS's service. Although Marcus claims that the marketing  c)materials were distributed "throughout Los Angeles County," there is no evidence in the record defining  S - c)the scope of the direct mail campaign.H ~- {O-ԍSee Marcus' petition at 8.H Specifically, there is no information concerning how many  S -subscribers in Whittier, if any, were actually sent mailings.kZ - {OX- c)ԍSee also Los Angeles Times, "PacBell Digital TV Venture Begins in L.A., Orange Counties," Marla Matzer,  c),May 30, 1997 ("SBC representative declined to say how many people are being targeted or on what basis customers would be selected, should demand outweigh SBC's ability to deliver.")k  SX-  (#12.` ` Marcus points to articles on the launch of PBVS as evidence that subscribers in Whittier  c)[are reasonably aware of PBVS's service. These articles and others, for the most part, describe the launch  S- c)of PBVS's video service as a "gradual rollout" and as "low key."2 2 - {O- c)ԍSee e.g., The Wall Street Journal, "PacTel Launches Wireless CableTV On ScaledBack Basis in California,"  c)ZLeslie Cauley, May 30, 1997 ("SBC yesterday said it has begun a limited commercial rollout of video services in  c).Los Angeles and Orange counties, but it will wait to see how customers respond before proceeding further.");  {O4- c)xElectronic Media, "Pacific Bell Pushes On With Cable," Michael Schneider, September 1, 1997 ("Pacific Bell has  c)quietly started rolling out the system," and quoting Carlson, "[w]e have not used any media [to market the service]  {O- c)and have no plans to do so."); Multichannel News, "SBC tiptoes into L.A. cable market; SBC Communications,  c)Inc.," Kent Gibbons, June 2, 1997 ("Pacific Bell Video Services has quietly started signing up paying customers"  c)and "PacBell said it plans a 'gradual' rollout to make sure that the service quality is high and to test market  {O "- c)Kacceptance."); Broadcasting & Cable, "Pac Bell's lowkey digital: company is quietly building California wireless  c)system," Joe Schlosser, October 6, 1997 ("company officials acknowledged that there are no plans for a marketing  {O#- c)-blitz anytime soon."); Los Angeles Times, "PacBell Digital TV Venture Begins in L.A., Orange Counties," Marla  c)Matzer, May 30, 1997 ("Though the company said the service is available now, it's not clear where or how quickly consumers can subscribe."). It appears that some subscribers were  c)targeted for the mailings while many other potential subscribers were not solicited. Former PBVS Vice  c)-President and General Manager Jeff Carlson has said that the company is purposely controlling the number",,`(`(88"  S- c)of subscribers to "contain demand."- {Oh-ԍElectronic Media "Pacific Bell Pushes On With Cable," Michael Schneider, September 1, 1997. According to Carlson, the company will add new customers  S- c)gradually to ensure highquality service.+$Z- {O- c)-ԍThe San Francisco Chronicle, Business, "L.A. Gets 'Wireless Cable' TV/ Pac Bell's Bay Area service still on  {O- c)hold," Jonathan Marshall, May 30, 1997. See also Multichannel News, "PacBell Taking Cable's Best Subs in S.  c)Calif.," Linda Haugsted, October 6, 1997 ("PBVS is still not ready for the increase in demand that a widespread campaign might engender: Each installation still takes one hour and 50 minutes, on average, executives said.")+ Carlson has also stated that "[a]s for the advertising, we are  c)doing a very controlled rollout; it is conservative by design. We have limited our marketing to very  S-specific demographics."F- {On - c)-ԍBroadcasting & Cable, "Pac Bell's lowkey digital: Company is quietly building California wireless system," Jon Schlosser, October 6, 1997.  S`-  S8- (#13.` ` Marcus' submission of a PBVS subscriber bill addressed to a Marcus employee residing  c)Lin Whittier does not persuade us that residents of Whittier are reasonably aware that they may purchase  c).service from PBVS. That certain specific subscribers are aware of PBVS because they are employees of  c)the cable operator or PBVS or were specifically targeted does not mean that subscribers in Whittier  c)=generally are informed that there is an alternative video service provider to the cable operator. The cable  c)operator must submit evidence demonstrating that potential subscribers in Whittier, not only segments of  c)kthe population that may have been specifically targeted or handpicked for solicitation, are reasonably  c)>aware that they may purchase services from a video provider other than the cable operator. Because  c)evidence of a broad awareness of the existence and availability of PBVS's service is lacking, we find that Marcus has failed to prove that PBVS "offers" service in Whittier.  S - (#14.` ` As a general matter, we note that evidence presented by cable operators regarding the  c)number and location of subscribers to the competing service shows that the competitor is physically able  c)\to deliver service. Such evidence, in most cases, can also reflect the degree subscribers are reasonably  c)aware of the competing service since they are, in fact, receiving it. However, in this instance, the PBVS  c)\subscriber figure submitted by Marcus does not persuade us that consumers in Whittier generally are  S- c)knowledgeable about PBVS's service. T he number of households in Whittier is roughly 29,000.K - yO- xԍWe derived the 29,000 household figure by: (1) determining the population of Whittier, which is 76,000; and  x(2) dividing the population figure by 2.62, which represents the Census Bureau's estimate of people per household  yO- xjas of July 1, 1996, in order to convert the population figure into a household figure (76,000  2.62 = 29,008  xhouseholds). We obtained the population figure based on information contained in the FCC Form 325 filed by the cable operator.K The  c)number of subscribers that Marcus claims are definitively aware of PBVS's service because they receive  Sh- c)it is 50. This figure represents only .17% of the total number of households in Whittier (50  29,000 =  c)\.17%). Given the lack of information concerning the scope of PBVS's direct mail campaign as well as  c)what appears to be PBVS's incremental marketing strategy, that PBVS has some subscribers in Whittier  c)/does not convince us that subscribers throughout Whittier are reasonably aware of the availability of PBVS's service. "xP ,`(`(88"Ԍ S- (#15.` ` We find that Marcus has failed to submit sufficient evidence demonstrating that its cable  c)system serving Whittier, California is subject to LEC effective competition from PBVS. Marcus' petition is denied.  S`- IV.ORDERING CLAUSES  S8-  S- (#%16.` ` Accordingly, IT IS ORDERED that the Petition for Determination of Effective  c)LCompetition filed by Marcus Cable Associates, L.P., d/b/a Marcus Cable, challenging the certification of  S-the local franchising authority in Whittier, California IS DENIED.  Sp- (# 17.` ` This action is taken pursuant to the interim rules adopted in Implementation of Cable  SJ - c) Reform Provisions of the Telecommunications Act of 1996, 11 FCC Rcd 5937 (1996), and is without  c)prejudice to any further action taken by the Commission in adopting final rules pursuant to the Notice of  S -Proposed Rulemaking contained therein.i! R {Od -ԍCable Act Reform Order, 11 FCC Rcd at 59385945, 59615964.i  S - (#18.` ` This action is taken pursuant to delegated authority under Section 0.321 of the  S -Commission's rules, as amended.<" ZR yO~-ԍ47 C.F.R  0.321.< ` `  Ghh}FEDERAL COMMUNICATIONS COMMISSION ` `  Ghh}John E. Logan ` `  Ghh}Acting Chief, Cable Services Bureau     X- #Xj\  P6G;ynXP#