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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: ) ) RCN TELECOM SERVICES OF ) PHILADELPHIA, INC. ) ) ) Certification to Operate an ) Open Video System ) MEMORANDUM OPINION AND ORDER Adopted: June 15, 1998 Released: June 15, 1998 By the Acting Chief, Cable Services Bureau: I. INTRODUCTION 1. On June 5, 1998, RCN Telecom Services of Philadelphia, Inc. ("RCN-Philadelphia"), a wholly owned subsidiary of RCN Corporation ("RCN"), 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. RCN-Philadelphia seeks to operate an open video system in the City of Philadelphia and in the Counties of Buck, Chester, Delaware, and Montgomery, Pennsylvania. In accordance with our procedures, the Commission published notice of receipt of RCN-Philadelphia's certification application and posted the application on the Internet. Comments were filed by the Pennsylvania Cable & Telecommunications Association ("PCTA"). 2. Pursuant to Section 653(a)(1) of the Communications Act, any person may obtain certification to operate an open video system. In light of the brief period (ten days) for Commission review of certification filings, the Commission concluded that Congress intended a streamlined certification process. Prospective 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, the applicant must obtain certification prior to the commencement of service, allowing itself sufficient time to comply with the Commission's requirements regarding notifications that must be provided to potential 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 channel 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. COMMENTS 4. PCTA states that, based on the history of the open video system operations of RCN affiliates, RCN-Philadelphia's certification application follows the same pattern in choosing large regions within which to become certified with no apparent intent to construct open video service facilities in each listed community in those regions. PCTA further states that RCN-Philadelphia, like its sister companies, most likely intends to leverage its open video system certification to obtain cable television franchises in some of the communities for which it requests certification. PCTA asserts that the Commission's requirements governing open video system certification require applicants to examine the economic feasibility of providing open video service to a particular community before such applicant files its certification application. 5. PCTA further states that RCN affiliates who have been granted open video system certification have attempted to circumvent the pro-competitive intent of the open video system framework by designing their open video systems to serve only those multiple dwelling units where an RCN-affiliated video programming provider is authorized to offer service. PCTA argues that RCN-Philadelphia seeks to obtain open video system certification in numerous communities in order to prevent incumbent cable operators from offering video programming in any of those communities. PCTA further argues that while RCN-Philadelphia, like other RCN affiliates, states in its certification application that it intends to offer 330 analog channels, reports indicate that its open video systems operated by RCN affiliates support only 110 video channels. 6. PCTA states that the Commission should acknowledge the history of the open video system operations of RCN affiliates and take steps to avoid the same outcomes by monitoring closely RCN- Philadelphia's open video system operations and conditioning any grant of certification on RCN-Philadelphia's compliance with its obligation to provide full enrollment opportunities for all video programming providers. PCTA suggests that open video system certification applicants be required to file a separate application for each community in which it intends to offer open video service as a means of insuring that the applicant intends to offer service in that particular community. III. DISCUSSION 7. We have reviewed the information contained in RCN-Philadelphia's FCC Form 1275. RCN- Philadelphia has applied to become a certified open video system operator in Philadelphia, Pennsylvania and in certain communities of Montgomery County, Delaware County, Bucks County, and Chester County, Pennsylvania. As required by Form 1275, RCN-Philadelphia's certification application provides: company information and a separate statement of ownership, including all affiliated entities; eligibility and compliance representations; and system information, system capacity and verification statements. RCN-Philadelphia indicates that it has served the designated telecommunications officials of communities affected by its application in Philadelphia, Pennsylvania and the Counties of Montgomery, Delaware, Bucks, and Chester, Pennsylvania. 8. We have also reviewed the comments filed in response to RCN-Philadelphia's Form 1275. PCTA has questioned RCN-Philadelphia's intent with regard to offering open video service to each of the communities listed in its certification application. As an initial matter, we note that the FCC Form 1275 does not require an open video system applicant to evidence that it has conducted an economic feasibility study before filing its certification application. In Time Warner, Time Warner Cable urged the Commission to revoke certain RCN open video system certifications based on statements made by officials of RCN which indicated that RCN did not intend to offer open video system service in each community in which it was certified. At that time, we stated that "while we question certain of RCN's statements ... the record is not adequately developed to address Time Warner's allegations that RCN does not intend to offer open video system service in its intended service area." While in the case before us, we do not find evidence sufficient to find that RCN does not intend to offer open video system service in the communities listed on its FCC Form 1275, we note that our open video system rules contemplate a complaint process to resolve such issues. PCTA has not asked us to deny RCN-Philadelphia's certification application, instead, it has asked us to monitor RCN- Philadelphia's open video system operations and has suggested that we require open video system applicants to file a separate certification application for each community for which it intends to offer open video service. With regard to PCTA's suggestion of separate filings, we note that the Commission's rules governing open video system certification do not require separate filings for each community within an open video system applicant's intended service area. In addition, the FCC Form 1275 requires open video system certification applicants to list the names of the local communities in which the applicant intends to operate. In order to require separate filings for each community, the Commission would have to act to amend its rules governing open video system certification, an action that is outside the scope of the certification application review process. 9. PCTA also was concerned with the apparent practice of RCN affiliates to design their network to serve only those multiple dwelling units where RCN's own video programming provider already offers service and to deny service to single family homes and other multiple dwelling units. We take note of the Commission's rules prohibiting open video system operators from discriminating among video programming providers with regard to carriage on its open video system. We further note our complaint procedures contained in Section 76.1503 of the Commission's rules should evidence develop that RCN-Philadelphia's representations regarding its intended service areas prove untruthful. 10. PCTA is also concerned that RCN-Philadelphia seeks to become certified in a large service area containing numerous communities in order to impede an incumbent cable operator's opportunity to obtain capacity as a video programming provider with the same region. In Time Warner, we clarified our rules as they pertain to competing, in-region cable operators by stating that "[a]n incumbent cable operator is a competing, in region cable operator where there is an actual overlap between a cable operator franchise area and a specific community served by an open video system operator." (emphasis added) Thus, as Time Warner makes clear, open video system certification applicants are not able to stifle competition because the restriction applies only to the communities actually served by the open video system operator. With regard to whether RCN-Philadelphia will actually offer 330 channels, the Commission's rule only requires an open video system applicant to state its "anticipated" channel capacity on FCC Form 1275. 11. We find that RCN-Philadelphia has provided the requisite facts and representations concerning the open video system it intends to operate and has certified that it "agrees to comply and remain in compliance with each of the Commission's regulations" under Section 653(b) of the Communications Act. We note that, if any representation in RCN-Philadelphia's certification filing proves to be materially false or materially inaccurate, the Commission retains the authority to revoke RCN-Philadelphia's certification or impose such other penalties it deems appropriate, including forfeiture. We further find that PCTA has not raised issues which warrant denial of RCN-Philadelphia's certification application. IV. ORDERING CLAUSES 12. Accordingly, IT IS ORDERED, that the certification application of RCN Telecom Services of Philadelphia, Inc. d/b/a RCN of Philadelphia to operate an open video system in the communities of: Philadelphia, Pennsylvania; Abington, Ambler, Bridgeport, Bryn Athyn, Cheltenham, Collegeville, Conshohocken, East Norritin, Hatboro, Hatfield Borough, Hatfield Township, Horsham, Jenkintown, Lansdale, Lower Merion, Lower Moreland, Lower Providence, Montgomery, Naberth, Norristown, North Wales, Perkiomen, Plymouth, Rockledge, Schwenksville, Souderton, Springfield, Telford, Towamencin, Trappe, Upper Moreland, West Conshohocken, West Norriton, and Whitemarsh in Montgomery County, Pennsylvania; Aldan, Aston, Bethel, Brookhaven, Chadds Ford, Chester City, Chester Heights, Chester Township, Clifton Heights, Collingdale, Colwyn, Concord, Darby Borough, Darby Township, East Lansdowne, Eddystone, Edgemont, Folcroft, Glenolden, Haverford, Lansdowne, Lower Chichester, Marcus Hook, Marple, Media, Middletown, Millbourne, Morton, Nether Providence, Newtown, Norwood, Parkside, Prospect Park, Radnor, Ridley, Ridley Park, Rose Valley, Rutledge, Sharon Hill, Springfield, Swarthmore, Thornbury, Tinicum, Trainer, Upland, Upper Chichester, Upper Darby, Upper Providence, and Yeadon in Delaware County, Pennsylvania; Bensalem, Bristol Borough, Bristol Township, Falls, Hulmeville, Langhorne, Langhorne Manor, Lower Makefield, Lower Southhampton, Middletown, Morrisville, Newtown Borough, Newtown Township, Pendel, Telford, Tullytown, Upper Southhampton, Warminster, and Yardley in Bucks County, Pennsylvania; Downington, Easttown, Malverne, Phoenixville, Tredyffrin, West Chester, and Westtown in Chester County, Pennsylvania IS GRANTED. 13. This action is taken by the Chief, Cable Services Bureau, pursuant to the authority delegated by Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Acting Chief, Cable Services Bureau APPENDIX A BUCKS COUNTY Bensalem Bristol Borough Bristol Township Falls Hulmeville Langhorne Langhorne Manor Lower Makefield Lower Southhampton Middletown Morrisville Newtown Borough Newtown Township Pendel Telford Tullytown Upper Southhampton Warminster Yardley CHESTER COUNTY Downington Easttown Malverne Phoenixville Tredyffrin West Chester Westtown DELAWARE COUNTY Aldan Aston Bethel Brookhaven Chadds Ford Chester City Chester Heights Chester Township Clifton Heights Collingdale Colwyn Concord Darby Borough Darby Township East Lansdowne Eddystone Edgemont Folcroft Glenolden Haverford Lansdowne Lower Chichester Marcus Hook Marple Media Middletown Millbourne Morton Nether Providence Newtown Norwood Parkside Prospect Park Radnor Ridley Ridley Park Rose Valley Rutledge Sharon Hill Springfield Swarthmore Thornbury Tinicum Trainer Upland Upper Chichester Upper Darby Upper Providence Yeadon MONTGOMERY COUNTY Abington Ambler Bridgeport Bryn Athyn Cheltenham Collegeville Conshohocken East Norritin Hatboro Hatfield Borough Hatfield Township Horsham Jenkintown Lansdale Lower Merion Lower Moreland Lower Providence Montgomery Naberth Norristown North Wales Perkiomen Plymouth Rockledge Schwenksville Souderton Springfield Telford Towamencin Trappe Upper Moreland West Conshohocken West Norriton Whitemarsh