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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 ) CALIFORNIA, INC. d/b/a ) RCN OF CALIFORNIA ) ) 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. RCN Telecom Services of California, Inc., d/b/a RCN of California ("RCN") filed an Application for Certification for Open Video System (FCC Form 1275) ("Application") on June 5, 1998, pursuant to Section 653(a)(1) of the Communications Act of 1934 ("Communications Act") and the Commission's regulations. RCN seeks to operate an open video system in the San Francisco, California metropolitan area, which includes San Francisco, communities in San Mateo County (Atherton, Belmont, Brisbane, Burlingame, Colma, Daly City, East Palo Alto, Foster City, Hillsborough, Menlo Park, Millbrae, Pacifica, Portolo Valley, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, and Woodside) and Santa Clara County (Campbell, Cupertino, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, and Sunnyvale). In accordance with our regulations, we issued a Public Notice acknowledging receipt of RCN's Application and setting forth the comment period, which was released and posted on the Internet on June 5, 1998. The California Cable Television Association ("CCTA") filed an Opposition. 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 AND OPPOSITION 4. CCTA urges us to dismiss RCN's Application because it does not satisfy our regulations and conflicts with the policies set forth in our orders. In particular, CCTA points to RCN's alleged pattern of conduct in other parts of the country where we have granted it open video system certification and suggests that RCN is merely using open video system certification as leverage to obtain cable franchises while simultaneously discouraging non-affiliated programming providers from utilizing its open video system. As an example, CCTA points to RCN-BeCoCom, LLC's decision to withdraw open video system certification for Somerville, Massachusetts after obtaining a franchise to operate a cable system therein. CCTA also contends that we cannot consider RCN's representations on FCC Form 1275 credible in light of its past conduct. CCTA asserts that RCN represented that it would provide 330 analog channels in other open video system certifications and subsequently deployed only 110 analog channels. CCTA argues that RCN's build-out policies reveal a pattern of "creamskimming" and "redlining." CCTA references an RCN press release, which announces that Starpower, an RCN affiliate, would initially provide open video system service to a limited area consisting of Georgetown University Law students' housing and to 16 buildings in the Washington, D.C. area. CCTA believes that RCN will pursue a similar strategy in California (i.e., pick and choose service areas within a community). III. DISCUSSION 5. We have reviewed the information contained in RCN's FCC Form 1275. As required by FCC Form 1275, RCN's 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 indicates that it has served its Application on the designated telecommunications officials of the communities affected by its Application. 6. The ten day statutorily mandated review period for open video system certification applications requires us to confine our review to issues concerning RCN's FCC Form 1275 and its related attachments. The purpose of the open video system certification process is to determine whether RCN's Application complies with Congress' mandate and our regulations. CCTA alleges that RCN will not serve all of the communities listed in its Application and that RCN included many communities for the purpose of preventing the incumbent cable operators located therein from becoming video programming providers on RCN's open video system. FCC Form 1275 requires that open video system applicants "[p]rovide a general description of the anticipated communities or areas to be served upon completion of the system." Attached to its Application as Exhibit 3, RCN lists the communities to which it intends to offer open video system service. RCN's representations in its Application satisfies the anticipated communities information requirement. In addition, in Time Warner Cable v. RCN-BeCoCom, the Commission clarified our open video system 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." Thus, as Time Warner makes clear, open video system certification applicants are not able to stifle competition because the restriction applies only to those communities actually served by open video systems. 7. CCTA argues that RCN will not actually provide 330 analog channels as represented in its FCC Form 1275. With respect to channel capacity, FCC Form 1275 merely requires that RCN declare its "anticipated" channel capacity (e.g., digital and switched digital, or analog). RCN represents that it anticipates offering 330 analog channels. The certification process requires an applicant to represent the number of channels it will offer. The record before us is not adequate to evaluate what appears to be a challenge to this representation. To the degree that a party believes a misrepresentation is present, and has information supporting this contention, the Commission's other processes are better able to review and adjudicate such a contention. 8. CCTA also argues that RCN does not intend to operate an open video system and is using the certification process as leverage to negotiate cable franchises from certain communities. 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." RCN has requested certification in the listed communities and verified this request. In the absence of direct evidence contradicting RCN's request, we must accept RCN's representations. With regard to CCTA's arguments relating to creamskimming, we note that such allegations do not relate to the adequacy and accuracy of RCN's Application and, therefore are beyond the scope of the open video system certification process. 9. RCN 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 should any representation contained within RCN's Application prove to be materially false or materially inaccurate, the Commission retains the authority to revoke RCN's certification and seek and impose such other penalties it deems appropriate, including forfeiture. We further find that CCTA's Opposition does not raise issues that warrant denial of RCN's Application. IV. ORDERING CLAUSES 10. Accordingly, IT IS ORDERED, that the certification application of RCN Telecom Services of California, Inc., d/b/a RCN of California to operate open video systems in San Francisco, San Mateo County (Atherton, Belmont, Brisbane, Burlingame, Colma, Daly City, East Palo Alto, Foster City, Hillsborough, Menlo Park, Millbrae, Pacifica, Portolo Valley, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, and Woodside) and Santa Clara County (Campbell, Cupertino, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, and Sunnyvale) IS GRANTED. 11. This action is taken by the Acting Chief, Cable Services Bureau, pursuant to the authority delegated by Section 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Acting Chief, Cable Services Bureau