********************************************************    
                         NOTICE
********************************************************

This document was converted from
WordPerfect to ASCII Text format.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

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:                    )
                                     )
DIGITAL BROADCASTING OVS             )
                                     )
Certification to Operate an          )
Open Video System                    )                 
                                     
                                     
                       MEMORANDUM OPINION AND ORDER

        Adopted:  July 13, 1998                    Released:  July 13, 1998 

By the Deputy Chief, Cable Services Bureau:

I.      INTRODUCTION

  1.    Digital Broadcasting OVS ("DBOVS") filed an Application for Certification for Open
Video System (FCC Form 1275) ("Application") on July 2, 1998, pursuant to Section 653(a)(1) of the
Communications Act of 1934 ("Communications Act") and the Commission's regulations.  DBOVS seeks
to operate an open video system in forty-four California communities: Alameda, Albany, Atherton,
Belmont, Berkeley, Brisbane, Burlingame, Campbell, Colma, Cupertino, Daly City, East Palo Alto,
Emeryville, Foster City, Fremont, Hayward, Hillsborough, Los Altos Hills, Los Altos, Los Gatos, Menlo
Park, Millbrae, Milpitas, Monte Serno, Morgan Hill, Mountain View, Newark, Oakland, Pacifica, Palo
Alto, Piedmont, Portola Valley, Redwood City, San Bruno, San Carlos, San Francisco, San Jose, San
Mateo, Santa Clara, Saratoga, South San Francisco, Sunnyvale, Union City, and Woodside.  In accordance
with our regulations, we issued a Public Notice acknowledging receipt of DBOVS' Application and
setting forth the comment period, which was released and posted on the Internet on July 2, 1998.  The
City and County of San Francisco ("San Francisco") and the California Cable Television Association
("CCTA") filed oppositions.

  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.      OPPOSITIONS

  4.     San Francisco urges us to deny DBOVS' Application on two substantive grounds: (1) the
five-day open video system FCC Form 1275 comment period violates the Due Process Clause of the
United States Constitution; and (2) open video system certifications effect an unconstitutional taking of
San Francisco's property.  In the event that we approve DBOVS' Application, San Francisco urges us
to limit DBOVS' right to use or occupy San Francisco's property by requiring DBOVS to first obtain all
necessary authorizations from San Francisco.

  5.     Although conceding that DBOVS properly completed its Application and followed our
procedural requirements, CCTA argues that we should deny DBOVS' Application because DBOVS has
not demonstrated that it "is prepared to actually construct an OVS system and serve the communities for
which it is already certified."

III.     DISCUSSION

  6.      We have reviewed DBOVS' FCC Form 1275 and related attachments.  As required by
FCC Form 1275, DBOVS' 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.  DBOVS' certificate of service represents that
it served its Application on the Commission's Office of the Secretary, the Cable Service Bureau's Office
of the Bureau Chief, and on the designated telecommunications officials of the communities affected by
its Application.

  7.     The ten day statutorily mandated review period for open video system certification
applications requires us to confine our review to issues concerning DBOVS' FCC Form 1275 and its
related attachments.  The purpose of the open video system certification process is to determine whether
DBOVS' Application complies with Congress' mandate and our regulations.

  8.     Neither San Francisco nor CCTA challenge the accuracy or sufficiency of the information
that DBOVS provided in compliance with our rules and FCC Form 1275.  Instead, they raise issues that
fall outside the scope of the certification process and do not constitute grounds for us to deny DBOVS'
Application.

  9.     San Francisco argues that the five days provided under our regulations to respond to a
prospective open video system operator's FCC Form 1275 is insufficient as a matter of due process and
did not permit it to complete even the most rudimentary due diligence check.  The Commission has
previously addressed this issue.  The ten-day review period is mandated by statute.  Given that
constraint, the Commission established the five-day comment period to provide affected parties the
maximum opportunity to be heard consistent with the ten-day review requirement.  In addition, although
the certification process is by necessity streamlined, the Commission's regulations afford adequate
opportunity to interested parties, particularly through the complaint process, to seek a remedy of any
violation of law or regulation.

  10.    San Francisco also takes issue with the Commission's decision to let non-local exchange
carriers apply for and operate open video systems.  The Commission addressed this issue in the Second
Report and Order, wherein it describes the statutory support for its position.

  11.    San Francisco's second constitutional argument is grounded in the Takings Clause of the
United States Constitution.  San Francisco contends that a grant of an open video system certification leads
to "forced occupation" of its property and for which it must be justly compensated.  In examining the
scope of preemption authority granted to the Commission by Congress to preempt local governments from
imposing Title VI franchise or Title VI "franchise-like" requirements on open video system operators, the
Commission concluded that the narrow preemption at issue did not raise a Fifth Amendment taking
because Congress provided for "just compensation" to the local governments.  San Francisco may recover
"normal fees associated with the zoning and construction" of open video systems, as long as it imposes
them in a non-discriminatory, neutral manner that does not duplicate the compensation provided by a gross
revenues fee.  
 
  12.    To avoid the constitutional issue, San Francisco argues that we should either deny
DBOVS' Application or "condition any approval to clarify that DBOVS must obtain permission from the
City to use City streets, and that the City retains the discretion to determine the time, place, and manner
of DBOVS' use of City streets."  There is no need to expressly condition DBOVS' certification in this
manner because open video system certification does not interfere with a local government's ability to
control its rights-of-way.  In this regard, the Commission has stated that "Management of the rights-of-way
is a traditional local government function.  Local governments should be able to manage the rights-of-way
in their usual fashions without the imposition of unique requirements for open video service."  

  13.    With respect to CCTA's contention that we deny DBOVS' Application until it is prepared
to "actually construct" an open video system in the areas for which we have already certified it to operate
open video systems, we note that neither our regulations nor FCC Form 1275 require DBOVS to provide
a roll-out schedule or similarly detailed information on the timing and manner of deployment of facilities
or service.

  14.    We find that DBOVS 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 DBOVS' Application proves to be materially false or materially
inaccurate, the Commission retains the authority to revoke DBOVS' certification or impose such other
penalties it deems appropriate, including forfeiture.  We further find that San Francisco and CCTA's
oppositions have not raised issues that warrant denial of DBOVS' open video system Application for
Certification.

IV.      ORDERING CLAUSES

  15.    Accordingly, IT IS ORDERED that the certification application of Digital Broadcasting
OVS to operate open video systems in Alameda, Albany, Atherton, Belmont, Berkeley, Brisbane,
Burlingame, Campbell, Colma, Cupertino, Daly City, East Palo Alto, Emeryville, Foster City, Fremont,
Hayward, Hillsborough, Los Altos Hills, Los Altos, Los Gatos, Menlo Park, Millbrae, Milpitas, Monte
Serno, Morgan Hill, Mountain View, Newark, Oakland, Pacifica, Palo Alto, Piedmont, Portola Valley,
Redwood City, San Bruno, San Carlos, San Francisco, San Jose, San Mateo, Santa Clara, Saratoga, South
San Francisco, Sunnyvale, Union City, and Woodside IS APPROVED.

  16.    This action is taken by the Deputy Chief, Cable Services Bureau, pursuant to the authority
delegated by Section 0.321 of the Commission's rules.

  FEDERAL COMMUNICATIONS COMMISSION 


  John E. Logan, Deputy Chief
  Cable Services Bureau