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S- X    S-  Federal Communications Commission`}(#DA 981968 ă  yxdddy =r S- DRAFT 9/17/98 = P3 #&a\  P6G;u&P#Before the Federal Communications Commission  S-" Washington, D.C. 20554 ă  S`-#X\  P6G;ɒP##&a\  P6G;u&P#In the Matter of:#&a\  P6G;u&P#R)  X8-R#Xj\  P6G;ynXP#)  S!-#&a\  P6G;u&P#CABLEVISION OF BOSTON, INC.,R) AR CABLE SERVICES, INC.,R) AR CABLE PARTNERS, and R) CABLEVISION OF FRAMINGHAM, INC.R) R) Petition for Determination pursuantR) to Section 76.1503(c)(2)(v)(B)R) of the Commission's rulesR) T  S -  MEMORANDUM OPINION AND ORDER TP  SA-X` hp x (#%'0*,.8135@8:on RCNBECoCom's open video system platform will "likely translate into greater choice and lower  xprices for consumers" in Massachusetts in furtherance of the Commission's goals of promoting  S- xcompetition.7  {O -ԍId. at 9.7 Finally, Cablevision argues that its presence on RCNBECoCom's system will significantly  xenhance, not impede, competition for video programming in the relevant communities in Massachusetts  xKand that allowing its participation on RCNBECoCom's system will not negatively impact the development  Sh-of RCNBECoCom's system.8h {O&#-ԍId. at 11.8  S- xB.` ` RCNBECoCom's Opposition  S- ` x8.` ` In its Opposition to Cablevision's Petition, RCNBECoCom argues that Cablevision fails  S- xto demonstrate pursuant to Section76.1503(c)(2)(v)(B) of the Commission's rules that facilitiesbased",`(`(88"  xcompetition will not be significantly impeded if the Commission were to grant Cablevision access to RCN S- xBECoCom's open video system.D yO@-ԍRCNBECoCom Opposition at 1.D RCNBECoCom also argues that Cablevision fails to show good cause  S- xfor a waiver of the Commission's rules.$X {O- xԍId. at 4. RCNBECoCom also notes that Cablevision makes no showing that it offers service to less than 20%  xof the households passed by the open video system and has less than 17,000 customers in the open video system's  {O:- xservice area. Id.; see supra n.11, discussing the automatic exception permitting competing, inregion cable operators to request carriage on an open video system.  RCNBECoCom notes that throughout its Petition, Cablevision  xconsistently omits the words "facilitiesbased" from its description of the Section 76.1503(c)(2)(v)(B)  x[standard and instead focuses narrowly on the general impact that permitting Cablevision access to RCN xBECoCom's system would have on competition for video programming. RCNBECoCom asserts that  S- x[Cablevision's motives run counter to the Commission's desire that cable operators upgrade their facilities  S- xand argues that Cablevision provides no evidence in its Petition that its network cannot be upgraded.7 D {O -ԍId. at 7.7  xRCNBECoCom notes that if Cablevision were legitimately interested in promoting competition in the video programming market, it would have expanded its network and services years ago.  SH - ` 3x9.` ` In response to Cablevision's request for information regarding RCNBECoCom's open  S - xvideo system, RCNBECoCom responds that the release of such information has potential anticompetitive  S - xconsequences.7!  {On-ԍId. at 9.7 RCNBECoCom asserts that the release of such information will seriously undermine  S - x\RCNBECoCom's ability to compete against Cablevision.8" h  {O-ԍId. at 14.8 RCNBECoCom also references several  xprogram access complaints that have been filed against Cablevision and its programming affiliates as  S -evidence of Cablevision's refusal to provide new entrants with access to critical programming.8#  {O-ԍId. at 11.8  S0- xC.` ` Comments  S- ` $x10.` ` In its comments, the Alliance takes no official position regarding Cablevision's request  S- xfor carriage on RCNBECoCom's open video system.?$  yO-ԍAlliance Comments at 3.? The Alliance expresses its concern that, regardless  xof the Commission's decision, both RCNBECoCom and Cablevision must comply with the public,  xeducational, and governmental ("PEG") access requirements of Section76.1505(b) of the Commission's  S@- xrules.W%Z@ {O#- x<ԍId. at 1. Section 76.1505(b) of the Commission's rules provides that "an open video system operator must  xensure that all subscribers receive any public, educational and governmental access channels within the subscribers' franchise area." 47 C.F.R. 76.1505(b).W In addition, the Alliance submits that Cablevision has provided no evidence demonstrating that  xit is entitled to the exception for inregion cable operators who serve less than 17,000 subscribers in the">%,`(`(88q"  S- xLopen video systems service area.& {Oh- xԍSee supra n.11, discussing the automatic exception permitting competing, inregion cable operators to request carriage on an open video system. Rather, according to the Alliance, Cablevision's Boston system alone  xserves more than 132,000 subscribers, which the Alliance asserts precludes access to RCNBECoCom's open video system.  S`- ` x11.` ` Sudbury urges the Commission to grant Cablevision permission to use RCNBECoCom's  S8- xopen video system on a limited basis.>'8" yO-ԍSudbury Comments at 1.> Sudbury believes that its community will best be served by  xklimiting Cablevision's usage of RCNBECoCom's open video system to programming, such as special  S-business community programming, culturally diverse programming and new local programming.1( {O: -ԍId.1  S- ` qx12.` ` Thomas Magee, a resident of Brookline, Massachusetts, in comments filed with  Sp- xyCommission, urges the Commission to grant Cablevision's Petition.)"pD yOT- xԍMagee Comments at 1. In its Supplemental Reply, RCNBECoCom alleges that Cablevision sent a draft letter  xiin support of Cablevision's Petition to fortyeight communities in Massachusetts which those communities could  xsubmit to the Commission as comments to this proceeding. Supplemental Reply at 3. RCNBECoCom alleges that  {O-except for cityspecific references, the draft letter is identical to the Magee letter. Id. Mr. Magee submits that unclaimed  SH - x]capacity on RCNBECoCom's open video system could be utilized to offer a range of specialized  x"programming services, including special business community programming, culturally diverse  S -programming, and educational channels.9* .  {O-ԍId. 9  S - ` nx13.` ` Bell Atlantic argues that Cablevision's Petition should be denied. Bell Atlantic asserts that  xthe open video systems model was intended to provide an alternative to incumbent cable operators and  xLthat Congress did not intend to allow subversion of that design to shield incumbent cable operators from  S0- xcompetition.D+0  yO-ԍBell Atlantic Comments at 2.D Bell Atlantic disputes Cablevision's claim that allowing them to occupy capacity on RCN xBECoCom's open video system will add an additional programming voice in Massachusetts, based on the  x>fact that Cablevision, by virtue of its status as an incumbent cable operator, is already an established  S- xprogramming voice in Massachusetts.7,P  {O -ԍId. at 3.7 To the contrary, Bell Atlantic argues that allowing Cablevision  xto occupy capacity on RCNBECoCom's open video system will potentially reduce the number of  Sh- xunrepresented programming voices that have an opportunity to reach consumers.1-h {O#-ԍId.1 Finally, Bell Atlantic  x.argues that forcing RCNBECoCom to offer Cablevision capacity on its open video system and provide  xyit with competitively sensitive material would decrease the opportunity for independent programmers to  x/reach consumers, undermine Congress' goal of encouraging investment in new technologies, and harm facilitiesbased competition between new entrants and incumbent cable operators."t-,`(`(883"Ԍ S-ԙ xD.` ` Reply Comments  S-  S- ` x14.` ` In its Reply, Cablevision submits that denying the only unaffiliated video programmer who  xyhas expressed interest in carriage on RCNBECoCom's open video system would deprive Massachusetts  xconsumers of the benefits of competitive diversity and would allow RCNBECoCom to continue operating  xas a cable operator, rather than an open video system operator, without complying with a cable operator's  S- xknumerous statutory obligations under Title VI of the Communications Act.C. yOx-ԍCablevision's Reply at 23.C Cablevision argues that  S- xRCNBECoCom is using its open video system certification as a "regulatory stalking horse" in its ongoing  S- xattempts to provide video service through other means.7/X {O -ԍId. at 3.7 Cablevision argues that if RCNBECoCom is  xunwilling to operate an open platform, it should be decertified by the Commission, and, at a minimum,  Sp- x<the Commission should investigate RCNBECoCom's operations.70p {O -ԍId. at 4.7 Cablevision submits that neither RCN xBECoCom nor any commenter has demonstrated that allowing Cablevision to provide programming on  S - xRCNBECoCom's facility would "significantly impede" the development of facilitiesbased competition.71 | {O<-ԍId. at 4.7  S - xCablevision also alleges that RCNBECoCom is not providing, and has no intention of complying with  S - xthe statutory and regulatory obligations of an open video system.72  {O~-ԍId. at 5.7 Cablevision alleges that RCN xBECoCom has used its open video system certification as leverage in negotiations with local franchising  xauthorities in communities in which it is certified as an open video system. Cablevision observes that  xonce RCNBECoCom obtains a cable franchise, it will abandon its open video system status and points  S0- xto RCNBECoCom's indications that it will most likely seek a cable franchise within one year.3\0 {Op- xԍId. at 6. Cablevision quotes from a public hearing of the Town of Wakefield, at which an RCNBECoCom  {O:- xYrepresentative stated his preference for cable television licenses rather than open video system certifications. Id. at 7, citing Transcript of Public Hearing of Board of Selectmen, Town of Wakefield, Mass. at 16.  xCablevision also references a pending Show Cause Order issued by the Massachusetts Cable Television  xCommission regarding Residential Communications Network of Massachusetts, Inc.'s, a corporate affiliate  S-of RCNBECoCom, status as an unfranchised cable operator.74  {O-ԍId. at 9.7  Sh- ` 4x15.` ` In its Reply, Cablevision references the June 2, 1997 one year Interim Open Video  x<Systems Agreement between RCNBECoCom and the City of Boston and argues that no prospective video  S- xprogrammer is likely to request channel capacity on an open video system that will likely convert to a  S- xjfranchised cable system within 12 to 24 months.85V  {O$-ԍId. at 11.8 Cablevision also complains that RCNBECoCom has"5,`(`(88C"  ximpermissibly truncated the enrollment period for video program providers requesting open video system  S-carriage in violation of the Commission's rules.6" {O@- xKԍId. at 12. Cablevision alleges that RCNBECoCom filed its Notice of Intent with the FCC on February 28,  x1997, stating that the enrollment period would commence February 28, 1997 and conclude May 31, 1997.  xCablevision asserts that RCNBECoCom also stated that preliminary enrollment requests be received no later than April 30, 1997. =%vD   =%vD   S- `  x16.` ` In its Reply, RCNBECoCom notes that commenters agree with RCNBECoCom that, not  xonly did Cablevision fail to demonstrate that facilitiesbased competition will not be significantly impeded  xif the Commission were to grant Cablevision access to RCNBECoCom's open video system, Cablevision  S- xkfailed to even address the correct standard established by the Commission's rules.7" yOb - xԍRCNBECoCom Reply at 1. In response to the Alliance's concern about the availability of PEG access  x<channels on RCNBECoCom's open video systems, RCNBECoCom states that it intends to provide PEG access  xchannels to all of its open video system subscribers and will require all video programming providers on its open  {O -video system to comply with Section 76.1505 of the Commission's rules. Id. at 2. RCNBECoCom  xargues that Cablevision clearly fails to demonstrate that "facilitiesbased competition will not be  S- xsignificantly impeded" by permitting it access to RCNBECoCom's open video system.8\ {O- x]ԍId. at 3. RCNBECoCom points out that Cablevision fails to satisfy the test set forth in Section  x76.1503(c)(2)(v)(B), because Cablevision does not either serve less than 20% of the households passed by the open  {O-video system, nor does it serve less than 17,000 subscribers within the open video system service area. Id.ħ  In its Reply,  xyRCNBECoCom notes that although Cablevision claims that upgrading its existing network is technically  Sp- xinfeasible, Bell Atlantic currently operates such a system.k9p  {O-ԍId. at 4, citing Bell Atlantic and NYNEX Comments at 3 n. 11.k RCNBECoCom agrees with Bell Atlantic  xjthat allowing Cablevision to occupy capacity on RCNBECoCom's open video system could potentially  S -reduce the number of additional programming voices that reach customers.?: R  yO-ԍRCNBECoCom Reply at 6.?  S -  S - IV.xDISCUSSION  S - ` x17.` ` The provision of the Commission's rules applicable to Cablevision's petition, Section 76.1503(c)(2)(v), provides in pertinent part:  ` prXxX` ` Notwithstanding the general prohibition on an open video system operator's  ` pdiscrimination among video programming providers contained in paragraph (a)  ` pqof this section, a competing, in region cable operator or its affiliate(s) that offers  ` pcable service to subscribers located in the service area of an open video system  ` pshall not be entitled to obtain capacity on such open video system, except . . . (B)  ` ptWhere a showing is made that facilitiesbased competition will not be  S-significantly impeded.G; yO%-ԍ47 C.F.R. 76.1503(c)(2)(v).G ` "r;,`(`(884"Ԍ xIt is not disputed by the parties that Cablevision is a competing, inregion cable operator offering cable  S- xservice to subscribers in RCNBeCoCom's open video system service area.,<( {O@- xԍThis is in contrast to the factual situation faced by the Commission in Time Warner Cable v. RCNBeCoCom,  {O - xL.L.C. in which the Cable Services Bureau concluded that there was no actual overlap of RCN's open video system  {O- xservice area and any of Time Warner's Bostonarea franchise areas. See Time Warner Cable v. RCNBeCoCom,  {O-L.L.C. 13 FCC Rcd 8613 (Cab. Serv. Bur. 1998) (petition for reconsideration pending)., Accordingly, to prevail in  xits petition, Cablevision bears the burden of showing that carriage of its programming on RCNBeCoCom's open video system will not significantly impede facilitiesbased competition.  S8- ` Ax18.` ` In adopting the requirement that competing, inregion cable operators may obtain carriage  xon an open video system only where facilitiesbased competition will not be significantly impeded, the  xCommission reasoned that this approach served the public interest because a competing, inregion cable  x/operator should generally be encouraged to develop and upgrade its own system, rather than occupy  S- x\capacity on a competitor's system that could be used by another video programming provider.\= {O -ԍSecond Report and Order, 11 FCC Rcd. at 18258.\ The  xCommission found this approach to be consistent with Congress' intent to "encourage common carriers  xto deploy open video systems and introduce vigorous competition in entertainment and information  S - xmarkets."A> J {O -ԍId. at 18259.A By promoting facilitiesbased competition in this manner, the Commission recognized that  xin most cases an open video system will be a new entrant into video markets where a dominant, incumbent  S -cable operator will be present.1?  {OL-ԍId.1  S - ` x19.` ` Cablevision devotes a substantial portion of its petition to explaining how carriage of its  xprogramming on RCNBECoCom's will benefit subscribers in the communities served by RCN x\BECoCom. Cablevision also argues that carriage of its programming will benefit RCNBECoCom by  xdemonstrating its financial and technical viability. We note that RCNBECoCom has already refused to  xcarry voluntarily Cablevision's programming. In the absence of a clear showing that carriage of  xCablevision's programming on RCNBECoCom's system will not significantly impede facilitiesbased  xcompetition, we will not substitute Cablevision's business judgement for that of RCNBECoCom regarding  xcarriage of Cablevision's programming. Cablevision expends little effort in demonstrating how carriage  xof its programming on RCNBECoCom's system will not significantly impede facilitiesbased competition in the Boston area. In this regard, Cablevision merely asserts in its Reply that Cablevision's:  ` pXxX` ` presence will in no way undermine either facilitiesbased competition or interprogrammer competition a key aspect of [open video systems]. `  Sx-x` `  hh*@*h*  ` p6XxX` ` As a basis for its opposition, RCNBECoCom merely asserts, but does not  S(- ` pSexplain, how [Cablevision's] participation as a video programming provider will  ` pimpede competition. RCNBECoCom's repetitive discussion of "facilitiesbased  ` pcompetition" does not constitute an explanation. Put simply, if RCNBECoCom  S- ` phas capacity available on its [open video] systems, and [Cablevision is] willing" n ?,`(`(88"  ` pto pay for carriage of their programming services, facilitiesbased competition will  S-be advanced.C@ yO@-ԍCablevision Reply at 1516.C `  xFirst, it is Cablevision's burden to demonstrate that carriage of its programming will not impede facilities xbased competition. Contrary to Cablevision's implication, it is not RCNBECoCom's task to demonstrate  xthat carriage of Cablevision's programming will impede facilitiesbased competition. Second,  xCablevision's mere assertion that carriage of its programming will not impede facilitiesbased competition,  xjwithout evidence to support such assertion, does not persuade us that the grant of Cablevision's petition  xmis consistent with the Commission's rules. Cablevision provides no information and makes no representation regarding plans for its facilities.  SH - ` x20.` ` Cablevision's arguments regarding enhanced competition for the delivery of video  xprogramming, increased video programming options to subscribers, and the increased viability of RCN xBECoCom's open video system (and open video systems in general) are inapposite. The standard  xestablished by the Commission for carriage of the programming of a competing, inregion cable operator  xon an open video system is whether such carriage will significantly impede facilitiesbased competition.  x/Cablevision has failed to provide evidence as to how it satisfies this standard. Cablevision's petition  xpursuant to Section 76.1503(c)(2)(v)(B) of the Commission's rules is denied. Because we conclude that  xLCablevision has not demonstrated that it is eligible for carriage on RCNBECoCom's open video system,  x=it is also not entitled to the information it requested relating to carriage on RCNBECoCom's open video system.  S- ` x21.` ` We also deny Cablevision's request pursuant to Section 1.3 of the Commission's rulesQAX yO-ԍSection 1.3 of the Commission's rules provides that:  ` pXxX` ` The provisions of this chapter may be suspended, revoked, amended, or waived for good  ` pcause shown, in whole or part, at any time by the Commission, subject to the provisions  ` pof the Administrative Procedure Act and the provisions of this chapter. Any provision  ` pof the rules may be waived by the Commission on its own motion or on petition if good cause therefor is shown. ` 47 C.F.R. 1.3.Q  xfor a waiver of Section 76.1503(c)(2)(v)(B) requiring RCNBECoCom to provide carriage of Cablevision's  xprogramming for good cause shown. In this regard, Section 76.1503(c)(2)(v)(B) is essentially a waiver  xprovision relating to the Commission's conclusion that competing, inregion cable operators should  x.generally not be granted carriage on open video systems. As discussed, Cablevision has failed to satisfy  xits burden under the Section 76.1503(c)(2)(v)(B) waiver standard. Cablevision's general assertions as to  xenhanced competition and subscriber choice do not overcome the Commission's express conclusion that  xthe statutory premise of open video systems would best be served by limiting a competing, inregion cable  xoperator's access to open video systems. We decline Cablevision's request that we waive the requirements  xof Section 76.1503(C)(2)(v)(B) and require RCNBECoCom to provide carriage of Cablevision's  S-programming.` ` " ( A,`(`(88"Ԍ S- ` `x22.` ` Cablevision argues at length, and submits extensive supporting information, that RCN x>BECoCom is not complying with its obligations as an open video system operator. These represent  xserious allegations. Cablevision's petition to obtain carriage on RCNBECoCom's system, however, is  xnot the appropriate forum to address these issues. Section 76.1513 of the Commission's rules provides  xLthat "[a]ny party aggrieved by conduct that it alleges to constitute a violation of the regulations set forth  xLin this part or in Section 653 of the Communications Act . . . may commence an adjudicatory proceeding  xat the Commission. The Commission shall resolve any such dispute within 180 days after the filing of  S- xa complaint."AB yOP-ԍ47 C.F.R. 76.1513(a).A Any party believing that RCNBECoCom is not satisfying its obligations as an open video system operator may bring a complaint for the Commission's review and adjudication.  Sp- V.xORDERING CLAUSES  S - ` x23.` ` Accordingly, IT IS ORDERED that the petition of Cablevision of Boston, Inc., AR  xlCable Services, Inc., AR Cable Partners, and Cablevision of Framingham, Inc. for a determination  S -pursuant to Section 76.1503(c)(2)(v)(B) of the Commission's rules IS DENIED.  S - ` Ox24.` ` IT IS FURTHER ORDERED that Cablevision of Boston, Inc., AR Cable Services, Inc.,  xNAR Cable Partners, and Cablevision of Framingham, Inc.'s request pursuant to Section 1.3 of the  S0-Commission's rules for a waiver of Section 76.1503(c)(2)(v)(B) of the Commission's rules IS DENIED.  S- ` x25.` ` This action is taken pursuant to delegated authority under Section 0.321 of the  S-Commission's rules, as amended.<CX yO-ԍ47 C.F.R. 0.321.< x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@Deborah A. Lathen x` `  hh@Chief, Cable Services Bureau#&a\  P6G;u&P#