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To show that service is actually  !available, Cox provides service orders from current BSE subscribers within the relevant franchise areas  S' !as well as direct mail advertisements targeted to potential customers in Cox's franchise areas.H  yOp'ԍCox Petition at 6 and Exhibit B.H Finally,  !Cox contends that no regulatory, technical or other impediments exist to the receipt of BSE's service in  S`'New Orleans.<` yO 'ԍCox Petition at 5. <  S' ( 6.` ` Cox asserts that potential subscribers in its franchise areas are reasonably aware that they  S' !may purchase digital MMDS service as a result of an aggressive marketing plan by BSE.7@ {O 'ԍId. at 6.7 Cox provides  !marketing materials from BSE, including news releases, newspaper articles, and other marketing  S' !Mparaphernalia, which have been distributed in the Affected Communities.@ {O 'ԍId. and Exhibit D.@ Cox also explains that BSE  !ghas sent direct mailings targeting potential subscribers, opened a retail store in its service area, and has  SH 'arranged for endorsements by a local radio personality in connection with the store's opening.1H d  {OL'ԍId.1  S ' ( S 7.` ` Cox asserts that BSE offers programming comparable  yO' !* ԍThe Commission observed that Congress specified a different definition of comparable programming for the  ! LEC effective competition test from that adopted for the first three effective competition tests enacted as part of the  ! 1992 Cable Act. The Commission, on an interim basis, determined that it will apply this new comparable  !k programming standard which "includes access to at least 12 channels of programming, at least some of which are  {O' !! television broadcasting signals" to the LEC effective competition test. See Cable Act Reform Order at 12 (quoting 1996 Act Conference Report, S. Rep. 104230 at 170 (Feb. 1, 1996)). to that offered by Cox in the  !Affected Communities. Cox provides BSE's channel lineup showing that BSE's video service consists  S ' ! of 128 channels of video programming, including 9 local television broadcast signals.H p yO'ԍCox Petition at 7 and Exhibit F.H Cox provides  !between 5680 channels of programming, 10 of which are local broadcast stations, on its various cable  SX'systems serving the Affected Communities.@X {O!'ԍId. and Exhibit G.@  S' ( 8.` ` Cox argues that competition has contributed to the introduction of new services on its  S' !part.: yO&'ԍCox Petition at 7.: Cox states that it is in the process of upgrading its entire system. During this system upgrade, Cox  !is adding digital services to those systems that have not yet been upgraded in order to ensure that at least"",p(p(88"  !pa partial digital lineup of services will be available to its customers. Also, to ensure that its current  !analog offering remains competitive with other multichannel video services, Cox is adding to its cable  !programming service tier the following services: (1) Animal Planet, (2) TV Food, (3) HGTV, (4) Classic  !Sports Network, (5) Turner Classic Movies, (6) MSNBC, (7) The Box, (8) Outdoor Life, and (9)  S`' !&Speedvision.7` {O'ԍId. at 8.7 Cox is also making available advanced analog converters along with its introduction of  S8' !the Starsight programming guide in the Affected Communities.18Z {O2'ԍId.1 Finally, Cox states that because of  !competition from BSE and direct broadcast satellite services, it has for some time charged less that the  S'maximum permitted rates authorized under the Commission's rate regulations.1 {Ot 'ԍId.1  S' ( 9.` ` In opposition, St. Charles Parish argues that BSE does not provide service to residents of  Sp' !the Parish, and the company has no plans to do so in the future.Kp~ yO'ԍSt. Charles Parish Opposition at 1.K St. Charles Parish asserts that BSE's  SH 'signal is not powerful enough to reach Parish residents.1H  {O'ԍId.1  S ' ( 10.` ` In opposition, Jefferson Parish argues that Cox's petition should be rejected for several  !reasons. It first asserts that BSE does not offer public, educational, and governmental access channels  S ' !("PEG") comparable to those offered by Cox.I  yO'ԍJefferson Parish Opposition at 2.I The Parish maintains that because of this deficiency, the  S ' !comparable programming prong of the LEC test is not met and effective competition does not exist.7! 0  {OP'ԍId. at 3.7  !Jefferson Parish also asserts that the towns of Barataria, Laffite, and Grand Isle (all in Jefferson Parish)  !and large portions of St. Bernard Parish and St. Charles Parish, are beyond the range of BSE's  S' !7transmitter.7"  {Oj'ԍId. at 6.7 Jefferson Parish requests that the Commission defer Cox's petition pending the adoption of  !a pass or penetration test which would quantify the amount of subscribers that need be served by the LEC  S' !Zcompetitor before deregulation of the incumbent cable operator takes place.9#T  {O 'ԍId. at 67.9 Jefferson Parish further  !requests that, if the Commission grant Cox's petition, such a determination should be predicated on a  !tcertification that Cox charge uniform rates through its service area in order to avoid the possibility that  !Cox may raise its rates in areas not subject to competition and subsidize competition in areas that are  S'subject to competition.7$ {O%'ԍId. at 7.7 "x$,p(p(88"Ԍ S' ( =11.` ` Jefferson Parish also complains that Cox violated the Commission's rate regulation rules  S' !by not notifying the Parish or its subscribers of impending rate increases.8% {O@'ԍId. at 10.8 It argues that Cox's petition,  S' !and the rate increases it took in 1994 and subsequent years, should be rejected for this reason.8&Z {O'ԍId. at 11.8 The  !Parish further argues that Cox had submitted a defective costofservice petition to the Commission  !because it included intangibles into the cost equation, had unfairly crosssubsidized its rates between  S8' !kjurisdictions, and had unfairly subsidized its telecommunications ventures through cable service revenue.;'8 {O 'ԍId. at 1213.;  !<Jefferson Parish asks the Commission to declare Cox basic service rates null and void and that the  !Commission should issue a declaration that the Parish is free to audit and contest any costofservice used  S'to justify existing and future rates.1(~ {O 'ԍId.1  Sp' ( 12.` ` In its opposition, Orleans Parish also argues that BSE is not providing effective  !competition to Cox. It states that because BSE has not negotiated to provide service to many apartment  !Rcomplexes in New Orleans, and that because 60% of the city's population are renters, effective  S ' !7competition cannot exist unless and until there is service offered at such residences.G)  yO'ԍOrleans Parish Opposition at 3.G Orleans Parish also  !^argues that Cox did not demonstrate that an adequate percentage of New Orleans residents are reasonably  S ' !aware of BSE's service.1*  {O'ԍId.1 Orleans Parish also echoes the arguments presented by Jefferson Parish that  !DBSE does not provide comparable programming because it does not carry PEG programming comparable  SX' !tto that offered by Cox,7+X2  {O*'ԍId. at 5.7 that there are areas in the Parish that cannot receive BSE's service,7,X  {O'ԍId. at 6.7 and that  !gthe Commission should defer acting on Cox's request pending the possibility that a passorpenetration  S'test will be established soon.-V  {O' !^ ԍId. at 7. Orleans Parish also notes that Cox is allegedly subsidizing its telecommunications ventures through cable services revenues and that this is unfair to cable ratepayers. Id. at 9.  S' ( 13.` ` In its reply to arguments made by Jefferson Parish, Cox maintains that cable operators are  !not required to demonstrate that a LEC or its affiliate carries PEG access programming as a condition of  !&establishing the existence of effective competition. It argues that PEG programming is not one of the  !factors that the Commission has indicated is germane in determining whether comparable programming  S' !is being offered by a competitor.7. yOh&'ԍCox Reply at 3.7 With regard to the argument that BSE does not provide service to  !*some residents of Jefferson Parish, Cox argues that there is no credible evidence to support the assertion"@.,p(p(88"  S' !^that the MMDS service area encompasses less than 35 miles.s/\ {Oh' !Q ԍId. at 4. Cox also notes that, despite St. Charles Parish's claim that BSE has not, and will not provide service  !x to the Parish, mapping evidence to the contrary demonstrates that residents in St. Charles Parish are within BSE's  {O'35 mile service area. Id. at 5, n.11.s As for Jefferson Parish's request for delay  !on acting on the petition while a pass or penetration test is being considered by the Commission, Cox  !argues that the statute places no minimum of the number of subscribers necessary for a LEC to provide  !geffective competition in a cable operator's franchise area and that the Communications Act's legislative  S`' !history is consistent with this view.70` {O'ԍId. at 6.7 Cox also asserts that any attempt to impose a uniform rate  !requirement as a condition of finding effective competition is contrary to the Act and the U.S. Court of  !Appeals' finding that effective competition terminates a cable operator's uniform rate obligations and rate  S' !Dregulation, generally.a1~ {O 'ԍId. at 7 citing Section 623(l)(1) of the Act.a Finally, Cox claims that the Parish lacks standing to challenge Cox cost of service  !showing. Cox argues, the Parish is raising an untimely and unsupported challenge to the reasonableness  S'of Cox's basic cable rates that is irrelevant to a petition for effective competition.72 {OH'ԍId. at 8.7  SH ' ( =14.` ` In its supplement to its petition, Cox presents new evidence demonstrating that potential  S ' !ksubscribers are broadly aware that competitive services are available from BSE.<3  yOb'ԍCox Supplement at 4.< According to Cox, BSE  !/has engaged in an extensive radio and newspaper advertising campaign targeting New Orleans and  S ' !surrounding areas.B4 2  {O'ԍId. and Exhibit 12.B Cox asserts that these marketing efforts have been reported in numerous local,  S 'regional, and national newspaper and magazine articles.@5  {O 'ԍId. and Exhibit 8.@  SX' ( 15.` ` In an opposition filed to Cox's supplement, St. Charles Parish argues that residents within  !its borders have not been made aware of BSE's service nor are they able to receive such service. St.  !Charles Parish asserts that BSE has not advertised in the local St. Charles newspaper or in the "River  S' !Parishes Section" of the New Orleans TimesPicayune, which is geared to St. Charles Parish residents.R6V  yO'ԍSt. Charles Opposition to Supplement at 1.R  !The Parish also asserts that no direct mail, doortodoor promotions, demonstration kiosks, billboard  S' !advertising, or promotional coupons have been offered or made available in St. Charles.17 {O#'ԍId.1 Finally, St.  !cCharles Parish submits that BSE's press release clearly states that its service is available in Orleans,  S@'Jefferson, and St. Bernard Parishes, yet it is silent with regard to St. Charles Parish.18@x {OX&'ԍId.1 " 8,p(p(88"Ԍ S' ( 16.` ` In its reply, Cox argues that the Parish cannot deny that BSE has conducted an extensive  !mass media promotional campaign encompassing both radio and newspaper advertising throughout the  S' !New Orleans metropolitan area, including St. Charles.9 yO' ! ԍCox Reply at 2 and Exhibit 1, which includes a recent advertisement placed by BellSouth in the August 10, 1998 edition of the New Orleans TimesPicayune. Cox also states that the Parish cannot deny that  !potential subscribers in St. Charles Parish are reasonably aware of BSE's service as a result of these  S`' !/marketing activities.1:`  {O 'ԍId.1 Finally, Cox presents evidence from BSE itself that the LEC is "pursuing an  !aggressive strategy of deploying wired and wireless multichannel video technologies throughout its service  !area in direct competition with incumbent cable operators" and that it "also has launched digital wireless  S'cable service in New Orleans (approximately 400,000 lineofsight households).";Z {O: ' !* ԍId. citing Comments of BellSouth Corporation, BSE Interactive Media Services, Inc. and BellSouth Wireless  ! Cable, Inc. in CS Docket No. 98102, filed July 31, 1998 (in response to the Commission's Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming Notice of Inquiry).  S' III.ANALYSIS  SH ' ( q17.` ` In the absence of a demonstration to the contrary, cable systems are presumed not to be  S ' !Zsubject to effective competition as defined in the Communications Act.<  yO'ԍ#X\  P6G;ɒP#47 C.F.R. 76.906.#Xj\  P6G;ynXP#ы The cable operator bears the  !burden of rebutting the presumption that effective competition does not exist and must provide evidence  !sufficient to demonstrate that effective competition, as defined by Section 76.905 of the Commission's  S ' !rules, is present in the franchise area.= d  yO'ԍ#X\  P6G;ɒP#47 C.F.R. 76.911(b)(1).#Xj\  P6G;ynXP#ё Cox has partially met this burden and its petition in granted in  S 'part and denied in part.  S0' ( 18.` ` With regard to the first part of the LEC effective competition test, which requires that  !8the alleged competitive service be provided by a LEC or its affiliate (or any multichannel video  S' !@programming distributor ("MVPD")>  yOt' ! ԍ#X\  P6G;ɒP#The Commission's rules define a MVPD as "an entity such as, but not limited to, a cable operator, a  !Q multichannel multipoint distribution service, a direct broadcast satellite service, a television receiveonly satellite  ! program distributor, a video dialtone service provider, or a satellite master antenna television service provider that  ! makes available for purchase, by subscribers or customers, multiple channels of video programming." 47 C.F.R.  yO '76.905(d). #Xj\  P6G;ynXP#ѣ using the facilities of such LEC or its affiliate), we find that Cox  !Qhas provided sufficient evidence demonstrating that BSE Entertainment Inc. is a whollyowned subsidiary  !of BellSouth, which is unquestionably a LEC. We find that Cox satisfies the affiliation prong of the LEC effective competition test. We also find that Cox is unaffiliated with BellSouth or BSE Entertainment Inc.  S' ( 19.` ` Contrary to the assertions made by Jefferson Parish and Orleans Parish, we find that Cox  !has submitted sufficient evidence demonstrating that BSE provides comparable programming. In a LEC  !effective competition setting, a competing MVPD is said to offer comparable programming when at least  !12 channels of programming, some of which are television broadcasting signals, are present. Neither the">,p(p(88"  !@Communications Act nor the Commission's rules mandate that comparable programming include PEG  !programming. We agree with Cox that PEG programming is not one of the factors the Commission has  !indicated is germane in determining whether comparable programming is being offered by a competitor.  !QThe channel lineup for BSE submitted by Cox establishes that BSE offers 128 channels of programming,  !tincluding 9 overtheair broadcast signals. This is sufficient to satisfy the Commission's programming comparability criterion.  S' (  20.` ` The LEC effective competition test requires that competitive service be offered directly  !to subscribers in the franchise area of an unaffiliated cable operator which is providing cable service in  !Ethat franchise area. In enacting the LEC effective competition test, Congress indicated that the  !tCommission should apply its preexisting definition of the term "offer" to the LEC effective competition test. This definition provides that service is offered:  mX(1) When the multichannel video programming distributor is physically able to deliver  \service to potential subscribers, with the addition of no or only minimal additional  investment by the distributor, in order for an individual subscriber to receive service; and   (2) When no regulatory, technical or other impediments to households taking service exist,  vand potential subscribers in the franchise area are reasonably aware that they may  S0'purchase the services of the multichannel video programming distributor.[?0 {O' ! ԍ#X\  P6G;ɒP#47 C.F.R. 76.905(e); see Cable Act Reform Order, 11 FCC Rcd at 5941 (citing Telecommunications Act 1996  yOb'Conference Report, S. Rep. 104230 at 170 (Feb. 1, 1996) ("Conference Report") ). #Xj\  P6G;ynXP#[   S' ( 21.` ` Based on the information before us, we find that BSE is offering service and providing  !geffective competition in Gretna, Harahan, Jean Lafitte, Kenner, Orleans Parish, St. Bernard Parish, and  !Westwego. We are unable to conclude that effective competition exists in Jefferson Parish, LaFourche  !Parish, Plaquemines Parish, St. Charles Parish (East) and St. Charles Parish (West). BSE's transmitter  !is in place and physically able to offer service. In order to provide service where a BSE signal is  !available, BSE need only install an MMDS antenna on, or near, a subscriber's home. Cox has provided  !a map showing the relationship between the subject communities and the 35 mile protected service contour  !of the MMDS facility. Because the protected service contour is not intended as a predictor of actual  !service, it is not adquate to to demonstrate the availability of service by itself. The 35 mile protective  !service contour is intended to ensure that other MMDS facilities are not built in nearby locations that  !could potentially cause interference or reception problems. A lineofsight/shadow plot map is the more  !relevant evidentiary tool to determine MMDS availability from a technical point of view because it takes  !into account terrain barriers inhibiting reception where such barriers exist. Here, the terrain is relatively  !flat so that the 35 mile protected service contour and the service area shown by a lineofsight/shadow plot  !^map are relatively congruent. Although Cox, in its response to the Jefferson Parish opposition claims that  S' !"its entire service area lies within a thirtyfive mile radius of BSE's transmitter,"K@" yOJ"'ԍCox reply to Jefferson Parish at 3.K inspection of the map  !Qsubmitted does not reveal this to be the case. Indeed, significant portions of Jefferson Parish, LaFourche  !Parish, Plaquemines Parish, and St. Charles Parish are outside of the 35 mile contour and line of site  !service area of the MMDS facility. The southern tip of Plaquemines Parish, for example, appears to be  !Das much as 70 miles from the MMDS transmitter site. As Jefferson Parish points out, without challenge,  !the towns of Barataria, Laffite, and Grand Isle all of which are in Jefferson Parish are beyond the range of BSE's transmitter. "" @,p(p(88j!"Ԍ S' ( `ԙ22.` ` St. Charles Parish and Jefferson Parish specifically argue that BSE's MMDS signal is  !unavailable in all, or part, of their respective boundaries. Cox does not directly challenge these  !contentions but rather responds generally that BellSouth is "pursuing an aggressive strategy of deploying  !wired and wireless multichannel video technologies throughout its service area" and that BellSouth "also  !Qhas launched digital wireless cable service in New Orleans." Cox has not submitted any data showing that  !BellSouth provides any service or has any subscribers in these areas. Thus, we are unable to determine  !that BSE's MMDS signal is available in these two communities or those that are similarly situated. In  !the absence of proof that residents in Jefferson Parish, LaFourche Parish, Plaquemines Parish, and St.  !Charles Parish are physically able to receive BellSouth's digital MMDS service, and given Cox's burden  !@to demonstrate the presence of a LEC competitor, we must conclude that Cox does not face effective  Sp'competition in these areas.AZp {O ' ! ԍ#X\  P6G;ɒP#See Rate Order, 8 FCC Rcd at 565758 ("The installation by the MMDS operator of a special subscriber  !; antenna capable of receiving microwave signals represents an individual additional investment by the operator, the  yOj 'antenna being particular to that household's reception of the service.").#Xj\  P6G;ynXP#  S ' ( 423.` ` With regard to the other franchise areas, we conclude that no regulatory, technical or other  !Rimpediments prevent potential subscribers from receiving BSE's service. We find that potential  !subscribers in the majority of the Affected Communities are reasonably aware that they may receive  !/competing video service because of BSE's advertising campaigns. While BSE has not released the  S ' !number of subscribers in its service area,B  yO ' ! ԍWe note that, according to a recent trade article, "BSE is staying mum about its subscriber counts" in New  {O'Orleans. CABLEDAY, BSE Stays on Wireless Path, October 20, 1998, at p. 1. we believe that the evidence submitted by Cox demonstrates  !that BSE's marketing materials continue to inform potential subscribers about the availability of its service.  S' ( q24.` ` We find that the other arguments presented by Jefferson Parish and Orleans Parish to be  !pwithout merit. Congress did not include a pass or penetration test in the LEC effective competition  !^standard and the Commission has not indicated that it would impose such a test. Accordingly, we cannot  !*delay acting on Cox's petition based upon a policy that does not now exist. Moreover, while the majority  !of New Orleans residents may live in apartment complexes, and may not be able to access BSE's service  !in particularized situations, this fact does not have any legal significance in the context of an effective  ! competition proceeding. The U.S. Court of Appeals for the District of Columbia has held that all rate  !^regulationrelated rules, including the uniform rate requirement, cease to apply where the Commission has  S' !determined, as in this case, effective competition exists.CD {O' ! ԍSee Time Warner Entertainment Co. v. FCC, 56 F.3d 151, 191 (D.C. Cir. 1995) ("[W]e conclude that the  ! Commission's uniform rate structure regulation is contrary to the statute insofar as it applies to cable operators  !@ subject to 'effective competition.' By requiring competitive systems to charge uniform rates, the Commission  !H undermines a hallmark purpose of the 1992 Cable Act: to allow market forces to determine the rates charged by cable systems that are subject to 'effective competition' as defined by Congress."). As such, we cannot ignore established precedent  !3to impose a uniform rate requirement as a condition for rate deregulation. Finally, the Parishes raise a  !host of basic cable rate issues entirely unrelated to the matter at hand. A petition for a determination of  !effective competition proceeding is not the proper forum to argue about such issues as defective cost of service filings or crosssubsidization.. " C,p(p(88"Ԍ  S' IV.ORDERING CLAUSES  S'  S' ( \25.` ` Accordingly, IT IS ORDERED that the Petition for Determination of Effective  !Competition filed by CoxCom Inc., challenging the certification of the local franchising authorities in  S8' !Gretna, Harahan, Jean Lafitte, Kenner, Westwego, Orleans Parish, and St. Bernard Parish IS GRANTED . The franchising authorities' certifications to regulate rates are rescinded.  S' ( O26.` ` IT IS FURTHER ORDERED that the Petition for Determination of Effective  !Competition filed by CoxCom Inc., challenging the certification of the local franchising authorities in  Sp' !^Jefferson Parish, St. Charles Parish, Plaquemines Parish, and Lafourche Parish, IS DENIED , consistent with the opinion stated above.  S ' ( ` 27.` ` This action is taken pursuant to the interim rules adopted in Implementation of Cable  S ' !&Reform Provisions of the Telecommunications Act of 1996, 11 FCC Rcd 5937 (1996), and is without  !prejudice to any further action taken by the Commission in adopting final rules pursuant to the Notice of  S 'Proposed Rulemaking contained therein.iD  {O'ԍCable Act Reform Order, 11 FCC Rcd at 59385945, 59615964.i  S4' ( 28.` ` This action is taken pursuant to delegated authority under Section 0.321 of the  S 'Commission's rules, as amended.<E Z yO'ԍ47 C.F.R  0.321.< ` `  ,hh]FEDERAL COMMUNICATIONS COMMISSION ` `  ,hh]Deborah A. Lathen ` `  ,hh]Chief, Cable Services Bureau