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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: ) ) Time Warner Cable ) CSR 5425- E ) Petition for Revocation of the Certification ) Of the City of Lebanon, Ohio ) To Regulate Basic Cable Service ) And Equipment Rates ) MEMORANDUM OPINION AND ORDER Adopted: December 6, 1999 Released: December 10, 1999 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. In the captioned proceeding, Time Warner Cable ("Time Warner") filed a Petition for Special Relief seeking revocation of the certification of the City of Lebanon, Ohio ("Lebanon" or the "City") to regulate basic cable service and equipment rates. No oppositions were filed. 2. Section 623 of the Communications Act of 1934, as amended ("Communications Act"), provides that subscriber rates of cable television systems are subject to either local or federal regulation only where effective competition is absent. Section 623(1)(1)(C) of the Communications Act provides that a cable operator is subject to effective competition where: a multichannel video programming distributor operated by the franchising authority for that franchise area offers video programming to at least 50 percent of the households in the franchise area. Section 623(a)(4) of the Communications Act allows franchising authorities to become certified to regulate basic cable service rates of cable operators that are not subject to effective competition. Certification becomes effective 30 days from the date of filing, unless the Commission finds that the authority does not meet the statutory certification requirements. Cable operators may file petitions for reconsideration of the franchising authority's certification within 30 days from the date such certification becomes effective. Rate regulation is automatically stayed pending review of a timely-filed petition for reconsideration alleging the presence of effective competition. Once the period for filing petitions for reconsideration has elapsed, cable operators may challenge a franchising authority's certification by filing a petition for revocation. Regardless of its grounds, however, the filing of a petition for revocation does not automatically trigger a stay of a franchising authority's ability to regulate basic cable rates. II. DISCUSSION 3. Time Warner asserts that its cable system in Lebanon, Ohio is subject to municipal provider effective competition from City of Lebanon Telecommunications ("CLT"), a cable television system owned and operated by the City. Time Warner states that CLT has been offering multiple channels of cable television service to Lebanon residents since February, 1999. Time Warner provides copies of numerous newspapers articles on CLT's operations as evidence that CLT is municipally-owned, and that CLT operates a cable system within Time Warner's Lebanon franchise area. 4. With regard to the requirement that the municipally-owned cable system offer service to at least 50% of the households in the franchise area, Time Warner submits several newspaper articles indicating that, according to the City's deputy director of telecommunications, CLT's cable service offering had increased to about 70 % of the households in Lebanon. Research and observations by Time Warner system personnel found that CLT has wired and is offering service to at least 75% of the households in Lebanon. In addition, Time Warner states that CLT publishes and inserts monthly "Lebanon Telecom News" which contains CLT advertising and sign-up information into each Lebanon resident's utility bill, thereby advertising service to virtually every household in Lebanon. Time Warner provides a copy of an additional article that indicates that as a result of its service offering throughout Lebanon, as of August 16, 1999, CLT had signed 3,200 subscribers. Time Warner submits a copy of CLT's channel lineup, which lists 99 channels of programming, including numerous television broadcast and non-broadcast services. Time Warner asserts that the cable services of CLT have been widely publicized and that residents throughout Lebanon are aware of CLT's availability. 5. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition, as defined by Section 76.905 of the Commission's rules, is present within its franchise area. Time Warner has met this burden. 6. The municipal provider test requires that at least 50% of the households in the franchise area be offered service by a municipally-owned cable system. Time Warner's evidence establishes that CLT is owned by the City of Lebanon, Ohio, and that CLT operates in Time Warner's franchise area. With regard to the requirement that CLT offer service to at least 50% of the households in Lebanon, Time Warner's evidence indicates that there are approximately 7,300 households in Lebanon. To satisfy the 50% passage requirement, Time Warner must establish that CLT's system offers service to at least 3,650 households in Lebanon (50% of 7,300). Time Warner provides evidence that CLT offers service to 5,475 households, or 75% of the total households in Lebanon, significantly above the 3,650 households necessary to establish that CLT offers service to at least 50% of the households in the franchise area. Finally, we note that CLT's own website indicates that "the majority of the city now has the City of Lebanon Telecommunications Cable TV and Internet Access available." Indeed, the City states that only 13 streets in Lebanon remain to be wired for CLT's cable and Internet service. As Time Warner has submitted sufficient evidence demonstrating that its cable system serving the City of Lebanon is subject to municipal provider effective competition, its petition is granted. III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the Petition for Special Relief filed by Time Warner Cable challenging the certification of the City of Lebanon, Ohio to regulate Time Warner's basic cable service and equipment rates IS GRANTED. 8. IT IS FURTHER ORDERED that the certification granted to the City of Lebanon, Ohio to regulate Time Warner Cable's basic cable service and equipment rates IS REVOKED. 9. This action is taken pursuant to delegated authority pursuant to Section 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Service Bureau