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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
Galaxy Cable, Inc. ) File No. EB-02-TS-334
Operator of Cable System in: )
Schuyler, Nebraska )
Request for Waiver of Section 11.11(a) of the )
Commission's Rules )
Adopted: July 16, 2003 Released: July 18, 2003
By the Chief, Spectrum Enforcement Division, Enforcement Bureau:
1. In this Order, we grant Galaxy Cable, Inc. (``Galaxy
Cable'') a temporary, 36-month waiver of Section 11.11(a) of
the Commission's Rules (``Rules'') for the above-captioned
cable television system. Additionally, we clarify three
previous orders granting waivers of Section 11.11(a) to Galaxy
Telecom, L.P. (``Galaxy Telecom''), Galaxy Cable's
predecessor-in-interest.1 Section 11.11(a) requires cable
systems serving fewer than 5,000 subscribers from a headend to
either provide national level Emergency Alert System (``EAS'')
messages on all programmed channels or install EAS equipment
and provide a video interrupt and audio alert on all
programmed channels and EAS audio and video messages on at
least one programmed channel by October 1, 2002.2
2. The Cable Act of 1992 added new Section 624(g) to the
Communications Act of 1934 (``Act''), which requires that
cable systems be capable of providing EAS alerts to their
subscribers.3 In 1994, the Commission adopted rules requiring
cable systems to participate in EAS.4 In 1997, the Commission
amended the EAS rules to provide financial relief for small
cable systems.5 The Commission declined to exempt small cable
systems from the EAS requirements, concluding that such an
exemption would be inconsistent with the statutory mandate of
Section 624(g).6 However, the Commission extended the
deadline for cable systems serving fewer than 10,000
subscribers to begin complying with the EAS rules to October
1, 2002, and provided cable systems serving fewer than 5,000
subscribers the option of either providing national level EAS
messages on all programmed channels or installing EAS
equipment and providing a video interrupt and audio alert on
all programmed channels and EAS audio and video messages on at
least one programmed channel.7 In addition, the Commission
stated that it would grant waivers of the EAS rules to small
cable systems on a case-by-case basis upon a showing of
financial hardship.8 The Commission indicated that waiver
requests must contain at least the following information: (1)
justification for the waiver, with reference to the particular
rule sections for which a waiver is sought; (2) information
about the financial status of the requesting entity, such as a
balance sheet and income statement for the two previous years
(audited, if possible); (3) the number of other entities that
serve the requesting entity's coverage area and that have or
are expected to install EAS equipment; and (4) the likelihood
(such as proximity or frequency) of hazardous risks to the
requesting entity's audience.9
3. On April 2, 2002, Galaxy Telecom filed a request for
waiver of Section 11.11(a) of the Rules for 234 small cable
systems. In its waiver request, Galaxy Telecom noted that it
had filed for Chapter 11 bankruptcy protection in October 2001
and that it intended to transfer all of its assets to Galaxy
Cable as part of the court-ordered reorganization plan.
Galaxy Telecom indicated that it was therefore filing the
waiver request on behalf of both Galaxy Telecom and Galaxy
Cable. In support of its waiver request, Galaxy Telecom
submitted financial documentation indicating that compliance
with Section 11.11(a) would impose a serious financial
hardship on it. On June 21, 2002, the Technical and Public
Safety Division of the Enforcement Bureau released three
orders granting Galaxy Telecom temporary waivers of Section
11.11(a) for the 234 small cable systems.10 On July 19, 2002,
Galaxy Cable filed a request for clarification of the Waiver
Orders. Galaxy Cable states that following the issuance of
the Waiver Orders, all of Galaxy Telecom's assets were
transferred to Galaxy Cable pursuant to the court-ordered
reorganization plan. Galaxy Cable notes that the Waiver
Orders only reference Galaxy Telecom, not Galaxy Cable, and
seeks clarification that the waivers granted in these orders
also apply to Galaxy Cable. We clarify that the temporary
waivers of Section 11.11(a) granted to Galaxy Telecom in the
Waiver Orders also apply to its successor, Galaxy Cable. The
failure to reference Galaxy Cable in the Waiver Orders was
4. Galaxy Cable also requests clarification that the
waivers granted in the Waiver Orders will continue to apply to
the systems if the systems are sold. Galaxy Cable states that
it is currently seeking buyers for certain of its systems and
asserts that its ability to sell the systems at market value
may be substantially impaired if the buyers have to bring the
systems into compliance immediately. Galaxy Cable further
asserts that the Commission has recognized the importance of
small system relief following a system after sale of the
system to a larger operator. In support of this assertion,
Galaxy Cable cites a 1995 Commission order determining that a
small cable system eligible for relief from cable rate
regulation shall remain eligible for such relief even if the
system is subsequently acquired by a larger cable operator.11
5. We deny Galaxy Cable's request for clarification that
the temporary waivers granted in the Waiver Orders will
continue to apply if the systems are sold. We granted the
temporary waivers based on our review of the financial data
and other information submitted by Galaxy Telecom, which
demonstrated that the estimated cost of EAS equipment for the
234 small cable systems could impose a substantial financial
hardship on it. We have no basis for determining at this
juncture whether compliance with the EAS requirements would
impose a similar financial hardship on any buyer or buyers if
some of Galaxy Cable's systems are sold. Moreover, we do not
believe that the policy of allowing small cable systems to
remain eligible for relief from rate regulation even if they
are subsequently acquired by a larger operator should be
automatically extended to the EAS context. We think that
there is a significant distinction between the ongoing
regulatory burdens and costs associated with rate regulation
and the one-time expense of installing EAS equipment.
Further, the cost to small cable systems of complying with the
EAS rules continues to decline. In this regard, we note that
the Commission recently amended the EAS rules to permit cable
systems serving fewer than 5,000 subscribers to install FCC-
certified decoder-only units, rather than both encoders and
decoders, if such a device becomes available.12 On July 23,
2002, the Commission staff granted an equipment authorization
for an EAS decoder-only unit to an equipment manufacturer.13
We anticipate that such a decoder-only system could result in
significant cost savings to small cable systems.14 Finally,
in view of the serious public safety objectives underlying the
EAS rules, we do not think that it would be appropriate to
automatically extend the temporary waivers granted to Galaxy
Cable's systems to any subsequent buyer irrespective of its
size or financial status. Rather, we will afford any such
buyer 30 days from the date the sale of any system or systems
is consummated to request a waiver of Section 11.11(a),
submitting the information necessary to support a financial
hardship showing. Any buyer that does not file a waiver
request will be required to come into compliance with the EAS
rules by the end of the 30-day period.
6. On August 26, 2002, Galaxy Cable filed a supplemental
request for a temporary, 36-month waiver of Section 11.11(a)
for its Schuyler, Nebraska cable system. Galaxy Cable states
that in preparing the April 2, 2002 waiver request, it
incorrectly identified the Schuyler system as being
interconnected with its Wilber, Nebraska headend and therefore
believed that the Schuyler system would not require a waiver.
However, Galaxy Cable states that it is actually its Geneva,
Nebraska cable system that is interconnected with the Wilber
headend and therefore does not require a waiver. One of the
Waiver Orders granted Galaxy Telecom's request for a 24-month
waiver of Section 11.11(a) for the Geneva, Nebraska cable
system.15 Galaxy Cable notes that the Schuyler cable system
has approximately 996 subscribers. Based on price quotes from
EAS equipment manufacturers, Galaxy Cable estimates that it
would cost approximately $10,000 to install EAS equipment at
this system. Galaxy Cable asserts that this cost will impose
a substantial financial hardship on it and provides its
financial statements for 2000 and 2001 in support of this
assertion. In addition, Galaxy Cable submits that its
subscribers will continue to have ready access to national EAS
information from other sources, including its cable systems.
Galaxy Cable also asserts that its subscribers will have
access to EAS information through over-the-air reception of
broadcast television and radio stations.
7. Based upon our review of the financial data and other
information submitted by Galaxy Cable, we conclude that a
temporary, 36-month waiver of Section 11.11(a) for the
Schuyler cable system is warranted.16 In particular we find
that the estimated $10,000 cost of EAS equipment for this
small cable system could impose a financial hardship on Galaxy
Cable. Further, we withdraw the temporary, 24-month waiver
previously granted for the Geneva, Nebraska cable system.
8. Accordingly, IT IS ORDERED that Galaxy Cable, Inc.'s
request for clarification IS GRANTED to the extent indicated
herein and IS otherwise DENIED.
9. IT IS FURTHER ORDERED that, pursuant to Sections 0.111,
0.204(b) and 0.311 of the Rules,17 Galaxy Cable, Inc. IS
GRANTED a waiver of Section 11.11(a) of the Rules until
October 1, 2005 for the Schuyler, Nebraska cable television
10. IT IS FURTHER ORDERED that the temporary, 24-month
waiver of Section 11.11(a) of the Rules previously granted to
Galaxy Cable for its Geneva, Nebraska cable television system
11. IT IS FURTHER ORDERED that Galaxy Cable, Inc. place a
copy of this waiver in its system files.
12. IT IS FURTHER ORDERED that a copy of this Order shall
be sent by Certified Mail Return Receipt Requested to counsel
for Galaxy Cable, Inc., Christopher C. Cinnamon, Esq.,
Cinnamon Mueller, 307 North Michigan Avenue, Suite 1020,
Chicago, Illinois 60601.
FEDERAL COMMUNICATIONS COMMISSION
Joseph P. Casey
Chief, Spectrum Enforcement Division
1 Galaxy Telecom, L.P., 17 FCC Rcd 11798 (Enf. Bur., Tech. &
Pub. Safety Div., 2002); Galaxy Telecom, L.P., 17 FCC Rcd 11801
(Enf. Bur., Tech. & Pub. Safety Div., 2002); Galaxy Telecom,
L.P., 17 FCC Rcd 11805 (Enf. Bur., Tech. & Pub. Safety Div.,
2002) (collectively, ``Waiver Orders'').
2 47 C.F.R. § 11.11(a).
3 Cable Television Consumer Protection and Competition Act of
1992, Pub. L. No. 102-385, § 16(b), 106 Stat. 1460, 1490 (1992).
Section 624(g) provides that ``each cable operator shall comply
with such standards as the Commission shall prescribe to ensure
that viewers of video programming on cable systems are afforded
the same emergency information as is afforded by the emergency
broadcasting system pursuant to Commission regulations ....'' 47
U.S.C. § 544(g).
4 Amendment of Part 73, Subpart G, of the Commission's Rules
Regarding the Emergency Broadcast System, Report and Order and
Further Notice of Proposed Rule Making, FO Docket Nos. 91-171/91-
301, 10 FCC Rcd 1786 (1994), reconsideration granted in part,
denied in part, 10 FCC Rcd 11494 (1995).
5 Amendment of Part 73, Subpart G, of the Commission's Rules
Regarding the Emergency Broadcast System, Second Report and
Order, FO Docket Nos. 91-171/91-301, 12 FCC Rcd 15503 (1997).
6 Id. at 15512-13.
7 Id. at 15516-15518.
8 Id. at 15513.
9 Id. at 15513, n. 59.
10 See Waiver Orders, supra n. 1.
11 Implementation of Sections of the Cable Television Consumer
Protection and Competition Act of 1992: Rate Regulation, Sixth
Report and Order and Eleventh Order on Reconsideration, 10 FCC
Rcd 7393, 7413 (1995).
12 Amendment of Part 11 of the Commission's Rules Regarding
the Emergency Alert System, 17 FCC Rcd 4055, 4082 (2002).
13 Public Notice, ``Notice Regarding FCC Certification of EAS
Decoder,'' DA 02-2312 (Enf. Bur. released September 19, 2002).
14 One estimate indicates that an EAS decoder-only system can
reduce the cost by 64% over what a cable operator would spend for
an encoder/decoder unit. 17 FCC Rcd at 4082.
15 Galaxy Telecom, L.P., 17 FCC Rcd 11801 (Enf. Bur., Tech. &
Pub. Safety Div., 2002).
16 The waiver will extend from October 1, 2002, until October
1, 2005. We clarify that the waiver we are granting also
encompasses the EAS testing and monitoring requirements. Galaxy
Cable also requests that we clarify that this waiver will
continue to apply to the Schuyler cable system if it is sold.
For the reasons stated above, we deny this request.
17 47 C.F.R. §§ 0.111, 0.204(b) and 0.311.