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ECI contends that  x[to the degree its signal is transmitted over a public right of way, it does so through the facilities of a local  xOexchange carrier ("LEC"), and that the law does not require it to obtain a franchise under these circumstances.  S- ` x3.` ` ECI limits the issue in its motion for a declaratory ruling to whether it is required to  x0obtain a cable franchise. We note that the issue of ECI's status as a cable operator has significant  S@- xadditional consequences under the Communications Act and Commission's rules, inter alia, mandatory  xcarriage of television broadcast signals, nonduplication protection and syndicated exclusivity, cable  S- xtelevision access and technical standards, and equal employment opportunity requirements.  {O"- xԍSee Communications Act 614, 47 U.S.C. 534 (carriage of local commercial television signals); 47 C.F.R.  x76.5170 (same); Communications Act 614(b)(5), 47 U.S.C. 534(b)(5) (nonduplication and syndicated  xexclusivity); 47 C.F.R. 76.92163 (same); Communications Act 612, 47 U.S.C. 532 (leased access); 47 C.F.R.  xw76.701 (same); Communications Act 632, 47 U.S.C. 552 (consumer protection and customer service); 47 C.F.R.  xw76.309 (same); Communications Act 634; 47 U.S.C. 554 (equal employment opportunity); 47 C.F.R. 76.7179; 47 C.F.R. 76.60130 (technical standards). In addressing"j,N(N(ZZ%"  xECI's Motion, we are cognizant that a finding that ECI is a cable operator would require ECI to comply with all of a cable operator's statutory obligations.  S- ` x4.` ` We grant ECI's Motion for a Declaratory Ruling. Because it neither owns an interest in  xthe facility that transmits its programming over the public rights of way, nor controls, or is responsible  xfor the management and operation of those facilities, we conclude that ECI is a not cable operator as  x.defined by the Communications Act and is not obligated to comply with the requirements of Title VI of  S-the Communications Act.  S- II.xBACKGROUND  SH - ` Bx5.` ` ECI contends that it is a satellite master antenna television ("SMATV") H  yO -ԍThe Supreme Court has stated that:  ` pXxX` ` Unlike a traditional cable television system, which delivers video programming to a large  ` pcommunity of subscribers through coaxial cable laid under city streets or along utility  ` pblines, an SMATV system typically receives a signal from a satellite through a small  ` psatellite dish located on a rooftop and then retransmits the signal by wire to units within a building or complex of buildings. `  {O-FCC v. Beach Communications, Inc. 113 S.Ct. 2096, 2099 (1993). operator that  S - xprovides video programming to approximately 1,600 subscribers of 12 multiple dwelling units ("MDUs")  xjthat are variously owned, managed and controlled by other entities. Until 1996, ECI provided its service  S - xthrough separate headends located at each MDU. Since 1996, to transmit its video signal from one  xheadend to other MDUs, ECI has used a service provided by Ameritech, the area's incumbent local  xexchange carrier, on a common carriage basis pursuant to Tariff No. 2, referred to as Ameritech  SX- xSupertrunking Video Service.X {O-ԍSee ECI Motion, Exhibit 1 (Ameritech Supertrunking Video Service Confirmation of Service Order). The signal carrying the video programming that ECI provides to its  xsubscribers transverses numerous public rightsofway by way of Ameritech's facilities before connecting  S- x to ECI's various facilities inside the private property lines of the buildings ECI serves.7 ,  {O-ԍId. at 3.7 Ameritech's  xfacilities connect to junction boxes located inside the individual MDUs, which connect to ECI's interior  S-building drop lines, which connect to residents' television sets.7   {O-ԍId. at 4.7  Sh- ` 3x6.` ` ECI contends that the same fiber that Ameritech uses to provide service to ECI can be  S@- xused to provide service for up to eleven other video service providers.9 @P  {O0#-ԍId. at 34.9 ECI states that its facilities are  S-located solely on private property and do not cross any public rightsofway.7  {O%-ԍId. at 4.7 "t ,N(N(ZZ"Ԍ S-ԙ III.xTHE PLEADINGS  S-x A.` ` ECI's Motion for Declaratory Ruling  S`- ` x7.` ` In its Motion, ECI contends that it is not a cable operator ` {O-ԍSee supra n.4 and accompanying text, discussing the definition of a cable operator. because (i) the facilities that  x[are owned and controlled by ECI do not constitute a cable system, and (ii) the common carrier's facilities  S- x\that deliver signals to ECI's facilities are not owned, managed or controlled by ECI.:Z yO -ԍECI Motion at 6. : ECI argues that  xzits owned or controlled facilities consist of wiring and equipment located solely on the MDU owners'  xyproperties and that, pursuant to the 1996 Act, a facility that serves subscribers without using any public  S-rightsofway is not a cable system.t {O" -ԍId., citing Communications Act 602(7)(B), 47 U.S.C. 522(7)(B).t  SH - ` Qx8.` ` ECI cites as support for its position the Commission's finding in Telephone Company S" - x\Cable Television CrossOwnership Rules, Sections 63.5458E" | yO>-ԍ7 FCC Rcd 300, 32728 (1991).E that customerprogrammers on a video  xMdialtone platform were not required to obtain a cable franchise to provide their programming over the  xtelephone companies' facilities. In particular, ECI notes the Commission's reasoning that customer xprogrammers are not cable operators because they neither own a significant interest in the telephone  S - xcompanies' facilities, nor control, manage, or operate those facilities.[  yO0-ԍECI Motion at 8, citing 7 FCC Rcd at 327, 328 n.86.[ ECI also cites the United States  S\- xCourt of Appeals for the District of Columbia Circuit's decision in National Cable Television Association  S6- xv. FCCx\6 {Or- xԍ33 F.3d 66 (D.C. Cir. 1994) ("NCTA"). In NCTA, the District of Columbia Circuit reviewed the Commission's  xYdetermination that video dialtone operators and customer/programmers need not obtain cable franchises pursuant to  {O-Section 621(b) of the Communications Act. Id.x which holds that customerprogrammers of video dialtone service are not cable operators.86  yO-ԍECI Motion at 8.8 ECI  S-quotes the NCTA court stating that:  ` pXxX` ` Where the "closed transmission paths" and "associated" headend equipment are  ` p owned and controlled by different entities (as in video dialtone), and where  ` pdifferent configurations of equipment would be used to move video programming  ` pbfrom the different providers to the different customers, the concepts of a single,  S"-integrated system and unified control are not present.["P  {O$-ԍId. at 8, quoting NCTA, 33 F. 3d at 74.[ `  xLECI notes the District of Columbia Circuit's finding that the customerprogrammer's control of the head xyend equipment and responsibility for the program selection were not enough to warrant a finding that the  xcustomerprogrammer had control of, or responsibility for, the operation and maintenance of the overall",N(N(ZZ"  S- x=facilities themselves.: yOh-ԍECI Motion at 89.: ECI contends that it is in the same position as customerprogrammers on a video  x[dialtone platform with respect to a lack of control or responsibility for the operation and maintenance of  S-the common carrier's facilities, and that therefore, ECI need not obtain a cable franchise.X yO- xxԍECI also notes that Ameritech's fiber "often" is routed to one of Ameritech's central offices before going to  {Op-the property served by ECI, further illustrating ECI's lack of control. Id. at 9.   S`- ` Px9.` ` ECI argues that pursuant to Section 651(a)(2) of the Communications Act, one of the four  xoptions for providing video programming permitted to common carriers includes the provision of video  xprogramming on a common carriage basis. ECI submits that, consistent with Section 651(a)(2), Ameritech  S- xcomplies with Title II requirements and is not required to comply with Title VI requirements.8 {O: -ԍId. at 10.8 ECI also  xstates that allowing it to operate without obtaining cable franchises is consistent with the procompetitive  S- xnature of the 1996 Act and that it is exempt from the franchise requirement under Section 602(7)(B).;D {O|-ԍId. at 1011.;  xyECI asserts that requiring it to obtain a cable franchise will further inhibit competition to franchised cable operators.  S - ` Qx10.` ` In the alternative, ECI suggests that even if the Commission were to conclude that ECI  xcontrols the operation of Ameritech's facilities, the common carrier's facilities would not be a cable  xsystem because they are used to transmit video programming to ECI's facilities rather than "directly to  S - xsubscribers" as required by the Communications Act.~  {O-ԍId. at 12; see Communications Act 602(7)(C), 47 U.S.C. 522(7)(C).~ In addition, ECI notes that while Section 651(a)(1)  xapplies to common carriers' use of radiobased systems to provide programming "to subscribers," Section  S0- x651(a)(2) expressly omits the key phrase "to subscribers."<0h  yO8-ԍECI Motion at 1617.< Therefore, argues ECI, Section 651(a)(2)  x[applies whenever a common carrier is providing transmission of video programming on a common carrier  S- xLbasis.8  {Ox-ԍId. at 17.8 Moreover, according to ECI, the NCTA court recognized that a facility transmitting signals from  S-one cable operator to another that stops short of the subscriber's homes is not a cable system.[  {O-ԍId. at 12, citing NCTA, 33 F. 3d at 74.[  Sj- ` nx11.` ` Although ECI acknowledges the generally accepted proposition that a cable operator using  SB- xchannel service must obtain a cable franchise,B {O#- xԍId. at 14. The Commission has stated that channel service is the provision by a telephone company of video  {O$- xwdistribution facilities and services to franchised cable operators on a common carrier basis. See Telephone Company {O%- xCable Television CrossOwnership Rules, Section 63.54 63.58, CC Docket No. 87266, Further Notice of Inquiry  {O\&- xand Notice of Proposed Rulemaking, 3 FCC Rcd 5849, 5870 n. 2; Telephone CompanyCable Television Cross {O&'- xiOwnership Rules, Section 63.54 63.58, CC Docket No. 87266, Second Report and Order, Recommendation to"&',N(N(U'"  {O- xCongress, and Second Further Notice of Proposed Rulemaking, 7 FCC Rcd 5781, 5787, n.21 (1992) ("Second Report  {OZ-and Order"). ECI asserts that its services are distinguishable from"B$,N(N(ZZ"  S- xchannel service. Channel service entails a telephone company building a video distribution system from  xthe interconnection with the recipient's headend to the subscriber's premises and leasing it, in whole or  S- xpart, to a cable operator.{$ {Ov-ԍNCTA, 33 F.3d at 71; see also First Report and Order, 7 FCC Rcd at 327.{ ECI contends that since channel service facilities are deployed for the exclusive  xkuse of the franchised cable operator and it is only one of several entities able to use Ameritech's fiber,  Sb- x\the channel service analogy is not appropriate.?b yO -ԍECI Motion at 14.? ECI also notes that franchised cable operators using  xchannel service ordinarily maintain and control the common carrier's facilities. ECI contends that its  S- xsituation differs from that of New York Telephone,d ZF {O - xԍ8 FCC Rcd 4325 (1993), Order on Reconsideration, 10 FCC Rcd 11548 (1995) ("New York Telephone") (New  xYork Telephone's intended use of Liberty Cable's coaxial drops was an acceptable means of complying with the Commission's video dialtone rules during a limited, oneyear trial).d noting that the Commission's New York Telephone  S- xjdecision involved a request for a video dialtone trial rather than the request sought by ECI.F!h  yO-ԍECI Motion at 15. F ECI further  S- xargues that the Commission's decision in New York Telephone is inapposite because it was rendered prior  S-to the enactment of the 1996 Act. #Xj\  P6G;9XP#  Sx-#&a\  P6G;&P#  SP -x B. ` ` Comments in Support of ECI's Motion  S - ` x12.` ` Several SMATV and wireless cable operators support ECI's motion for a declaratory  x1ruling that the lease of transmission capacity from common carriers for the transport of video  xprogramming across public rightsofway does not require a cable television franchise pursuant to Section  S - xL621 of the Communications Act.)"  {O - xԍSee OpTel, Inc. Comments ("OpTel Comments); ICS Communications, Inc. Comments ("ICS Comments");  xWedgewood Communications, Inc. Comments ("Wedgewood Comments"); RCN Telecom Services, Inc. Comments  xx("RCN Comments"); Microwave Satellite Technologies, Inc. Comments ("MSTI Comments"); MultiTechnology  xwServices Reply Comments ("MTS Reply Comments"); Independent Cable & Telecommunications Association Reply Comments ("ICTA Reply Comments").) The comments in support of ECI argue that the distribution of video  xprogramming through a programmer's facilities located solely on private property does not constitute a  S8- xcable system#8 {O -ԍSee infra n.186 and accompanying text, discussing the definition of cable system. under Section 602(7)(B) of the Communications Actb$8< yO"-ԍCommunications Act 602(7)(B), 47 U.S.C. 522(7)(B).b and does not trigger the cable  S-franchise requirements of Section 621.g% yO|$-ԍRCN Comments at 2, 5; MSTI Comments at 4; OpTel Comments at 2. g "\%,N(N(ZZ"Ԍ S- ` x13.` ` Commenters note that Section 602(7)(B) exempts from the definition of cable system  S- x/facilities that serve subscribers "without using any public rightofway."k&\ {O@- xԍOptel Comments at 2., citing Communications Act 602 (7), 47 U.S.C. 522(7); FCC v. Beach  {O - xCommunications, Inc., 113 S. Ct. 2096, 2099 (1993); Definition of a Cable Television System, 5 FCC Rcd 7638, 764041 (1990); Wedgewood Comments at 45; ICS Comments at 6.k Commenters allege that a  S- xSMATV system that does not use a public rightofway is not a cable system."'X yO<- xԍWedgewood Communications Inc. Comments at 5; ICS Comments at 6. SBVS argues for an interpretation of  x<"use" which is as narrow as possible and promotes, rather than discourages competition. SBVS Reply Comments at 56." OpTel argues that the  x=common carrier providing video transport to ECI, rather than ECI itself, has the requisite nexus with the  S`- xlocal jurisdiction which would justify local regulation.q(`  {O -ԍOptel Comments at 2, citing Beach Communications 113 S.Ct. at 2104.q In this regard, OpTel argues that the common  xycarrier owns the fiber optic cable which crosses the public rightofway, operates the "extensive physical  S- xfacilities" involved and has engaged in "substantial construction" on public property.2) {ON-ԍId. 2 In addition, ICS  xCommunications, Inc. ("ICS") argues that the common carrier, rather than the SMATV operator, is  S- xresponsible for any facility repair and maintenance that will affect the use of the public rightofway.:*0  yO-ԍICS Comments at 6.:  xBy contrast, commenters argue that ECI, as a customer of the common carrier, has no nexus with the local  xMjurisdiction, has no ownership or control over the facilities and will not engage in any construction or  SH -installation on public property.O+H  yO-ԍOpTel Comments at 3; ICS Comments at 6.O  S - ` x14.` ` MSTI cites the Commission's decision in Definition of a Cable Television SystemD, P %U yO-ԍ5 FCC Rcd 7638, 7642 (1990).D as  xLdefining a subscriber as "a member of the general public who receives broadcast programming distributed  S - xby a cable television system and does not further distribute it.";-  yO*-ԍMSTI Comments at 3.; In support of its argument, MSTI cites  S - xa Commission program access ruling involving a Walt Disney Company subsidiary, Madeira, which owns  SZ- x.a program distribution facility serving hotels at the Walt Disney World Complex..Zp {Oj - x-ԍMSTI Comments at 4, citing Petition of Walt Disney Company for Waiver of Program Access Rules, 5 FCC  {O4!-Rcd 4007, n. 18 (1994) ("Disney"). In that decision, the  xhotels received the Madeira programming and distributed it to guest rooms using their own internal wiring.  xMSTI cites the Commission's statement that "[s]ince Madeira services the hotels, and since the hotels do  x.further distribute the programming, there are arguably no true subscribers to Madeira's operation, so the  S-operation cannot be considered a cable system."h/ {O&&-ԍMSTI Comments at 4, quoting Disney, 5 FCC Rcd 4007, n. 18.h "^/,N(N(ZZ"Ԍ S- ` A  x15.` ` Several commenters state that an entity, having no subscribers of its own, providing video  xtransport services on a common carrier basis to an entity with facilities located solely on private property  S- x\is not a cable operator subject to Title VI regulation.\0 yO-ԍMSTI at 1; OpTel Comments at 1; RCN Comments at 4. \ MSTI argues that neither the entity providing  x video transport services on a common carrier basis between two or more MDUs, nor a video service  S`- xjprovider serving the MDUs by hiring the unrelated carrier's interconnection service, is a cable operator.=1`X yOX-ԍMSTI Comments at 12.=  x=RCN argues that a SMATV system that leases capacity from a common carrier pursuant to a tariff does  xnot satisfy the definition of a cable operator under Section 602(5) because it does not own or control a  x[cable system or have responsibility for its management and operation, and does not have exclusive rights  S-to the common carrier facilities.:2 yOH -ԍRCN Comments at 4.:  Sp- ` nx16.` ` Several commenters contend that the Commission's video dialtone decisions support ECI's  SH - x[proposition.N3H x yO`-ԍMSTI Comments at 5; ICS Comments at 8.N Supporters cite the Commission's determination in Telephone CompanyCable Television  S" - xCross Ownership RulesB4"  yO-ԍ7 FCC Rcd 300, 327 (1991).B that a local exchange carrier ("LEC") providing video dialtone service does not  xfall within the cable operator definition because the LEC itself is not providing the video programming  S - xservice directly to subscribers.5  yO - x-ԍMSTI Comments at 5; ICS Comments at 8, citing Telephone CompanyCable Television CrossOwnership Rules, Sections 63.5458, CC Docket No. 87266, 7 FCC Rcd 300, 32728 (1991). Rather, supporters argue, the LEC is acting as a conduit in providing  x^broadband commoncarrier based service that enables customerprogrammers to provide video  S - x.programming service to subscribers. MSTI points to the Commission's holding in Telephone Company S^- xyCable Television Cross Ownership Rules~6^  {O-ԍ7 FCC Rcd 5069, 507173 (1992), aff'd, NCTA, 33 F. 3d 66 (D.C. Cir. 1994).~ that customer programmers did not qualify as cable operators  xand were not subject to the franchise requirement since they neither owned a significant interest in the  S- xLEC's facilities nor were responsible for the management and operation of those facilities.<7  yO2-ԍMSTI Comments at 5. < MSTI argues  xthat Ameritech provides ECI the same service provided by a LEC video dialtone operator to its customer  S- xprogrammer.98 {Or!-ԍId. at 56.9 Commenters also cite the NCTA decision as supporting ECI's position.w9 {O#-ԍSee supra n.18 and accompanying text, discussing the NCTA decision.w Commenters  xargue that the Commission's video dialtone proceedings determined that local telephone companies already  xreceive authorization to use public rightsofway pursuant to common carrier regulation and therefore it"r69,N(N(ZZ"  xjwould be redundant to require LECs to obtain a cable television franchise to use rightsofway they were  S-already authorized to use.:: yO@-ԍICS Comments at 9.:  S- `   x17.` ` Several commenters argue that requiring a video programming provider utilizing common  x/carrier video transport service to obtain a franchise would counter Congressional intent to streamline  S8- x>regulation of new entrants in the video programming market.;8X yO0-ԍRCN Comments at 6; Optel Comments at 3; ICS Comments at 1213; SBVS Reply Comments at 67. Commenters argue that from a policy  xzperspective, the imposition of a cable franchise requirement on companies such as ECI would impede  S-innovation and competition in the market for delivery of video programming.i< yOp -ԍRCN Comments at 78; ICS Comments at 11; MTS Reply Comments at 4.i  S-  S- ` 4x18.` ` ICS supports ECI's Motion and urges the Commission to expand the scope of this  xproceeding and rule that private cable operators should have an opportunity to use the fiber facilities of  xany independent provider, whether offered on a common carrier or private carrier basis, without incurring  S - x?cable franchise obligations under Section 621 of the Communications Act.:= x yO8-ԍICS Comments at 5.: MTS argues that the  xCommission should give franchised cable operators the option of maintaining their current networks while  xNbeing subject to franchise requirements, or divesting themselves of their cable plant by transfer or  xkassignment to an unaffiliated third party, and leasing transport from a common carrier subject to local  S -regulation and accountable for its use of the public rightofways.@>  yO(-ԍMTS Reply Comments at 6.@  S0- xC.` ` Comments Opposing ECI's Motion  S- ` Px19.` ` Numerous cable industry groups, cable operators, and local franchising authorities oppose  S- xECI's Motion.? {O- x.ԍSee Time Warner Cable Comments ("Time Warner Comments"); US West, Inc. Comments ("US West Comments"); The opponents argue that ECI is providing cable service@  {OJ-ԍSee infra n.185 and accompanying text, discussing the definition of cable service. under its arrangement with  S- xMAmeritech.A  yO - x<ԍTime Warner Comments at 5; NCTA Comments at 4; Ameritech New Media Comments at 4; City of New York Comments at 1011. The opponents state that the question for the Commission to determine is whether the  Sh- xcombination of facilities used by ECI is a cable system. The opponents claim it is. The opponents assert  xthat the combined facilities meet every element of the statutory definition of a cable system: ECI owns  xthe "facility" consisting of "closed transmission paths" (its wires); "associated signal generation . . .  xequipment" (its headend, located in one or more MDUs it serves); "reception . . . equipment" (the dish  xjand antenna also located in one or more MDUs); "control equipment" (such as scramblers authorizing its  xLpremium services); "designed to provide cable service" (services including video programming); provided  xto "multiple subscribers" (the residents of the multiple dwelling units); "within a community" (each"z A,N(N(ZZ"  S- xcommunity unit within which ECI is operating)._B yOh-ԍUS West Comments at 3; City of New York Comments at 10._ Ameritech New Media argues that, combined, the fiber  xland wires create a closed transmission path leading directly to the subscriber which constitutes an  xintegrated video programming delivery system, and that such a system meets the statutory criteria for a  S- xLcable system.JCX yO-ԍAmeritech New Media Comments at 5.J Ameritech New Media analogizes ECI's proposal with General Motors purchasing tires  xLfrom Michelin for new cars: the tires are essential for the car to move from one place to another, but the  xKfact that they are purchased from another supplier does not destroy either the integrity of the final product,  S-the car, nor alter the identity of General Motors as a car manufacturer.7D {O -ԍId. at 6.7  S- ` x20.` ` The opponents assert that the bifurcated analysis utilized by ECI (Ameritech's facilities  xexempted by Section 602(7)(C), and ECI's facilities exempted under 602(7)(B)) ignores the plain statutory  x/language, and wellestablished Commission precedent, that all technically integrated facilities used to  SH - xdeliver cable service from a single headend constitute a single cable system. EH z {Ob- xԍTime Warner Comments at 67, citing Definition of a Cable Television System, 63 FCC 2d 956, 96465 (1977); City of Lansing Reply Comments at 7, citing Communications Act 602(7)(C), 47 U.S.C. 522(7)(C).  Time Warner argues that  xLSection 602(7)(C) is inapplicable to ECI because only a portion of the combined facilities will be offered  xon a common carrier basis, while the headend and the private property component are not common carrier  S - x>facilities.BF  yOD-ԍTime Warner Comments at 8.B The opponents state that the common carriage exception applies only to common carrier  x\facilities which extend from endtoend and that the Communications Act expressly states that "such  xfacility shall be considered a cable system to the extent such facility is used in the transmission of video  SX- x\programming directly to subscribers."GXd  yO\- xԍTime Warner Comments at 9; US West Comments at 4, quoting Communications Act 602(7), 47 U.S.C. 522(7). The opponents argue that the 602(7)(B) public rightofway  xexception applies only to facilities that proceed from endtoend without using a public rightofway, and  S- x/that ECI uses public rightsofway.WH  yOd-ԍTime Warner Comments at 14; NCTA Comments at 5.W In the alternative, the opponents argue that the fact that ECI's  xywhollyowned facility does not use any public rightofway is irrelevant, because the combined facilities,  S- xas a whole, make extensive use of public rightsofway.IL  yO - xԍTime Warner Comments at 1415; NCTA Comments at 5; City of New York Comments at 56; Alliance Comments at 13. Time Warner notes that Congress expressly  x<stated that different entities may separately own significant interests in different portions of a cable system  xlwhich does not detract from the conclusion that a technically integrated facility which uses closed  S@- xtransmission paths crossing public rightsofway to deliver cable service is a cable system.J@ {O%- xԍTime Warner Comments at 17, citing Amendment of Parts 1, 63, and 76 of the Commission's Rules to  {ON&-Implement the Provisions of the Cable Communications Policy Act of 1984, Report and Order, 58 RR2d 1, 6 (1985). In this regard,  xythe City of New York claims that the Commission has interpreted the term "use" in Section 602(7)(C) of" J,N(N(ZZ"  S- xLthe Communications Act to exclude only infrared and other wireless transport technologies.K {Oh- xԍCity of New York Comments at 67, quoting Definition of a Cable Television System, 5 FCC Rcd 7638, 7639 (1990). Several of  S- xthe opponents cite a 1990 Illinois Circuit Court decisionL" {O- xԍSee City of Chicago v. Day, Case No. 88MC313994 (Cir. Ct. Cook Cty, Ill May 1, 1990) ("this court finds  xthat [the programmer's] cable operation is an integrated system consisting of a signal generating reception and control  xequipment at the Essex Hotel, the interconnecting closed set of transmission paths leased from [Illinois Bell] and the  xdistribution systems located at each building to which it provides cable service. Therefore, [the programmer] does not qualify for the [common carrier] exemption contained in the Cable Act."). involving similar circumstances in which the  xcourt determined that the entity leasing the facilities that crossed public rightsofway was a cable system  S-as defined by the Communications Act.M yO -ԍTime Warner Comments at 1112; NCTA Comments at 1011; US West Comments at 4, n.5, 11.  S8- ` Px21.` ` The opponents argue that ECI is a cable operator as defined by Section 602(5)(B) because  xit controls and is responsible, through an arrangement, for the management and operation of all key  S- xLaspects of the combined facility.ZNd  yO-ԍTime Warner Comments at 15; US West Comments at 5.Z Ameritech New Media claims that ECI is a cable operator because it:  x(1) controls the necessary signal generation, reception and control equipment which is associated with the  xyselection and provision of video programming; (2) directly bills the subscribers for the provision of video  xkservices; and (3) controls the means of distributing the video programming by virtue of its decision to  x=purchase a tariffed telecommunications service enabling it to use a common carrier's fiber crossing public  S - xrightsofway to take the signal to its subscribers.LO  yO-ԍAmeritech New Media Comments at 67.L According to the opponents, the Commission has  x>expressly rejected the technical maintenance and repair test for the definition of a cable operator, and  xinstead looks to the entity with editorial control, the entity responsible for the selection, packaging and  S - xpricing of video programming offered to subscribers.P  yO- x,ԍTime Warner Comments at 16, quoting Telephone CompanyCable Television CrossOwnership, 7 FCC Rcd 5069, 507172 (1992); Ameritech New Media Comments at 9. US West argues that, in the 1984 Cable Act  xkRulemaking, the Commission specifically held that the definition of cable operator was "intentionally  xbroad" broad enough to apply cable rules to many entities which in combination delivered cable services  S0- x-to the public.Q0 {O- xxԍUS West Comments at 5, citing Amendment of Parts 1, 63, and 76 of the Commission's Rules to Implement  {Ov -the Provisions of the Cable Communications Policy Act of 1984, Report and Order, 58 RR2d 1, 6 (1985). Moreover, US West states that the broad sweep of the cable operator definition is designed  S-to encompass entities involved in hybrid arrangements such as ECI's arrangement with Ameritech.?R8 yO"-ԍUS West Comments at 5. ?  S- ` } x22.` ` While ECI claims that its arrangement with Ameritech is consistent with the Commission's  S- xvideo dialtone decisions and the District of Columbia Circuit's decision in NCTA, the opponents argue  xthat, because ECI controls the headend and subscriber service facilities while directing Ameritech's"j R,N(N(ZZ"  S- x.delivery of its signal, ECI's arrangement with Ameritech is clearly that of channel service.}S yOh-ԍTime Warner Comments at 11; City of New York Comments at 8; Alliance Comments at 56.} Contrary to  xECI's claims, the opponents assert that channel service is not a private carrier service and has always been  S- xa common carrier service.5T&X {O- xԍTime Warner Comments at 12; NCTA Comments at 12; Alliance Comments at 6.  See ECI Motion at 14  x("Channel service is the provision on a private carrier basis by a local telephone company of video transport services  {O:- xto a franchised cable operator from the cable operator's headend to the subscriber premises."), citing Telephone  {O-CompanyCable Television CrossOwnership Rules, Sections 63.5458, 7 FCC Rcd 5781, 5787, n.21 (1992). 5 Indeed, NCTA asserts that the order cited by ECI as support for its  xcharacterization of channel service as a private carrier service fails to support this contention. Instead,  xthe order describes channel service as "the provision on a common carrier basis by a local telephone  xcompany of video transport service to a cable operator holding a local cable franchise from the cable  S- xoperator's headend to the residential customer's premises."UF {O - xKԍNCTA Comments at 12, quoting Telephone CompanyCable Television CrossOwnership Rules, 7 FCC Rcd 5781, 5787, n.21 (1992). NCTA cites Northwestern Indiana Telephone  S- x/Company v. FCCV~ yO*- x\ԍ872 F.2d 465 (D.C. Cir. 1989). In supporting its decision to deny the Section 214 certification, the  xCommission argued that Northwestern Indiana incorrectly claimed that the Commission had certified other telephone  x,companies that were offering channel service on a discriminatory basis. In explaining why the existence of a single  xYfranchisee in each of the cases cited by Northwestern Indiana did not establish an inconsistency in the Commission's  {OJ- xapplication of its rules, the Court of Appeals found ". . . the existence of only one franchisee in the Ohio Bell and  {O- xC&P settings resulted not from the telephone companies' refusal to provide common carriage, but from the licensing  {O-decisions of the local governments involved." Id. at 469. in which the District of Columbia Circuit upheld the Commission's rejection of a  xLSection 214 certificate to a local telephone company that refused to provide channel service to all locally  S-franchised entities.<W yO"-ԍNCTA Comments at 12.<  SL - ` x23.` ` The opponents claim that ECI's reliance on the NCTA decision upholding the  x[Commission's video dialtone regulations is misplaced. According to the opponents, the Commission has  xcarefully circumscribed the application of the video dialtone rules and Congress has expressly repealed  S - x"the Commission's regulations and policies with respect to video dialtone."X v yO- xԍAlliance Comments at 8, n.12, quoting 1996 Act 302(b)(3); Time Warner Comments at 18; NCTA Comments at 9; Ameritech New Media Comments at 11; Alliance Comments at 67. The Alliance states that ECI  xcannot avail itself of the benefits of the defunct video dialtone regulatory regime without, at a minimum,  S - xtaking on the regulatory responsibility to act itself as a common carrier of unaffiliated third party signals.@Y  yO!-ԍAlliance Comments at 11.@  S^- xzThe opponents also state that the NCTA decision relied heavily on the fact that multiple packagers of  S8- xprogramming could reach the enduser subscriber an essential component missing from ECI's proposal.Z8^ yO6%-ԍUS West Comments at 8; City of New York Comments at 14; East Lansing/Meridian Comments at 8.  S- xIn addition, Time Warner claims that the NCTA court declined to address the fact pattern presented by" Z,N(N(ZZ+"  xECI an arrangement where a single entity controls (1) the headend equipment, (2) program selection,  S-and (3) an ownership and operational interest in a significant portion of the distribution network.C[ yO@-ԍTime Warner Comments at 18.C  S- ` o x24.` ` Time Warner asserts that Section 651(a)(2) of the Communications Act,\X {O-ԍSee infra n.179 and accompanying text, discussing Section 651(a)(2) of the Communications Act. outlining the  x\common carrier video transport option, does not offer refuge to ECI from the requirement to obtain a  S8- x]cable franchise.I]8 yO -ԍTime Warner Comments at 20.I Time Warner argues that, while it exempts Ameritech as a common carrier from  xLobtaining a franchise, Section 651(a)(2) does not safeguard the user of such common carrier facilities that  S- xare used in the transmission of video programming directly to subscribers.8^z {O -ԍId. at 21.8 The opponents argue that  xAmeritech's Title II regulation in this arrangement only governs its action as a common carrier, and does  S- xnot include the provision of video programming to subscribers by ECI.d_  yOD-ԍAmeritech New Media Comments at 10; Alliance Comments at 10.d US West also states that Section  x651(a)(2), while carrying forward the leaseback arrangement, specifically defers to the definitions in  xSection 602(7)(C), under which "such facility shall be considered a cable system . . . to the extent such  S - xLfacility is used in the transmission of video programming directly to subscribers."`  yO\-ԍUS West Comments at 9, quoting Communications Act 651(a)(2), 47 U.S.C. 571(a)(2). Time Warner argues  xthat if Congress had intended to exempt all use of common carrier systems from Title VI regulation, it  x\could have done so. Instead, Congress specifically added the second sentence to Section 651(a)(2) to  S - xexpressly provide that common carrier facilities could be considered part of a cable system.@a ,  yOt-ԍAlliance Comments at 11.@ The  xLopponents also state that the 1996 Act does not address the regulatory status of customerprogrammers utilizing common carrier video transport.  S0-    S- ` Bx25.` ` In response to ECI's arguments that the regulatory burden of being classified as a cable  xoperator is often too great for smaller telecommunications providers to bear, Time Warner asserts there  S- xis no statutory basis for establishing a different standard for smaller companies.Cb  yO-ԍTime Warner Comments at 21.C In this regard, Time  S- xyWarner observes that thousands of smaller cable systems already operate under franchise requirements.1cL  {O|!-ԍId.1  xMoreover, the opponents note that it is difficult to understand why any common carrier would accept the  xTitle VI franchiselike requirements (franchise fees, ceding twothirds channel capacity, and Public,  xEducational, and Governmental Access) imposed on open video system providers by Congress in the 1996  S- x-Act, if the Commission sanctions the enormous loophole claimed by ECI.d yOn&- x-ԍTime Warner Comments at 21; NCTA Comments at 6; US West Comments at 10; East Lansing/Meridian Comments at 8. Under ECI's proposal, NCTA" 6d,N(N(ZZa"  xargues no franchise is required, even though ECI's system, by leasing the facilities of an unaffiliated  S- xcommon carrier, may conceivably serve every MDU in a community.;e yO@-ԍNCTA Comments at 6.; Nor is it necessary to stop at  S- xMDUs; the logic of ECI's proposal applies equally to single dwelling units.7fX {O-ԍId. at 6.7 Such entities would be  S- xexempt from all regulatory oversight, which was clearly not intended by Congress.Kg yO-ԍAmeritech New Media Comments at 11.K Specifically, the  xAlliance claims that Congress generally intended that wireline video programming services should be  S8- xLregulated at the local level.?h8z yOR -ԍAlliance Comments at 8.? The City of New York observes that, while Congress intended to promote  x[competition in the telecommunications industry through enactment of the 1996 Act, Congress also made  S- xlclear that such competition was not intended to eviscerate the cable franchise requirement.Hi  yO-ԍCity of New York Comments at 18.H The  xopponents argue that granting ECI's motion will substantially reduce local communities' ability to control  S-their own destinies with regard to multichannel video programming.ej yO-ԍAlliance Comments at 15; City of Lansing Reply Comments at 9.e #Xj\  P6G;9XP#  Sp- #&a\  P6G;&P#  SH - x D.` ` Reply Comments  S - `  x 26.` ` ECI objects to ICS's and Ameritech New Media's proposals to expand the scope of this  S - xproceeding arguing that the Commission should decide only the issues raised by ECI in its motion.k *  {O-ԍECI Reply Comments at 2; see ICS Comments at 5,6,9; Ameritech New Media Comments at 12, n.18. ECI  xnotes that Ameritech's affiliate Ameritech New Media filed an opposition to ECI's motion even though  xAmeritech is providing video transport service to ECI, Wedgewood and others. ECI alleges that  xAmeritech New Media opposed its motion because Ameritech wants to inhibit competition in areas where  S0- xit is a franchised cable operator.@l0  yO-ԍECI Reply Comments at 5.@ ECI asserts that Ameritech's own advertisements for its supertrunking  xservice repeatedly represented that users would not need a franchise and that Ameritech New Media's  S- xposition before the Commission contradicts its corporate affiliate's advertisements.}m\L  {O- x,ԍId. at 6, Exhibit 1. ECI acknowledges that it did not receive such written advertising prior to commencement  xof its service, but instead received numerous oral assurances from an Ameritech manager that ECI would not need  {O^!-a franchise if it used Ameritech's service. Id. at 7. } ECI submits  x|Ameritech's advertisement for its supertrunking service, which states that "network repair and  S- xmaintenance" is included in Ameritech's service.Cnp {O$-ԍId. at 17, Exhibit 1.C As further evidence of Ameritech's control over its"n,N(N(ZZ"  xown fiber, ECI states that Ameritech refused to provide it with enhancements, such as twoway service  S-and multiplexing.1o {O@-ԍId.1  S- ` x27.` ` In response to arguments by the Alliance, Ameritech New Media and NCTA that the  S`- x\Commission's reasoning in its video dialtone proceeding should be ignored because video dialtone has  x|been repealed, ECI submits that the Commission's reasoning from the video dialtone context is  xnevertheless applicable by analogy in situations other than video dialtone and that the District of Columbia  S- xlCircuit's ruling in NCTA has not been vacated.ApZ yO -ԍECI Reply Comments at 12.A ECI argues that the Commission's video dialtone  S- xjdecisions and the District of Columbia Circuit's 1994 NCTA decision explicitly recognize that "where the  xtelephone company did not own or control the headend equipment but owned and controlled only its own  xfacilities, its facilities and the headend equipment were not part of one facility under the definition of a  SL - xcable system."ZqL  {O-ԍId. at 11, citing NCTA, 33 F.3d at 74.Z Accordingly, ECI asserts that Time Warner's argument that the definition of a cable  xysystem changed from 1977 to 1984 so that all technically integrated facilities used to deliver cable service  S -from a single headend are a single cable system is simply incorrect.1r | {O-ԍId.1  S - ` x28.` ` ECI asserts that the City of Chicago's determination that Wedgewood did not need a  S - x=franchise is controlling legal authority.s  {O2- xԍBut see infra n.174 and accompanying text, discussing the City of Chicago's letter reversing its decision that Wedgewood did not need to obtain a cable franchise. In addition, ECI distinguishes the Day decision by noting that,  xin that case, the common carrier built the facilities in order to lease them to the SMATV operator and that  S6- xzissues of control and use of the facilities in that situation are unclear.8t6h  {O>-ԍId. at 13.8 ECI contends that opponents  S- xincorrectly focus on the issue of whether public rightsofway are used in the provision of video  S- x/programming, rather than focusing on whether ECI's facilities are using public rightsofway.u  {O-ԍId. at 15, citing NCTA Comments at 5; Alliance Comments at 14; PROTEC/Troy Comments at 2. ECI  xstates that the 1996 Act focuses on whether an entity providing cable service owns or controls a cable  xsystem. ECI asserts that the exception contained in the cable system definition focuses on the  x transmission facility itself and if the facility does not use a public rightofway, then it is not a cable  SF- x system and the provider does not need a franchise.1vF  {Or"-ԍId.1 Moreover, ECI argues that even if the issue of  xwhether public rightsofway are used in the provision of ECI's service is relevant, the Commission should  xfind that there is no such use as intended by the Communications Act because, while ECI's signals  xtraverse public rightsofway, there is no physical use of the rightofway like that of Ameritech, which  S-constructs, maintains, owns and operates facilities in the public rightofway._w {Od'-ԍId. at 1516, citing OpTel Comments at 23._"w,N(N(ZZ"Ԍ S- ` %ԙx29.` ` In response to the City of New York's statements that ECI differs from customer xprogrammers in that ECI own the drops and feeder lines, whereas the customerprogrammers owned only  x[the headend equipment, ECI submits that this difference is not relevant to the critical issue of ownership  S- xor control of the common carrier facilities.x {O-ԍId. at 15. ECI also notes that some customerprogrammers using video dialtone did own the drops. Id.ğ ECI rebuts Time Warner's argument that because ECI  xlmakes all editorial and pricing decisions, ECI will necessarily have control of the common carrier's  xfacilities by noting that video dialtone customerprogrammers also made all editorial and pricing decisions,  S-yet were found not to have control over the common carrier's facilities.8yZ {O -ԍId. at 19.8  S- ` x30.` ` ECI contends that the opponents' assertion that video dialtone facilities must accommodate  S- xzmultiple programmersz {O$ - xԍSee Alliance for Community Media at 7; US WEST Comments at 8; Opposition by the City of New York at 1516. while ECI has no such obligation confuses the real issue, which, according to  Sp- xECI, is whether ECI owns or controls the common carrier's facilities.D{pF yOV-ԍECI Reply Comments at 1920.D In any event, ECI states that it  SH -will permit any provider to use its drops when technologically feasible.8|H  {O-ԍId. at 20.8 x` `  S - ` x31.` ` ECI argues that Section 651(a)(2) expressly authorized common carriage transport of video  xprogramming without the common carrier bearing the burden of the requirements of Title VI, as long as  S - xthe common carrier complies with Title II requirements.8} h  {O-ԍId. at 23.8 ECI states that Ameritech New Media's  xargument that it is not providing "transmission" of video programming under Section 651(a)(2) because  SX- xit is not actively involved in the selection of video programming fails for two reasons.>~X  {O-ԍId. at 24.> First, ECI  xargues that Ameritech New Media ignores the legislative history of Section 651(a)(2), which authorizes  S- x"common carrier transport of video programming."d  {O4-ԍId. at 24, citing H.R. Rep. No. 104458, at 172.d In addition, ECI contends that Ameritech New  xMedia's interpretation ignores the fact that an entity providing common carriage of video programming  S- x/under Title II, by definition, would not also be actively involved in the selection of programming. In  xresponse to the City of New York's position that Section 651(a)(2) does not address the regulatory status of customerprogrammers of video transport facilities, ECI states;  oXx. . . Section 651(a)(2) provides a clear indication that the customerprogrammers do not  need a franchise. Section 651(a)(2) contains a second sentence, which places a limitation  on the first sentence. If Congress wanted additional limitations it would have so  prescribed, especially given that it prescribed the limitation set forth in the second  sentence. The fact that Congress did not do so shows that the only limitation to the first  sentence of Section 651(a)(2) is the second sentence to that paragraph. That second"P,N(N(ZZ"  sentence provides that "[t]his paragraph shall not affect the treatment under section  S-602(7)(C) of a facility of a common carrier as a cable system." {O@- xԍId. at 25, quoting Communications Act 651(a)(2), 47 C.F.R. 571(a)(2); see City of New York Opposition at 16.   xIn response to arguments by Time Warner and the Alliance that Section 651(a)(2) is not applicable  xbecause the common carriage facilities do not go all the way to the end user, ECI notes that Section 651(a)(2) does not require the facilities to reach the end user.  S- ` x32.` ` In response to the opponents' claim that ECI is providing channel service and needs a  xfranchise, ECI notes that under traditional channel service the cable operator has the exclusive right to use  xjthe facilities. ECI argues that it does not have the right to exclude anyone from the Ameritech's facilities,  Sp- xand thus ECI is not receiving channel service.Ep" {O2 -ԍId. at 28. E ECI argues that Time Warner mistakenly claims that  xthe Commission's video dialtone proceedings established that maintenance and repair of the facilities is  S -irrelevant in determining who is a cable operator.  {Ot- xԍId. at 30; citing Telephone CompanyCable Television CrossOwnership Rules, Sections 63.5463.58, 7 FCC Rcd at 5072, n.27.  S -  S - `  x33.` ` ECI responds to arguments by Time Warner and the Alliance that a ruling for ECI would  xopen the floodgates for unfranchised service by every cable operator throughout the United States, by  xasserting that this will not happen because in order for cable operators to avoid a franchise requirement  xsuch cable operators would have to restructure their system to relinquish control over the portions of their  S0- xsystems that use public rightsofway.;0 {O-ԍId. at 3536.; ECI claims that cable operators will not be willing to give up  S-control of their systems.> {OH-čId. at 36.>  S- `  x34.` ` In its reply comments, OpTel contends that there is a difference between facilities  xkownership and the lease of facilities, and that users leasing fiber from a local exchange common carrier  Sh- xdo not themselves become local exchange carriers.Bh2  yO:-ԍOpTel Reply Comments at 2.B OpTel argues that the owner of the facilities, the  S@- xcommon carrier, is responsible for complying with applicable local regulations.7@  {O!-ԍId. at 2.7 Citing the  xCommission's definition of channel service, OpTel also argues that the leasing by a private cable operator  x>of common carrier transmission capacity from a local telephone company, pursuant to a tariff, is not  S- x=channel service.ZT  {O%- xԍId. at 34, citing New York Telephone Co., 10 FCC Rcd 11548, 11552 n.18 (1995) ("Channel service is the  x,provision on a common carrier basis, by a local telephone company, of video transport services to a cable operator holding a local cable franchise, from the cable operator's headend to subscriber premises."). OpTel asserts that even if the Commission were to conclude that leased transport on"v,N(N(ZZ$"  x\common carrier facilities constitutes the "use" of a rightofway, the hubtohub use of rightsofway  xLwould not constitute "cable service" because the "closed transmission paths" would not be used to serve  S-subscribers.D yO-ԍOpTel Reply Comments at 45.D  S`- ` Px 35.` ` RCN notes that the customerprogrammer in channel service retains exclusive control over  xthe telephone company facilities used in that service, while ECI proposes to receive common carrier  S- xservice that would be provided over facilities available to multiple programmers competing with ECI.AX yO -ԍRCN Reply Comments at 11.A  xzRCN argues that Congress intended in Section 602(7) to distinguish between the distribution of video  xprogramming directly to subscribers and the transmission of programming on a common carrier basis to  S- xfacilities that distribute programming to subscribers.7 {O -ԍId. at 3.7 RCN submits that the opponents' efforts to gloss  Sp- xover this distinction is a misreading of Section 602(7)(C).7pz {O-ԍId.7 RCN also notes that the Day case was  x"decided before the passage of the 1996 Act and therefore, does not reflect the current state of  S" -telecommunications law.7"  {O-ԍId. at 4.7  S - `  x36.` ` Wedgewood states that the Ameritech tariff is res judicata, given that the opponents had  xzan opportunity to protest Ameritech Tariff No. 2, and did not, and thus cannot, two years later, now  S - xcontest the tariff.H  yO-ԍWedgewood Reply Comments at 23.H Wedgewood also cites the City of Chicago's decision that entities receiving  S\- xAmeritech's supertrunking service are not required to obtain a franchise.\.  {O*- x[ԍId. at 3; but see infra n.174 and accompanying text, discussing the City of Chicago's letter reversing its decision that Wedgewood did not need to obtain a cable franchise. Wedgewood argues that ECI's  S4- xopponents mistakenly rely on the Day case, which involved a closed system, unlike Ameritech's fiber and  S- xswitch facilities.N  yO6-ԍWedgewood Reply Comments at 34.N Wedgewood contends that the opponents reliance upon channel service cases is  x/misplaced, because those cases involved Section 214 matters before the Common Carrier Bureau and  S- x/involved voice service rather than video service.= {Ov!-ԍId. at 5.= Furthermore, Wedgewood argues that the City of  x{Chicago adopted a technology neutral entertainment tax, in lieu of traditional franchise fees, which  Sn- xpreserves a level playing field from a tax standpoint and that Illinois could adopt such a bill statewide.=n {O$-ԍId. at 8.=  xFinally, Wedgewood argues that the Commission's definition of a cable system is not applicable in this"F<,N(N(ZZ"  xproceeding, because Wedgewood's facilities are franchiseexempt SMATV facilities located entirely on  S-private property.> {O@-ԍId. at 11.>  S-  S- ` n x37.` ` In its reply comments, NCTA states that the commenters that support ECI's motion offer  xjfew new arguments and no compelling reason to grant ECI's motion. NCTA notes that the only support  xZthat OpTel supplies for distinguishing between "crossing" rightsofway and "using" rightsofway involves  xxthe crossing of public rightsofway by SMATV or multichannel multipoint distribution service ("MMDS")  S- xradio waves.7Z {O -ԍId. at 4.7 NCTA states that extending this concept to the use of rightsofway by wirebased  S- xphysical facilities is against longstanding Commission precedent.7 {OL -ԍId. at 4.7 NCTA also counters MST's assertion  xthat no franchise is required because the common carrier facilities do not serve subscribers. NCTA states  xthat under channel service, the telephone company providing video transport facilities does not provide  xlvideo programming directly to subscribers, nevertheless, the channel service recipient has without  S - xMexception been required to obtain a franchise.7 ~ {O>-ԍId. at 5.7 In addition NCTA states that MST's reliance on the  S - xDisney case is misplaced because it involved a waiver of the Commission's program access rules involving  S - xan unrelated, unique circumstance.>  {O-ԍId. at 6. > NCTA also states that the fact that Wedgewood has obtained a letter  xfrom the City of Chicago advising that Wedgewood need not obtain a franchise to operate in the City of  x.Chicago is irrelevant because whether Wedgewood or ECI are cable operators operating cable systems is  SZ- xka matter of federal law.Z {O- xLԍId. at 7; but see infra n.174 and accompanying text, discussing the City of Chicago's letter reversing its decision that Wedgewood did not need to obtain a cable franchise. NCTA also argues that MST's reliance on the Commission's video dialtone  S2- xrules and the District of Columbia Circuit's decision in NCTA is unwarranted because those authorities  S - xdid not examine a situation remotely comparable to the one presented by ECI.7   {O-ԍId. at 9.7 NCTA counters RCN's  xpolicy arguments in favor of ECI's motion by stating that such policy arguments ignore the express  S- xlstatutory provisions applicable to the instant proceeding.8  {O-ԍId. at 10.8 With regard to ICS's request that the  xCommission expand the scope of the proceeding to include carriage by private carriers in addition to  x\common carriers, NCTA asserts that ICS's proposal is beyond the scope of the Commission's public  SD-notice regarding ECI's motion and therefore not properly an issue in this proceeding.hD  {O$-ԍId. at 1011; see Time Warner Reply Comments at 67.h ",N(N(ZZ"Ԍ S- ` x38.` ` Time Warner argues that ECI's interpretation of the Communications Act is incorrect  S- xbecause it ignores the integrated nature of the facility through which it provides service.J yO@-ԍTime Warner Reply Comments at 35.J With regard  xto the commenters that assert that the Commission must grant ECI's motion to carry out the broad policy  xof the Communications Act to promote competition, Time Warner asserts that the Commission cannot  xpromote competition where to do so directly contravenes the express language of the Communications  S8- xjAct.78X {O0-ԍId. at 5.7 Moreover, Time Warner notes that the legislative history cited by RCN is actually the legislative  xhistory of a prior version of the 1996 Act which was not enacted by Congress and which discussed a video  S- xplatform similar to video dialtone that evolved to become the open video system under the 1996 Act.7 {Or -ԍId. at 6.7  xTime Warner argues that the Commission must reject Ameritech New Media's argument that Ameritech  xcan, without obtaining a franchise, provide programming that it selects over its own facilities without a  Sp-franchise pursuant to Section 651(a)(2) of the Communications Act.7p| {O-ԍId. at 8.7  S - ` x39.` ` Ameritech New Media states that the Commission recently reached essentially the same  S - xconclusion as the Day court, albeit in a different context. Ameritech New Media argues that, in TBA, Inc.  S - x/v. Ohio Bell Telephone Company, the Commission held that Ohio Bell did not exceed its Section 214  xkauthorization when it built a broadband transmission facility consisting of fiber and coaxial cable over  S - xwhich a cable operator provided video programming services to subscribers.V  yO2-ԍAmeritech New Media Reply Comments at 6.V Ameritech New Media  xasserts that the Commission made clear that a telephone company leasing its broadband facilities to a cable  xNoperator is not engaged in the "transmission" of video programming when it "does not control the  xtransmitted signals or the destination of the transmitted signals" and only "simply process[es] incoming  S- xtransmissions and pass[es] those signals on to their unique destinations." {O"-ԍId., quoting TBA, Inc. v. Ohio Bell Telephone Company, 12 FCC Rcd 2876 (1997). Ameritech New Media argues  xthat reliance by ECI and its supporters on video dialtone decisions is incorrect because ECI is not similarly  xsituated with video dialtone programmers since ECI controls the necessary signal generation, reception  xand control equipment, the selection of the programming, and "the means of distributing such video  x=programming by virtue of their decision to purchase a tariffed telecommunications service which enables  x"them to use a common carrier's fiber crossing rightsofway to take the signal directly to their  S-subscribers."70  {O!-ԍId. at 7.7 " ,N(N(ZZ$"Ԍ S- ` `x40.` ` The Chicago Access Corporation ("CAC")  yOh- xYԍCAC is an independent nonprofit organization that administers five local noncommercial channels that reach  xmore than 350,000 households in Chicago through cable systems operated by Chicago Cable TV/TCI and Prime  xjCable of Chicago. The Chicago households that receive cable service from Wedgewood do not receive CAC's programming. CAC Reply Comments at 2.  submitted reply comments to respond to  xzcertain statements contained in Wedgewood's comments in support of ECI's motion. CAC objects to  xWedgewood's statement that the Chicago Corporation Counsel determined that Wedgewood's arrangement  S- x"promotes competition" or otherwise benefits the public.@ yO-ԍCAC Reply Comments at 4.@ CAC argues that the Chicago Corporation  xCounsel's opinion that Wedgewood does not need a cable franchise and what constitutes a cable system  S8- xLare entitled to no deference by the Commission.98@ {O -ԍId. at 45.9 CAC supports the comments of those entities which  xargue that ECI is operating a cable system and that the use of rightsofway (even if owned by another  S-entity) is the critical determinant in defining a cable system.7 {OZ-ԍId. at 5.7  S- ` #x41.` ` The Alliance reiterates its statement that ECI's proposal is indistinguishable from channel  Sp- xservice and should be treated as such.Epd  yOt-ԍAlliance Reply Comments at 2.E With regard to ECI's claims that there is room for eleven other  xprogrammers to utilize Ameritech's fiber capacity, the Alliance states that "[e]leven empty fiberoptic lines  xLnow stand ready and waiting to carry potential competitors' video signals from their headends to a dead S - xend."7  {O-ԍId. at 2.7 The Alliance states that, while having complete editorial control over what subscribers see  xthrough their television sets, ECI avoids the result which entitle open video systems and video common  xcarriers to exemption from cable regulation competitive, common carrier access to wireline  S -subscribers.7  {O-ԍId. at 3.7  S0- ` ax42.` ` The Michigan Coalition to Protect Public Rights of Way from Telecommunications  xEncroachments ("PROTEC") and the City of Troy, Michigan filed joint reply comments asserting that the  x[question of whether ECI needs a franchise is a matter of state law that the Commission is not competent  S- xto address.H yOp!-ԍPROTEC/Troy Reply Comments at 3.H Should the Commission proceed to address the federal question explicitly raised by ECI's  xmotion, PROTEC/Troy argues that the Commission should exercise care to avoid ruling on related  Sh-questions of state law.7h {O$-ԍId. at 3.7  S- ` x43.` ` US West asserts that its fundamental point remains unrebutted, that a multichannel video  xprogrammer using common carrier facilities to provide programming to multiple subscribers always has":,N(N(ZZa"  xbeen subject to franchise, or franchiselike, requirements and the exception that ECI purports to find is  S- xnonexistent.D yO@-ԍUS West Reply Comments at 1.D Moreover, US West argues that ECI's purported exception is equally inconsistent with  xCongress' most recent expression on this topic through the imposition of franchiselike obligations on open  S-video system operators.7X {O-ԍId. at 2.7  S8- ` px44.` ` On April 15, 1997, Ameritech New Media submitted a written ex parte submission  xpursuant to Section 1.1206 of the Commission rules responding to certain "egregious and inappropriate  S- xLallegation[s]" contained in ECI's reply comments.] {Ot -ԍAmeritech New Media Ex Parte Presentation at 1.] Thereafter, on April 30, 1997, CAC also submitted  S- xa written ex parte submission attaching a copy of a letter from the Chicago Corporation Counsel to the  xpresident of Wedgewood Communications, Inc. stating that "the position set forth in the 1995 letter no  xlonger represents the view of this office. . . . It is our determination that the operations of Wedgewood  SL - x!require a City of Chicago cable franchise."YL | {Oh-ԍCAC Ex Parte Presentation, Exhibit 1 at 1. Y In addition, numerous ex parte presentations to the  x[Commission were made by interested parties, including cable operators, noncable video distributors and  S -representatives of local franchising authorities. #Xj\  P6G;9XP#  S - #&a\  P6G;&P#  S -IV.xDISCUSSION  S^- ` x45.` ` The essential facts underlying ECI's service are not disputed by the parties. ECI serves  xapproximately 1,600 subscribers at 12 MDUs with headend facilities located entirely on private property  xzand ECI interconnects with Ameritech's fiber optic facilities inside the private property line. Prior to  xobtaining service from Ameritech, ECI served its subscribers utilizing a separate headend at each MDU  xlocation. ECI purchases and Ameritech provides Supertrunking video transport service. Pursuant to this  xservice, Ameritech transports ECI's signal over public rightsofway to the subscribers ECI serves.  x=Ameritech possesses authority to provide its Supertrunking video transport service as a common carrier  xzin the public rights of way. Ameritech controls all routing of ECI's communications when they travel  xover Ameritech's facilities. Inside the MDU private property line, ECI connects with Ameritech's  xfacilities and owns, controls and maintains the final portion of facilities which terminate at the subscriber's  xtelevision set. Ameritech's Supertrunking facilities are capable of providing service to several other  xcustomers. ECI has committed to make its drops available to competing video programming providers,  xlwhere technologically feasible. Given these circumstances, ECI seeks a ruling that it is not a cable  xkoperator subject to the requirements of Title VI of the Communications Act. ECI argues that Section  x651(a)(2) (common carriage of video transport) and Section 602(7)(B) (private cable exemption to the  xdefinition of cable system) independently support its argument that it is not a cable operator. We address each argument below.  S-x A.` ` Common Carriage of Video Traffic  S>- ` x46.` ` Section 651 of the Communications Act sets out four options for the provision of video  xLprogramming services provided by common carriers. Such carriers may: (1) provide video programming" ,N(N(ZZ!"  S- xto subscribers through radio communication under Title III of the Communications Act;b yOh-ԍCommunications Act 651(a)(1), 47 U.S.C. 571(a)(1).b (2) provide  xtransmission of video programming on a common carrier basis under Title II of the Communications  S- xAct;]X {O-ԍId. at 651(a)(2), 47 U.S.C. 571(a)(2).] (3) provide video programming as a cable system under Title VI of the Communications Act;\ {O:-ԍId. at 651(a)(3), 47 U.S.C. 571(a)(3).\  x|or (4) provide video programming by means of an open video system under Section 653 of the  S`-Communications Act.a`| {O| -ԍId. at (a)(3)(4), 47 U.S.C. 571(a)(3)(4).a Section 651(a)(2) states: Xx(#  ` pXxX` ` To the extent that a common carrier is providing transmission of video  ` pprogramming on a common carrier basis, such carrier shall be subject to the  ` prequirements of title II and section 652, but shall not otherwise be subject to the  ` prequirements of this title. This paragraph shall not affect the treatment under  Sp-section 602(7)(C) of a facility of a common carrier as a cable system.^p {O-ԍId. at 651(a)(2), 47 U.S.C. 571(a)(2). ^ `  S - ` p x47.` ` ECI asserts that Congress specifically intended Section 651(a)(2) to allow SMATV  x=operators to distribute video programming without using public rightsofway through a common carrier  xvideo transport to facilities located solely on private property without complying with a cable operator's  S - xobligations.V  yO-ԍECI Motion at 10; ECI Reply Comments at 2227.V ECI argues that, since it receives service from Ameritech pursuant to Section 651(a)(2), ECI is not subject to the requirements of Title VI.  S0- ` x48.` ` We disagree with ECI's contention. We cannot perceive an intent, express or inferred,  xon the part of Congress to address in Section 651(a)(2) the regulatory status of video distributors that  xpurchase common carriage of video traffic service. Instead, Section 651(a)(2) expressly exempts from  xthe requirements of Title VI common carriers, such as Ameritech, that provide a common carrier service  S- xzthrough which their facilities are used by video providers to transmit their signal.0  yO`- xԍWe find that Ameritech is providing common carriage of video traffic in accordance with Section 651(a)(2)  {O(-of the Communications Act. See Communications Act 651(a)(2), 47 U.S.C. 571(a)(2).  Section 651(a)(2)  x=does not expressly address the obligations of video distributors which purchase such service and use the  xcommon carrier facilities to transmit video programming directly to subscribers. Section 651(a)(2)  xspecifically states that it does "not affect the treatment under Section 602(7)(C) of a facility of a common  S- xcarrier as a cable system."b  yO$-ԍCommunications Act 651(a)(2), 47 U.S.C. 571(a)(2).b Section 602(7)(C) states that "a facility of a common carrier which is  xjsubject, in whole or in part, to the provisions of title II of this Act . . . shall be considered a cable system  xA. . . to the extent such facility is used in the transmission of video programming directly to",N(N(ZZ"  S- x]subscribers...."c yOh-ԍCommunications Act 602(7)(C), 47 U.S.C. 522(7)(C). c Given this language, we cannot reasonably interpret Section 651(a)(2) as an  xexemption shielding ECI from complying with the obligations of Title VI, including the cable franchise  xobligation. Accordingly, we next address whether ECI is a cable operator to which the cable franchise  S-requirement and other cable operator obligations apply.  S`-  S8-xB.` ` ECI's Status as a Cable Operator  S- `  x49.` ` To be subject to a cable operator's obligations, including the franchise requirement of Section 621(b), an entity must be a cable operator, which is defined as:  ` pEXxX` ` any person or group of persons (A) who provides cable service over a cable  ` pDsystem and directly or through one or more affiliates owns a significant interest  ` pin such cable system, or (B) who otherwise controls or is responsible for, through  S -any arrangement, the management and operation of such a cable system.\ X yO-ԍCommunications Act 602(5), 47 U.S.C. 522(5).\ `  xNone of the parties to this proceeding contest that ECI provides cable service to its subscribers. We find  xthat ECI provides cable service within the meaning of Section 602(6), because it provides "(A) oneway  xtransmission to subscribers of (i) video programming, or (ii) other programming service, and (B)  xMsubscriber interaction, if any, which is required for the selection or use of such video programming or  S-other programming service."\ yO-ԍCommunications Act 602(6), 47 U.S.C. 522(6).\  S- x  S- ` Px50.` ` Although we find ECI provides cable service, it is a cable operator only if it provides such  xservice over a "cable system," in which it owns a significant interest directly or through an affiliate, or  xwhich it controls or is responsible for the management or operation. As explained below, we conclude, based on the facts before us that ECI is not operating a cable system.  S- ` x51.` ` Section 602(7) enumerates the elements of a cable system. In pertinent part, the Communications Act defines the term cable system as:  ` pXxX` ` a facility, consisting of a set of closed transmission paths and associated signal  ` pgeneration, reception, and control equipment that is designed to provide cable  ` pservice which includes video programming and which is provided to multiple  S-subscribers within a community.oXx yO"- xzԍCommunications Act 602(7), 47 U.S.C. 522(7). A subscriber is defined in Section76.5(ee) of the  x-Commission's rules as a member of the general public who receives broadcast programming distributed by a cable television system and does not further distribute it. 47 C.F.R. 76.5(ee). o `  x-The Communications Act provides several exemptions to the definition of what constitutes a cable system.  xkThe exemption at issue in this proceeding, the private cable exemption, set forth at Section 602(7)(B)",N(N(ZZ"  xMprovides that "a facility that serves subscribers without using any public rightofway" is not a cable  S-system. yO@- xhԍCommunications Act 602(7)(B), 47 U.S.C. 522(7)(B). As enacted in the 1984 Act, the definition of a cable  xsystem excluded "a facility that serves only subscribers in 1 or more multiple unit dwellings under common  xownership, control, or management, unless such facility or facilities uses any public rightofway. . . ."  {O- xwCommunications Act 602(7), 47 U.S.C. 522(7)(B), amended by Telecommunications Act of 1996 301(a)(2), 47  x,U.S.C. 522(7)(B). The 1996 Act amended this exclusion retaining only the requirement that such systems not use "any public rightofway."   S- ` ~x52.` ` Consistent with this statutory exemption, in analyzing the definition of the term "cable system," the Commission has stated that:  ` pXxX` ` [t]he dual federallocal jurisdictional approach to regulating cable television  ` prservice is largely premised on the fact that cable systems necessarily involve  ` pextensive physical facilities and substantial construction upon and use of public S-rights of way in the communities they serve."iB {Oz-ԍDefinition of a Cable Television System, 5 FCC Rcd at 7639.i `  xThus, through the policies enumerated by the Communications Act, the definitions reflecting these  xpolicies, and the Commission's decisions, the cable franchise requirement of Section 621(b) is inextricably  S - xlinked to the use of public rightsofway."  {Ol- xԍSee Order on Reconsideration, 7 FCC Rcd at 5072, stating that the LEC "facilities used to provide video  xdialtone service . . . would all be governed by common carrier regulations that incorporate the same concerns about  xJpublic safety and convenience and use of public rightsofway that provide a key justification for the cable franchise requirement."  In addition, there is evidence in the legislative history that  xCongress did not intend users of noncablefranchised common carrier services to be subject to Title VI  x[requirements. In its comments, RCN cites the legislative history of earlier versions of Section 302 of the 1996 Act and Section 651 of the Communications Act, which states:  ` pXxX` ` to the extent that the carrier provides programming through a common carrier  S- ` pplatform, neither it, nor any video programming provider making use of such  S- ` pplatform shall be deemed to be a cable operator providing cable service. Under  ` pcurrent law, a programmer who uses a video dialtone network to deliver  S-programming to subscribers is not a cable operator.  yO-ԍRCN Comments at 5, quoting S. Rep. No. 104230, 104th Cong., 1st Sess. 37 (1995) (emphasis RCN). `  xWhile we recognize, as Time Warner points out in its comments, that the legislative history cited by RCN  xrefers to a proposal relating to what evolved into the open video system option, we are not persuaded that  S- xRCN's reference is inapplicable to the instant proceeding.LN  {O$-ԍSee Time Warner Comments at 6.L  The cited legislative history can be  xMinterpreted as a congressional indication that video distributors that transmit their signals over public rightsofway through the use of a LEC's common carrier platform not be deemed cable systems. "|,N(N(ZZ"Ԍ S- ` $x53.` ` We have previously determined that the term "cable operator" does not encompass an  xentity that maintains reception and transmission equipment wholly on private property and that transmits  xits video signals through the public rightsofway solely by means of a local exchange carrier's facilities  xthat are made available on a common carrier basis. Under the video dialtone framework, local telephone  xcompanies were permitted to make available, on a nondiscriminatory common carrier basis, a basic  xplatform that delivered video programming and other services from the separatelyowned headend facilities  S- xof multiple customer programmers to enduser subscribers.\ {Ox-ԍSecond Report and Order, 7 FCC Rcd at 578385.\ In Telephone CompanyCable Television  S- xCrossOwnership Rules, Sections 63.54 63.58, Further Notice of Proposed Rulemaking, First Report and  S- xOrder, and Second Further Notice of Inquiry ("First Report and Order"), the Commission determined that  xLneither a LEC providing video dialtone services nor its customer/programmer was required under Section  Sv- x621(b) to obtain a cable franchise in order to offer service.cvZ {Op -ԍFirst Report and Order, 7 FCC Rcd 300, 32425 (1991).c The Commission determined that the  xcustomer/programmers were not cable operators subject to the franchise requirement because "they neither  xown a significant interest in the telephone company broadband facilities, or control, or are responsible for  S - xthe management and operation of those facilities. . . ." $  {O- xZԍId. at 32728 (footnotes omitted). The Commission also held that the cable franchise requirement did not  xapply to the LEC video dialtone service provider because the LEC is not providing video programming service  xdirectly to subscribers and therefore acted simply as a conduit in providing broadband common carrier based service  {O-that enables customer/programmers to reach subscribers. Id. at 327.  In Telephone CompanyCable Television Cross S - x=Ownership Rules, Sections 63.54 63.58, Memorandum Opinion and Order on Reconsideration ("Order  S - xon Reconsideration"), the Commission addressed reconsideration requests on the issue of whether LEC  S - xjvideo dialtone providers should be required to obtain local cable franchises.^  {O-ԍOrder on Reconsideration, 7 FCC Rcd 5069 (1992).^ Although the Commission  xwas not asked to reconsider the cable franchise requirement as it pertained to video dialtone customer/programmers, the Commission indirectly touched on this issue by holding that:  ` pXxX` ` [w]e conclude further that video dialtone facilities typically would not constitute  ` pa "cable system" for the additional reason that they will not ordinarily include the  ` pnecessary signal generation, reception and control equipment. As a video dialtone  ` pprovider, a telephone company generally will not control this "headend  ` pequipment," which is associated with selection and provision of video  ` pprogramming. It will be the video programmers, rather than the telephone  ` pcompany, who will generate and control the signal sent over transmission  ` pSfacilities made available by the telephone company. As long as the facilities are  ` pGnot used by the telephone company for the direct provision of video  S-programming, the system does not qualify as a cable system.j  {O#- xԍId. at 507273 (footnotes omitted); see infra 5758, discussing why ECI's service does not closely resemble common carrier channel service. ` "\ ,N(N(ZZ"Ԍ S- ` x54.` ` In upholding the Commission's video dialtone policies as set forth in the First Report and  S- xOrder and the Order on Reconsideration, the District of Columbia Circuit in NCTA stressed the importance of separate ownership of the headend and transmission facilities stating that:  ` pXxX` ` [w]here the "closed transmission paths" and "associated" headend equipment are  ` p owned and controlled by different entities (as in video dialtone), and where  ` pdifferent configurations of equipment would be used to move video programming  ` pbfrom the different providers to the different customers, the concepts of a single,  S-integrated system and unified control are not present.C {O, -ԍNCTA, 33 F.3d at 74. C `  St- `  x55.` ` We believe the District of Columbia Circuit's affirmance of our decisions in the video  xdialtone context supports the conclusion that ECI is not a cable operator. The court's decision is based  xzon principles that are present here. First, there is an absolute separation of ownership between ECI's  xheadend facilities, which are located entirely on private property, and the transmission facilities owned  xand controlled by Ameritech. ECI has no financial interest in Ameritech and Ameritech has no financial  xlinterest in ECI. The companies are in no way affiliated. Ameritech takes no part in programming  xselection. ECI retains total control over the selection of programming offered to its subscribers. After  xdelivery of its signal to Ameritech at the junction box, ECI surrenders control to Ameritech, retaining only  S4- xthe right to designate the delivery points, which Ameritech must approve.D4Z yO.-ԍ ECI Motion, Exhibit 1.D ECI can provide service only  xto those locations where Ameritech has facilities or is willing to construct facilities in furtherance of its  S- xSupertrunking service.7 {On-ԍ Id.7 In short, there is absolutely no evidence that the relationship between Ameritech  S- xand ECI is other than a "carrieruser" relationship.| {O-ԍSee, e.g., 47 C.F.R. 63.54(c) & Note (repealed 1996), discussing the "carrieruser" relationship. In addition, Ameritech also has capacity to serve  xMmultiple customers in the same MDUs ECI asserts that it uses one strand of fiber in a twelve fiber  Sl- xLbundle.+$l yO- x#X\  P6G;P#эAmeritech New Media asserts that, while ECI's programming actually occupies only one fiber strand,  {O- xAmeritech, out of redundancy concerns, assigns a second fiber for each fiber used. See March 4, 1998 Ameritech  {O- xLNew Media Ex Parte Presentation. After accounting for ECI's use of the fiber bundle, Ameritech New Media maintains that 10 strands remain for use by other Ameritech customers. + We acknowledge that the relationship between Ameritech and ECI does not absolutely mirror  xLthat of a video dialtone operator and a customer programmer. For example, in the instant circumstances,  xat least initially, there will be only a single stream of programming from a single programming provider.  xHowever, such distinctions are not legally relevant to the issue of whether a single, integrated cable system is present.  S|- ` 3x56.` ` We acknowledge Time Warner's argument that the definition of the term cable system,  xas codified by the 1984 Act, intentionally omitted the Commission's previous requirement that all portions  S,- xof a cable system be under common ownership or control.E,  yO&-ԍTime Warner Opposition at 17.E Accordingly, Time Warner contends that", ,N(N(ZZ"  xthe separate ownership of ECI's headend facilities and Ameritech's transmission facilities does not  S- xkpreclude a finding that ECI is a cable operator of a cable system.2 {O@-ԍId. 2 While Time Warner's argument is  x.correct as far as it goes, we find that it does not compel a different conclusion in this case. As explained  xherein, Ameritech exercises complete stewardship over the transmission facilities that actually traverse the  S`- xpublic rightofway. "`Z {OZ- xԍSee infra 63, discussing AT&T Communications of the Southwest, Inc. v. City of Austin, Texas, No. A97CA x;532 SS (W.D Tex. June 4, 1998) (holding that new entrant that leases capacity in the rightofway from incumbent  xlocal LEC, which remains responsible for the installation, operation, maintenance and repair of such capacity, does not use the rightofway in a manner recognized by the Communications Act).  It has no affiliation whatever with ECI and no obligation to use the facilities exclusively for ECI. Under all these circumstances, we find that ECI is not a cable operator.  S- ` 3x57.` ` Several partiescD yO -ԍ Time Warner, City of New York, Alliance, and US West.c argue that Ameritech's Supertrunking service more closely resembles  xcommon carrier channel service than video dialtone, and that the Commission has always required that  xchannel service recipients comply with all Title VI requirements. We disagree. Ameritech's  xzSupertrunking service does not have the traditional characteristics of channel service. Channel service  x[generally entailed a telephone company building a video distribution system or systems, if the telephone  xcompany received multiple channel service requests, from the interconnection with the recipient's headend  S - xto the subscriber's premises and leasing it to a cable operator.&  {Ol- x-ԍFirst Report and Order, 7 FCC Rcd at 327; Telephone CompanyCable Television CrossOwnership Rules,  {O6- x-Sections 63.54 63.58, Second Report and Order, Recommendation To Congress, and Second Further Notice of  {O- xProposed Rulemaking, 7 FCC Rcd 5781, 5787, n.21 (1992) ("Second Report and Order"); see also NCTA, 33 F.3d  yO-at 71. Channel service facilities are builtto S - x>order facilities constructed solely for the use of a particular channel service recipient.  {O2-ԍSee New York Telephone Co., 10 FCC Rcd at 11552. The Commission has described channel service as:  ` pXxX` ` [T]he provision, on a common carrier basis, by a local telephone company, of video  ` ptransport services to a cable operator holding a local cable franchise, from the cable  ` poperator's headend to subscriber premises. . . . Channel service differs from video  ` pdialtone service insofar as channel service facilities are deployed for the exclusive use of  ` pthe franchised cable operator, whereas video dialtone facilities must accommodate multiple video programmers. `  {O< -Id. (citations omitted). The channel  x]service facilities are constructed to take the recipient's signal to the destinations designated by the recipient.  S0- ` x58.` ` This stands in distinct contrast to the service ECI receives from Ameritech. ECI purchases  xa tariffed service provided over facilities the large majority of which were constructed by Ameritech prior  xto marketing its Supertrunking video service and some of which were constructed in response to ECI's"^,N(N(ZZ"  S- xrequest for service. {Oh-ԍSee ECI Reply, Exhibit 1 (Ameritech Supertrunking Video Service marketing brochure). Thus, the fiber optic facilities used to provide service were not wholly constructed  xat ECI's request. In addition, because such construction, at a minimum, consists of twelvestrand fiber  xbundles, the facilities constructed to provide service to ECI do not benefit any particular programming  xprovider, Moreover, Ameritech does not own and control the facilities that go directly to the subscriber's  xpremises. ECI owns and controls the facilities from its interconnection with Ameritech inside the private  xjproperty line to the subscriber's television. Ameritech's service is provided over facilities totally owned,  S- xcontrolled and maintained by Ameritech. Also in contrast to channel service, several other video  x\programming distributors may purchase on demand the same service provided to ECI under the same  xprices, terms and conditions. We believe these factors distinguish ECI's service from traditional channel  xservice and render the opponent's analogy unpersuasive. Again, we find the District of Columbia Circuit's  Sp- xopinion in NCTA instructive. In response to claims that the Commission's video dialtone decisions would  xpermit channel service recipients to restructure their service to avoid the cable franchise requirements, the District of Columbia Circuit stated that:  ` pXxX` ` [a] cable operator could presumably do that, but it would at the same time  ` pfundamentally alter the nature of its business, offering the public programs rather  ` pthan channels of programming. It would also have to give up control over,  ` pincluding the right to exclude others from, the channel capacity that it formerly  ` pleased, and depend upon the capacity of the public switched network in order to  ` preach its customers. In these important ways, video dialtone and channel service  S-are not . . . functionally indistinguishable.FZ {O-ԍNCTA, 33 F.3d at 75. F `  S-  S- ` Px59.` ` We reject contentions that the Commission's video dialtone decisions have no precedential  Sj- xvalue in light of Congress' express repeal of video dialtone in the 1996 Act.j {O- xJԍSee 1996 Act 302(b)(3), stating that, on the date of enactment, "[t]he Commission's regulations and policies with respect to video dialtone requirements . . . shall cease to be effective." The amendments to the  x]Communications Act by the 1996 Act do not alter the analysis of Section 602(7) contained in the  S- xCommission's video dialtone orders and the District of Columbia Circuit's NCTA decision.F {O-ԍSee supra n.187, discussing the 1996 Act amendments to the cable system definition. These  S- xdecisions and NCTA analyzed the video dialtone framework in the context of the definition of cable  x|system set forth in Section 602(7) to determine whether the video dialtone system operator or  xcustomer/programmers were cable operators of cable systems, necessitating that either or both of these  xparties obtain a cable franchise. The reasoning and analysis that formed the underpinning of the  xzCommission's video dialtone decisions continues to have applicability in interpreting the definition of "cable system."  S- ` x60.` ` Ameritech New Media argues that, in TBA v. Ohio Bell, the Commission considered facts  xzsimilar to the instant proceeding and concluded that a common carrier does not engage in transmission  S- x!when it does not control the transmitted signals or their destination. {O'-ԍAmeritech New Media Reply Comments at 6, citing TBA v. Ohio Bell, 12 FCC Rcd 2876 (1997). We disagree. In TBA, the"j ,N(N(ZZ"  xCommission addressed whether Ohio Bell violated its Section 214 grant of authority in connection with  xthe construction, operation and extension of lines of a broadband cable television transport system for  S- xNorth Coast Cable Ltd. ("NCC").W {O-ԍTBA v. Ohio Bell, 12 FCC Rcd at 287677.W NCC purchased the coaxial cable portion of the system from Ohio  S- xBell.@Z {O-ԍId. at 2877.@ Although record title remained with Ohio Bell, all other incidents of ownership were conveyed  S`- xto NCC.1` {O-ԍId.1 Thereafter, NCC extended a line of the coaxial portion of the system into a neighboring  S8- xcommunity and began competing with another cable operator, TBA, Inc. ("TBA").28~ {OV -ԍId. 2 TBA filed a  x.complaint alleging that Ohio Bell violated its Section 214 authority when NCC extended the line outside  S- x of Ohio Bell's telephony service area and into TBA's franchise area.: {O-ԍId. at 2878.: The Common Carrier Bureau  x("CCB") concluded that TBA failed to establish a Section 214 violation, and TBA filed an application for  S- xreview of the CCB's order to the Commission.1 {O-ԍId.1 On review, the Commission upheld the CCB's  Sp- xdecision.=p4  {OD-ԍId. at 288082.= Our review of that decision indicates that Ohio Bell clearly provided channel service to NCC.  x.Accordingly, because Ameritech provides common carriage video transport, not channel service, to ECI,  S -we find the reasoning of TBA to be inapplicable to ECI's Motion.  S -  S - ` x61.` ` We conclude that ECI's facilities and Ameritech's facilities do not constitute a single,  S - xPintegrated cable system.F  {O-ԍSee NCTA, 33 F.3d at 74.F ECI is not a cable operator as defined by Section 602(5) of the  S - x\Communications Act because it does not provide service to its subscribers through a cable system. X  yOz- xԍBecause we find that ECI satisfies the private cable exemption contained in Section 602(7)(B), we need not address ECI's Section 602(7)(C) common carrier exemption arguments.  xBecause only cable operators are required by Section 621(b) to obtain cable franchises and comply with  x[the other Title VI requirements, ECI is not required to obtain a cable franchise or otherwise comply with  S -a cable operator's obligations under Title VI of the Communications Act.  S- ` x62.` ` We find also that ECI qualifies for the private cable exemption of Section 602(7)(B),  xwhich provides that "a facility that serves subscribers without using any public rights of way" does not  Sj- xconstitute a cable system under Section 602(7).bj yO$-ԍCommunications Act 602(7)(B), 47 U.S.C. 522(7)(B).b That ECI's signal moves across public rightsofway  xto reach its subscribers does not by itself render ECI the operator of a cable system. The issue is whether  xthe transport by Ameritech of ECI's signal constitutes a use of such rightsofway by ECI as contemplated  xby Section 602(7)(B). It is Ameritech, not ECI, that uses the rightsofway, as the Commission and courts"@,N(N(ZZp"  xhave interpreted the term, whether for installations, repair or maintenance of its facilities. Ameritech does  xnot have unfettered use of public rightsofway and must comply with a range of safety, convenience, and  xother requirements. The public safety and convenience and management of public rightsofway, provide  S- xKa key premise for the cable franchise requirement.| {O-ԍNCTA, 33 F.3d at 73, citing Order on Reconsideration, 7 FCC Rcd at 5072.| Because Ameritech possesses the authority to operate  xin the rightofway and to transmit ECI's, or other video distributors', signals, we conclude that the  xunderlying premise tying the franchise requirement to the use of public rightsofway is not present in  xECI's circumstances, and that requiring ECI to obtain a franchise would be needlessly duplicative. As  xdiscussed above, a cable operator's construction in and use of public rightsof way is an important factor,  xand advantage, underlying the Communication Act's requirement that all cable operators be franchised.  xECI engages in neither of these activities, relying on Ameritech's authorization, construction and  xmaintenance of its rightofway facilities. We cannot conclude that ECI's mere interaction with  xAmeritech's authorized facilities in the public rightofway is the type of use to which Congress spoke in  xdefining what constitutes a cable system. Any conclusion to the contrary would be inconsistent with the  S - xNCTA decision, where the District of Columbia Circuit held that a programmer's "use" of LEC common  x=carrier facilities in the public rightsofway does not trigger the cable franchise requirement. We find our  xconclusion in concert with the amendments to the private cable exemption effected by Congress in the  x1996 Act. By removing the requirement that private cable operators serve only commonly owned,  SZ- xcontrolled, or managed MDUs,ZZ {OT-ԍSee supra n.187, discussing the 1996 Act amendments to the private cable exemption. Congress clearly indicated its desire that the private cable exemption be more broadly available than prior to the 1996 Act.  S- ` x63.` ` The United States District Court for the Western District of Texas' recent decision in  S- xAT&T Communications of the Southwest v. City of Austin further supports our holding. {OF- xԍAT&T Communications of the Southwest, Inc. v. City of Austin, Texas, No. A97CA532 SS (W.D Tex. June 4, 1998). In that case,  x/Southwestern Bell Telephone Company ("SWBT") leased facilities to AT&T of the Southwest, Inc.  Sl- x("AT&T") for the provision of local telephone service by AT&T.lF {OR- xԍAT&T Communications of the Southwest, Inc. v. City of Austin, Texas, 975 F. Supp. 928, 934 (W.D. Tex 1997). Based on AT&T's occupancy of  xSWBT's facilities located in public rightsofway, the City of Austin claimed that AT&T must obtain a  S- xlocal franchise before offering local telephone service.< {O\-ԍId. at 93435.< Arguing that Section 253 of Communications  xAct precludes such barriers to entry by localities, AT&T sought and was granted a preliminary injunction  S-enjoining the City's franchise requirement.<2  {O"-ԍId. at 94243.< In granting a permanent injunction, the District Court stated:  XxAT&T transmits signals consisting of electrons and lightwaves, which travel through  ST- `copper and fiber optic lines, cables, and link switches located in (as opposed to above)  the City's rightsofway. The City contends these electrons and lightwaves constitute both  3a use and an occupancy of the public rightsofway. The distinction between "in" and" ,N(N(ZZz"  S- "above" is due to the Court's reliance in its preliminary injunction order on In the Matter  S- of Definition of a Cable Television System . . . a Federal Communications Commission  ("FCC") decision which held that the "mere passing over of . . . a rightofway by  Belectromagnetic radiation" does not constitute the "use" of the rightofway. The City  argues the FCC decision, which involves wireless communication passing over a rightof Cway, is materially different from the situation here in which communication travels through wires located in the City's rightsofway.   S-x` `  hh*@*h*  Xx[T]he manner in which electrons travel in, through, out, above, below, beyond,  between, around, over, under, on, within, without is irrelevant. The essential point is  ~that AT&T will not erect telephone polls [sic] or dig holes in the City's streets in order  SL - to install, maintain, operate or repair SWBT's network (i.e., wires, cables, and switches)  because those rights and duties belong to SWBT, not to AT&T. When AT&T purchases  Cwholesale services and network functionalities from SWBT, SWBT provides those  Bservices to AT&T through SWBT's network, and AT&T then resells those services to  consumers. True, when AT&T's customers place a local telephone call, electromagnetic  `radiation travels through SWBT's network, but that is not to say that AT&T owns the  `electromagnetic radiation travelling through the network (a question which is better left  to the ruminations of philosophers rather than a court of law). The Court once again  S-rejects the City's bizarre definition of the term "use." {Ov- xxԍAT&T v. City of Austin, No. A97CA532 SS, at 57 (emphasis original), quoting In the Matter of Definition  {O@-of a Cable Television System, 5 FCC Rcd 7638 (1990).   S- ` _x64.` ` Our decision is consistent with the procompetitive mandate imparted on the Commission  xby Congress in enacting the 1996 Act. Indeed, the Conference Report states: "[r]ecognizing that there can  xNbe different strategies, services and technologies for entering video markets, the conferees agree to  xmultiple entry options to promote competition, encourage investment in new technologies and to maximize  S- xLconsumer choice of services that best meet their information and entertainment needs."$ yO-ԍTelecommunications Act of 1996 Conference Report, S. Rep. 104230 at 172 (Feb. 1, 1996). The 1996 Act  xMdirects that advanced telecommunications service be obtained through robust competition rather than  S- xthrough regulatory oversight.9 {O"-ԍId. at 175.9 ECI's service is a statutorily permissible option which will, where  S-possible, promote competition in the MVPD marketplace and enhance consumer choice.  S~-#&a\  P6G;&P#  SV- xC.` ` Miscellaneous Matters  S- ` #x 65.` ` We reject ICS' request to expand the scope of this proceeding to consider whether private  xcable operators should be allowed to use the fiber optic facilities of any independent provider, both  xcommon carrier and private carrier. We also reject MTS' request that the Commission grant franchised  x.cable operators the option to transfer their cable plant that use public rightsofway to unaffiliated third parties. Both requests are beyond the scope of this proceeding.  S - ` Qx66.` ` We disagree with PROTEC/Troy's assertion that whether or not ECI needs to obtain a  xcable franchise is a question of state law that the Commission is not competent to address. The" F,N(N(ZZt""  xCommission is charged with administering and enforcing the Communications Act. Incumbent in such  xMjurisdiction is interpreting the applicability of the provisions of the Communications Act such as the  x]definition of cable operator and cable system contained in Section 602 as those terms relate to the  xfranchising requirement of Section 621(b)(1) of the Communications Act. This decision does not reach the issue of state and local authority over video distributors such as ECI.  S-x D.` ` Motion to Dismiss  S- ` x67.` ` The Cities of Chicago, East Lansing, and Meridian (the "Cities") filed a Joint Motion to  S- xDismiss ECI's Motion arguing that ECI breached its duty of truthfulness and candor to the Commission.O yO - xԍNATOA, PROTEC, the Texas Coalition of Cities on Franchised Utility Issues ("TCCFUI"), and the Cities of  xJDallas and St. Louis filed a Joint Statement in Response to the Joint Motion to Dismiss in which they argue that the  xCommission should reexamine its procedures for handling CSR petitions, such as ECI's petition, which involve  xrelatively small municipalities with limited resources, but which raise broad preemption issues that have nationwide impact. Joint Statement at 25. O  xThe Cities assert that ECI has breached that duty by misrepresenting and failing to candidly disclose that  xconstruction of new facilities is necessary in the majority of cases for Ameritech to provide service to ECI  S - x-and other Supertrunking video transport service customers.E x yO8-ԍJoint Motion to Dismiss at 2.E The Cities cite two statements made by ECI in its Reply Comments which state:  XxAs also previously explained, unlike traditional channel service, Ameritech did not  construct its system for ECI to provide cable service but instead is simply now allowing  ECI, Wedgewood and presumably others to transport video over preexisting Ameritech facilities that are also used for the transport of nonvideo services.   S-x` `  hh*@*h*  XxTherefore, a ruling against petitioners will lead to the underutilization of the common  ~carriers facilities, as such facilities would be able to support a viable service that cannot  S-take off because of regulation.Y {O8-ԍId., quoting ECI Reply Comments at 29 & 34.Y   S@- xThe Cities also cite several similar statements made by parties supporting ECI's Motion.l@ {Oz-ԍId. at 34, quoting OpTel Comments at 3; ICS Comments at 910.l The Cities  xrequest that the Commission either dismiss ECI's Motion on the basis of "facts already known," or, in the  xalternative, conduct a hearing for the purpose of determining whether ECI made material  S-misrepresentations or omitted to disclose relevant information in its filings with the Commission.8,  {O"-ԍId. at 17.8  Sx- ` ox68.` ` In its Opposition, ECI asserts that the Cities' Joint Motion to Dismiss is frivolous and  SP- xmaintains that the statements the Cities complained of are not false.<P  yO&-ԍECI Opposition at 4.< With regard to the first alleged"P!N ,N(N(ZZ"  xmisrepresentation regarding extension of Ameritech facilities to provide it service, ECI asserts that the Cities:  Xx. . . focus solely on the fact that not every foot of Ameritech's facilities were preexisting,  which ECI never stated in the first place. It is axiomatic that when two facilities such as  Ameritech's and ECI's are connected there ordinarily will be some small extension of the  S-lines to connect to the other facility.9 {Ox-ԍId. at 45.9   xECI further argues that the small extensions of line necessary to connect Ameritech's preexisting facilities  xis not relevant to, or inconsistent with, ECI's argument that it need not obtain a franchise because the lines  x[added by Ameritech are part of Ameritech's common carrier facilities, all of which are owned, controlled,  SH - x!and managed by Ameritech.7H Z {OB -ԍId. at 5.7 ECI states that, while the Cities allege that ECI withheld material  xMinformation from the Commission, it was ECI that first brought the information to the Commission's  S - x\attention through its ex parte submissions.7  {O-ԍId. at 5.7 In these submissions, states ECI, the Commission was  xclearly informed of the fact that Ameritech was required to install short extensions to connect its facilities  S - xwith ECI.o ~ {O-ԍId. at 56, citing ECI March 18 & 20 ex parte submissions. o ECI states that these submissions included a map clearly detailing the portions of  xAmeritech's system which preexisted ECI's service and those facilities which were constructed to provide  SZ- xLservice to ECI.7Z {O -ԍId. at 6.7 With regard to the second alleged misrepresentation concerning the underutilization of  xAmeritech's facilities, ECI states that the Cities' claim is "absurd as obviously those common carrier  x[facilities that are currently utilized to provide service to entities such as ECI and Wedgewood will not be  S-so utilized if the Commission rules against ECI."7 {O$-ԍId. at 4.7  S- ` x69.` ` As the Cities correctly acknowledge, all parties to Commission proceedings have an  Sj- x=affirmative duty of truthfulness and candor.^j4  {O>- xKԍJoint Motion to Dismiss at 67, citing RKO General, Inc. v. FCC, 670 F2d 215, 232 (D.C. Cir. 1981); Sea  {O - xIsland Broadcasting Corp. v. FCC, 627 F2d 240, 243 (D.C. Cir. 1980), cert. denied, 449 U.S. 843 (1980); Golden  {O -Broadcasting Systems, Inc., 68 FCC 2d 1099, 110104 (1978); 47 C.F.R. 1.17.  We fail to perceive, however, how ECI has breached this  xduty. At the outset of our discussion, we note that the disputed statements are immaterial to our decision  x.today. As discussed above, Ameritech is providing ECI with a common carriage video transport service over facilities wholly owned, controlled and managed by Ameritech.  S- ` %x70.` ` We first address the Cities' argument that ECI has been less than truthful regarding  xAmeritech's construction of facilities. A party's duty of truthfulness and candor does not extend to  x.pleading facts that are so patently obvious that their inclusion does not serve to inform the Commission"R"Z ,N(N(ZZ"  xand needlessly inflates pleadings. The Commission did not approach ECI's Motion in a vacuum, and was  xnot under the misapprehension that Ameritech had constructed all the facilities needed to serve ECI, or  x other similarlysituated programming providers, at all present and future locations such that the two  xfacilities need merely to be connected to commence service. To argue that ECI had an affirmative duty  xto dissuade the Commission of this fact is unreasonable. The Commission correctly read ECI's statements  xthat Ameritech did not construct its system with the intent of permitting ECI to provide cable service and  xkthat ECI's service was provided "over preexisting Ameritech facilities" in their proper context that  xMAmeritech did not construct the primary facilities necessary to provide service to ECI. The fact that  xlAmeritech had to construct short extensions to connect with ECI's facilities does not render ECI's statements untrue or misleading.  SH - ` x71.` ` We also acknowledge that, despite the voluminous record amassed in this proceeding, the  xissue of the existence and scope of Ameritech's extensions to serve ECI was not raised by any party until  xalmost one year after ECI filed its Motion. The Commission finds it difficult to posit that all parties to  xthis proceeding believed that ECI was receiving service via facilities that completely preexisted its service  xrequest to Ameritech. We find it far more likely that these parties correctly read ECI's statement in its  xintended context. When the issue of the existence and scope of Ameritech extensions to serve ECI was  xraised before the Commission, ECI promptly filed information with the Commission detailing such extensions.  S- ` x72.` ` We next address the Cities' argument that ECI's statement concerning underutilization of  xPfacilities was false or misleading. We find ECI's statement in this regard to be a reasonable  xcharacterization of the facts. To the extent that Ameritech is prevented from providing its common  xcarriage video transport service to ECI, facilities will not be used to serve ECI and thus not utilized to  xkcapacity. Finally, to the extent that the Cities base a portion of their Joint Motion to Dismiss on the  xallegedly false statements of parties supporting ECI's Motion, we find that, while false statements in a  xproceeding are always of concern to the Commission, such statements do not serve as grounds to dismiss  xKthe motion of a party that did not render such statements. Accordingly, the Cities Joint Motion to Dismiss  x>ECI's motion for declaratory ruling based on a breach of ECI's duty of truthfulness and candor to the  xCommission is denied. For the foregoing reasons, we also deny the Cities alternate request for a hearing  x/for the purpose of determining whether ECI made material misrepresentations or omitted to disclose relevant information in its filings with the Commission.  S-  S-V.xCONCLUSION  S- ` Bx 73.` ` In granting ECI's motion for a declaratory ruling, we are cognizant that other similarly xsituated operators have embraced the same interpretation as ECI. In so stating, we caution other MVPDs  xjthat the instant decision is expressly limited to the facts before the Commission as presented by ECI. In  xthis regard, we note that: (i) there is absolute separation of ownership between ECI and Ameritech and  xthere is nothing more than the carrieruser relationship between them; (ii) ECI's facilities are located  xentirely on private property; (iii) Ameritech provides service to ECI pursuant to a tariffed common carrier  xservice; (iv) Ameritech has no editorial control over the content of ECI's programming; (v) the facilities  xprimarily used by Ameritech to provide service to ECI were not constructed at ECI's request; (vi) there  xLis capacity to serve several other programming providers; and (vii) ECI has committed to make its drops  S %-available to other programming providers.  S%- "&#,N(N(ZZn("  S-VI.xORDERING CLAUSES  S- ` ^x74.` ` Accordingly, IT IS ORDERED that the Motion for a Declaratory Ruling of Entertainment  S- xConnections, Inc. IS GRANTED as described in this Memorandum Opinion and Order, and in all other respects denied.  S8-  S- ` x75.` ` IT IS FURTHER ORDERED that the Joint Motion to Dismiss Proceeding filed by the  xjCity of Chicago, Illinois, Meridian Charter Township, Michigan, and the City of East Lansing, Michigan  S- IS DENIED. X` hp x !(#%'0*,.8135@8:proper deference to local officials is critical in light of the extensive physical facilities and substantial  xconstruction upon and use of public rightsofway. We remain committed to upholding the legitimate rights of local governments to manage their rights of way and receive compensation for their use.   xUnder the facts presented here, however, we believe the local government can and must exercise  xthese rights in the context of its relationship with the local exchange carrier that owns, installs, and  x=maintains the facilities in the public rights-of-way, rather than via franchising and regulation of the video  xprogrammer that makes no such use of the rights-of-way. We believe this reasoning, and today's decision,  x.follow from the judicial precedent cited in the order and are consistent with the decision by Congress, in  xkthe Telecommunications Act of 1996, to expand the "private cable" exception to the cable franchising  S - xmrequirement. See 47 U.S.C.  522(7)(B). Our decision makes clear our commitment to ensure competitive opportunity while safeguarding the discretion and responsibilities of local officials. #&a\  P6G;&P# "r#%,N(N(ZZ$"  S-  Nz DISSENTING STATEMENT OF COMMISSIONER GLORIA TRISTANI ă  S-In the Matter of Entertainment Connections, Inc., Motion for Declaratory Rulingă  S-   Sb-    xI dissent. Today's decision is wrong as a matter of law and misguided as a matter of policy.  xyMoreover, by concluding for the first time that a wireline video distribution service with a single editorial  xvoice need not obtain a cable franchise, I fear that the majority has opened a Pandora's box that will prove difficult and timeconsuming to close.  S- Legal Issues   xThe sole legal issue under review is whether ECI must obtain a Title VI cable franchise. ECI must obtain such a franchise if it is a "cable operator" providing "cable service" over a "cable system."  S -ECI is providing "cable service"   OxThis is not in dispute. As the majority correctly concludes, ECI is clearly providing oneway  SZ-transmission of video programming to subscribers.UZ {O-ԍSee Communications Act, Section 602(6).U  S -ECI is providing its cable service over a "cable system" x A cable system is:  ` pXxX` ` a facility, consisting of a set of closed transmission paths and associated signal  ` pgeneration, reception, and control equipment that is designed to provide cable  ` pservice which includes video programming and which is provided to multiple  S-subscribers within a community.KZ yO-ԍCommunications Act, Section 602(7).K `   xECI's video distribution system meets this standard. First, ECI uses a "set" of transmission paths  x(some owned, some leased) to transmit its video programming to subscribers. Just like any cable operator,  xthese transmission paths do not change and are dedicated to ECI's exclusive use. Second, these  S*- xtransmission paths are "closed" because they transmit via wires rather than radio waves.m* {O-ԍSee Definition of a Cable System, 5 FCC Rcd 7638, 7642 (1990). m Third, these  xclosed transmission paths have "associated signal generation, reception, and control equipment [i.e., ECI's  xheadend equipment] that is designed to provide cable service." Fourth, ECI's service includes video programming and is provided to multiple subscribers within a community.   |xThe conclusion that ECI is operating a cable system is consistent with the Commission's long xstanding definition of "cable system" based on technical integration: all technically integrated facilities":&|,N(N(ZZ "  S- xthat provide cable service from a single headend to multiple subscribers are deemed to be a cable system.~ {Oh- x,ԍSee Definition of a Cable Television System, 63 FCC 2d 956, 974 (1977) ("Under the new definition of system,  x;it should be clear that all trunk and distribution cable operating off one headend is a single cable television system").  xGiven the similarity between the Commission's definition and the definition codified in the 1984 Cable Act, the  {O- xJCommission recently reaffirmed its technical integration standard. See Roberts v. Houston Division of Time Warner  {O- xYEntertainment Company, L.P., 11 FCC Rcd 5999 at  15 (1996) (pre1984 definition based on the "actual technical  x;integration and functional characteristics common to all systems" has not been changed by the 1984 Cable Act, the 1992 Cable Act or the 1996 Telecommunications Act).  xLRather than apply a straightforward technical integration test, however, the majority gets sidetracked by  xthe fact that ECI leases part of its distribution system from Ameritech. Relying primarily on an inapt  xanalogy to video dialtone, the majority argues that the separation of ownership between headend (ECI)  S`-and transmission paths (Ameritech) precludes a finding that ECI is operating a cable system.@` yO - xԍVideo dialtone, as the majority notes, was a Commissioncreated framework that permitted telephone companies,  x+ consistent with the telcocable crossownership ban, to offer a common carrier platform to multiple independent video  x-programmers on a nondiscriminatory basis. (Thus, while the Commission developed video dialtone as a way to  xpermit telephone companies to participate in the video marketplace notwithstanding the statutory ban, today's  xkmajority has no such excuse. ECI is under no statutory restrictions preventing it from entering the video  x,programming marketplace.) Consumers who subscribed to the common carrier's video dialtone platform could then  xaccess any and all of the programming available from multiple independentlyowned headends through the telephone company's switched network.    NxThe majority's mistaken analogy to video dialtone is based on a failure to distinguish between use  S- xkof a common carrier's facilities and use of a common carrier platform.vZ yO- xJԍThis is also at the root of the majority's mistaken reliance on an early legislative draft of what evolved into the  xZopen video system framework. The cited legislative history discusses only whether a programmer on a common  {O.-carrier platform should be deemed a cable operator. v The distinction is critical. Use  S- x of a common carrier's facilities on a technically integrated basis i.e., where a single entity, like ECI,  xLprovides programming to subscribers from a single headend over a dedicated set of common carrier wires  xԩ has always been considered a cable system. Indeed, that is "channel service," a common carrier offering  SL - x]that requires the programmer leasing capacity to obtain a Title VI cable franchise.L 8 {O$- xԍSee NCTA v. FCC, 33 F.3d 66, 71 (1994); Northwestern Indiana Tel. Co. v. FCC, 872 F.2d 465 (D.C. Cir. 1989). By contrast, a  S$ - xcommon carrier video platform like video dialtone refers to a common carrier service on which multiple  xindependent programmers may obtain carriage on a nondiscriminatory basis and provide video  xprogramming directly to consumers. As the Commission recently stated, our rules required video dialtone service:  Xxto include at a minimum, a basic common carrier platform available to multiple video  S6- programmers on a nondiscriminatory basis, and a means by which enduser subscribers  S-could access any and all of the video programming offered.\ {OB%- x ԍMetropolitan Fiber Systems/New York, Inc. d/b/a MFS Telecom of New York and Metropolitan Fiber  {O &- xSystems/McCourt, Inc., 12 FCC Rcd 6901 at  2324 (1997) (emphasis added) (declining to find that MFS's video  xYtransport service was a common carrier platform where MFS provided no evidence that multiple programmers could"&,N(N(&"  {O- xmake uninterrupted use of its facilities to provide service to end user subscribers). See also In the Matter of  xKTelephone CompanyCable Television Cross Ownership Rules, Sections 63.5463.58, Second Report and Order,  {O"- xRecommendation to Congress, and Second Further Notice of Proposed Rulemaking, 7 FCC Rcd 5781 at  29, 89  {O- x,(1992) ("Second Video Dialtone Report and Order") ("The basic common carrier platform should provide multiple  x-video programmers nondiscriminatory access to a common carrier transmission service that will enable them to  {O~-deliver, and consumers to receive, video programming and video programming services") (emphasis added).  "'H,N(N(ZZ"Ԍ xԙPut differently, if channel service is like cable, a common carrier video platform is more like a video  xversion of a common carrier "900" service through which multiple independent entities can obtain nondiscriminatory access to consumers through the common carrier's network.   xThis distinction is significant and demonstrates why ECI is clearly operating a cable system. First,  xzas a technical matter, ECI's system resembles a cable system and not a common carrier platform. In a  x=key passage regarding video dialtone cited by the majority as supporting its conclusion, the D.C. Circuit stated:  Xx[w]here the "closed transmission paths" and "associated" headend equipment are owned  Sp- and controlled by different entities (as in video dialtone), and where different  #configurations of equipment would be used to move video programming from the different  S" - aproviders to the different customers, the concepts of a single, integrated system and  S -unified control are not present.Y H {O-ԍNCTA, 33 F.3d at 74 (emphasis added).Y    Nx In other words, in video dialtone there was no "single, integrated system and unified control" not  xMsimply because different entities owned the headends and closed transmission paths, but because the  xpresence of multiple headends meant that no technically integrated "system" was used to deliver  S4- xprogramming to subscribers (i.e., a different mix of facilities might be used to deliver video programming  S - x/to each subscriber). This is nothing like ECI's technically integrated system, where there is only one  S- xheadend "associated" with the closed transmission paths, and the same configuration of equipment is used  S-to deliver video programming to subscribers from a single provider. @ yO:- xԍThe unified nature of ECI's facility is not altered by the fact that ECI owns part of the facility and leases part  xof it from Ameritech. As the majority acknowledges, in codifying the definition of "cable system" in 1984, Congress  xintentionally omitted the Commission's previous requirement that all portions of a cable system be under common  xownership or control. This interpretation is consistent with the common carrier exemption from the definition of  x"cable system," which states that a common carrier facility regulated pursuant to Title II is not a cable system "except  xthat such facility shall be considered a cable system . . . to the extent such facility is used in the transmission of video programming directly to subscribers . . ." Section 602(7)(C).    lxNor can ECI's technically integrated system be shoehorned into the video dialtone model because  x=Ameritech may have additional fibers in the ground that could accommodate other programmers. Unlike  xvideo dialtone, Ameritech's service does not provide a common vehicle for multiple programmers to reach  x\subscribers to the platform. Rather, Ameritech provides dedicated transmission paths readymade  xchannel service, if you will for single programmers operating from single headends to reach only their  xown customers. Every ECI customer receives programming only from ECI's headend; every customer"( ,N(N(ZZ"  S- xkof a different service would receive programming from only that service's headend.  yOh- xYԍThe majority's assertion (at para. 58) that the presence of additional strands in Ameritech's fiber bundles means  xxthat the facilities used to serve ECI "do not benefit any particular programming provider" is completely baseless.  xThe dedicated capacity that ECI leases benefits only ECI. Further, given the high cost of fiber installation compared  xKto the cost of fiber, companies commonly lay more fiber than present demand requires. If the mere presence of  xKadditional fibers meant that none of the dedicated fibers could be attributed to a particular programmer, our rules would be easily evaded.  The requirement that multiple programmers be able to reach consumers was a key aspect of video dialtone:  Xx[W]e believe that such a requirement will prevent a telephone company from seeking to  3present ordinary channel service to a single video programmer and claiming that such a  construct is a sufficient video dialtone "platform" to enable it to provide to video  S-programmers unregulated enhanced services related to video programming. @ {O - xyԍSecond Video Dialtone Report and Order, 7 FCC Rcd 5781 at  30. See also In the Matter of Telephone  xKCompanyCable Television Cross Ownership Rules, Sections 63.5463.58, Memorandum Opinion and Order on  {O- xReconsideration and Third Notice of Proposed Rulemaking, 11 FCC Rcd 244 at  33 (1994) (without sufficient  xcapacity to permit multiple video programmers to provide service to consumers, "it is not clear that video dialtone  xservice would differ materially from channel service, which telephone companies were able to provide to cable  yO-operators even before we adopted the video dialtone framework").     xIn fact, there is no guarantee that residents in multiple dwelling unit buildings ("MDUs") served  S- xby ECI will even have a choice among separate service providers that may use Ameritech's service. At  Sr- xbest, Ameritech's service only gets programmers as far as a junction box within an MDU.{ r  yO- xԍThus, the majority's assertion (at para. 55) that "Ameritech also has capacity to serve multiple customers in  xYthe same MDUs" is not true. Ameritech's network strands service providers at a junction box within an MDU. Any  xprogrammer using Ameritech's service that wishes to obtain access to MDU residents must deal separately with the  {O&- xprivate property owner. See MFS, 12 FCC Rcd 6901 at  24 (no common carrier platform was established where system ended at a point of presence within a building). { An MDU  xzowner that selects ECI or a different provider (possibly for a share of the revenues), could prevent all  xother programmers using Ameritech's service from reaching MDU residents. Thus, an MDU resident may  S -have no choice at all among service providers it could be ECI or nothing. n yO- xԍECI's offer to make its drop wires available to its competitors (i.e., trade the drops back and forth), while commendable, may therefore be irrelevant.   _xSecond, ECI exercises the editorial discretion of a cable operator, not of a programmer on a  xcommon carrier platform. A traditional cable system is a "closed" system a single cable operator (using  xchannel service or otherwise) generally has broad editorial control over what programming is carried on  S2- xits system.2 {O#- xԍSee Second Video Dialtone Report and Order, 7 FCC Rcd 5781 at  15 ("hallmarks of acting as a traditional  xYcable operator" include: (1) selecting and packaging programming for sale to consumers; and (2) exercising editorial  {O*%- xcontrol over, or possessing an ownership interest in, video programming provided directly to consumers). See also  {O%- xFCC v. Midwest Video Corp., 440 U.S. 689, 707 (1979) ("cable operators exercise a 'significant amount of editorial discretion regarding what their programming will include'").  A common carrier platform, on the other hand, is an "open" system no one has control"2)|,N(N(ZZ"  xover the system's editorial content because the common carrier must provide access to all programmers  S- x=on a nondiscriminatory basis. yO@- xԍUnder certain specified circumstances, Title VI also denies cable operators the right to exclude others from its system (e.g., commercial leased access, mustcarry and PEG access channels). ECI's broad editorial discretion to select and package programming, and  xLto exclude others from its dedicated wire, is far more similar to cable service than video dialtone. Indeed,  x ECI will have even more editorial control than a traditional cable operator since, under the majority's  xdecision, ECI has no leased access, mustcarry or public, educational and governmental ("PEG") access obligations.   xThird, unlike a common carrier platform, it is feasible as a practical matter to regulate ECI's  S- xsystem as a cable system. As the NCTA court pointed out, it would be nonsensical to apply many of the  S- xstrictures of Title VI to a common carrier platform like video dialtone.F  {OZ -ԍSee NCTA, 33 F.3d at 75.F For instance, with multiple  xprogrammers providing service from separate headends over a single wire, it is difficult to imagine how  x|the system would comply with the basic service tier, commercial leased access and mustcarry  xrequirements. No such practical problems present themselves with ECI. As with channel service, it is  xnot difficult to determine which programmer must comply with the requirements of Title VI because there is only one entity providing programming to ECI's customers: ECI.   xFinally, the majority asserts that, even if ECI's system constitutes a "cable system," it qualifies  xfor the private cable exemption reserved for "a facility that serves subscribers without using any public  S2- xrights of way."D2 {O-ԍSee Section 602(7)(B).D The majority argues that it is Ameritech, not ECI, that is using the public rightsofway.  S - xLThis argument can be dismissed quickly. Under Title VI, the issue is not whether a particular entity uses  S- xthe public rights of way, but whether the facility uses the public rights of way.5D {O- xԍThe majority's reliance on AT&T Communications of the Southwest, Inc. v. City of Austin, Texas, 975 F. Supp.  x928 (W.D. Tex. 1997) is therefore misplaced. That case arose under Title II, not Title VI, and dealt with the issue  {OZ- x,of whether a nonfacilitiesbased reseller of a telephone company's local exchange service uses the public rightsof {O$- xway. But under Title VI, the issue is whether a technicallyintegrated facility uses the public rightsofway.  xMoreover, ECI is not merely reselling a service already offered by Ameritech, but is leasing dedicated video transport facilities in order to provide its own programming service to consumers.5 Were it otherwise,  xtraditional channel service would not have required a Title VI franchise. As described above, ECI owns  xpart of its video distribution facility and leases part of it, but there can be no question that this unified,  Sn- xendtoend facility uses the public rights of way. The majority's argument cannot withstand scrutiny under  SH-the plain language of the Act.H  yO!- xԍIn any event, it is those who select the programming and designate where it should be delivered who are using  {Or"- xZthe public rightsofway for purposes of Title VI. See NCTA, 33 F.3d at 7172 (telephone company that merely  xserves as transparent conduit for the programming of others is not engaged in the "transmission" of video  xprogramming under Title VI). Indeed, the majority acknowledges (at para. 53) that it is the programmers using  yO$-common carrier facilities that "generate and control" the signals from their headend to their subscribers.   "*t,N(N(ZZ%"Ԍ S-ECI is a "cable operator" xSection 602(5) defines a "cable operator" as:  ` pEXxX` ` any person or group of persons (A) who provides cable service over a cable  ` pDsystem and directly or through one or more affiliates owns a significant interest  ` pin such cable system, or (B) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system. `   xAlthough the majority does not reach this issue, I believe that ECI likely satisfies both tests by  xwhich an entity can be deemed a cable operator. First, ECI may own a "significant interest" in the  SH - xfacilities that constitute its cable system.AZH  yO - xԍUnder the Commission's rules, a "significant interest" is a cognizable interest for attributing interests in  {Ox - xbroadcast, cable and newspaper properties pursuant to Sections 73.3555, 73.3615, and 76.501. See 47 C.F.R.  76.5(bb).A Although Ameritech owns the closed transmission paths in the  xpublic rights of way, ECI owns all of the signal generation, reception, and control equipment, as well as  xthe portion of the closed transmission paths at each MDU (including all inside wiring, amplifiers, splitters,  xlockboxes, etc.). At the very least, this raises a substantial question of fact that cannot be resolved on the current record.   xMoreover, ECI controls or is responsible for (through its ownership and lease arrangements) the  xmanagement and operation of the cable system. ECI decides how many channels the cable system will  x=have and what programming services will be carried. ECI selects the MDUs that will be served, sets the  xprice for and markets the service, and bills subscribers for the service. If a subscriber wants to initiate  xservice or has a service outage, he or she would call ECI, not Ameritech. Ameritech essentially serves  xas a transparent conduit, transporting video signals at ECI's direction from ECI's headend to its customers.  Sh- xAs the NCTA court found, where an entity is using the facilities of a common carrier to transmit video  xprogramming to subscribers, it is the transmitting entity and not the common carrier that is engaged in  S-activity covered by Title VI.`Z {O- xKԍNCTA, 33 F.3d at 71.  See also TBA v. Ohio Bell Telephone Company, FCC 9764 (March 4, 1997) at  12  x(common carrier that simply processes incoming transmissions and passes those signals on to their designated destinations does not control the transmitted signals).`  S- Policy Considerations   xAlthough this case primarily turns on a legal interpretation of the Communications Act, several policy considerations also argue against granting ECI's petition.   xFirst, today's decision upsets the careful regulatory balance struck by Congress in the  xCommunications Act. The Act establishes several distinct methods for entering the video marketplace,  xeach with its own specific benefits and obligations. Even under the "reduced regulatory burdens" of the  S- xopen video system ("OVS") model,n  {O6&-ԍSee S. Rep. 104230, 104th Cong. 2d Sess. at 177 (Feb. 1, 1996).n Congress imposed various Title VI obligations including mustcarry,  x[PEG and the payment of a gross revenue fee to local authorities. ECI, by contrast, will have virtually all"b+,N(N(ZZ"  xyof the benefits of being a cable or OVS operator with none of the Title VI obligations. Regardless of how  xmuch we want to promote competition in the multichannel video marketplace, we cannot do so by creating loopholes in the regulatory scheme created by Congress.   xSecond, today's decision undermines the vital franchising role that Title VI reserves for local  xgovernments. Under Title VI, local franchising authorities can ensure that the needs of their particular  xcommunities are met, such as requiring that all neighborhoods be served and that capacity for PEG access  xybe provided. We should not lightly deprive local governments of the ability to protect their communities in this regard, and certainly not without a fuller analysis than is presented here.   xThird, today's decision poses a substantial risk of unintended consequences. For instance, I see  xno legal basis for limiting the decision solely to entities that want to serve MDUs. If ECI's system is not  xa "cable system," it would not be a cable system whether it serves MDUs or single family homes. The  xMnext case before us could be an overbuild of an entire cable franchise area that would look exactly like a cable system in every respect except that no Title VI obligations would apply.   {xMoreover, the next case may not involve a small entity like ECI; telephone companies, incumbent  xcable operators and others have already expressed an interest in obtaining similar treatment if ECI's  xpetition is granted. We should not underestimate the incentive that today's decision gives companies to  xartificially restructure their ownership arrangements to evade Title VI regulation. Unfortunately, by failing  xto articulate a clear legal or factual standard of review for future cases, the majority has done little to  S-discourage such behavior. #Xj\  P6G;9XP#