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                           Before the
                Federal Communications Commission
                     Washington, D.C. 20554

In the Matter of                )
                                )
Bluebonnet Rural Development Corporation     )    File No. EB-02-
TS-524
                                )
Operator of Cable Systems in:   )
                                )    
Birch Creek, Texas              )
Burton, Texas                   )
Carmine, Texas                  )
Chappell Hill, Texas            )
Dime Box, Texas                 )
Lexington, Texas                )
Smithville, Texas               )
                                )
Request for Waiver of Section 11.11(a) of the     )    
Commission's Rules              )    
                                        
                              ORDER 

Adopted:  May 9, 2003                   Released:  May 15, 2003

By the Chief, Technical  and Public Safety Division,  Enforcement 
Bureau:

1.        In this Order,  we grant  Bluebonnet Rural  Development 
  Corporation  (``Bluebonnet'') temporary,  36-month  waivers  of 
  Section 11.11(a) of the Commission's Rules (``Rules'') for  the 
  seven  above-captioned   cable  television  systems.    Section 
  11.11(a)  requires  cable  systems  serving  fewer  than  5,000 
  subscribers from  a headend  to either  provide national  level 
  Emergency  Alert System  (``EAS'') messages  on all  programmed 
  channels  or  install   EAS  equipment  and  provide  a   video 
  interrupt and  audio alert on all  programmed channels and  EAS 
  audio and video messages on at least one programmed channel  by 
  October 1, 2002.1

2.        The Cable Act of 1992  added new Section 624(g) to  the 
  Communications  Act  of 1934  (``Act''),  which  requires  that 
  cable  systems be  capable of  providing  EAS alerts  to  their 
  subscribers.2  In 1994, the Commission adopted rules  requiring 
  cable systems to participate in EAS.3  In 1997, the  Commission 
  amended the  EAS rules  to provide financial  relief for  small 
  cable systems.4  The Commission declined to exempt small  cable 
  systems  from the  EAS requirements,  concluding that  such  an 
  exemption would be  inconsistent with the statutory mandate  of 
  Section  624(g).5    However,  the   Commission  extended   the 
  deadline   for  cable   systems  serving   fewer  than   10,000 
  subscribers to  begin complying with the  EAS rules to  October 
  1, 2002,  and provided cable systems  serving fewer than  5,000 
  subscribers the option  of either providing national level  EAS 
  messages  on   all  programmed  channels   or  installing   EAS 
  equipment and  providing a video interrupt  and audio alert  on 
  all programmed channels and EAS audio and video messages on  at 
  least  one programmed  channel.6  In  addition, the  Commission 
  stated that  it would grant waivers of  the EAS rules to  small 
  cable  systems  on  a case-by-case  basis  upon  a  showing  of 
  financial  hardship.7   The Commission  indicated  that  waiver 
  requests must contain at least the following information:   (1) 
  justification for the waiver, with reference to the  particular 
  rule sections  for which  a waiver is  sought; (2)  information 
  about the financial status of the requesting entity, such as  a 
  balance sheet and  income statement for the two previous  years 
  (audited, if possible);  (3) the number of other entities  that 
  serve the  requesting entity's coverage area  and that have  or 
  are expected to  install EAS equipment; and (4) the  likelihood 
  (such  as proximity  or frequency)  of hazardous  risks to  the 
  requesting entity's audience.8

3.        Bluebonnet filed a  request for  a temporary,  36-month 
  waiver  of  Section 11.11(a)  for  the  seven  captioned  cable 
  systems  on September  13,  2002.   In support  of  its  waiver 
  request,  Bluebonnet  states that  these  cable  systems  serve 
  between  65  and  295  subscribers.    Based  on  price  quotes 
  provided by  EAS equipment vendors,  Bluebonnet estimates  that 
  it would  cost approximately  $70,000 to  purchase and  install 
  EAS equipment at  these systems.  Bluebonnet asserts that  this 
  cost will  impose a  substantial financial hardship  on it  and 
  provides its financial  statement for 2000 and 2001 in  support 
  of this  assertion.  In addition,  Bluebonnet submits that  its 
  subscribers will continue to have ready access to national  EAS 
  information from  other sources, including  its cable  systems. 
  In  this   regard,  Bluebonnet  notes   that  its   subscribers 
  currently have access to  national EAS messages on at least  57 
  percent of all programmed channels. Bluebonnet further  submits 
  that  its  subscribers will  have  access  to  EAS  information 
  through  over-the-air  reception of  broadcast  television  and 
  radio stations.  

4.        Based upon our review of  the financial data and  other 
  information   submitted  by   Bluebonnet,  we   conclude   that 
  temporary, 36-month waivers  of Section 11.11(a) for the  seven 
  captioned  systems are  warranted.9    In particular,  we  find 
  that  the estimated  $70,000 cost  of  EAS equipment  for  this 
  small  cable  system  could  impose  a  financial  hardship  on 
  Bluebonnet.  

5.        We note that  the Commission recently  amended the  EAS 
  rules  to  permit  cable  systems  serving  fewer  than   5,000 
  subscribers  to   install  FCC-certified  decoder-only   units, 
  rather  than both  encoders  and  decoders, if  such  a  device 
  becomes  available.10    Based  on   comments  from   equipment 
  manufacturers, we  anticipate that such  a decoder-only  system 
  could  result  in  significant  cost  savings  to  small  cable 
  systems.11  

6.        Accordingly, IT IS ORDERED  that, pursuant to  Sections 
  0.111, 0.204(b)  and 0.311  of the  Rules,12  Bluebonnet  Rural 
  Development  Corporation  IS   GRANTED  a  waiver  of   Section 
  11.11(a) of  the Rules  until October  1, 2005   for the  seven 
  captioned cable television systems.

7.        IT IS FURTHER ORDERED that Bluebonnet Rural Development 
  Corporation place a copy of this waiver in its system files.

8.        IT IS FURTHER ORDERED that  a copy of this Order  shall 
  be sent by  Certified Mail Return Receipt Requested to  counsel 
  for Bluebonnet  Rural Development  Corporation, Christopher  C. 
  Cinnamon, Esq.,  Cinnamon Mueller, 307  North Michigan  Avenue, 
  Suite 1020, Chicago, Illinois 60601.

                         FEDERAL COMMUNICATIONS COMMISSION

                         


                         Joseph P. Casey
                         Chief, Technical and Public Safety 
Division
                         Enforcement Bureau
_________________________

  1 47 C.F.R. § 11.11(a).

  2 Cable Television  Consumer Protection and Competition Act  of 
1992, Pub. L. No. 102-385, § 16(b), 106 Stat. 1460, 1490  (1992).  
Section 624(g) provides that  ``each cable operator shall  comply 
with such standards as the  Commission shall prescribe to  ensure 
that viewers of video programming  on cable systems are  afforded 
the same emergency  information as is  afforded by the  emergency 
broadcasting system pursuant to Commission regulations ....''  47 
U.S.C. § 544(g).  

  3 Amendment  of Part 73, Subpart  G, of the Commission's  Rules 
Regarding the Emergency  Broadcast System, Report  and Order  and 
Further Notice of Proposed Rule Making, FO Docket Nos. 91-171/91-
301, 10  FCC  Rcd  1786  (1994)  (``First  Report  and  Order''), 
reconsideration granted in part, denied in part, 10 FCC Rcd 11494 
(1995).

  4 Amendment  of Part 73, Subpart  G, of the Commission's  Rules 
Regarding the  Emergency  Broadcast  System,  Second  Report  and 
Order, FO  Docket Nos.  91-171/91-301, 12  FCC Rcd  15503  (1997) 
(``Second Report and Order'').

  5 Id. at 15512-13.

  6 Id. at 15516-15518.

  7 Id. at 15513.

  8 Id. at 15513, n. 59.

  9 The waivers will  extend from October 1, 2002, until  October 
1, 2005.    Additionally,  we clarify  that  the waivers  we  are 
granting  also   encompass  the   EAS  testing   and   monitoring 
requirements.  

  10 Amendment  of Part  11 of the  Commission's Rules  Regarding 
the Emergency Alert System,  EB Docket 01-66, FCC  02-64 at ¶  71 
(released February 26, 2002).

  11 One manufacturer  estimated that an EAS decoder-only  system 
can reduce the cost by 64% over what a cable operator would spend 
for an encoder/decoder unit.  Id. at ¶ 70.

  12 47 C.F.R. §§ 0.111, 0.204(b) and 0.311.