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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
SM Cable Holdings, L.L.C. ) File No. EB-02-TS-301
)
Operator of Cable Systems in: )
)
Andalusia (Heath), Alabama )
Ashville, Alabama )
Barnwell, Alabama )
Blount County, Alabama )
Good Hope, Alabama )
Frazier Park, California )
Lake Almanor, California )
Port St. Joe, Florida )
Soda Springs, Idaho )
Winnemucca, Nevada )
Shady Cove, Oregon )
Kemmerer, Wyoming )
)
Request for Waiver of Section 11.11(a) of the )
Commission's Rules )
ORDER
Adopted: February 6, 2004 Released: February
10, 2004
By the Director, Office of Homeland Security, Enforcement Bureau:
1. In this Order, we extend the temporary, 12-month
waivers of Section 11.11(a) of the Commission's Rules
(``Rules'') previously granted to SM Cable Holdings, L.L.C.
(``SM Cable'') for the 12 above-captioned cable television
systems for an additional nine months.1 Section 11.11(a)
requires cable systems serving fewer than 5,000 subscribers
from a headend to either provide national level Emergency
Alert System (``EAS'') messages on all programmed channels or
install EAS equipment and provide a video interrupt and audio
alert on all programmed channels and EAS audio and video
messages on at least one programmed channel by October 1,
2002.2
2. The Cable Act of 1992 added new Section 624(g) to the
Communications Act of 1934 (``Act''), which requires that
cable systems be capable of providing EAS alerts to their
subscribers.3 In 1994, the Commission adopted rules requiring
cable systems to participate in EAS.4 In 1997, the Commission
amended the EAS rules to provide financial relief for small
cable systems.5 The Commission declined to exempt small cable
systems from the EAS requirements, concluding that such an
exemption would be inconsistent with the statutory mandate of
Section 624(g).6 However, the Commission extended the
deadline for cable systems serving fewer than 10,000
subscribers to begin complying with the EAS rules to October
1, 2002, and provided cable systems serving fewer than 5,000
subscribers the option of either providing national level EAS
messages on all programmed channels or installing EAS
equipment and providing a video interrupt and audio alert on
all programmed channels and EAS audio and video messages on at
least one programmed channel.7 In addition, the Commission
stated that it would grant waivers of the EAS rules to small
cable systems on a case-by-case basis upon a showing of
financial hardship.
3. On July 11, 2002, SM Cable filed a request for
temporary, 36-month waivers of Section 11.11(a) for 180 small,
rural cable systems in the states of Alabama, California,
Florida, Georgia, Idaho, Montana, Nevada, Oregon, South
Carolina, Utah and Wyoming. In its waiver request, SM Cable
stated that 168 cable systems served between 16 and 953
subscribers and 12 cable systems served between 1,029 and
2,792 subscribers. In support of its waiver request, SM Cable
estimated that it would cost approximately $7,300 to install
EAS equipment at each of the 180 cable systems for a total
cost of $1,314,000. SM Cable asserted that this cost would
impose a substantial financial hardship on it. On January 13,
2003, we granted SM Cable temporary, 36-month waivers of
Section 11.11(a) for 168 cable systems and temporary, 12-month
waivers of Section 11.11(a) for 12 cable systems.8 We
concluded that the financial data and other information
submitted by SM Cable at that time did not justify a waiver
period of longer duration for the 12 cable systems.
4. On September 16, 2003, SM Cable filed a request for a
temporary, 24-month extension of the temporary, 12-month
waivers granted in the Waiver Order for the 12 captioned cable
systems. SM Cable states that it was in a state of financial
crisis and that both prior to and going forward from the date
of the initial waiver request it attempted to sell all of its
cable systems. SM Cable further states that it sold some of
its assets in July 2002 and some in January 2003. SM Cable
notes that it is currently operating under Chapter 11
bankruptcy pursuant to a Court-approved plan.9 Additionally,
SM Cable asserts that the Bankruptcy Court will conduct a
hearing on September 24, 2003 to approve the final asset
purchase agreement. In a January 15, 2004 report, SM Cable
affirms that the Bankruptcy Court approved the final asset
purchase agreement. SM Cable anticipates that the sale of the
remaining 12 systems will occur in February 2004.
5. Based on the information provided by SM Cable, we
conclude that 24-month extensions of the temporary waivers of
Section 11.11(a) previously granted to the 12 captioned cable
systems are not warranted. Instead, we conclude that
temporary, nine-month extensions of the waivers of Section
11.11(a) for these cable systems are warranted.10
Furthermore, in view of the serious public safety objectives
underlying the EAS rules, we do not think that it would be
appropriate to automatically extend the temporary waivers
granted to SM Cable's systems to any subsequent buyer
irrespective of its size or financial status. Rather, we will
afford any such buyer 30 days from the date the sale of any
system or systems is consummated to request a waiver of
Section 11.11(a), submitting the information necessary to
support a financial hardship showing. Any buyer that does not
file a waiver request will be required to come into compliance
with the EAS rules by the end of the 30-day period.
6. Accordingly, IT IS ORDERED that, pursuant to Sections
0.111, 0.204(b), 0.311 of the Rules,11 SM Cable Holdings,
L.L.C. IS GRANTED a waiver extension of Section 11.11(a) of
the Rules until July 1, 2004 for the 12 captioned cable
television systems.
7. IT IS FURTHER ORDERED that SM Cable Holdings, L.L.C.
place a copy of this waiver extension 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 SM Cable Holdings, L.L.C., Sharon O'Malley Monahan, Esq.,
Fleishman and Walsh, L.L.P., 1400 Sixteenth Street, N.W.,
Washington, D.C. 20036.
FEDERAL COMMUNICATIONS COMMISSION
James A. Dailey
Director, Office of Homeland Security
Enforcement Bureau
_________________________
1 SM Cable Holdings, L.L.C., 18 FCC Rcd 1 (Enf. Bur., Tech. &
Pub. Safety Div., 2002) (``Waiver Order'').
2 47 C.F.R. § 11.11(a).
3 Cable Television Consumer Protection and Competition Act of
1992, Pub. L. No. 102-385, § 16(b), 106 Stat. 1460, 1490 (1992).
Section 624(g) provides that ``each cable operator shall comply
with such standards as the Commission shall prescribe to ensure
that viewers of video programming on cable systems are afforded
the same emergency information as is afforded by the emergency
broadcasting system pursuant to Commission regulations ....'' 47
U.S.C. § 544(g).
4 Amendment of Part 73, Subpart G, of the Commission's Rules
Regarding the Emergency Broadcast System, Report and Order and
Further Notice of Proposed Rule Making, FO Docket Nos. 91-171/91-
301, 10 FCC Rcd 1786 (1994), reconsideration granted in part,
denied in part, 10 FCC Rcd 11494 (1995) (``Report and Order'').
5 Amendment of Part 73, Subpart G, of the Commission's Rules
Regarding the Emergency Broadcast System, Second Report and
Order, FO Docket Nos. 91-171/91-301, 12 FCC Rcd 15503 (1997).
6 Id. at 15512-13.
7 Id. at 15516-15518.
8 18 FCC Rcd at 1.
9 On May 9, 2003, SM Cable Holdings, L.L.C. filed for Chapter
11 bankruptcy with the United States Bankruptcy Court, the
District of Delaware.
10 These temporary waivers will extend from October 1, 2003,
until July 1, 2004. We clarify that the waivers we are granting
also encompass the EAS testing and monitoring requirements.
11 47 C.F.R. §§ 0.111, 0.204(b), 0.311.