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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) File No. EB-07-SE-352
Oceanic Time Warner Cable, ) Acct. No. 200832100074
a subsidiary of Time Warner Cable, Inc. ) FRN No. 0018049841
)
order
Adopted: September 29, 2009 Released: September 29, 2009
By the Deputy Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau ("Bureau") and Time Warner Cable, Inc.
("TWC"). The Consent Decree terminates an investigation by the Bureau
into TWC's possible violations of Section 76.1603(c) of the
Commission's Rules, regarding provision of advanced written notice to
subscribers and local franchise authorities prior to implementing any
service change.
2. The Bureau and TWC have negotiated the terms of the Consent Decree
that resolve this matter. A copy of the Consent Decree is attached
hereto and incorporated by reference.
3. After reviewing the terms of the Consent Decree and evaluating the
facts before us, we find that the public interest would be served by
adopting the Consent Decree which terminates the investigation.
4. In the absence of material new evidence relating to this matter, we
conclude that our investigation raises no substantial or material
questions of fact as to whether TWC possesses the basic
qualifications, including those related to character, to hold or
obtain any Commission license or authorization.
5. Accordingly, IT IS ORDERED that, pursuant to Sections 4(i) and
503(b)of the Communications Act of 1934, as amended, and Sections
0.111 and 0.311 of the Commission's Rules, the Consent Decree attached
to this Order IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
7. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree
shall be sent by first class mail and certified mail, return receipt
requested, to counsel for Time Warner Cable, Inc.: Matthew A. Brill,
Latham & Watkins LLP, 555 11th Street, N.W., Suite 1000, Washington,
DC 20004, and Arthur H. Harding, Fleischman & Harding LLP, 1255 23rd
Street, N.W., Eighth Floor, Washington, DC 20037.
FEDERAL COMMUNICATIONS COMMISSION
Suzanne M. Tetreault
Deputy Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-07-SE-352
)
Oceanic Time Warner Cable, ) NAL/Acct. No. 200832100074
a subsidiary of Time Warner Cable, Inc. )
) FRN 0018049841
CONSENT DECREE
The Enforcement Bureau ("Bureau") and Time Warner Cable Inc. ("TWC"), by
their authorized representatives, hereby enter into this Consent Decree
for the purpose of terminating the Bureau's investigation into whether TWC
violated Section 76.1603(c) of the Commission's Rules ("Rules") by failing
to provide advance written notice to local franchising authorities
("LFAs") prior to the deployment of switched digital video ("SDV")
technology throughout various cable systems.
I. Definitions
1. For the purposes of this Consent Decree, the following definitions
shall apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C.
S:151 et seq.
b. "Adopting Order" means an Order of the Bureau adopting the terms of
this Consent Decree without change, addition, deletion, or
modification.
c. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
d. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
e. "Effective Date" means the date on which the Bureau releases the
Adopting Order.
f. "Hawaii LFA" means the Hawaii Department of Commerce and Consumer
Affairs, Cable Television Division.
g. "Investigation" means the investigation regarding whether TWC may have
violated Section 76.1603 of the Rules by failing to provide timely
written notice to LFAs where TWC deployed SDV technology during the
period between September 26, 2005 and the Effective Date.
h. "Oceanic" means the Oceanic Time Warner Cable division of TWC.
i. "Parties" means TWC and the Bureau.
j. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
k. "TWC" means Time Warner Cable Inc., its predecessors-in-interest and
corporate successors-in-interest.
l. "UDCPs" are unidirectional digital cable products.
II. Background
8. Section 76.1603(c) of the Rules requires cable systems to provide
thirty (30) days written notice to both subscribers and LFAs before
implementing any rate or service change. In late 2007, the Bureau
began investigating TWC's use of SDV technology to deliver certain
cable programming, including the extent to which TWC provided advance
notice to subscribers and LFAs where its use of SDV technology to
deliver programming that was previously transmitted in a one-way
format rendered such programming inaccessible via unidirectional
digital cable products ("UDCPs") absent additional equipment. In its
responses to Bureau inquiries, TWC indicated that it had not provided
advance written notice to each LFA in areas where subscribers with
UDCPs were affected by such SDV deployments.
9. On August 22, 2008, the Bureau issued a Notice of Apparent Liability
for Forfeiture against TWC for its apparent violation of Section
76.1603(c), in failing to provide the Hawaii LFA with at least 30
days' advance written notice before deploying SDV technology in the
Oceanic cable system on September 24, 2007. According to TWC, on or
about September 3, 2008, it began notifying LFAs throughout its
service areas in advance of using SDV technology to deliver
programming that was previously transmitted in a one-way format. On
September 14, 2008, TWC filed a response to the LFA Notice NAL
contesting the Bureau's finding of apparent liability.
10. On January 19, 2009, the Bureau issued a Forfeiture Order finding TWC
liable for violating Section 76.1603(c) with respect to the Hawaii
LFA, concluding that TWC's use of SDV technology to deliver
programming that was previously transmitted in a one-way format
constitutes a "change in service" within the meaning of the rule.
Pursuant to Section 503(b)(1)(B) of the Act, the Bureau ordered TWC to
pay a forfeiture in the amount of seven thousand five hundred dollars
($7,500). TWC filed a Petition for Reconsideration and a Request for
Stay of the Forfeiture Order on February 18, 2009. On March 9, 2009,
the Parties entered into a Tolling Agreement to provide additional
time for discussions regarding the facts surrounding possible
violations of Section 76.1603(c) without expiration of the applicable
statute of limitations.
11. On June 26, 2009, the Commission issued the SDV Order on Review, which
affirmed the Bureau's finding that TWC violated Section 76.1603(c) and
its imposition of a forfeiture, while vacating the other findings of
liability arising from TWC's use of SDV technology. On July 27, 2009,
TWC filed a Petition for Reconsideration and a Request for Stay of the
SDV Order on Review with respect to the finding of liability under
Section 76.1603(c) and the associated forfeiture. On August 5, 2009,
the Parties extended the Tolling Agreement to allow for further
discussions regarding a consensual resolution of this proceeding.
III. Terms of Agreement
12. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by
incorporation of such provisions by reference in the Adopting Order
without change, addition, modification, or deletion.
13. Jurisdiction. TWC agrees that the Bureau has jurisdiction over it and
the matters contained in this Consent Decree and has the authority to
enter into and adopt this Consent Decree.
14. Effective Date; Violations. The Parties agree that this Consent Decree
shall become effective on the date on which the Bureau releases the
Adopting Order. Upon release, the Adopting Order and this Consent
Decree shall have the same force and effect as any other Order of the
Bureau. Any violation of the Adopting Order or of the terms of this
Consent Decree shall constitute a separate violation of a Bureau
Order, entitling the Bureau to exercise any rights and remedies
attendant to the enforcement of a Commission Order.
15. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further
expenditure of public resources, the Bureau agrees to terminate the
Investigation. In consideration for the termination of the
Investigation, TWC agrees to the terms, conditions, and procedures
contained herein. The Bureau further agrees that in the absence of new
material evidence, the Bureau will not use the facts developed in this
Investigation, or the existence of this Consent Decree, to institute,
on its own motion, any new proceeding, formal or informal, or take any
action on its own motion against TWC concerning the matters that were
the subject of the Investigation. The Bureau also agrees that it will
not use the facts developed in the Investigation, or the existence of
this Consent Decree, to institute on its own motion any proceeding,
formal or informal, or take any action on its own motion against TWC
with respect to TWC's basic qualifications, including its character
qualifications, to be a Commission licensee or to hold Commission
licenses or authorizations.
16. Withdrawal of TWC Filings. TWC agrees to withdraw its Petition for
Reconsideration and its Request for Stay of the Commission's SDV Order
on Review within ten (10) calendar days of the Effective Date.
17. Future Compliance. For purposes of settling the matters set forth
herein, TWC agrees to make the following commitments regarding its
compliance with Section 76.1603:
(a) Compliance Measures.
(1) TWC shall provide advance written notice pursuant to Section 76.1603
to each LFA where its use of SDV technology to deliver programming that
was previously transmitted in a one-way format renders such programming
inaccessible via UDCPs absent additional equipment.
(2) TWC has instituted internal compliance measures in each of its
operating units in which deployment of SDV is contemplated to ensure that
adequate procedures are implemented and executed in order to satisfy the
notice requirements of Section 76.1603 of the Rules. Specifically, TWC has
developed procedures to ensure that it notifies all affected subscribers
and all relevant LFAs at least 30 days in advance of using SDV technology
to deliver programming that was previously transmitted in a one-way
format, including the following:
-- Before one of TWC's operating divisions or regions initiates a
deployment of SDV technology, it must submit detailed plans to TWC's
corporate SDV team for approval;
-- Where such planned SDV deployments involve the delivery of programming
services previously made available in a one-way format, the division or
region must prepare customized letters to UDCP subscribers and LFAs using
letter templates prepared by TWC's Law Department;
-- The revised notice letters then must be submitted for approval by the
Law Department, and final approval for the SDV deployment plan cannot be
obtained until the updated notice letters have undergone this review.
-- Following approval of the notice letters, they must be distributed at
least 30 days before the SDV deployment plan may be executed.
-- As a further safeguard, TWC's divisions and regions are required to
provide copies of LFA and customer notices to the corporate SDV team once
they have been mailed out.
(3) TWC will file a compliance report with the Commission on October 1,
2010. The compliance report shall include a compliance certificate from
an officer, as an agent of TWC, stating that the officer has personal
knowledge that TWC has maintained operating procedures intended to ensure
compliance with this Consent Decree, together with an accompanying
statement explaining the basis for the officer's compliance
certification. The compliance report shall be submitted to Chief,
Spectrum Enforcement Division, Enforcement Bureau, Federal Communications
Commission, 445 12th Street, S.W., Washington, D.C. 20554.
(b) Termination Date. Unless otherwise stated, the requirements of this
Consent Decree will expire twenty-four (24) months after the Effective
Date. The termination of this Consent Decree shall not have any effect on
TWC's independent obligation to comply with Section 76.1603, to the extent
that it remains applicable.
18. Voluntary Contribution. TWC agrees that it will make a voluntary
contribution to the United States Treasury in the amount of
twenty-five thousand dollars ($25,000). The payment shall be made
within thirty (30) calendar days after the Effective Date. The payment
must be made by check or similar instrument, payable to the order of
the Federal Communications Commission. The payment must include the
Account Number and FRN Number referenced in the caption to the
Adopting Order. Payment by check or money order may be mailed to
Federal Communications Commission, P.O. Box 979088, St. Louis, MO
63197-9000. Payment by overnight mail may be sent to U.S. Bank -
Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St.
Louis, MO 63101. Payment by wire transfer may be made to ABA Number
02130004, receiving bank TREAS/NYC, and account number 27000001. For
payment by credit card, an FCC Form 159 (Remittance Advice) must be
submitted. When completing the FCC Form 159, enter the Account number
in block number 23A (call sign/other ID), and enter the letters "FORF"
in block number 24A (payment type code). TWC will also send electronic
notification on the date said payment is made to JoAnn Lucanik at
JoAnn.Lucanik@fcc.gov and Kevin M. Pittman at Kevin.Pittman@fcc.gov.
19. Waivers. TWC waives any and all rights it may have to seek
administrative or judicial reconsideration, review, appeal or stay, or
to otherwise challenge or contest the validity of this Consent Decree
and the Adopting Order, provided the Bureau issues an Adopting Order
adopting the Consent Decree without change, addition, modification or
deletion. TWC shall retain the right to challenge Commission
interpretation of the Consent Decree or any terms contained herein. If
either Party (or the United States on behalf of the Commission) brings
a judicial action to enforce the terms of the Adopting Order, neither
TWC nor the Commission shall contest the validity of the Consent
Decree or the Adopting Order, and TWC shall waive any statutory right
to a trial de novo. TWC hereby agrees to waive any claims it may
otherwise have under the Equal Access to Justice Act, 5 U.S.C. S: 504
and 47 C.F.R. S: 1.1501 et seq., relating to the matters addressed in
this Consent Decree.
20. Invalidity. In the event that this Consent Decree in its entirety is
rendered invalid by any court of competent jurisdiction, it shall
become null and void and may not be used in any manner in any legal
proceeding.
21. Subsequent Rule or Order. The Parties agree that if any provision of
the Consent Decree conflicts with any subsequent Rule or Order adopted
by the Commission (except an Order specifically intended to revise the
terms of this Consent Decree to which TWC does not expressly consent)
that provision will be superseded by such Commission Rule or Order.
22. Successors and Assigns. TWC agrees that the provisions of this Consent
Decree shall be binding on its successors, assigns, and transferees.
23. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties, and
shall discharge any and all liability arising from the Investigation,
including the forfeiture upheld by the SDV Order on Review. The
Parties further agree that this Consent Decree is for settlement
purposes only and does not constitute an adjudication on the merits or
a factual or legal finding or determination regarding any compliance
or noncompliance with the requirements of the Act or the Commission's
Rules and Orders and that by agreeing to this Consent Decree, TWC does
not admit or deny noncompliance, violation or liability for violating
the Act or Rules in connection with the matters that are the subject
of this Consent Decree.
24. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
25. Paragraph Headings. The headings of the Paragraphs in this Consent
Decree are inserted for convenience only and are not intended to
affect the meaning or interpretation of this Consent Decree.
26. Authorized Representative. Each Party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
27. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed
and delivered, shall be an original, and all of which counterparts
together shall constitute one and the same fully executed instrument.
Suzanne M. Tetreault
Deputy Chief, Enforcement Bureau
Date
Steven Teplitz
Senior Vice President, Government Relations
Time Warner Cable Inc.
Date
47 C.F.R. S: 76.1603(c).
47 U.S.C. S:S: 154(i), 503(b).
47 C.F.R. S:S: 0.111, 0.311.
47 C.F.R. S: 76.1603(c).
Id.
See, e.g., Letter from Arthur H. Harding, Fleischman and Harding LLP and
Matthew A. Brill,, Latham & Watkins LLP, Counsel for Time Warner Cable,
Inc. to Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission (Nov. 30, 2007)
("LOI Response").
Oceanic Time Warner Cable, a subsidiary of Time Warner Cable, Inc., Notice
of Apparent Liability for Forfeiture, 23 FCC Rcd 12804 (Enf. Bur. 2008)
("LFA Notice NAL").
Time Warner Cable Inc. Response to NAL and Request for Cancellation of
Forfeiture, File No. EB-07-SE-352 (filed Sept. 14, 2008).
Oceanic Time Warner Cable, a subsidiary of Time Warner Cable, Inc.,
Forfeiture Order, 24 FCC Rcd 960 (2009) ("Forfeiture Order").
47 U.S.C. S: 503(b)(1)(B).
Forfeiture Order at P: 11.
Petition for Reconsideration of Time Warner Cable Inc., File No.
EB-07-SE-352 (filed Feb. 18, 2009); Time Warner Cable Inc. Request for
Stay Pending Resolution of Petition for Reconsideration, File No.
EB-07-SE-352 (filed Feb. 18, 2009).
Tolling Agreement, File No. EB-07-SE-352, executed by and between Kathryn
S. Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau,
Federal Communications Commission, and Jeffrey Zimmerman, Senior
Vice-President and Deputy General Counsel, Time Warner Cable, Inc. (March
9, 2009) ("Tolling Agreement").
See Oceanic Time Warner Cable, a subsidiary of Time Warner Cable, Inc.,
Order on Review, 24 FCC Rcd 8716, P:P: 16-24 (2009) ("SDV Order on
Review"), petitions for recon. and stay pending.
Petition for Reconsideration of Time Warner Cable Inc., File No.
EB-07-SE-352 (filed July 27, 2009) ("Petition for Reconsideration"); Time
Warner Cable Inc. Request for Stay Pending Resolution of Petition for
Reconsideration, File No. EB-07-SE-352 (filed July 27, 2009) ("Request for
Stay").
Tolling Agreement, File No. EB-07-SE-352, executed by and between Kathryn
S. Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau,
Federal Communications Commission, and Steven N. Teplitz, Senior
Vice-President, Government Affairs, Time Warner Cable, Inc. (August 5,
2009).
In this regard, TWC will not be obligated to report this matter, including
as an adverse finding or adverse final action, on any Commission
application or form.
Federal Communications Commission DA 09-2136
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