FCC Record, Volume 27, No. 5, Pages 3728 to 4696, April 9 - April 27, 2012 Page: 3,764
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2. In the absence of a demonstration to the contrary, cable systems are presumed not to be
subject to effective competition,9 as that term is defined by Section 623(1) of the Communications Act of
1934, as amended ("Communications Act") and Section 76.905 of the Commission's rules.' In the
litigation that ended in 2001, Comcast's predecessor established that it was subject to one form of
effective competition, the so-called local exchange carrier, or "LEC," effective competition test. As
defined in Section 623(1)(1)(D) of the Communications Act, a cable system is subject to LEC effective
"a local exchange carrier or its affiliate (or any multichannel video programming
distributor ["MVPD"] using the facilities of such carrier or its affiliate) offers video
programming services directly to subscribers by any means (other than direct-to-home
satellite services) in the franchise area of an unaffiliated cable operator which is
providing cable service in that franchise area, but only if the video programming services
so offered in that area are comparable to the video programming services provided by the
unaffiliated cable operator in that area.""
3. The Commission determined that a cable operator seeking to end basic rate regulation by
demonstrating LEC effective competition make a number of showings. First, the cable operator must
show that the alleged LEC (or its affiliate or any MVPD using the facilities of the LEC or its affiliate) fits
the definition of a local exchange carrier set forth in the Communications Act, which in pertinent part
provides that a "local exchange carrier is "any person that is engaged in the provision of telephone
exchange service or exchange access."" Second, the LEC's video service area must have a substantial
geographic overlap with the incumbent cable operator's franchise area.'3 If the LEC's service is offered
to only a geographically limited market within the franchise area, there is no "substantial overlap" and the
LEC test is not satisfied.'4 Third, the LEC must have actually begun offering video service to consumers,
and they must be "reasonably aware" that they may purchase the LEC's video service.'5 Finally, the LEC
must be offering video service that is "comparable" to the incumbent cable operator's.'6
9 47 C.F.R. 76.906.
10 See 47 U.S.C. 543(1); 47 C.F.R. 76.905.
" 47 U.S.C. 543(I)(1)(D); 47 C.F.R. 76.905(b)(4).
12 47 U.S.C. 153(26). The Communications Act defines the term "telecommunications service" as "the offering of
telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to
the public, regardless of the facilities used." 47 U.S.C. 153(46). The Communications Act defines the term
"'telephone exchange service" as "(A) service within a telephone exchange, or within a connected system of telephone
exchanges within the same exchange area operated to furnish to subscribers intercommunicating service of the
character ordinarily furnished by a single exchange, and which is covered by the exchange service charge, or (B)
comparable service provided through a system of switches, transmission equipment, or other facilities (or combination
thereof) by which a subscriber can originate and terminate a telecommunications service." 47 U.S.C. 153(47).
"3 See Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 14 FCC Rcd 5296,
5303, 1 10 (1999) ("Cable Reform Order"). Although the Commission established that the LEC's video service area
must substantially overlap the incumbent cable operator's franchise area, the LEC test for effective competition,
unlike some other tests for effective competition set forth in the Communications Act, does not contain specific
homes passed or subscriber penetration levels. Id; see 47 U.S.C. 543(1)(1 )(A) & (B) (setting forth the "low
penetration" and "competing provider" tests for effective competition).
" Cable Reform Order, 14 FCC Rcd at 5304, 12.
'5 d at 14 FCC Red at 5305, 13.
16 The Commission has held that a LEC's video service is comparable if it includes "at least 12 channels of video
programming, including at least one channel of nonbroadcast service programming." 47 C.F.R. 76.905(g); 14
FCC Red at 5306-08, 16-18.
Federal Communications Commission
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United States. Federal Communications Commission. FCC Record, Volume 27, No. 5, Pages 3728 to 4696, April 9 - April 27, 2012, book, April 2012; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc102307/m1/53/: accessed October 16, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.