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Lorrie Rempher
From: Michael Bradley [bradley@bradleyguzzetta.com]
Sent: Tuesday, April 08, 2008 1:32 PM
To: Lorrie Rempher
Subject: Auburn - Petition for Effective Competition
Importance: High
Lorrie,
Comcast served the City of Auburn with a Petition for Special Relief. The Petition claims that Comcast is subject
to "effective competition." Once the Petition is published, the City has only 20 days to respond to the Petition. It
does not appear to have been published yet, but will likely be published within the next two weeks. The Petition
claims that the City has effective competition in the delivery of video services because they are being served by
Satellite providers in excess of 15% of its households.
If the FCC determines that effective competition exists in a particular franchise area, the following occurs:
the cable operator is no longer required to file rate forms with a local franchising authority (i.e., the Form
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1240 (calculating basic service rates) and the Form 1205 (calculating rates and charges for equipment and
installations ));
local franchising authorities can no longer order rate reductions and refunds for basic service, equipment
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and installations;
a uniform rate structure is no longer required throughout the franchise area. See 47 U.S.C. Sec. 543(d).
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In other words, Comcast will be able to charge what it wants, where it wants within its franchise territory
(unless it can be established that Comcast is unlawfully engaging in rate discrimination). This can lead to
inconsistent, arbitrary and confusing pricing; and
the federal buy-through tier prohibition no longer applies. See 47 C.F.R. Sec. 76.984. The buy-through
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tier prohibition prevents Comcast from requiring customers to subscribe to any service, other than basic
service, as a condition to subscribing to programming offered on a per channel or per program charge
basis. Once this prohibition is eliminated, Comcast could require subscribers to subscribe to multiple
services before they are permitted to purchase premium channels or pay-per-view programming (e.g., a
consumer could be required to pay for expanded basic in order to subscribe to HBO).
Thus, there are serious legal and practical ramifications that flow from any FCC finding that effective competition
exists in a franchise area. This is why many communities choose to fight a petition for effective competition,
unless there is no chance of prevailing based on the facts. If the City is able to join with the other 8 cities listed in
the Petition, each City should be able to respond to the Petition in an amount under $2,000.00.
I'll call you shortly.
Mike
253-931-4753 ext. 2.
Michael R. Bradley
Bradley & Guzzetta, LLC
55 East Fifth Street, Suite 1220
St. Paul, MN 55101
P/(651) 379-0900 ext. 2
M/(651) 592-7472
F/(651) 379-0999
4/16/2008