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Mediacom FCC Petition Reply for Special Releif DU~~E ~<k~ MEMORANDUM May 9,2005 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Reply in Opposition to Mediacom FCC Petition Cable Franchise Administrator Merrill Crawford is submitting information on the filing of a Reply in Opposition to Mediacom's FCC Petition for Special Relief. 0J~~ Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Merrill Crawford, Cable Franchise Administrator 5U~~E ~<k~ MEMORANDUM April 28, 2005 MEMO TO: Michael C. Van Milligen, City Manager FROM: Merrill Crawford, Cable Franchise Administrat~ SUBJECT: Reply in Opposition to Mediacom FCC Petition INTRODUCTION: The purpose of this memorandum is to report on the filing of a Reply in Opposition to Mediacom's FCC Petition For Special Relief BACKGROUND: On March 1, 2005, Mediacom filed a Petition For Special Relief with the Federal Communications Commission, claiming that its cable systems in Dubuque and several surrounding communities are subject to "Effective Competition" under federal standards,by virtue of Direct Broadcast Satellite viewership in the respective franchise areas. It is one of numerous such petitions being filed by Mediacom and other cable operators across the country. At their March 21, 2005 meeting, the City Council authorized the Miller and Van Eaton law firm to file a Reply on behalfdf the City, in opposition to Mediacom's Petition. Attorney Rick Ellrod made the filing April 20, 2005, which was the deadline under FCC rules. A copy is attached. As noted in my March 17 memo, the FCC typically grants these "Effective Competition" requests by cable operators, rarely giving much credence to the arguments of those few cities that oppose the operator's request. As applied by the FCC, both the "Effective Competition" standard and the "Special Relief' filing process strongly favor the cable operator while arguably flying in the face of practical experience. I also noted in the earlier memo that the granting of Mediacom's request should not cause any immediate problem or change for the City or for Dubuque cable subscribers. Nevertheless, the City is now on record as rejecting on several grounds the claim that Mediacom's Dubuque cable system faces true effective competition. This may prove in the future to have been an important stance. RECOMMENDED ACTION: This memorandum is for information purposes only. cc: Barry Lindahl, Corporation Counsel Randy Gehl, Public Information Officer Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 RECEIVED APR 2 0 2005 Federal Communlcatlons Commission OffIce 01 Secretary In re Petition of CSR- -E MCCIOWALLC Asbury, IA Dubuque, IA Epworth, IA Farley, IA SageviIIe, IA Galena, IL CUID No. IA0055 cum No. IAOOll CUID No. IA01l5 CUID No. IA01l4 CUID No. IA0689 CUID No. IL0026 For Determination of Effective Competition and Revocation of Certification OPPOSITION OF THE CITY OF DUBUQUE, IOWA, TO MEDIACOM'S PETITION FOR SPECIAL RELIEF Frederick E. Ellrod III Marci L. Frischkom Miller & Van Eaton, P.L.L.C. 1155 Connecticut Avenue, N. W. # 1000 Washington, D.C. 20036-4306 202-785-0600 Counsel for the City of Dubuque, Iowa April 20, 2005 TABLE OF CONTENTS SUMMARy........ ........................... ............. ....... ................................ .............. ....... ......................... i I. MEDIACOM BEARS THE BURDEN OF SHOWING EFFECTIVE COMPETITION. ......... ....... .... ...... ................ ......................... ............... .............................. 2 II. THE BUREAU'S PAST TREATMENT OF EVIDENCE IN EFFECTIVE COMPETITION CASES, WHEN COMBINED WITH THE COMMISSION'S PROCEDURE, VIOLATES DUE PROCESS AND EFFECTIVEL Y PREVENTS THE CITY FROM ADDRESSING MEDIACOM'S CLAIM. .......................................... 3 A. The Bureau's Automatic Acceptance of SBCA Data and Rejection of Countervailing Local Information Shifts the Burden of Proof and Requires Extensive Factual Investigation. . ...................... ................... ........ .................. ................. 3 B. The Deadline Set By the Commission Makes Such Factual Investigation Impossible for the City. ..... ......... ................... ...................... ........................................... 6 III. THE BUREAU'S TREATMENT OF EFFECTIVE COMPETITION DATA REPRESENTS AN IMPROPER DELEGATION OF GOVERNMENTAL AUTHORITY TO A PRIVATE ENTITY, AND THUS PREVENTS THE CITY FROM EFFECTIVELY ADDRESSING MEDIACOM'S CLAIM. ....................... 7 IV. DBS~ONL Y COMPETITION CANNOT REASONABLY BE TREATED AS CONSTITUTING EFFECTIVE COMPETITION. ............................................................ 8 V. CONCLUSION.. ....... ........................................ ............ ......................... ............. ...... ........ 11 SUMMARY Mediacom argues that direct broadcast satellite ("DBS") service alone provides effective competition in the City. The Bureau has consistently accepted at face value the factual conclusions about DBS penetration provided by a private trade association, SBCA, although the Commission has never conducted any independent investigation of the reliability of the SBCA data. Moreover, the Bureau has consistently rejected relevant information provided by local franchising authorities to qualify or question SBCA's conclusions. Thus, the only way a local franchising authority can possibly oppose an effective competition filing is to conduct an intensive factual investigation. This effectively shifts the burden of proof from the cable operator to the community, in contravention ofthe statute and Commission rules. The twenty-day time frame for response set by the Commission makes it effectively impossible for a community to undertake the kind of factual investigation that would be necessary to affect the Bureau's decision. Thus, under the Commission's procedures and the Bureau's evidentiary policies, the City has no meaningful opportunity to oppose Mediacom's Petition and is denied due process of law. Because the Bureau accepts SBCA data as con9lusive, the Bureau has essentially delegated to a private industry entity the regulatory task of determining the facts on which the City's authority depends. Such a delegation to a private entity is unsound and improper. DBS penetration alone cannot curb Mediacom's market power. The General Accounting Office has found that satellite providers alone have at most a minuscule effect on cable rates. As long as there is a differential between cable rates in DBS-only "competitive" areas and those in areas enjoying wireline competition, the Commission cannot assume that DBS competition fulfills the purpose of the statute - to ensure reasonable rates. Moreover, the City questions 11 whether DBS offerings should properly be regarded as comparable with respect to the basic service tier. iii Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re Petition of CSR- -E MCC IOWA LLC Asbury,IA Dubuque, IA Epworth, IA Farley, IA Sageville, IA Galena, IL CUID No. IAOOSS CUID No. IAOOll CmD No. IAOllS CUID No. IAOll4 CUID No. IA0689 CUID No. IL0026 For Determination of Effective Competition and Revocation of Certification OPPOSITION OF THE CITY OF DUBUQUE, lOW A, TO MEDIACOM'S PETITION FOR SPECIAL RELIEF Pursuant to 47 C.F.R. S 76.7, the City of Dubuque, Iowa ("City"), by its attomeys, opposes the petition ("Petition") of MCC Iowa LLC ("Mediacom") in the above-captioned proceeding. Mediacom has not met its statutory burden of showing that its rates are subject to competitive restraints in the City. Thus, the Bureau should deny Mediacom's petition. 1. MEDIACOM BEARS THE BURDEN OF SHOWING EFFECTIVE COMPETITION. Congress instituted the law from which Mediacom seeks relief based on the finding of Congress that the cable industry enjoyed market power.l In the absence of a robust competitive market that would effectively prevent the exercise of cable's market power, such rules are necessary to protect subscribers - a duty with which the Commission is charged under law? Thus, Mediacom bears the burden of showing that the legislative finding of Congress is now incorrect as to the City of Dubuque.3 The showing Mediacom seeks to make in the Petition is based solely on its claim that direct broadcast satellite ("DBS") service provides effective competition in the City.4 Mediacom's claim, however, does not fit with the City's experience. If Mediacom faced real competition, the effects of that competition, such as lower rates, would be visible in the City - and they are not. For this reason, the City is skeptical of the claims advanced in the Petition. The City is aware that under Media Bureau precedent, an effective competition claim is essentially decided once a cable operator has produced DBS penetration data. However, the City objects to this approach, and respectfully suggests that applying that historical criterion in this case is both constitutionally infinn and contrary to the intent of the statute. 1 See 47 V.S.C. 9 543(a)-(f), (h)-G), (1)-(n) (provisions of federal law related to finding of effective competition); Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460, SS 2(a)(I) and 2(a)(2) (1992). 2 47 V.S.C. S 543(b)(I). See also id at 9543(h) (Commission is responsible for preventing evasions). 347 C.F.R. 9976.906, 76.907(b). 4 Petition at 2. 2 II. THE BUREAU'S PAST TREATMENT OF EVIDENCE IN EFFECTIVE COMPETITION CASES, WHEN COMBINED WITH THE COMMISSION'S PROCEDURE, VIOLATES DUE PROCESS AND EFFECTIVELY PREVENTS THE CITY FROM ADDRESSING MEDIACOM'S CLAIM. A. The Bureau's Automatic Acceptance of SBCA Data and Rejection of Countervailing Local Information Shifts the Burden of Proof and Requires Extensive Factual Investigation. In seeking to address Mediacom's effective competition claim, the City has reviewed recent decisions by the Media Bureau in similar cases. Those decisions reveal that the Bureau's treatment of evidence in such matters, when combined with the time period allowed by the Commission for response to an effective competition filing, deprives a local community of any meaningful opportunity to respond to a cable operator's claim. Thus, at the threshold the City faces an impossible task. Mediacom's Petition, like many others filed by the cable industry in recent years, relies solely on DBS "competition" to meet the statutory standards.s In past effective competition cases, the Bureau has consistently accepted at face value the factual conclusions about DBS penetration provided to the cable industry by a private trade association, the Satellite Broadcasting & Communications Association ("SBCA"), and its predecessors.6 The Bureau has 5 Petition at 6-7. 6 See, e.g., Mediacom Minnesota, LLC, DA 05-546, 2005 WL 524913 at" 8-10 (March 7, 2005) ("Mediacom Minnesota"); In the Matter of Time Warner Entertainment Company, L.P., Time Warner Cable of Southeast Wisconsin, L.P., Century Venture Corporation, Memorandum Opinion and Order, DA 03-2172,18 FCC Red. 13,043,' 10 (Media Bur. July 2, 2003) ("Time Warner Wisconsin"); In the Matter of Cable One, Inc., Memorandum Opinion and Order, DA 03-2102, 18 FCC Red. 12,792," 7-8 (Med. Bur. July 7,2003). Previously, SkyTrends, a subsidiary of SBCA, was the sole provider of DBS subscriber information. In recent years, SBCA itself has taken over this role. In addition, Media Business Corp., apparently an affiliate of SBCA, seems to play some role in such determinations. See, e.g., In the Matter of Adelphia Communications, Memorandum Opinion and Order, DA 05-545, 2005 WL 524912, , 8 (Media Bur. March 7, 2005) ("A de lphia"). For convenience, this Opposition will refer simply to SBCA when SBCA and its predecessor(s) or affiliates are meant. 3 established this pattern of automatic acceptance even though the Commission has never conducted any independent investigation of the reliability of the SBCA data. This failure to provide any independent verification of the crucial industry data is particularly surprising in light of the fact that the Bureau has in the past recognized problems and errors in the industry data, which shows that the industry's subscriber counts are not immune from error or distortion.7 Moreover, the Bureau has consistently rejected relevant information provided by local franchising authorities to qualify or question SBCA's conclusions. For example, when a local community has presented evidence indicating recent residential growth in a franchise area, and thus indicating that the total population (for purposes of measuring penetration as a percentage) may be larger than the figure used in the cable operator's calculation based on prior year data, the Bureau has summarily dismissed such evidence.8 Similarly, the Bureau has rejected questions raised as to the validity of the SBCA data on the ground that the communities' questions were not themselves based on specific countervailing data.9 Thus, for example, it may well be that in Dubuque, where the local terrain - steep bluffs overlooking the Mississippi River - has historically made it nearly impossible for residents to receive broadcast signals, many residents may be geographically located in places where they will never be able to "see" satellite 7 See, e.g., Time Warner-Advance/Newhouse Partnership D/B/A Time Warner Cable, Memorandum Opinion and Order, DA 05-646, 2005 WL 579037, ~ 11 (Media Bur. March 11, 2005) See generally Comments of the National Association of Telecommunications Officers and Advisors, the National League Of Cities, and the Miami Valley Cable Council, MB Docket No. 02-144, MM Docket No. 92-266, MM Docket No. 93-215, CS Docket No. 94-28, and CS Docket No. 96-157, at 31-33 (filed Nov. 4, 2002). 8 See, e.g., Adelphia, DA 05-545 at ~ 9; Mediacom Minnesota, DA 05-546 at ~ 8. Information on household growth over time could well establish a trend in population growth even in cases where the Bureau might have reason to suppose that physical residences, rather than specifically occupied households, were being counted. 9 See, e.g., Adelphia, DA 05-545 at ~ 4. 4 transmitters.lo But to provide evidence on this point meeting the lofty standards of the Bureau would require a detailed, time-consuming, and expensive factual investigation by the City. The Bureau's rubber-stamp acceptance of SBCA data and rejection of contrary information suggests that the most productive avenue of investigation for a local franchising authority may be to obtain and investigate the SBCA data directly to determine its reliability. Here, however, the community encounters a financial barrier. SBCA is the sole provider ofDBS penetration data - it has no competitors. It offers this information to localities for sale at the same prices it charges to the cable industry. The Bureau has thus imposed on a local franchising authority the burden of paying sole-source market prices for the only possible data on which it might oppose a cable operator's petition. Nothing in the statute or in the Commission's rules authorizes the imposition of this burden on local communities seeking to preserve their statutory rights. The only way a local franchising authority can possibly oppose an effective competition filing is thus to conduct an intensive factual investigation: either to obtain detailed data from SBCA and conduct its own statistical analysis to determine the validity of that infonnation, or to conduct independent investigations to obtain other factual data (such as household counts or geographical exposure to satellite signals) that might be considered relevant by the Bureau. The Bureau's evidentiary policies thus effectively shift the burden of proof from the cable operator to the community, in contravention of the statute and of 47 C.F.R. SS 76.906 and 76.907.11 10 For this reason, cable penetration has historically been unusually high in Dubuque. See Declaration of Merrill Crawford in Support of Opposition of the City of Dubuque, Iowa, to Petition for Special Relief at ~ 4 (attached as Exhibit 1) ("Crawford Declaration"). 11 See, e.g., Time Warner Wisconsin, DA 03-2172 at ~ 10 (requiring local franchising authority to produce "evidence to call into question the validity of the SkyTrends report," although without any information as to what sort of evidence could do so). 5 B. The Deadline Set By the Commission Makes Such Factual Investigation Impossible for the City. The time frame set by the Commission makes it effectively impossible for a community to undertake such an investigation in the time available. The Commission has chosen to handle effective competition requests under the "special relief' procedure set out in ~ 76.7 of the Commission's rulesY Under that procedure, a local community's opposition is due twenty days after the Commission places the operator's petition on public notice. 13 Thus, the community has a little less than three weeks to review the cable operator's filing, determine the issues involved, conduct factual investigations, obtain SBCA data as necessary (a decision which may itself involve a separate budgetary action by the legislative body, given the costs involved), carry out statistical or mathematical analyses, and prepare its response. 14 It should be noted that the statute does not require this time period. Rather, it is basically an accident of the Commission's having utilized the special relief process for this particular purpose. (In fact the original scheme for handling effective competition claims, embodied in fonner 47 C.F.R. ~ 76.915, was quite different, requiring the operator to petition the local franchising authority first, which would have allowed a community much more opportunity to investigate the facts. The Commission eliminated that rule in 1999.) 12 See 47 C.F.R. ~ 76.907(a). 13 47 C.F.R. ~ 76.7(b)(1). 14 Some unpredictable amount of additional time may be gained from the time lag between the Commission's receipt of the filing and its issuance of public notice. On the other hand, a community is unlikely to receive the filing on the sanle day it arrives at the Commission. Here, some delay was introduced because Mediacom filed its petition with the mayors of all the affected cities, as indicated by the Certificate of Service, rather than with the City Manager as required by ~ 10.7 of Mediacom's franchise agreement with the City. See Crawford Declaration at~ 2. 6 It is patently unrealistic to expect a community to mount a serious factual investigation in twenty days, particularly when the key information is in the hands of a private organization making it available only for a price. Thus, the interaction of the Bureau's evidentiary policies with the Commission's procedural choices deprives the City of any meaningful opportunity to oppose Mediacom's Petition in any way that might be expected to affect the Bureau's decisionY The City's right to respond to the Petition is oflittle real value if the City is required, because of time constraints, to rely solely on the calculations and data provided by Mediacom. In such a case, the Commission's special relief procedure cannot be said to afford the City its fundamental right to due process of law. III. THE BUREAU'S TREATMENT OF EFFECTIVE COMPETITION DATA REPRESENTS AN IMPROPER DELEGATION OF GOVERNMENTAL AUTHORITY TO A PRIVATE ENTITY, AND THUS PREVENTS THE CITY FROM EFFECTIVELY ADDRESSING MEDIACOM'S CLAIM. A further issue with respect to the Bureau's handling of effective competition claims follows from the points made above. Once a cable operator has submitted SBCA data favoring its DBS penetration claim, the matter is essentially over, from the Bureau's point of view. But because the Bureau accepts and relies on the SBCA data as conclusive, the Bureau has 15 The problem is exacerbated in the current case because during the pendency of Mediacom's Petition the City has been entirely occupied by renewal negotiations with Mediacom, based on a deadline for action demanded by Mediacom. See Crawford Declaration at '3. Curiously, the Mediacom petition is dated February 4, and the signature page appears to indicate that it was signed on that date, although the Certificate of Service indicates that the document was not filed with the Commission until almost a month later, March 1. This discrepancy, whatever its explanation in this particular case, highlights a further general problem with the Commission's process: The short time frame for response makes it possible for a cable operator to conduct extensive factual investigations of its own, taking months or years to prepare its filing, then schedule its filing at a time of maximum inconvenience or difficulty for the local community. A longer time period for response would mitigate this potential for manipulation. 7 essentially delegated to a private industry entity the regulatory task of determining the facts on which the City's authority depends. Such delegation of federal authority to an interested private party is arguably unlawful.I6 At the very least, it is bad policy, on a par with setting the fox to guard the henhouse. If the Commission had carefully reviewed SBCA's database in detail at some point and confirmed that the information was accurate and sound, one might imagine that the Commission could reasonably rely on such a privately-held database in the future, assuming that the agency exercised continuing oversight to ensure that the data remained valid. But the Commission has never conducted any independent investigation of the validity or accuracy of SBCA's data. Thus, it is unsound and improper for the Bureau to give SBCA the unquestioned authority that private entity currently enjoys in effective competition matters. IV. DBS-ONL Y COMPETITION CANNOT REASONABLY BE TREATED AS CONSTITUTING EFFECTIVE COMPETITION. It is thus unclear whether the Bureau can reasonably accept the unverified SBCA data as overcoming Mediacom's burden of proof under the statute. In addition, however, even if Mediacom succeeded in showing that DBS penetration in the City exceeded fifteen percent, DBS penetration alone cannot suffice to constitute effective competition and curb Mediacom's market power. Congress did not choose arbitrarily to have rate regulation (along with related consumer protections such as the buy-through rule and the negative option rule) cease when effective competition appeared. Rather, Congress relied on an essential relationship between competition and rates. In a robust competitive market, where many companies vie for customers, some are 16 See, e.g., US. Telecom Ass 'n v. FCC, 359 F.3d 554, 555-56 (D.C. Cir. 2004); National 8 bound to compete by offering lower prices. This will then give their competitors an incentive to lower their prices, and hence drive the price to equilibrium at a point where each seller covers its costs and makes an acceptable return on investment, but without additional monopoly profits. Congress thus used "effective competition" as a criterion not because "competition" is a magic wand of some sort, a single wave of which somehow makes everything right, but rather because Congress assumed such competition would hold rates to reasonable levels via market pressures (and for similar reasons protect consumers in other respects), making regulation unnecessary.17 But if some form of ersatz competition doe~ not in fact restrain rates through the discipline of the market, then whether or not it can be made to look like "competition" in some sense of the word, it will not fulfill the purpose of the statute - to protect consumers from cable's market power. DBS represents just such a form of ersatz "competition" that does not effectively control rates. The General Accounting Office has found that satellite providers alone have at most a minuscule effect on cable rates. See United States General Accounting Office, Telecommunications: Wire-Based Competition Benefited Consumers i1i Selected Markets, Report to the Subcommittee on Antitrust, Competition Policy and Consumer Rights, Committee on the Judiciary, U.S. Senate, GAO 04-241 (February 2004); Telecommunications: Issues Related to Competition and Subscriber Rates in the Cable Television Industry, Report to the Chairman, Committee on Commerce, Science, and Transportation, U.S. Senate, GAO-04-8 (Oct. 24, 2003); Telecommunications: Issues in Providing Cable and Satellite Television Services, Report to the Subcommittee on Antitrust, Competition, and Business and Consunler Rights, Park and Conservation Ass 'n v. Stanton, 54 F. Supp. 2d 7, 20 (D.D.C. 1999). 17 See, e.g., S. Rep. 102-92 at 11-12, reprinted at 1992 U.S.C.C.A.N. 1133, 1144 (1991). 9 Committee on the Judiciary, U.S. Senate, GAO-03-130 (Oct. 15, 2002).18 These findings bear out the common experience of subscribers and regulators: DBS is not equivalent to wireline competition in terms of controlling unreasonable rates. As long as there is a differential between cable rates in DBS-only "competitive" areas and those in areas enjoying wire line competition, the Commission cannot assume that DBS competition fulfills the purpose of the statute - to ensure reasonable rates. There is an additional reason to be skeptical about Mediacom's claim that DBS alone will restrain its market power. Mediacom states that DBS providers offer programming "comparable" to that of Mediacom's cable system, because they offer "at least twelve channels of programming, including at least one channel of non-broadcast programming.,,19 The Commission's rule on this point, however, originated in an era when both basic and CPS tiers were subject to regulation. In regulating the combined basic and CPS tiers, using such criteria- simple number of channels and the presence of at least one non-broadcast, "cable programming" channel - had a certain plausibility. Now, however, when only the basic tier is regulated, these criteria do not seem relevant to the question of what offerings are "comparable" to the basic tier. Most notably, the basic tier in the City includes public, educational and governmental ("PEG") access channels, which are not carried on satellite. While Mediacom' s Petition may track the Commission's current rule with respect to comparability, the City would suggest that not every 18 The Commission itself has reported that "the presence of effective competition due to DBS overbuild status has no significant effect on cable rates." See, e.g., In the Matter of Implementation of Section 3 of the Cable Television Consumer Protection and Competition Act 0[1992, Report on Cable Industry Prices, 17 FCC Rcd. 6301, ~ 45 (2002). 19 Petition at 5, citing 47 C.F.R. g 76.905(g). 10 consumer may see DBS as substitutable for basic cable service - and thus, again, the presence of ostensibly "competitive" offerings may not serve to restrain Mediacom's market power.20 V. CONCLUSION Regulation is a poor second best to competition as a means of ensuring reasonable rates and ensuring that a cable operator does not abuse rate-related policies such as buy-through requirements and negative options. The City would be very pleased to find that there was true competition in the City, sufficient to restrain Mediacom's market power. In light of the above considerations, however, the City does not believe that Mediacom has made the necessary demonstration that legal protections are no longer necessary for consumers. To deprive consumers of statutory protections based only on a vague hope or casual assumption that competition exists would be irresponsible and capricious. 20 In this connection it is noteworthy that Mediacom itself has recently stated it does not expect DBS penetration to increase further: "This gives us some reason to believe that the worst is behind us with respect to the local-into-Iocal launches by DBS and that customer erosion has stabilized." Mediacom chief financial officer Mark Stephan, quoted in Mike Farrell, A1ediacom Cuts Sub Losses; 4Q Sluggish, Multichannel News Web site (article dated Feb. 22, 2005) (attached as Exhibit 2). 11 For the reasons indicated above, the Bureau should deny Mediacom's Petition for Special Relief. Respectfully submitted, d~~ z: ~9-J;::- Frederick E. Ellrod III Miller & Van Eaton, P.L.L.C. 1155 Connecticut Avenue, N.W. #1000 Washington, D.C. 20036-4306 202-785-0600 Counsel for the City Of Dubuque, Iowa April 20, 2005 12 CERTIFICATION PURSUANT TO 47 C.F.R. ~ 76.6(a)( 4) The below-signed signatory has read the foregoing Opposition of the City of Dubuque, Iowa, to Mediacom's Petition For Special Relief, and, to the best of my knowledge, information and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law; and it is not interposed for any improper purpose. Respectfully submitted, tJj~ 2-01 2-0~ Date /?~z:~~ Frederick E. Ellrod III, Esq. Marci L. Frischkom, Esq. Miller & Van Eaton, P.L.L.C. 1155 Connecticut Avenue, N.W. Suite 1000 Washington, D.C. 20036-4306 202-785-0600 EXHIBIT 1 Declaration of Merrill Crawford . APR.10. 2005 11: OOAM C!TV HALL ANNEX NO, 72 9 P. 2 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re Petition of CSR- -E MCC 10'V A LLC Asbury, IA Dubuque, IA Epworth, IA Farley,IA SageviIle,IA Galena,IL CUID No. IA0055 CUID No. IAOOll CUID No. IA0115 CUID No. IA0114 CUID No. IA0689 curn No. IL0026 For Determination of Effective Competition and Revocation of Certification DECLARATION OF MERRILL eRA WFORD IN SUPPORT OF OPPOSITION OF THE CITY OF DUBUQUE, IOWA, TO PETITION FOR SPECIAL RELIEF I, Merrill Crawford, do hereby declare and state under penalty of perjury as follows: 1. I am the Cable Franchise Administrator for the City of Dubuque, Iowa ("City''). 2. Under 9 10.7 of the franchise agreement between MCC Iowa, LLC ("Mediacom"), and the City, notices to the City are to be sent to the attention of the City Manager. 3. During the period since Mediacom filed its Petition for Special Relief C~Petition"), the City has been involved in intensive renewal negotiations with . APR, 20. 2005 11: OOAM C!TV HALL ANNEX NO, 72 9 P. 3 Mediacom. based on a deadline for action by the City which was sought by Mediacom as part of the negotiations. 4. Much of the City is located on and around a series of steep bluffs overlooking the Mississippi River. This ten"ain makes it nearly impossible for residents to receive broadcast signals. As a result, cable service pene:tration in the City has always been unusually high. ~~J~ Date 4253\01\00) 08117.DOC 2 EXHIBIT 2 Mike Farrell, Mediacom Cuts Sub Losses; 4Q Sluggish, Multichannel News Web site (article dated Feb. 22, 2005) Page 1 of J (j,. Reed BI.l9ness Information .1 11mb ., NE'W"S I rln i! Ie aune 1M Jlediacom Cuts Sub Losses; 4Q Sluggish 3y Mike Farrell 2/22/20054:54:00 PM i1ediacom Communications Corp. reported mixed results for the fourth quarter and full year, ,aring down its basic-subscriber losses but showing sluggish revenue and cash-flow growlh. Aediacom lost about 3,000 basic subscribers in the quarter, its lowest quarterly decline in iNO years. Revenue rose 2% in the period to $265 million and cash flow was flat at $102.5 nillion. :or Ihe year, revenue rose 5.2% to $1.06 billion and cash flow increased 2% to $413.7 nillion. ihe MSO was encouraged by the basic-subscriber numbers, claiming that it could be an ndication thaI the losses of the past two years are beginning to stabilize. -Aediacom has lost about 131,000 basic subscribers since the first quarter of 2003, mainly lue to aggressive local-into-Iocallaunches by direct-broadcast satellite service providers in ts markets. The operator said about 92% of its markets have local-into-Iocal DBS service. This gives us some reason to believe that the worst is behind us with respect to the local- nto-Iocallaunches by DBS and that customer erosion has stabilized," Mediacom chief inancial officer Mark Stephan said on a conference call with analysts. ::xecutive vice president of operations John Pascarelli said on the call that the decline in ,ubscriber losses was due mainly to the MSO's decision to include subscription-video-on- jemand service in the price of premium services like Home Box Office. -Ie added that about 65% of digital homes now have access to VOD and SVOD and that nore than one-half of its digital subscribers are watching 10 VOD-type events per month. fhat VOD and SVOD penetration translated into stronger digital-customer growth -- Mediacom added about 14,000 digital subscribers during the quarter. High-speed-data ~ustomers increased by 17,000 during the period. Mediacom also plans to begin rolling out its own telephony product, "Mediacom Digital Phone," during the second quarter. The Middletown, N.Y.-based MSO said the service will be available to 70% of its households by the second quarter of 2006. The company issued its 2005 year-end guidance, expecting revenue for the full year to be $1.09 billion-$1.11 billion and cash flow to range between $415 million-$425 million. Capital expenditures for the year will be slightly up from the $181.4 million spent during 2004 -- to between $200 million-$210 million -- due to upgrades to its Florida properties as a result of the hurricanes in the region last year and to the telephony rollout. <:<:: Back I Print @ 2005, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved. tt.....//.......ll!t; "h "nn., 1 I"{"\1'Y\/inrh"y ~<::n?l ~v()1lt=~rtir.l~ Print&atiicleid=CA505663 4/20/20C Certificate of Service I hereby certify that I have caused to be mailed this 20th day of April, 2005, copies of the foregoing Opposition of the City Of Dubuque, Iowa, to Mediacom' s Petition for Special Relief, by first-class mail, postage prepaid, to the following persons: Bruce Gluckman, Esquire Vice President, Legal and Regulatory Affairs MCC Iowa LLC 100 Crystal Run Road Middletown, N.Y. 10941 Ms. Kathy McMullen Mediacom 3033 Asbury Road Dubuque, Iowa 52001 Washington, D.C. April 20, 2005 4253\01 \00 I08039.DOC