.~ . " \'\~'{ '\ In the Matter of: ~ ccttf\tl~-- Great Plains Cable Television, Inc. )S CSR- 7c2/2--Z. Petition for Waiver of ~ ALEDIACCEPTED 47 C.F.R. § 76. 1204(a)(1) ~ MAY 3 12007 To: Chief, Media Bureau ) Federal Communications CommISSion Office of the Secretary PETITION FOR WAIVER OF 47 C.F.R. § 76.1204(a)(1) I. Introduction and Summary Great Plains Cable Television, Inc. ("Great Plains") is a small cable company providing cable services to approximately 10,000 subscribers in rural Nebraska. Pursuant to 47 U.S.C. § 549(c), and 47 C.F.R. §§ 1.3, 76.7 and 76.1207, Great Plains respectfully requests that the Commission grant a limited waiver of 47 C.F.R. § 76.1204(a)(1) for the following set-top boxes: • Motorola DCT-1000 series • Motorola DCT-2000 series • Motorola DSR-410 (collectively, "Low-Cost Set-Top Boxes").Great Plains requests that the waiVer remain effective until the earlier of (i) the commercial availability of non-integrated I set-top boxes compatible with one-way cable plant and Comcast's HITS seryice; 1 or (ii) Great Plains' upgrade of its systems to two-way cable plant. Great Plains can and will comply with 47 C.F.R. § 76.1204(a)(1) for the almost 50% of its subscribers who are currently served by two-way cable plant. No. of Copies rec'duO-,-__ UstABCDE 1 Currently, there are DQ such set-top boxes commercially available. 1 As required by the Commission's Second Report and Order, ~ GreatPlains attaches full specifications for the Low-Cost Set-Top Boxes as Exhibit 1. , Granting Great Plains' requested waivers is critical: Compliance wit~ 47 C.F.R. § 76.104(a)(1) is technically impossible for Great Plains unless the company rebuilds its current headends and one-way cable plant. This is because no manufacturer produces, or has announced production of, non- integrated set-top boxes compatible with one-way cable plant. The compa'ny estimates that if it were to rebuild its cable plant so that it could comply with! the Commission's integration ban, the rebuild would cost between $3 million and $4 million. With only about 5,600 subscribers served by these one-way systems, it is financially impossible for Great Plains to undertake such a rebuild. Accordingly, absent a grant of the requested waivers. Great Plains will be forced to stop deploying digital services to new or upgrading subscribers on its one-way cable systems. Conversely, grant of the requested waivers will benefit consumers and I assist in the development of a new multichannel video programming service - Great Plains's digital cable television services.3 At the same time, granting Great Plains's requested waivers will have no negative effect on the development of a competitive market for navigation devices. 2 In the Matter of: Implementation ofSection 304 ofthe Telecommunications Act of. 1996, Commercial Availability ofNavigation Devices" Second Report and Order, 20 FCC Red. 6794 (2005) ("Second Report and Order") at 11' 37. 3 As explained in more detail below, Great Plains' digital services are provided via HITS. 2 We organize this waiver request as follows: • Relief requested • Background information on Great Plains, its cable systems, and its use of the Low-Cost Set-TOp Boxes . • Authority for the requested waiver • Conclusion II. Relief Requested Waivers. Great Plains requests that the Commission grant a limited waiver of 47 C.F.R. § 76. 1204(a)(1) for the Low-Cost Set-Top Boxes until t~e earlier of (i) the commercial availability of non-integrated set-top boxes compatible with one-way cable plant and Comcast's HITS service; or (ii) Gr~at Plains' upgrade of its systems to two-way cable plant. III. About Great Plains Great Plains. Great Plains is a small cable operator headquartered :in Blair, Nebraska. The company has been providing cable services to rural Nebraska subscribers since 1981. The company currently serves approxirn.ately 10,000 rural subscribers. Great Plains' cable systems and its use of the low-Cost Set-Top Boxes. Approximately 5,600 of Great Plains' subscribers are served by old~r- technology, one-way cable systems that were constructed long before the Commission adopted its final orders on separable security. Currently, no manufacturer offers, or has announced, set-top boxes compatible with thes~ one- way systems. 3 Despite the fact that these are one-way systems, Great Plains is able to offer digital services to its subscribers via HITS.4 For its five systems serving Arnold (pop. 624), Bancroft, Callaway, Chapman, Oconto, Stapleton, Sutherland .and Wolbach, Nebraska, Great Plains uses the HITS2 HOME system,5 which can be delivered to subscribers through the Motorola DSR-410 set-top box only. This set-top box is no longer manufactured.6 Great Plains therefore must use refurbished boxes to deploy this service to its subscribers. The refurbished' boxes cost Great Plains approximately $80 each. Great Plains provides the'se boxes free with its digital services. On its other one-way cable systems, Great Plains provides digital services using HITS Classic. Great Plains uses the Motorola DCT-1000 series and DCT- 2000 series set-top boxes to deliver the HITS Classic services. These Low~Cost Set-Top Boxes are compatible with a one-way cable system. The DCT-1000 series boxes cost Great Plains around $50 per box, and DCT-2000 series boxes , cost Great Plains approximately $100 per box. Great Plains provides these, boxes for free with its digital services. Because there are currently no one~way, non-integrated digital set-top boxes commercially available, GreatPlains has only one option if not granted the requested waivers - to stop deploying digital services to upgrading and new 4 We attach Great Plains channel lineups as Exhibit 2. , 2 5 HITS HOME is Motorola and Comcast's Headend InThe Sky digital cable/satellit~ overlay serVice. Services are delivered to each subscriber via a small HITS dish at the subscriber's home. For more information on HITS 2 HOME, see http://www.motorola.com/content.isp?globaIObjectld=5169-8289 6 See http://www.motorola.com/content.jsp?globaIObjectld=5169-8289. 4 digital subscribers. This is because converting its systems to two-way plant would require Great Plains to rebuild these systems' headends. This would cost approximately $3 million - $4 million and take at least 2 - 3 years. For syst~ms serving a total of only 5,600 subscribers, these costs and administrative burdens are impossible. IV. Justification for Requested Waivers The Commission has ample authority to grant Great Plains's requested waivers Section 76.1204(a)(1) of the Commission's rules (A) for good caus~ under the general waiver provisions of the Commission's rUles;? (8) under the set-top box waiver provisions in 47 U.S.C. § 549(c) and Section 76.1207 of'the Commission's rules; and (C) under Commission precedent. A. Good cause. The Commission may grant a petition for waiver of any provision of Part 76 of its rules for good cause shown.8 Good cause exists I for the requested waivers in this case: (1) financial hardship; and (2) the public , interest in deployment of digital services to rural consumers. (1) Financial hardship. To convert Great Plains's cable systems to two-way facilities will cost Great Plains approximately $3 million - $4 million. Last year, Great Plains' operated at a seven-figure loss of 7 See 47 C.F.R. §§ 1.3 and 76.7(a)(1). B/d. 5 ($1,836,099).9 The company simply cannot afford to replace its small, one-way cable systems. For this reason, Commission precedent supports a grant of the requested I waivers on the basis of Great Plains' financial hardship alone. The Commission recently granted Charter a waiver of the deadline in Section 76.1204(a)(1), : recognizing the financial difficulty involved in serving a rural customer base;1o Great Plains' customer base is far more rural than Charter's, 11 and its financial situation is similarly difficult. Like Charter, Great Plains is burdened with 12 significant debt. Moreover, the Commission has previously granted waiv~rs of its regulations to Great Plains based on the company's continuing financial· hardship.13 9 Net loss after taxes was ($946,372). Great Plains' Income Statement for 2006 is attached under seal as Exhibit 3, along with a Request for Confidentiality Pursuan~ to 47 CFR § 0.459. 10 In the Matter ofCharter Communications, Inc. Request for Waiver of Section 76. 1204(a)(1) ofthe Commission's Rules, CSR-7049-Z, CS Docket No. 97-80, Memorandum Opinion and Order (reI. May 4, 2007) at 11 18. 11 Ofthe twenty-eight communities served by the systems at issue, the largest is Neligh (pop.1 ,591). Seventy-five percent of the communities have a population under 1,000. 12 Great Plains is servicing nearly $4.5 million in loans. 13 See In the Matter ofGreat Plains Cable Television, Inc., Request for Waiver ofSection 11.11(a) ofthe Commission's Rules, Order, 19 FCC Red. 305 (2004) and In the Matter ofGreat Plains Cable Television, Inc., Request for Waiver ofSection 11.11(a) ofthe Commission's Rules, Order, 17 FCC Red. 19043 (2002). The Commission has consistently granted waivers of its regUlations based on financial hardship. See In the Matter ofCarson Communications, L.L. C. Request for Waiver ofSection 11.11(a) ofthe Commission's Rules, Order, 17 FCC Red. 10,431 (2002); In the Matter of WMW Cable Television Co. Request for Waiver ofSection 11.11(a) ofthe Commission's Rules, Order, 17 FCC Red. 10,444 (2002); In the Matter ofCunningham Communications, Inc.