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26 <br />• Appendix B also outlines strict enforcement mechanisms to ensure compliance with <br />the foregoing non-severable conditions. Failure to comply with these conditions and <br />safeguards during the transition period can result in a forfeiture of up to $100,000 for the <br />first failure and up to $250,000 for additional failures. Continuing failure by AT&T to <br />comply with these interim conditions can result in additional penalties of up to $10,000 <br />per day, and up to $100,000 per day after 5 days of not resolving the continuing failure. <br />FACT SHEET: <br />FCC's Conditioned Approval of AT&T-MediaOne Merger <br />FC_C's Cable Horizontal Ownership Rules <br />The 1992 Cable Act required the Commission to establish rules and regulations limiting the <br />number of cable subscribers a company is authorized to reach through its own cable systems or <br />those in which it has an attributable ownership interest. In 1992, the FCC adopted cable <br />horizontal ownership rules that limited the reach of one entity to 30 percent of cable subscribers <br />nationwide. <br />On October 8, 1999, the FCC adopted new cable horizontal ownership rules that maintained.a 30 <br />percent limit, but calculated total horizontal ownership by counting nationwide subscribers of <br />cable, direct broadcast satellite (DBS) and other multichannel video programming distributors <br />(MVPD), not just cable homes passed. At the time the rules were revised, a 30% limit on <br />MVPDs subscribers was effectively equal to 36.7% of cable subscribers nationwide. <br />FCC's Cable Ownership Attribution Rules <br />The FCC's cable ownership attribution rules determine whether the size or type of an entity's <br />ownership interest in a cable system is such that it confers on the entity the ability to influence or <br />control the operations of the cable system or creates economic incentives to take actions that <br />concern the FCC. Thus, the cable ownership attribution rules identify ownership interests that <br />raise issues of concern to the FCC. <br />_Multichannel Video Proerammine Distributor (MVPD) Subscribership <br />• Nationwide MVPD subscribers: 82.36 million <br />• Nationwide cable subscribers: 67.1 million <br />• Thirty percent of nationwide MVPD subscribers permits an operator to serve 24.7 million <br />subscribers <br />• AT&T selves 18.96 million subscribers, or 23 percent of MVPD subscribers nationwide <br />• Excluding its attributable ownership interest in Time Warner Entertainment (TWE), <br />MediaOne serves 5 million subscribers, or 6 percent of MVPD subscribers nationwide <br />Franchise Fee U-Tax Auditing & Cable Television Administration <br />101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868 <br />