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• TWE serves 12.6 million subscribers, or 15.3 percent of MVPD subscribers nationwide <br />Without divestitures, the merged AT&T-MediaOne would serve 34.4 million subscribers or <br />41.8% of MVPD subscribers, which represents 51.32% of nationwide cable subscribers. <br />?~ <br />Enforcement of the Cable Horizontal Ownership Rules, <br />On May 19, 2000, the U.S. Circuit Court for the District of Columbia upheld the constitutionality <br />of the statute underlying the FCC's rules on cable horizontal ownership. That court decision <br />automatically lifted the FCC's voluntary stay and the agency immediately began enforcing its <br />30% horizontal ownership limit. <br />Section 613 and the FCC's Cable Horizontal Ownership Rules <br />1. 1992 Cable Act required the FCC to set a horizontal ownership limit for cable. <br />2. Daniels Cablevision challenged the constitutionality ofthe statute in District Court. <br />3. September 1993 -District Court agreed that the statute was unconstitutional. <br />4. FCC appealed to the U.S. Court of Appeals for District of Columbia Circuit. <br />5. FCC adopted 30% as the ownership limit, but voluntarily stayed enforcement of the rule <br />because of the District Court's ruling. <br />6. Time Warner challenged the 30% rule as unconstitutional in the U.S. Court of Appeals for <br />the <br />District of Columbia Circuit. <br />7. D.C. Circuit Court consolidated the challenge to the statute (Daniels) and the challenge to the <br />rules (Time Warner). <br />8. On October 8, 1999, the FCC revised its 30% ownership limit to account for all multichannel <br />video program distributor (MVPD) subscribers, not just cable homes passed. <br />9. The D.C. Circuit Court decided to consider separately the challenge to the statute and the <br />challenge to the FCC rules. <br />10. On May 19, 2000, the D.C. Circuit Court upheld the constitutionality ofthe statute requiring <br />ownership limits. The FCC's voluntary stay on enforcing its rules was automatically lifted. <br />11. D.C. Circuit Court will heaz oral arguments on the FCC rules on October 17, 2000. <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 />