
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 47USC572]

 
          TITLE 47--TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
 
                 CHAPTER 5--WIRE OR RADIO COMMUNICATION
 
                  SUBCHAPTER V-A--CABLE COMMUNICATIONS
 
   Part V--Video Programming Services Provided by Telephone Companies
 
Sec. 572. Prohibition on buy outs


(a) Acquisitions by carriers

    No local exchange carrier or any affiliate of such carrier owned by, 
operated by, controlled by, or under common control with such carrier 
may purchase or otherwise acquire directly or indirectly more than a 10 
percent financial interest, or any management interest, in any cable 
operator providing cable service within the local exchange carrier's 
telephone service area.

(b) Acquisitions by cable operators

    No cable operator or affiliate of a cable operator that is owned by, 
operated by, controlled by, or under common ownership with such cable 
operator may purchase or otherwise acquire, directly or indirectly, more 
than a 10 percent financial interest, or any management interest, in any 
local exchange carrier providing telephone exchange service within such 
cable operator's franchise area.

(c) Joint ventures

    A local exchange carrier and a cable operator whose telephone 
service area and cable franchise area, respectively, are in the same 
market may not enter into any joint venture or partnership to provide 
video programming directly to subscribers or to provide 
telecommunications services within such market.

(d) Exceptions

                          (1) Rural systems

        Notwithstanding subsections (a), (b), and (c) of this section, a 
    local exchange carrier (with respect to a cable system located in 
    its telephone service area) and a cable operator (with respect to 
    the facilities of a local exchange carrier used to provide telephone 
    exchange service in its cable franchise area) may obtain a 
    controlling interest in, management interest in, or enter into a 
    joint venture or partnership with the operator of such system or 
    facilities for the use of such system or facilities to the extent 
    that--
            (A) such system or facilities only serve incorporated or 
        unincorporated--
                (i) places or territories that have fewer than 35,000 
            inhabitants; and
                (ii) are outside an urbanized area, as defined by the 
            Bureau of the Census; and

            (B) in the case of a local exchange carrier, such system, in 
        the aggregate with any other system in which such carrier has an 
        interest, serves less than 10 percent of the households in the 
        telephone service area of such carrier.

                            (2) Joint use

        Notwithstanding subsection (c) of this section, a local exchange 
    carrier may obtain, with the concurrence of the cable operator on 
    the rates, terms, and conditions, the use of that part of the 
    transmission facilities of a cable system extending from the last 
    multi-user terminal to the premises of the end user, if such use is 
    reasonably limited in scope and duration, as determined by the 
    Commission.

               (3) Acquisitions in competitive markets

        Notwithstanding subsections (a) and (c) of this section, a local 
    exchange carrier may obtain a controlling interest in, or form a 
    joint venture or other partnership with, or provide financing to, a 
    cable system (hereinafter in this paragraph referred to as ``the 
    subject cable system''), if--
            (A) the subject cable system operates in a television market 
        that is not in the top 25 markets, and such market has more than 
        1 cable system operator, and the subject cable system is not the 
        cable system with the most subscribers in such television 
        market;
            (B) the subject cable system and the cable system with the 
        most subscribers in such television market held on May 1, 1995, 
        cable television franchises from the largest municipality in the 
        television market and the boundaries of such franchises were 
        identical on such date;
            (C) the subject cable system is not owned by or under common 
        ownership or control of any one of the 50 cable system operators 
        with the most subscribers as such operators existed on May 1, 
        1995; and
            (D) the system with the most subscribers in the television 
        market is owned by or under common ownership or control of any 
        one of the 10 largest cable system operators as such operators 
        existed on May 1, 1995.

                      (4) Exempt cable systems

        Subsection (a) of this section does not apply to any cable 
    system if--
            (A) the cable system serves no more than 17,000 cable 
        subscribers, of which no less than 8,000 live within an urban 
        area, and no less than 6,000 live within a nonurbanized area as 
        of June 1, 1995;
            (B) the cable system is not owned by, or under common 
        ownership or control with, any of the 50 largest cable system 
        operators in existence on June 1, 1995; and
            (C) the cable system operates in a television market that 
        was not in the top 100 television markets as of June 1, 1995.

              (5) Small cable systems in nonurban areas

        Notwithstanding subsections (a) and (c) of this section, a local 
    exchange carrier with less than $100,000,000 in annual operating 
    revenues (or any affiliate of such carrier owned by, operated by, 
    controlled by, or under common control with such carrier) may 
    purchase or otherwise acquire more than a 10 percent financial 
    interest in, or any management interest in, or enter into a joint 
    venture or partnership with, any cable system within the local 
    exchange carrier's telephone service area that serves no more than 
    20,000 cable subscribers, if no more than 12,000 of those 
    subscribers live within an urbanized area, as defined by the Bureau 
    of the Census.

                             (6) Waivers

        The Commission may waive the restrictions of subsections \1\ 
    (a), (b), or (c) of this section only if--
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``subsection''.
---------------------------------------------------------------------------
            (A) the Commission determines that, because of the nature of 
        the market served by the affected cable system or facilities 
        used to provide telephone exchange service--
                (i) the affected cable operator or local exchange 
            carrier would be subjected to undue economic distress by the 
            enforcement of such provisions;
                (ii) the system or facilities would not be economically 
            viable if such provisions were enforced; or
                (iii) the anticompetitive effects of the proposed 
            transaction are clearly outweighed in the public interest by 
            the probable effect of the transaction in meeting the 
            convenience and needs of the community to be served; and

            (B) the local franchising authority approves of such waiver.

(e) ``Telephone service area'' defined

    For purposes of this section, the term ``telephone service area'' 
when used in connection with a common carrier subject in whole or in 
part to subchapter II of this chapter means the area within which such 
carrier provided telephone exchange service as of January 1, 1993, but 
if any common carrier after such date transfers its telephone exchange 
service facilities to another common carrier, the area to which such 
facilities provide telephone exchange service shall be treated as part 
of the telephone service area of the acquiring common carrier and not of 
the selling common carrier.

(June 19, 1934, ch. 652, title VI, Sec. 652, as added Pub. L. 104-104, 
title III, Sec. 302(a), Feb. 8, 1996, 110 Stat. 119.)

                  Section Referred to in Other Sections

    This section is referred to in section 571 of this title.
