[Federal Register Volume 59, Number 150 (Friday, August 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19134]


[[Page Unknown]]

[Federal Register: August 5, 1994]


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FEDERAL TRADE COMMISSION
[File No. 891 0104]

 

Boulder Ridge Cable TV, et al.; Proposed Consent Agreement With 
Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, two California-based cable companies and 
their officers from enforcing rights they may have under the current 
non-competitive agreement, entered into as part of Boulder Ridge's 
acquisition of Three Palms, Ltd., and would bar the respondents from 
entering into similar agreements in the future.

DATES: Comments must be received on or before October 4, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:
Ronald B. Rowe, FTC/S-2105, Washington, D.C. 20580. (202) 326-2610.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the following consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of sixty (60) days. Public Comment is invited. Such comments or 
views will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Agreement Containing Consent Order

    In the matter of Boulder Ridge Cable TV, a corporation, Dean 
Hazen, individually and as an officer of respondent Boulder Ridge 
Cable TV, Inc., Weststar Communications, Inc., a corporation, and 
Rodney A. Hansen, individually.

    The Federal Trade Commission (``the Commission''), having initiated 
an investigation of certain acts and practices of Boulder Ridge Cable 
TV, and Dean Hazen, individually and as an officer of said corporation, 
and Rodney A. Hansen, individually and as a partner in Three Palms, 
Ltd., and it now appearing that Boulder Ridge Cable TV, a corporation, 
Dean Hazen, Rodney A. Hansen, and Weststar Communications, Inc., a 
corporation, are willing to enter into an agreement containing an order 
to cease and desist from the use of the acts and practices being 
investigated,
    It is hereby agreed, by and between Boulder Ridge Cable TV, by its 
duly authorized officer, and Dean Hazen, individually and as an officer 
of said corporation, and by and between Weststar Communications, Inc., 
by its duly authorized officer, and Rodney A. Hansen, individually, and 
counsel for the Commission that:
    1. Proposed respondent Boulder Ridge Cable TV (hereafter ``Boulder 
Ridge''), is a corporation organized, existing and doing business under 
and by virtue of the laws of the State of California, with its 
principal office and place of business at 590 Kelly Ave., Half Moon 
Bay, California 94019.
    2. Proposed respondent Dean Hazen is the president and majority 
shareholder of Boulder Ridge, and was the sole shareholder of Boulder 
Ridge at the time of the acts and practices being investigated. His 
business address is 590 Kelly Ave., Half Moon Bay, California 94019.
    3. Proposed respondent Weststar Communications, Inc. (hereafter 
`'Weststar''), is a corporation organized, existing and doing business 
under and by virtue of the laws of the State of California, with its 
principal office and place of business at 2200 Sunrise Blvd., Suite 
250, Rancho Cordova, California 95670.
    4. Proposed respondent Rodney A. Hansen is a shareholder of 
Weststar and was a partner in Three Palms, Ltd., a dissolved California 
partnership. His business address is 8217 Hegseth Court, Fair Oaks, 
California 95628.
    5. Proposed respondents Boulder Ridge and Dean Hazen are 
collectively and individually referred to herein as proposed 
respondents ``Boulder Ridge Entities.''
    6. Proposed respondent Weststar and Rodney A. Hansen are 
collectively and individually referred to herein as respondents ``Three 
Palms Entities.''
    7. Boulder Ridge Entities and Three Palms Entities admit all the 
jurisdictional facts set forth in the draft of complaint, here 
attached.
    8. Boulder Ridge Entities and Three Palms Entities each waive:
    a. Any further procedural steps;
    b. The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    c. All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    d. Any claim under the Equal Access to Justice Act.
    9. This agreement shall not become a part of the public record of 
the proceeding unless and until it is accepted by the Commission. If 
this agreement is accepted by the Commission it, together with the 
draft of complaint contemplated thereby, will be placed on the public 
record for a period of sixty (60) days and information in respect 
thereto publicly released. The Commission thereafter may either 
withdraw its acceptance of this agreement and so notify Boulder Ridge 
Entities and Three Palms Entities, in which event it will take such 
action as it may consider appropriate, or issue and serve its complaint 
(in such form as the circumstances may require) and decision, in 
disposition of the proceeding.
    10. This agreement is for settlement purposes only and does not 
constitute an admission by Boulder Ridge Entities or Three Palms 
Entities that the law has been violated as alleged in the draft of 
complaint here attached, or that the facts as alleged in the draft 
complaint, other than jurisdictional facts, are true.
    11. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Section 2.34 of the 
Commission's Rules, the Commission may, without further notice to 
Boulder Ridge Entities and Three Palms Entities, (1) Issue its 
complaint corresponding in form and substance with the draft of 
complaint here attached and its decision containing the following Order 
to cease and desist, and (2) make information public with respect 
thereto. When so entered, the Order shall have the same force and 
effect and may be altered, modified, or set aside in the same manner 
and within the same time provided by statute for other orders. The 
Order shall become final upon service. Delivery by the U.S. Postal 
Service of the complaint and decision containing the agreed-to-Order to 
Boulder Ridge Entities' counsel and to Three Palms Entities' counsel 
shall constitute service. Boulder Ridge Entities and Three Palms 
Entities each waive any right they may have to any other manner of 
service. The complaint may be used in construing the terms of the 
Order, and no agreement, understanding, representation or 
interpretation not contained in the Order or the agreement may be used 
to vary or contradict the terms of the Order.
    12. Boulder Ridge Entities and Three Palms Entities have read the 
proposed complaint and Order contemplated hereby. Boulder Ridge 
Entities and Three Palms Entities understand that once the Order has 
been issued, each will be required to file one or more compliance 
reports showing that they have fully complied with the Order. Boulder 
Ridge Entities and Three Palms Entities further understand that they 
may be liable for civil penalties in the amount provided by law for 
each violation of the Order after it becomes final.

Order

I
    As used in this Order, the following definitions shall apply:
    (A) ``Boulder Ridge'' means (1) Boulder Ridge Cable TV, and its 
predecessors, successors and assigns, subsidiaries, and divisions, and 
their respective directors, officers, employees, agents, and 
representatives; and (2) partnerships, joint ventures, groups and 
affiliates that Boulder Ridge Cable TV, controls, directly or 
indirectly, and their respective directors, officers, employees, 
agents, and representatives.
    (B) ``Dean Hazen'' means Dean Hazen, individually, and all 
partnerships, joint ventures, and corporations that Dean Hazen 
controls, directly or indirectly, and their respective directors, 
officers, employees, agents, and representatives.
    (C) ``Three Palms, Ltd.'' means (1) Three Palms, Ltd, and its 
predecessors, successors and assigns, subsidiaries, and division, and 
their respective directors, officers, employees, agents and 
representatives; and (2) partnerships, joint ventures, groups and 
affiliates that Three Palms, Ltd., controlled, directly or indirectly, 
and their respective directors, officers, employees, agents, and 
representatives.
    (D) ``Weststar Communications, Inc.'' means (1) Weststar 
Communications, Inc., and its predecessors, successors ad assigns, 
subsidiaries, divisions, and their respective directors, officers, 
employees, agents, and representatives; and (2) partnerships, joint 
ventures, groups and affiliates that Weststar Communications, Inc., 
controls, directly or indirectly, and their respective directors, 
officers, employees, agents and representatives.
    (E) ``Rodney A. Hansen'' means Rodney A. Hansen, individually, and 
all partnerships, joint ventures, and corporations that Rodney A. 
Hansen controls, directly or indirectly, and their respective directors 
officers, employees, agents, and representatives.
    (F) ``Respondents'' means Boulder Ridge Cable TV, Inc., Dean Hazen, 
Weststar Communications, Inc., and Rodney A. Hansen.
    (G) ``Cable Television Service'' means the delivery to the home of 
various entertainment and informational programming via a cable 
television system.
    (H) ``Cable Television System'' means a facility, consisting of a 
set of closed transmission paths and associated signal generation, 
reception, and control equipment that is designed to provide cable 
television service, which includes video programming and which is 
provided to multiple subscribers within a community. The term does not 
include: (a) A facility that service only to retransmit the television 
signals of one or more television broadcast stations; or (b) a facility 
that serves only subscribers in one or more multiple dwelling units 
under common ownership, control, or management, unless such facility or 
facilities uses a public right-of-way.
    (I) ``NON-COMPETITION AGREEMENT'' means the ``NON-COMPETITION AND 
NON-DISCLOSURE AGREEMENT'' signed by respondents and Three Palms, Ltd., 
on November 22, 1988.
    (J) ``Agreeing not to compete'' means agreeing directly or 
indirectly not to own, manage, operate, control (or engage or 
participate in the ownership, management, operation, or control of) a 
cable television system, subscription television system, multipoint 
distribution system, direct broadcast system, private operational fixed 
microwave service, or any similar multi-channel video distribution 
system or service (or obtaining or holding any authorizations or 
franchises for any of the foregoing) in competition with another 
person.
II
    It is ordered, That respondents, in connection with the purchase, 
sale, or operation of any cable television system or cable television 
service in or affecting commerce, as ``commerce'' is defined in the 
Federal Trade Commission Act, as amended, to forthwith cease and desist 
from enforcing any rights they may have under Paragraphs 3 and 4 of the 
Non-Competition Agreement.
III
    It is further ordered, That respondents, in connection with the 
acquisition or sale of any cable television system or cable television 
service in or affecting commerce, as ``commerce'' is defined in the 
Federal Trade Commission Act, as amended, do forthwith cease and desist 
from agreeing not to compete with the seller or buyer of such cable 
television system or cable television service in any geographic area. 
Provided, however, that this paragraph shall not apply to any agreement 
made in connection with the lawful acquisition or sale of a cable 
television system or cable television service in which the seller 
agrees not to compete with the buyer or buyers, or the buyer agrees not 
to compete with the seller or sellers, in a geographic area that is 
reasonably related to:
    (A) The cable television system or cable television service that is 
being acquired or sold;
    (B) A proximately located system or service of the buyer with which 
the cable television system or cable television service that is being 
acquired will be jointly operated; or
    (C) A proximately located system or service of the seller with 
which the cable television system or cable television service that is 
being sold previously was jointly operated.
IV
    It is further ordered, That, within sixty (60) days after the date 
this Order becomes final, and annually thereafter for a period of three 
(3) years on the anniversary date this Order becomes finale, and at 
such other times as the Commission or its staff may request, each 
respondent shall file with the Secretary of the Federal Trade 
Commission a verified written report setting forth in detail the manner 
and form in which it intends to comply, is complying and has complied 
with this Order.
V
    It is further ordered, That, for the purposes of determining of 
securing compliance with this Order, and subject to any legally 
recognized privilege, upon written request and on five days notice to 
any respondent, made to its principal office, such respondent shall 
permit any duly authorized representatives of the Federal Trade 
Commission:
    (A) Access, during office hours and in the presence of counsel, to 
inspect and copy all books, ledgers, accounts, correspondence, 
memoranda and other records and documents in the possession or under 
the control of respondent relating to any matters contained in this 
Order; and
    (B) Without restraint or interference from respondent, an 
opportunity to interview officers or employees of respondent, who may 
have counsel present, regarding any matters contained in this Order.
VI
    It is further ordered, that, each respondent shall notify the 
Federal Trade Commission at least thirty (30) days prior to any 
proposed change in such respondent such as dissolution, assignment, or 
sale resulting in the emergence of a successor corporation or 
partnership, the creation, dissolution, or sale of subsidiaries, and 
any other change that may affect compliance obligations arising out of 
this Order.

Analysis to Aid Public Comment on the Provisionally Accepted 
Consent Order

    The Federal Trade Commission (``Commission'') has accepted for 
public comment, from Boulder Ridge Cable TV (``Boulder Ridge''), Dean 
Hazen, Weststar Communications, Inc., and Rodney A. Hansen 
(collectively ``the parties''), an agreement containing consent order. 
This agreement has been placed on the public record for sixty (60) days 
for reception of comments from interested persons.
    Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement or make final the agreement's order.
    The Commission's investigation of this matter concerns a non-
competition and non-disclosure agreement signed by the parties in 
connection with the acquisition of Three Palms, Ltd. (``Three Palms''), 
by Boulder Ridge. Boulder Ridge and Three Palms operated competing 
cable companies in Ridgecrest, California. The parties own and operate 
multiple cable systems in California and Hawaii.
    The agreement containing consent order, if finally issued by the 
Commission, would settle charges that the mutual agreement not to 
compete between Boulder Ridge and Three Palms appears to restrain 
competition unreasonably and bears no reasonable relation to the 
Ridgecrest market interests of the buying firm. The Commission has 
reason to believe that the agreement would affect competition for cable 
television services adversely and would violate Section 5 of the 
Federal Trade Commission Act, unless an effective remedy eliminates 
such anticompetitive effects.
    The order accepted for public comment would require the parties to 
cease and desist from enforcing any rights they may have under 
Paragraphs 3 and 4 of the agreement not to compete. The order also 
would ban the parties from entering into similar agreements in the 
future by prohibiting them from agreeing not to compete in any 
geographic area unrelated to the cable system or systems being sold. 
This would bar any unreasonable broad covenant not to compete but would 
provide an exception for an agreement made in connection with the sale 
of a cable television system or cable television service in which the 
parties agree not to compete with one another in a geographic area that 
is reasonably related to the cable television system or cable 
television service that is being acquired or sold.
    The purpose of this analysis is to invite public comment concerning 
the consent order. This analysis is not intended to constitute an 
official interpretation of the agreement and order or to modify their 
terms in any way.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 94-19134 Filed 8-4-94; 8:45 am]
BILLING CODE 6750-01-M