[Federal Register Volume 60, Number 148 (Wednesday, August 2, 1995)]
[Notices]
[Pages 39399-39403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18956]



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FEDERAL TRADE COMMISSION
[File No. 951-0024]


Summit Communications Group, Inc., 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, Summit and seven Wometco Cable TV 
companies from agreeing, attempting to agree or carrying out an 
agreement with any cable television provider to allocate or divide 
markets, customers, contracts or territories for cable television 
service in the incorporated and unincorporated areas of the Georgia 
counties of Cobb, Bartow, Dekalb, Walton, Gwinnett, Fulton, Douglas, 
Fayette, Coweta, Clayton, Henry, Rockdale, Newton and Cherokee.


[[Page 39400]]

DATES: Comments must be received on or before October 2, 1995.

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

FOR FURTHER INFORMATION CONTACT: Ronald Rowe or Robert Doyle, Jr., FTC/
S-2105, Washington, DC 20580. (202) 326-2610 or 326-2819.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 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 Section 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    In the Matter of Summit Communications Group, Inc., a 
corporation, and Wometco Cable TV of Georgia, Inc., a corporation; 
Wometco Cable TV of Cobb County, Inc., a corporation; Wometco Cable 
TV of Clayton County, Inc., a corporation; Wometco Cable TV of 
Conyers-Rockdale, Inc., a corporation; Wometco Cable TV of Fayette 
County, Inc., a corporation; Wometco Cable TV of Fulton County, a 
corporation; and Wometco Cable TV of Henry County, Inc., a 
corporation.

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Summit Communications Group, Inc. 
(``Summit''), a Delaware corporation, and Wometco Cable TV of Georgia, 
Inc., a Georgia corporation, Wometco Cable TV of Cobb County, Inc., a 
Georgia corporation, Wometco Cable TV of Clayton County, Inc., a 
Georgia corporation, Wometco Cable TV of Conyers-Rockdale, Inc., a 
Georgia corporation, Wometco Cable TV of Fayette County, Inc., a 
Georgia corporation, Wometco Cable TV of Fulton County, a Georgia 
corporation, and Wometco Cable TV of Henry County Inc., a Georgia 
corporation (hereinafter collectively referred to as ``Wometco''), and 
it now appearing that Summit and Wometco are willing to enter into an 
agreement containing an order to cease and desist from the acts and the 
practices being investigated and providing for other relief:
    It is hereby agreed by and between Summit and Wometco, by their 
duly authorized officers and attorneys, and counsel for the Federal 
Trade Commission that:
    1. Proposed respondent Summit is a corporation organized, existing, 
and doing business under and by virtue of the laws of the State of 
Delaware, with its office and principal place of business at 115 
Perimeter Center Place, Suite 1150, Atlanta, Georgia 30346.
    2. Proposed respondent Wometco Cable TV of Georgia, Inc., is a 
corporation organized, existing, and doing business under and by virtue 
of the laws of the State of Georgia, with its office and principal 
place of business at 5979 Fairburn Road, Douglasville, Georgia 30134.
    3. Proposed respondent Wometco Cable TV of Cobb County, Inc., is a 
corporation organized, existing, and doing business under and by virtue 
of the laws of the State of Georgia, with its office and principal 
place of business at 1145 Powder Springs Road, Marietta, Georgia 30064.
    4. Proposed respondent Wometco Cable TV of Clayton County, Inc., is 
a corporation organized, existing, and doing business under and by 
virtue of the laws of the State of Georgia, with its office and 
principal place of business at 6435 Tara Boulevard, Suite 22, 
Jonesboro, Georgia 30236.
    5. Proposed respondent Wometco Cable TV of Conyers-Rockdale, Inc., 
is a corporation organized, existing, and doing business under and by 
virtue of the laws of the State of Georgia, with its office and 
principal place of business at 1361 Iris Drive, Conyers, Georgia 30209.
    6. Proposed respondent Wometco Cable TV of Fayette County, Inc., is 
a corporation organized, existing, and doing business under and by 
virtue of the laws of the State of Georgia, with its office and 
principal place of business at 107 South Glynn Street, Fayetteville, 
Georgia 30214.
    7. Proposed respondent Wometco Cable TV of Fulton County is a 
corporation organized, existing, and doing business under and by virtue 
of the laws of the State of Georgia, with its office and principal 
place of business at 6435 Tara Boulevard, Suite 22, Jonesboro, Georgia 
30236.
    8. Proposed respondent Wometco Cable TV of Henry County, Inc., is a 
corporation organized, existing, and doing business under and by virtue 
of the laws of the State of Georgia, with its office and principal 
place of business at 6435 Tara Boulevard, Suite 22, Jonesboro, Georgia 
30236.
    9. Time Warner Inc. (``TWI'') is a corporation organized, existing, 
and doing business under and by virtue of the laws of the State of 
Delaware, with its office and principal place of business at 75 
Rockefeller Plaza, New York, New York 10019. After consummation of a 
proposed acquisition of Summit by TWI, Summit will become a wholly-
owned subsidiary of TWI.
    10. U S WEST, Inc. (``USW'') is a corporation organized, existing, 
and doing business under and by virtue of the laws of the State of 
Colorado, with its office and principal place of business at 7800 East 
Orchard Road, Englewood, Colorado 80111. USW is an owner of 
approximately 25% of Time Warner Entertainment Company, L.P., an 
affiliate of TWI. On December 6, 1994, USW, through its wholly-owned 
subsidiary Multimedia Cable, Inc., a Delaware corporation, acquired 
Wometco.
    11. Summit and Wometco admit all the jurisdictional facts set forth 
in the draft of complaint.
    12. Summit and Wometco 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.
    13. This agreement shall not become 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 with respect 
thereto publicly released. The Commission thereafter may either 
withdraw its acceptance of this agreement and so notify Summit and 
Wometco, 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.
    14. This agreement is for settlement purposes only and does not 
constitute an admission by Summit or Wometco that the law has been 
violated as alleged in the draft of complaint or that the facts as 
alleged in the draft complaint, other than jurisdictional facts, are 
true.
    15. 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 Sec. 2.34 of the 

[[Page 39401]]
Commission's Rules, the Commission may, without further notice to 
Summit or Wometco, (1) issue its complaint corresponding in form and 
substance with the draft complaint and its decision containing the 
following order to cease and desist in disposition of the proceeding, 
and (2) make information public with respect thereto. When so entered, 
the order to cease and desist 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 
compliant and decision containing the agreed-to order to the addresses 
of Summit and Wometco, as stated in this agreement, shall constitute 
service. Summit and Wometco waive any right each 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.
    16. Summit and Wometco have read the proposed compliant and order 
contemplated hereby. They understand that once the order has been 
issued, each will be required to file one or more compliance reports 
showing that each has fully complied with the order. Summit and Wometco 
further understand that they may be liable for civil penalties in the 
amount provided by law for each violation of the order after the order 
becomes final.

Order

I

    It is Ordered that, as used in this order, the following 
definitions shall apply:
    A. ``Summit'' means Summit Communications Group, Inc., its 
directors, officers, employees, agents and representatives, 
predecessors, successors and assigns, its subsidiaries, divisions, 
groups and affiliates controlled by Summit, and the respective 
directors, officers, employees, agents, representatives, successors and 
assigns of each:
    B. ``Wometco'' means Wometco Cable TV of Georgia, Inc., Wometco 
Cable TV of Cobb County, Inc., Wometco Cable TV of Clayton County, 
Inc., Wometco Cable TV of Conyers-Rockdale, Inc., Wometco Cable TV of 
Fayeete County, Inc., Wometco Table TV of Fulton County, Wometco Cable 
TV of Henry County, Inc., their directors, officers, employees, agents 
and representatives, predecessors, successors and assigns, their 
subsidiaries, divisions, groups and affiliates controlled by Wometco, 
and the respective directors, officers, employees, agents, 
representatives, successors and assigns of each;
    C. ``TWI'' means Time Warner Inc., its directors, officers, 
employees agents and representatives, predecessors, successors and 
assigns, it subsidiaries, divisions, group and affiliates controlled by 
TWI, and the respective directors, officers, employees, agents, 
representatives, successors and assigns of each;
    D. ``USW'' means US West, Inc., its directors, officers, employees, 
agents and representatives, predecessors, successors and assigns, its 
subsidiaries, divisions, groups and affiliates controlled by USW, and 
the respective directors, officers, employees, agents, representatives, 
successors and assigns of each;
    E. ``Commission'' means the Federal Trade Commission;
    F. ``Cable Operator'' means any partnership, sole proprietorship or 
corporation, including all of its subsidiaries, affiliates, divisions 
and joint ventures, that owns, controls or operates one or more Cable 
Television Systems; ``Cable Operator'' includes the partners, directors 
officers, employees, and agents of such partnership, sole 
proprietorship or corporation as well as the directors, officers, 
employees, and agents of such partnership's sole proprietorship's or 
corporation's subsidiaries, affiliates, divisions and joint ventures. 
The words ``subsidiary,'' ``affiliate,'' and ``joint venture'' refer to 
any firm in which there is partial (10% or more) or total ownership or 
control between corporations.
    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 serves 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. ``Relevant Geographic Area'' means the incorporated and 
unincorporated areas of the counties of Cobb, Bartow, Dekalb, Walton, 
Gwinnett, Fulton, Douglas, Fayette, Coweta, Clayton, Henry, Rockdale, 
Newton, and Cherokee, in the State of Georgia.
    J. ``Overbuilding'' means instances in which two or more Cable 
Operators have the facilities to provide and are capable of providing 
Cable Television Service to the same subscribers.

II

    It is further ordered that Summit and Wometco each cease and desist 
from, directly, indirectly, or through any corporate or other device, 
in or affecting commerce, as ``commerce'' is defined in the Federal 
Trade Commission Act, combining or attempting to combine, entering into 
or attempting to enter into, organizing or attempting to organize, 
implementing or attempting to implement, carrying out or attempting to 
carry out, or soliciting or attempting to solicit, any combination, 
agreement, or understanding, either express or implied, with any Cable 
Operator or other provider or potential provider of Cable Television 
Service in any part of the Relevant Geographic Area:
    A. To allocate or divide markets, customers, contracts, or 
territories for Cable Television Service in any part of the Relevant 
Geographic Area. ``Customers'' includes, but is not limited to, 
residents of existing, newly-constructed, or future housing 
developments, subdivisions, apartment complexes, or hotels; and
    B. To refrain from Overbuilding any portion of any Cable Television 
System in any part of the Relevant Geographic Area.
    Provided that nothing contained in the foregoing paragraphs of this 
order shall be construed to prohibit TWI or USW from engaging in any 
lawful conduct or entering into any lawful agreement.
III

    It is further ordered that Summit and Wometco shall:
    A. Within thirty (30) days after the date this order becomes final, 
distribute a copy of the complaint and order to each of their 
directors, officers, and supervisory employees who are in any way 
involved in Cable Television Service in the Relevant Geographic Area;
    B. For a period of three (3) years after the date this order 
becomes final, furnish a copy of the complaint and order to each of 
their new directors, officers, and to each of their supervisory 
employees in any way involved in Cable Television Service in the 
Relevant Geographic Area, at the time they 

[[Page 39402]]
become a director, officer, or supervisory employee;
    C. For a period of three (3) years from the date this order becomes 
final, and within thirty (30) days after the date any entity becomes a 
majority-owned subsidiary of Summit or Wometco, provide a copy of the 
complaint and order to all directors, officers, and supervisory 
employees of such entity who are in any way involved in Cable 
Television Service in the Relevant Geographic Area.

IV

    It is ordered that Summit and Wometco:
    A. Within sixty (60) days after the date this order becomes final, 
and annually for the next five (5) years on the anniversary of the date 
this order becomes final, and at other times as the Commission may 
require, shall each file a verified written report with the Commission 
setting forth in detail the manner and form in which each has complied 
and is complying with this order;
    B. For the purpose of determining or securing compliance with this 
order, shall permit any duly authorized representative of the 
Commission:
    1. 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 Summit or Wometco, relating to any matters contained in 
this order; and
    2. Upon five days' notice to Summit and Wometco, and without 
restraint or interference from them, to interview officers, directors, 
or employees of Summit and Wometco, relating to any matters contained 
in this order. Summit and Wometco, and the officers, directors, and 
employees, may have counsel present.
    C. Shall notify the Commission at least thirty (30) days prior to 
any proposed change in Summit or Wometco affecting the provision of 
Cable Television Service in the Relevant Geographic Area, such as 
dissolution, assignment, or sale resulting in the emergence of a 
successor corporation, or the creation or dissolution of subsidiaries 
or any other change that may affect their compliance obligations 
arising out of this order.

V

    It is further ordered that this order shall terminate twenty (20) 
years from the date this order becomes final.
Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted for 
public comment from Summit Communications Group, Inc. (``Summit''), 
and Wometco Cable TV of Georgia, Inc., Wometco Cable TV of Cobb 
County, Inc., Wometco Cable TV of Clayton County, Inc., Wometco 
Cable TV of Conyers-Rockdale, Inc., Wometco Cable TV of Fayette 
County, Inc., Wometco Cable TV of Fulton County, and Wometco Cable 
TV of Henry County, Inc. (hereinafter collectively referred to as 
``Wometco''), an agreement containing a proposed consent order to 
cease and desist.
    The agreement has been placed on the public record for sixty 
(60) days for receipt 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 
proposed order.
    The Complaint prepared for issuance by the Commission along with 
the proposed order alleges that on or about April 26, 1990, 
officials of Summit and Wometco reached an understanding concerning 
which of the two companies would serve apartment complexes and/or 
housing complexes in an area of unincorporated Cob County, Georgia, 
where both companies have franchise authority to provide cable 
television service. The Complaint alleges that this understanding 
between Summit and Wometco was in operation from late April 1990 
until at least March 24, 1993. The Complaint alleges that this 
understanding reached by Summit and Wometco was an agreement not to 
compete and has had the purpose or effect, or the tendency and 
capacity, to restrain competition unreasonably and to injure 
consumers by restraining competition between providers of cable 
television services in parts of unincorporated Cobb County, and 
depriving cable television subscribers in parts of unincorporated 
Cobb County of access to a competitively determined price and 
quality of cable television services.
    Summit and Wometco have signed a consent agreement containing 
the proposed order. The proposed order prohibits Summit and Wometco 
from directly or indirectly combining or attempting to combine, 
entering into or attempting to enter into, organizing or attempting 
to organize, implementing or attempting to implement, carrying out 
or attempting to carry out, or soliciting or attempting to solicit 
any combination, agreement, or understanding, either express or 
implied, with any cable operator or other provider or potential 
provider of cable television services to (a) allocate or divide 
markets, customers, contracts, or territories for cable television 
service, and (b) refrain from overbuilding any portion of any cable 
television system, in any part of the incorporated and 
unincorporated areas of the counties of Cobb, Bartow, Dekalb, 
Walton, Gwinnett, Fulton, Douglas, Fayette, Cowetta, Clayton, Henry, 
Rockdale, Newton, and Cherokee, in the State of Georgia.
    The purpose of this analysis is to invite public comment 
concerning the proposed consent order. This analysis is not intended 
to consent order. This analysis is not intended to constitute an 
official interpretation of the agreement and proposed order or to 
modify their terms in any way. The agreement would settle charges by 
the Commission that the proposed respondents violated Section 5 of 
the Federal Trade Commission Act by engaging in practices that 
restricted competition between providers of cable television 
services in parts of unincorporated Cobb County, Georgia.
Statement of the Commission; Summit Communications Group, Inc.

[File No. 951-0024]

    In this matter, the Commission has alleged that the respondents, 
Summit and Wometco, which were competing providers of cable 
television service, entered into a market allocation agreement. Such 
an agreement is per se illegal and, in this case, deprived cable 
television subscribers of a competitive marketplace.
    The two respondents were Georgia-based firms, each of which 
offered cable television services in some or all of fourteen Georgia 
counties. Subsequent to the alleged illegal conduct, Wometco was 
acquired by U.S. West, and after commencement of the Commission's 
investigation, Summit was acquired by Time-Warner. Thus, both Summit 
and Wometco are under the active control of major cable television 
firms whose managements were not implicated by the allegations of 
the Commission's complaint.
    The proposed order prevents these respondents from engaging in 
similar conduct in the fourteen counties in Georgia where either of 
the two firms had operations, a far broader area than the small area 
in one county where the parties had cable systems capable of 
competing for business. Under the unique circumstances of this 
proceeding, the Commission has concluded that relief may be limited 
in this fashion.
    The Commission's policy is that where per se illegal conduct is 
found, it will seek the broadest possible relief, without geographic 
limitation. Boulder Ridge Cable TV, Docket No. C-3537 (Oct. 19, 
1994). Only in extraordinary cases, such as this one, will it be 
appropriate to limit the scope of relief.

Statement of Commissioner Mary L. Azcuenaga Concurring in Part and 
Dissenting in Part; Summit Communications Group, Inc.

[File No. 951-0024]

    I concur in the Commission decision to issue a complaint 
alleging that the respondents conspired to allocate the market for 
cable television services. Market allocation agreements, including 
this one, are per se unlawful. Addyston Pipe and Steel Co. v. United 
States, 175 U.S. 211 (1899).
    I dissent from the decision to limit the cease and desist order 
against Summit Communications Group, Inc. (Summit) and the seven 
named Wometco cable systems to a small geographic area surrounding 
Atlanta, Georgia. Summit operates cable television systems outside 
the fourteen Georgia counties that are included in the geographic 

[[Page 39403]]
coverage of the order, and the order does nothing to prevent future 
violations at those systems. If, after the order is issued, Summit 
enters an identical market allocation agreement at a cable system 
outside these fourteen counties, the Commission's only recourse will 
be to initiate an administrative proceeding to obtain still another 
order.
    Market allocation, like price fixing, has long been deemed per 
se unlawful, and no proof of market power is necessary to condemn 
the conduct. Nothing about the fourteen Georgia counties renders 
them uniquely susceptible to market allocation schemes. Since market 
allocation is unlawful whenever and wherever it occurs, I see no 
reason to limit the prohibition in the order to a tiny geographic 
region.
    The complaint and order set forth no rationale for drawing a 
line around these fourteen counties as the geographic metes and 
bounds of the order's coverage. The actual agreements alleged in 
paragraphs six through eleven of the complaint relate to the 
provision of cable television service to the Asbury Village 
apartment complex and specific housing subdivisions. As alleged in 
paragraph thirteen of the complaint, the restraint of trade had its 
anticompetitive effect only in these unincorporated areas of Cobb 
County, Georgia. The absence of any apparent rationale is troubling. 
In future cases, it opens the door to unguided negotiations 
regarding the geographic scope of conduct orders.
    This is the second consent agreement involving allegations of 
market allocation in which the Commission has limited the coverage 
of the order to a narrow geographic area In B & J School Bus 
Service, Inc., Docket No. C-3425 (April 22, 1993), I dissented from 
the limitation on the geographic coverage of the order on the ground 
that in the rare case in which the Commission uncovers a flagrant 
per se violation such as bid rigging, price fixing or market 
allocation, it should take strong action to prohibit the 
participants in conspiracy from repeating the violation. I expressed 
concern that the Commission was signalling a new leniency toward per 
se antitrust violations. In accepting this second order with such a 
weak and limited remedy, the Commission appears to eliminate the 
possibility that the school bus order can be disregarded as an 
aberration.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 95-18956 Filed 8-1-95; 8:45 am]
BILLING CODE 6750-01-M