[Federal Register Volume 59, Number 197 (Thursday, October 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25023]


[[Page Unknown]]

[Federal Register: October 13, 1994]


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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76

[MM Docket Nos. 92-266 and 93-215, FCC 94-234]

 

Cable Television Act of 1992

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission has adopted a Fifth Order on Reconsideration to 
revise certain cable regulations affecting small cable operators. Small 
operators now will be permitted a total of 90 days after their initial 
date of regulation to complete and submit required rate justification 
forms and provide to subscribers advance notification of service and 
equipment changes. Furthermore, small operators may make their initial 
basic tier rates, established in accordance with the Commission's 
revised rate regulations, effective on 30-days notice without prior 
approval from their local franchising authority. If, upon subsequent 
examination of a rate justification, a local franchising authority or 
the Commission finds that a small operator has implemented rates in 
excess of the maximum permitted rate, refunds may be ordered in 
accordance with the Commission's regulations. These actions will 
provide small cable operators with the administrative flexibility 
needed to comply properly with the Commission's rate regulations.
    The Commission also has adopted a Further Notice of Proposed 
Rulemaking, which may be found elsewhere in this Federal Register.

EFFECTIVE DATE: November 16, 1994.

FOR FURTHER INFORMATION CONTACT: Susan Cosentino, (202) 416-0800.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Fifth Order on 
Reconsideration in MM Docket No. 92-266 and MM Docket No. 93-215, FCC 
94-234, adopted September 12, 1994 and released September 26, 1994.
    The complete text of this Fifth Order on Reconsideration is 
available for inspection and copying during normal business hours in 
the FCC Reference Center (room 239), 1919 M Street, NW., Washington, 
DC, and also may be purchased from the Commission's copy contractor, 
International Transcription Service at (202) 857-3800, 2100 M Street, 
NW., Suite 140, Washington, DC 20037.

Synopsis of the Fifth Order on Reconsideration

    Pursuant to the Cable Television Consumer Protection and 
Competition Act of 1992 (``1992 Cable Act''), the Commission has 
established a comprehensive regulatory framework governing rates for 
regulated cable services and equipment. Under that framework, all 
regulated cable systems generally must set rates based on a 17 percent 
competitive rate reduction from September 30, 1992 levels unless the 
system is (1) eligible for temporary transition relief, (2) is eligible 
for temporary streamlined rate relief, or (3) justifies rates based on 
a cost-of-service showing.
    The 1992 Cable Act requires the Commission to reduce regulatory 
burdens on small systems. Small systems are defined in the statute as 
systems serving 1,000 or fewer subscribers. Pursuant to that mandate, 
the Commission's regulatory framework governing regulated cable 
services incorporates several features designed to reduce 
administrative burdens on small systems. These small systems may elect 
to make streamlined rate reductions, unbundle charges for regulated 
equipment based on their average equipment costs, make use of a 
streamlined cost-of-service showing, or opt for transitional rate 
relief. Small cable operators also may elect transitional rate relief. 
Small operators are defined as operators serving 15,000 or fewer 
subscribers who are not affiliated with a larger operator.
    Under the Commission's rules, cable operators must file a rate 
justification or cost-of-service showing for regulated service and 
equipment, within 30 days of the initial date of regulation. All cable 
operators are required to have rates and service offerings that comply 
with our rules on the initial date of regulation. Operators with 
equipment or service charges that exceed permitted levels are subject 
to refund liability. As indicated, the 1992 Cable Act requires the 
Commission to reduce administrative burdens for small systems. We 
believe this statutory purpose would be furthered by permitting small 
operators a brief period of time to restructure and establish rates and 
service offerings that comply with our rules after a tier becomes 
regulated, rather than require them to be in compliance with rate rules 
on the initial date of regulation.
    We take these actions on reconsideration on our own motion. 
Petitions for reconsideration in Dockets MM 92-266 and 93-215 
addressing other aspects of our rate rules remain pending and will be 
addressed in subsequent Orders. We take up these issues on our own 
motion in order to establish additional relief for small systems as 
required by the Cable Television Consumer Protection and Competition 
Act of 1992, 47 U.S.C. Sec. 543.
    In the Rate Freeze Order, the Commission stated that it would 
consider lifting the freeze for a particular cable system if it could 
demonstrate that the freeze would impose severe economic hardship or 
threaten the viability of continued cable service. See Rate Freeze 
Order, MM Docket No. 92-266, FCC 93-176, 8 FCC Rcd 2921, 58 Fed. Reg. 
17530 (April 5, 1993). The Commission later denied Fidelity 
Cablevision, Inc.'s request for a waiver of the rate freeze for, among 
other things, failing to show that foreclosure proceedings had been, or 
would have been, initiated as a result of the rate freeze. See Order in 
the Matter of Fidelity Cablevision, Inc. Petition for Emergency Relief, 
FCC 93-445, 9 FCC Rcd 2629 (1993). In a July 28, 1994 letter, Jere W. 
Glover, Chief Counsel for Advocacy of the Small Business 
Administration, wrote to Chairman Reed E. Hundt that ``[p]roviding 
assistance at the time of bankruptcy or other type of loan foreclosure 
is too little assistance too late.''
    In the Report and Order and Further Notice of Proposed Rulemaking 
in MM Docket No. 93-215, the Commission made available hardship rate 
relief for an operator that concludes that the benchmark/cost-of-
service regulations threaten its financial health or ability to provide 
cable service. See Report and Order and Further Notice of Proposed 
Rulemaking, MM Docket No. 93-215, FCC 94-39, summarized at 59 Fed. Reg. 
17975 (April 15, 1994). Such relief does not require a showing that 
foreclosure or bankruptcy proceedings have been or would be imminently 
initiated, and continued cable service need not be in jeopardy. An 
important factor in assessing any hardship showing will be the 
operator's ability to meet costs, including costs associated with 
capital improvement and debt service. We recognize that there are 
differences among cable operators based on system size, and that small 
operators may experience greater difficulty in assembling documentation 
to make a hardship showing. Therefore, we would expect that a small 
operator could rely on existing data rather than expending resources on 
obtaining an independent analysis of its financial situation. 
Furthermore, the Commission recognizes that for those operators facing 
financial challenges, time is of the essence. The Commission will work 
as expeditiously as possible to resolve any request for hardship rate 
relief filed.
    This will reduce administrative burdens on small operators by 
assuring that they will not need to undertake the steps associated with 
establishing restructured rates and service offerings that comply with 
our rules, including completion of FCC forms, until they are actually 
regulated. Moreover, this additional time to comply will not harm cable 
subscribers because, under transition relief, small operators are not 
required in any event to make competitive rate reductions pending the 
Commission's cost studies, but may set rates based on March 31, 1994 
levels with some adjustments. Accordingly, we conclude that 
establishing a period of time after regulation begins for small 
operators to comply will further statutory purposes without injuring 
consumers.
    We believe that 90 days after the initial date of regulation is an 
appropriate period of time for small operator to establish rates and 
service offerings that comply with our rules. Accordingly, we will 
revise our rules to provide that small operators are not required to 
establish rates and service offerings that comply with our rules for 90 
days after the initial date of regulation. In addition, in order to 
assure that this will reduce administrative burdens, we are changing 
our rules to provide that small operators do not need to file necessary 
rate justification forms with the local franchising authority, or the 
Commission, until 60 days after the initial date of regulation. 
However, we are not altering our rules concerning provision of advance 
notice to subscribers. Pursuant to those rules, all operators, 
including small operators, must give 30-days notice to subscribers 
prior to implementing rate and service changes.
    Additionally, small systems and small operators may make their 
initial basic tier rates, established in accordance with the 
Commission's revised rate regulations, effective on 30-days notice 
without prior approval from their local franchising authority. If, upon 
subsequent examination of a rate justification, a local franchising 
authority or the Commission finds that a small operator or small system 
has implemented rates in excess of the maximum permitted rate, refunds 
may be ordered in accordance with our regulations.

Administrative Matters

Regulatory Flexibility Act Analysis

    Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C. 
Secs. 601-12, the Commission's final analysis with respect to the Fifth 
Order on Reconsideration is as follows:
    Need and purpose of this action. The Commission, in compliance with 
section 3(i) of the Cable Television Consumer Protection and 
Competition Act of 1992 pertaining to rate regulation, adopts rules and 
procedures intended to ensure cable subscribers of reasonable rates for 
cable services with minimum regulatory and administrative burden on 
cable entities.
    Sumary of issues raised by the public comments in response to the 
Initial Regulatory Flexibility Analysis. There were no comments 
submitted in response to the Initial Regulatory Flexibility Analysis. 
The Chief Counsel for Advocacy of the United States Small Business 
Administration filed comments in the original rulemaking order 
(``SBA''). The Commission addressed the concerns raised by the SBA in 
the First Report and Order, MM Docket No. 92-266, FCC 93-177. The SBA 
filed reply comments in MM Docket No. 93-215 and the Small Cable 
Business Association filed reply comments in MM Docket No. 92-266. 
Those comments will be reviewed as part of the instant Further Notice 
of Proposed Rulemaking.
    Significant alternatives considered and rejected. Petitioners 
representing cable interests and franchising authorities submitted 
several alternatives aimed at minimizing administrative burdens. The 
Commission responded to these comments in previous Orders in these 
dockets. Although the Commission is issuing this Fifth Order on 
Reconsideration on its own motion, the Commission has attempted to 
accommodate commenters' concerns and to reduce administrative burdens 
by providing an additional period of time for small cable operators to 
comply with the rate regulations.

Paperwork Reduction Act

    The requirements adopted herein have been analyzed with respect to 
the Paperwork Reduction Act of 1980 and found to impose no new or 
modified information collection requirements on the public.

Ordering Clauses

    Accordingly, it is ordered That, pursuant to sections 4(i), 4(j), 
303(r), 612, and 623 of the Communications Act of 1934, as amended, 47 
U.S.C. Secs. 154(i), 154(j), 303(r), 532, and 543 the rules, 
requirements and policies discussed in this Fifth Order on 
Reconsideration is adopted and Section 76.934 of the Commission's 
rules, 47 CFR Section 76.934, is amended as set forth below.
    It is further ordered That, the Secretary shall sent a copy of this 
Fifth Order on Reconsideration including the Initial Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration in accordance with paragraph 603(a) of the 
Regulatory Flexibility Act. Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. 
Secs. 601 et seq. (1981).
    It is further ordered, That, the requirements and regulations 
established in this decision shall become effective November 16, 1994.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

    Part 76 of Chapter I of Title 47 of the Code of Federal Regulations 
is amended as follows:

PART 76--CABLE TELEVISION SERVICE

    1. The authority citation for Part 76 continues to read as follows:

    Authority: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as 
amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085, 1101; 47 
U.S.C. Secs. 152, 153, 154, 301, 303, 307, 308, 309, 532, 533, 535, 
542, 543, 552, as amended, 106 Stat. 1460.

    2. Section 76.934 is amended by revising the section heading and 
adding paragraph (e) to read as follows:


Sec. 76.934  Small Systems and Small Operators.

* * * * *
    (e) Systems owned by Small Operators. Systems owned by small 
operators as defined in Section 76.922(b)(4)(A) shall have 90 days from 
their initial date of regulation of a tier to bring their rates for 
that tier into compliance with the requirements of Sections 76.922 and 
76.923. Such systems shall have sixty days from the initial date of 
regulation to file FCC Forms 1200, 1205, 1210, 1211, 1215, 1220 and/
1225 and any similar forms as appropriate. Rates established during the 
90-days period shall not be subject to prior approval by franchising 
authorities or the Commission, but shall be subject to refund pursuant 
to sections 76.942 and 76.961.

[FR Doc. 94-25023 Filed 10-12-94; 8:45 am]
BILLING CODE 6712-01-M