[Federal Register Volume 64, Number 127 (Friday, July 2, 1999)]
[Rules and Regulations]
[Pages 35948-35951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16955]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[CS Docket No. 96-85; FCC 99-57]
Implementation of Cable Act Reform Provisions of the
Telecommunications Act of 1996
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In the Report and Order, the Commission implemented provisions
of the 1996 Telecommunications Act that reform several parts of Title
VI of the Communications Act of 1934, including sections on effective
competition to a cable system, small cable operator rules, uniform rate
requirements, technical standards, and the sunset of the Commission's
role in regulating rates on the cable service programming tier.
DATES: Effective August 31, 1999 except for sections 76.952 and 76.990
which contain information collection requirements that have not been
approved by the Office of Management and Budget (``OMB''). The
Commission will publish a document in the Federal Register announcing
the effective date of those sections. Written comments by the public on
the information collection requirements are due August 2, 1999. Written
comments must be submitted by OMB on the information collection
requirements on or before August 31, 1999.
ADDRESSES: A copy of any comments on the information collections
contained herein should be submitted to Judy Boley, Federal
Communications Commission, Room 1-C804, 445 12th Street, SW,
Washington, DC 20554, and to Timothy Fain, OMB Desk Officer, 10236
NEOB, 725--17th Street, NW, Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT: Peggy Greene or Nancy Stevenson, Cable
Services Bureau (202) 418-7200, TTY (202) 418-7172. For additional
information concerning the information collections contained in this
Report and Order, contact Judy Boley at 202-418-0214, or via the
Internet at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Report and Order in CS Docket No. 96-85, FCC 99-57, adopted March 25,
1999, and released March 29, 1999. The complete text of the Report and
Order is available for inspection and copying during normal business
hours in the FCC Reference Center, and may also be purchased from the
Commission's copy contractor, International Transcription Service
(``ITS, Inc.''), (202) 857-3800, 1231 20th Street, NW, Washington, DC
20036. In addition, the complete text of the Report and Order is
available on the Internet at http://www.fcc.gov/Bureaus/Cable/Orders/
1999/fcc99057.txt.
Paperwork Reduction Act
This Report and Order has been analyzed with respect to the
Paperwork Reduction Act of 1995 (the ``1995 Act'') and found to impose
new or modified information collection requirements on the public. The
Commission, as part of its continuing effort to reduce paperwork
burdens, invites the general public to take this opportunity to comment
on the information collection requirements contained in this Report and
Order, as required by the 1995 Act. Public comments are due August 2,
1999. Written comments must be submitted by OMB on or before August 31,
1999. Comments should address: (a) whether the proposed collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
OMB Approval Number: 3060-0706.
Title: Cable Act Reform.
Type of Review: Revision of existing collection.
Respondents: Business and for-profit entities; state, local and
tribal governments.
Number of Respondents: 950.
Estimated Time per Response: 1-8 hours.
Total Estimated Annual Burden to Respondents: 3,900 hours.
Total Estimated Annual Cost to Respondents: $4,100.
Needs and Uses: The notice, filing and third-party disclosure
requirements accounted for in OMB 3060-0706 serve a variety of purposes
for subscribers, cable operators, franchising authorities and the
Commission. For example, pursuant to section 76.952, franchising
authority contact information is furnished on monthly billing
statements and is used by cable subscribers when wanting to inquire
about cable matters in their community. Franchising authorities have
the option to not have this information furnished on billing statements
if they so choose. The filing of a written request to the cable
operator facilitates this option. Pursuant to section 76.990, a small
cable operator may certify in writing to its franchising authority that
it meets the criteria to qualify as a small operator. The information
filed as part of the certification is reviewed by the franchising
authority to determine whether the operator qualifies for deregulation
as a small cable operator. Pursuant to section 76.1404, copies of
contract information are filed with the Commission for a determination
of whether use of a cable operator's facilities by a local exchange
carrier is reasonably limited in scope and duration.
OMB Approval Number: 3060-0549.
Title: Cable Programming Services Complaints (FCC Form 329).
Type of Review: Revision of existing collection.
Respondents: Individuals; state, local and tribal governments.
Number of Respondents: 1,300.
Estimated Time per Response: 45 minutes.
Total Estimated Annual Burden to Respondents: 1,200 hours.
Total Estimated Annual Cost to Respondents: $3,200
Needs and Uses: The data are used by Commission staff to examine
the reasonableness of a cable operator's rates for programming service
or
[[Page 35949]]
associated equipment prior to the March 31, 1999 sunset of CPST rate
regulation. The filing of FCC Form 329 initiates an investigation of a
cable systems's rates for cable programming service.
Synopsis of the Report and Order
The Commission's Report and Order implements provisions of the
Telecommunications Act of 1996 (``1996 Act'') that reform several parts
of the Cable Television Consumer Protection and Competition Act of 1992
(``1992 Cable Act''). These are generally known as the ``Cable Reform''
provisions. The Report and Order also includes information about the
sunset of the Commission's role in regulating rates on the cable
service programming tier (``CPST''). The Cable Reform provisions
include sections on effective competition to a cable system, small
cable operator rules, uniform rate requirements, technical standards
and subscriber notice.
2.Key findings:
CPST rate regulation sunset: Pursuant to section 623 of
the 1996 Act, rates for CPST services provided after March 31, 1999
will not be subject to Commission review and regulation. The Commission
will continue to process complaints regarding rates for services
provided prior to March 31, 1999.
Effective Competition: The statute provides that a cable
operator's rates are not regulated if the cable system is subject to
effective competition. The 1996 Act added a new effective competition
test addressing competition from local exchange carriers (``LECs''),
LEC affiliates, or multichannel video programming distributors using
LEC facilities. The Commission determined that effective competition
will be found if a LEC's service offering substantially overlaps the
incumbent cable operator's service in the same franchise area.
Potential as well as actual LEC service can be considered. The 1996 Act
also requires that the LEC's programming service be comparable to the
incumbent cable operator's service. The Commission adopted the
definition used for the competing provider test for effective
competition, which specifies that comparable service must include at
least 12 channels of video programming, including at least one hannel
of nonbroadcast service. The Report and Order provides that all
effective competition cases, other than petitions for reconsideration
of LFA certifications to regulate rates, will be resolved as petitions
for determinations of effective competition under the Commission's
special relief procedures. This will ensure uniform procedures,
including use of the public notice provisions. The Commission retained
its rule for handling petitions for reconsideration of LFA
certifications, which includes an automatic stay provision so that
erroneous certifications can be addressed before the LFA starts
regulating rates.
Small Cable Operators: Under the statute, small cable
operators meeting certain criteria are exempted from some rate
regulation. In addition to cable programming services, the exemption
applies to a basic service tier (``BST'') that was the only service
tier subject to regulation as of December 31, 1994 in any franchise
area in which that operator services 50,000 or fewer subscribers. A
small cable operator is ``a cable operator that, directly or through an
affiliate, serves in the aggregate fewer than one percent (1%) of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' The Commission decided that the BST exemption is not
lost if the operator created additional tiers of service after December
31, 1994. An affiliation exists when an entity owns an active or
passive equity interest of 20% or more in the cable operator or holds
de facto control over the operator. Purely passive investment, however,
will not be treated as an affiliation. Implementing the Cable Reform
provisions does not affect the Commission's small system cost of
service rules. The Report and Order concludes that the Commission lacks
the discretion to maintain an operator's small operator status once it
no longer meets the eligibility requirements in the statute. The Report
and Order allows operators losing their eligibility to maintain the
rates prevailing prior to the loss of eligibility and to implement rate
increases pursuant to the generally applicable rate regulations. To
prevent cable operators from imposing large rate increases in
anticipation of a change in status, the Report and Order requires cable
operators to demonstrate that their rates were in effect for three
months prior to the loss of small cable status.
Uniform Rate Requirement: Under the statute, unless a
cable operator is subject to effective competition, its rates must be
uniform throughout the franchise area. The statute provides a limited
exception for bulk discounts to multiple dwelling units (``MDUs'') so
that cable operators can respond to competition in individual MDUs by
offering lower prices. The Report and Order concludes that a bulk
discount is a volume discount available to all residents of the MDU.
The operator can offer the discount directly to residents; negotiation
about the rate with the MDU owner or manager is not required.
Technical Standards: The 1996 Act retains the requirement
that the Commission establish minimum technical standards for cable
systems' technical operation and signal quality and adds that no state
or franchising authority may prohibit, condition, or restrict a cable
system's use of any type of subscriber equipment or any transmission
technology. The Report and Order concludes that LFA oversight and
enforcement of the Commission's technical standards is permitted but
that LFAs cannot impose technical standards different from the
Commission's technical standards. The Report and Order also finds that
transmission technology includes, for example, an operator's use of
digital or analog transmissions and its use of coaxial cable, fiber
optic cable, or microwave facilities. The Report and Order also
acknowledges the LFA's important role in determining local needs and
access channel requirements, requiring institutional networks,
reviewing an operator's qualifications, and managing public rights of
way.
Subscriber Notice: The 1996 Act provides that a cable
operator may provide notice of service and rate changes using any
reasonable written means at its sole discretion. The item concludes
that Congress intended to limit the Commission's discretion in this
area but did not completely eliminate the role of regulatory
authorities. LFAs and the Commission retain the authority to determine
that a particular mechanism is not reasonable.
Ordering Clauses
3. Accordingly, It is ordered that, pursuant to sections 4(i),
4(j), 303(r), as amended, 47 U.S.C. 154(i), 154(j), 303(r), and the
Telecommunications Act of 1996, sections 301 and 302, the requirements
and policies discussed in this Report and Order, Are amended as set
forth below.
It is further ordered that the requirements and regulations
established in this decision shall become effective upon approval by
OMB of the new information collection requirements adopted herein, but
no sooner than 60 days after publication in the Federal Register.
5. It is further ordered that the Commission's Office of Public
Affairs, Reference Operations Division, Shall send a copy of this
Report and Order, including the Final Regulatory Flexibility Analysis,
to the Chief Counsel for Advocacy of the Small Business Administration.
[[Page 35950]]
List of Subject in 47 CFR Part 76
Cable Television.
Federal Communications Commission.
Shirley Suggs,
Chief, Publication Branch.
Rule Changes
For the reasons discussed in the preamble, The Federal
Communications Commission amends 47 CFR Part 76 as follows:
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
1. The authority citation for Part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,
307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533,
534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556,
558, 560, 561, 571, 572, 573.
2. Section 76.701 is amended by adding a new note to paragraph (b)
to read as follows:
Sec. 76.701 Leased access channels.
* * * * *
Note to paragraph (b): ``Nudity'' in paragraph (b) is
interpreted to mean nudity that is obscene or indecent.
3. Section 76.901 is amended by adding a new paragraph (f) to read
as follows:
Sec. 76.901 Definitions.
* * * * *
(f) Small cable operator. A small cable operator is an operator
that, directly or through an affiliate, serves in the aggregate fewer
than 1 percent of all subscribers in the United States and is not
affiliated with any entity or entities whose gross annual revenues in
the aggregate exceed $250,000,000. For purposes of this definition, an
operator shall be deemed affiliated with another entity if that entity
holds a 20 percent or greater equity interest (not including truly
passive investment) in the operator or exercises de jure or de facto
control over the operator.
Note 1 to paragraph (f): Using the most reliable sources
publicly available, the Commission periodically will determine and
give public notice of the subscriber count that will serve as the 1
percent threshold until a new number is calculated.
Note 2 to paragraph (f): For a discussion of passive interests
with respect to small cable operators, see Implementation of Cable
Act Reform Provisions of the Telecommunications Act of 1996, Report
and Order in CS Docket No. 96-85, FCC 99-57 (released March 29,
1999).
Note 3 to paragraph (f): If two or more entities unaffiliated
with each other each hold an equity interest in the small cable
operator, the equity interests of the unaffiliated entities will not
be aggregated with each other for the purpose of determining whether
an entity meets or passes the 20 percent affiliation threshold.
4. Section 76.905 is amended by revising paragraph (g) to read as
follows:
Sec. 76.905 Standards for identification of cable systems subject to
effective competition.
* * * * *
(g) In order to offer comparable programming as that term is used
in this section, a competing multichannel video programming distributor
must offer at least 12 channels of video programming, including at
least one channel of nonbroadcast service programming.
5. Section 76.907 is added to read as follows:
Sec. 76.907 Petition for a determination of effective competition.
(a) A cable operator (or other interested party) may file a
petition for a determination of effective competition with the
Commission pursuant to the Commission's procedural rules in Sec. 76.7.
(b) The cable operator bears the burden of rebutting the
presumption that effective competition does not exist with evidence
that effective competition, as defined in Sec. 76.905, exists in the
franchise area.
Note to paragraph (b): The criteria for determining effective
competition pursuant to Sec. 76.905(b)(4) are described in
Implementation of Cable Act Reform Provisions of the
Telecommunications Act of 1996, Report and Order in CS Docket No.
96-85, FCC 99-57 (released March 29, 1999).
(c) If the evidence establishing effective competition is not
otherwise available, cable operators may request from a competitor
information regarding the competitor's reach and number of subscribers.
A competitor must respond to such request within 15 days. Such
responses may be limited to numerical totals. In addition, with respect
to petitions filed seeking to demonstrate the presence of effective
competition pursuant to Sec. 76.905(b)(4), the Commission may issue an
order directing one or more persons to produce information relevant to
the petition's disposition.
6. Section 76.911 is amended by removing paragraph (b);
redesignating paragraphs (c) through (e) as paragraphs (b) through (d);
and by revising paragraphs (a) and (a)(1) to read as follows:
Sec. 76.911 Petition for reconsideration of certification.
(a) A cable operator (or other interested party) may challenge a
franchising authority's certification by filing a petition for
reconsideration pursuant to Sec. 1.106. The petition may allege either
of the following:
(1) The cable operator is not subject to rate regulation because
effective competition exists as defined in Sec. 76.905. Sections
76.907(b) and (c) apply to petitions filed under this section.
* * * * *
Sec. 76.915 [Removed]
7. Section 76.915 is removed.
8. Add a note to Sec. 76.934 to read as follows:
Sec. 76.934 Small systems and small cable companies
* * * * *
Note to Sec. 76.934: For rules governing small cable operators,
see Sec. 76.990 of this subpart.
9. Section 76.950 is amended by revising paragraph (b) to read as
follows.
Sec. 76.950 Complaints regarding cable programming service rates.
* * * * *
(b) This section shall not apply to cable programming services
provided after March 31, 1999.
10. Section 76.952 is amended by revising paragraph (a) to read as
follows:
Sec. 76.952 Information to be provided by cable operator on monthly
subscriber bills.
(a) The name, mailing address and phone number of the franchising
authority, unless the franchising authority in writing requests the
cable operator to omit such information.
* * * * *
11. Section 76.956 is amended by revising paragraph (a) to read as
follows:
Sec. 76.956 Cable operator response.
(a) Unless otherwise directed by the local franchising authority, a
cable operator must file with the local franchise authority a response
to the complaint. The response shall indicate when the cable operator
received notice of the complaint. Service by mail is complete upon
mailing. See Sec. 1.47(f) of this chapter. The response shall include
the information required by the appropriate FCC form, including rate
cards, channel line-ups, and an explanation of any discrepancy in the
figures provided in these documents and the rate filing. The cable
operator must file its response with the local franchise authority via
first class mail.
* * * * *
12. Section 76.961 is amended by revising paragraph (b) to read as
follows:
Sec. 76.961 Refunds.
* * * * *
[[Page 35951]]
(b) The cumulative refund due subscribers shall be calculated from
the date of the first complaint filed with the franchising authority
until the date a cable operator implements a prospective rate reduction
as ordered by the Commission pursuant to Sec. 76.960. The Commission
shall calculate refund liability according to the rules in effect for
determining the reasonableness of the rates for the period of time
covered by the complaint.
* * * * *
13. Section 76.984 is amended by removing the last sentence of
paragraph (b); revising paragraph (c)(2), adding paragraph (c)(3) and
adding notes 1 and 2 to paragraph (c)(3) to read as follows:
Sec. 76.984 Geographically uniform rate structure.
* * * * *
(c)(2) Any video programming offered on a per channel or per
program basis.
(c)(3) Bulk discounts to multiple dwelling units shall not be
subject to this section, except that a cable operator of a cable system
that is not subject to effective competition may not charge predatory
prices to a multiple dwelling unit. Upon a prima facie showing by a
complainant that there are reasonable grounds to believe that the
discounted price is predatory, the cable system shall have the burden
of showing that its discounted price is not predatory.
Note 1 to paragraph (c)(3): Discovery procedures for predatory
pricing complaints. Requests for discovery will be addressed
pursuant to the procedures specified in Sec. 76.7(f).
Note 2 to paragraph (c)(3): Confidential information. Parties
submitting material believed to be exempt from disclosure pursuant
to the Freedom of Information Act (FOIA), 5 U.S.C. 552(b), and the
Commission's rules, Sec. 0.457 of this chapter, should follow the
procedures in Sec. 0.459 of this chapter and Sec. 76.9.
14. Section 76.990 is added to read as follows:
Sec. 76.990 Small cable operators.
(a) Effective February 8, 1996, a small cable operator is exempt
from rate regulation on its cable programming services tier, or on its
basic service tier if that tier was the only service tier subject to
rate regulation as of December 31, 1994, in any franchise area in which
that operator services 50,000 or fewer subscribers.
(b) Procedures. (1) A small cable operator, may certify in writing
to its franchise authority at any time that it meets all criteria
necessary to qualify as a small operator. Upon request of the local
franchising authority, the operator shall identify in writing all of
its affiliates that provide cable service, the total subscriber base of
itself and each affiliate, and the aggregate gross revenues of its
cable and non-cable affiliates. Within 90 days of receiving the
original certification, the local franchising authority shall determine
whether the operator qualifies for deregulation and shall notify the
operator in writing of its decision, although this 90-day period shall
be tolled for so long as it takes the operator to respond to a proper
request for information by the local franchising authority. An operator
may appeal to the Commission a local franchise authority's information
request if the operator seeks to challenge the information request as
unduly or unreasonably burdensome. If the local franchising authority
finds that the operator does not qualify for deregulation, its notice
shall state the grounds for that decision. The operator may appeal the
local franchising authority's decision to the Commission within 30
days.
(2) Once the operator has certified its eligibility for
deregulation on the basic service tier, the local franchising authority
shall not prohibit the operator from taking a rate increase and shall
not order the operator to make any refunds unless and until the local
franchising authority has rejected the certification in a final order
that is no longer subject to appeal or that the Commission has
affirmed. The operator shall be liable for refunds for revenues gained
(beyond revenues that could be gained under regulation) as a result of
any rate increase taken during the period in which it claimed to be
deregulated, plus interest, in the event the operator is later found
not to be deregulated. The one-year limitation on refund liability will
not be applicable during that period to ensure that the filing of an
invalid small operator certification does not reduce any refund
liability that the operator would otherwise incur.
(3) Within 30 days of being served with a local franchising
authority's notice that the local franchising authority intends to file
a cable programming services tier rate complaint, an operator may
certify to the local franchising authority that it meets the criteria
for qualification as a small cable operator. This certification shall
be filed in accordance with the cable programming services rate
complaint procedure set forth in Sec. 76.1402. Absent a cable
programming services rate complaint, the operator may request a
declaration of CPST rate deregulation from the Commission pursuant to
Sec. 76.7.
(c) Transition from small cable operator status. If a small cable
operator subsequently becomes ineligible for small operator status, the
operator will become subject to regulation but may maintain the rates
it charged prior to losing small cable operator status if such rates
(with an allowance for minor variations) were in effect for the three
months preceding the loss of small cable operator status. Subsequent
rate increases following the loss of small cable operator status will
be subject to generally applicable regulations governing rate
increases.
Note to Sec. 76.990: For rules governing small cable systems and
small cable companies, see Sec. 76.934.
15. Section 76.1401 is amended by removing paragraphs (a), (c), and
(d) and by removing the designation from paragraph (b).
Sec. 76.1403 [Removed]
16. Section 76.1403 is removed.
17. Section 76.1603 is amended by revising paragraph (e) to read as
follows:
Sec. 76.1603 Written notification of changes in rates and services.
* * * * *
(e) To the extent the operator is required to provide notice of
service and rate changes to subscribers, the operator may provide such
notice using any reasonable written means at its sole discretion.
* * * * *
[FR Doc. 99-16955 Filed 7-1-99; 8:45 am]
BILLING CODE 6712-01-P
