[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
