FOR FCC RECORD ONLY //ORDER Remanding and Denying Appeal in Montgomery County, MD, DA 94-1251 //$ $/76.922 Rates for the basic service tier/$ $/76.923 Rates for equipment and installation/$ $/76.944 Commission Review of Franchising Authority Decisions/$ Before the FEDERAL COMMUNICATIONS COMMISSION DA 94-1251 Washington, D.C. 20554 In the Matter of: ) ) SBC MEDIA VENTURES, INC. ) ) Appeal of Local ) Rate Order of Montgomery ) County, Maryland ) CONSOLIDATED ORDER Adopted: November 9, 1994 Released: November 22, 1994 By the Chief, Cable Services Bureau: I. Introduction 1. By this Order, the Commission consolidates three related proceedings into one proceeding and rules on the merits raised in each proceeding. Specifically, the Commission resolves the appeal filed by SBC Media Ventures, Inc. ("SBC-MV") of the local rate order adopted by Montgomery County, Maryland ("the County"). The Commission also rules on the issues raised in a Motion for Declaratory Ruling filed by Montgomery County, and in third-party pleadings filed by William J. Franklin, a resident of Montgomery County, a subscriber to SBC-MV's cable television service and a participant in the local ratemaking process. In deciding this appeal, the Commission has reviewed all the pertinent pleadings filed in each of the separate proceedings. In the interest of administrative efficiency, the Commission has decided that each of the proceedings is sufficiently related to one another to justify the joint resolution of all the issues raised by each of the concerned parties in one consolidated proceeding. 2. SBC-MV, the franchisee in the above-referenced proceeding, filed with the Commission on May 24, 1994 a Petition for Review ("appeal") of the local Rate Order adopted by Montgomery County on April 29, 1994. In its Rate Order, Montgomery County established rates for basic tier service and associated equipment and installations and required SBC-MV to implement approximately $21 million in subscriber refunds. In its appeal, SBC-MV does not challenge the legal basis for approximately $10 million of its $21 million total refund liability. Therefore, as explained in its appeal, SBC-MV is seeking only a partial review of Montgomery County's Rate Order, involving $11 million in subscriber refunds and associated rate reductions. On June 23, 1994, after considering a petition for stay filed by SBC-MV and an opposition to petition for stay filed by the County, the Commission granted a partial stay of the County's local Rate Order pending review on appeal. 3. Montgomery County's Rate Order is effectively divided into two parts. The first part addresses an alleged "rate discrimination" violation and is disputed by SBC-MV. This part of the order accounts for $10 million in refund liability, all of which is disputed by SBC-MV. The second part of the order involves the County's ruling on the FCC Form 393 that SBC-MV filed with the County to determine its basic rates. This part of the order accounts for $11 million in refund liability. SBC-MV challenges only a portion of this $11 million liability, accounting for approximately $1 million in potential refunds. On June 8, 1994, Montgomery County filed an Opposition to Petition for Review, urging the Commission to reject SBC-MV's appeal and to allow Montgomery County's Rate Order to go into effect unchanged. Specifically, Montgomery County argues that the disputed portion of the Rate Order covering the rate discrimination issue should not be the subject of the appeal because the question of its legality is already before the Commission in a separate proceeding. Montgomery County asserts that the other portions of the Rate Order to which SBC-MV objects have a reasonable basis and do not merit Commission reversal on appeal. 4. Under the Commission's rules, appeals of franchising authorities' local rate orders are reviewed by the Commission. In ruling on appeals of local rate orders, the Commission will not conduct a de novo review, but instead will sustain the franchising authority's decision as long as there is a reasonable basis for that decision. Therefore, the Commission will reverse a franchising authority's decision only if we determine that the franchising authority acted unreasonably in applying the Commission's rules in rendering its local rate order. If the Commission reverses a franchising authority's decision, it will not substitute its own decision, but instead it will remand the issue to the franchising authority with instructions for its resolution. II. Rate Discrimination A. Background 5. The principal dispute arising from Montgomery County's Rate Order involves the County's determination that SBC-MV has engaged in rate discrimination in violation of local law and the 1992 Cable Act. To remedy this alleged violation, the County has ordered $10 million in subscriber refunds. SBC-MV claims that to prevent its customers who only subscribe to the basic tier from experiencing dramatic rate increases within a nine-month time span from December 31, 1992 until September 1, 1993, SBC-MV capped this class of subscribers' rates at their then-existing levels, while increasing the basic service rate for all other subscribers. Therefore, basic-only subscribers who became customers on or before December 31, 1992 were grandfathered at the 1992 basic rate of $6.95 per month (exclusive of franchise fees); basic-only subscribers who became customers between January 1, 1993 and August 31, 1993 were grandfathered at the rate of $10.00 per month (exclusive of franchise fees); and all subsequent subscribers to SBC-MV's services were charged $13.95 per month (exclusive of franchise fees) for basic service. Any grandfathered basic-only subscriber ceased to receive the grandfathered rate for the basic tier if he or she upgraded service. Therefore, the number of grandfathered subscribers could not increase and was continually decreasing as those subscribers upgraded service. Due to the grandfathering, as of September 1, 1993 (the implementation date for the Commission's rate regulations), SBC- MV was offering basic tier service to three separate classes of subscribers at three different rates. SBC-MV claims that, as of September 1, 1993, less than 4 percent of its subscribers were being charged either the $6.95 rate or the $10.00 rate for the basic service tier, while over 96 percent of its subscribers were charged the highest rate for the basic tier. 6. In its Rate Order, the County held that this practice of subscriber classification constituted rate discrimination in violation of its local Cable Communications Law and in violation of two provisions of the 1992 Cable Act. In the absence of federal legislative or administrative guidance, the County relied on local law to craft its own remedy and, accordingly, ordered SBC-MV to refund to its subscribers the difference between the higher basic rate charged to both its multi-package and post-September 1, 1993 basic-only subscribers and the lowest rate of $6.95 charged to its grandfathered basic-only subscribers. This portion of the Rate Order totals approximately $10 million in potential subscriber refunds. Under the terms of the County's Rate Order, SBC-MV's refund liability would run from September 1, 1993 until the day that it implemented uniform basic tier rates. SBC- MV argues that its decision to grandfather a segment of its basic-only subscribers at their then-existing rates, during the time that it increased the rates for the rest of its subscribers, was a legitimate business decision that does not violate the requirement that rates be uniform throughout the franchise area or constitute any other type of illegal discrimination prohibited under the 1992 Cable Act. Specifically, SBC-MV asserts that this grandfathered rate structure was intended to ameliorate the impact of rate restructuring undertaken to comply with the terms of the 1992 Cable Act. In the alternative, SBC-MV argues that even if the grandfathered rates were found to violate the 1992 Cable Act, the appropriate remedy would be a "cease and desist" order, not an order prescribing subscriber refunds. Conversely, the County asserts that an order requiring subscriber refunds is the County's best available remedy because refunds directly impact those subscribers who have been harmed by SBC- MV's alleged "rate discrimination" and prevent SBC-MV from benefitting from its purportedly illegal actions. The County found that SBC-MV offered no reasonable justification for its rate classification scheme. The County argues that, although the appropriate remedy for rate discrimination is uncertain under federal law, the County has the authority under local law to order subscriber refunds to remedy a finding of rate discrimination. The County also urges the Commission to reject SBC-MV's appeal with respect to the rate discrimination issue on the grounds that the issue should be resolved in a bifurcated proceeding initiated by the County as a Motion for Declaratory Ruling and reviewed separately from the other issues raised in the appeal. The County seeks the Commission's approval of its proposed remedy to impose subscriber refunds, which it argues are authorized under federal law. As explained in detail below, we will remand this portion of the rate order back to the County with the instruction that the County follow the guidelines laid out in this decision in rendering its determination. B. Discussion 7. In the interest of administrative efficiency, the Commission has decided to consolidate the resolution of the rate discrimination issue raised in the County's Motion for Declaratory Ruling with the resolution of this appeal of the County's Rate Order. In so doing, the Commission has been careful to consider all the arguments made on this issue by all sides in the submissions filed in both proceedings before us. 8. The County alleges that SBC-MV's rate classification scheme purportedly violates two separate provisions of the 1992 Cable Act. First, under Section 623(d) of the Communications Act and Section 76.984 of the Commission's rules, cable operators must offer a rate structure that is uniform throughout the franchise area. Secondly, under Section 623(e) of the Communications Act and Section 76.983 of the Commission's rules, regulatory authorities, including franchising authorities, may prohibit cable operators from engaging in discrimination among subscribers. The 1992 Cable Act seeks to ensure that rates are uniform throughout the franchise area, so that no group of subscribers within a franchise area is required to pay more for the same service than another group. Although the legislative history suggests that Section 623(d), which requires geographic uniformity, is intended, in part, to prevent cable operators from pricing service according to income level and from undercutting potential competitors by offering lower rates only in areas where competitors seek to offer a competing service, the provision must also be given its plain meaning. On its face, the provision requires the same rates for the same service within a geographic area. Therefore, SBC-MV's argument that this provision merely prevents rate classification schemes based solely on geography or neighborhood does not give the provision its proper scope. SBC-MV's offering of three separate rates for the same basic service tier to three different groups of subscribers in the same geographic area resulted in a basic tier rate structure that was not uniform throughout the franchise area. 9. The 1992 Cable Act and the Commission's implementing rules specifically contemplate certain exceptions to the fundamental requirement of uniformity. The Commission has noted several specific instances where an operator may be justified in offering different rates for the same service to specific, reasonable categories of subscribers: The Act specifically mandates a uniform "rate structure." The legislative history does not reveal any congressional intent to mandate a uniform rate for all services and classes of customers. Indeed, Section 623(e) specifically contemplates [that] special categories of customers may receive separate rates. [footnote omitted] Accordingly, we conclude that Section 623(d) does not preclude establishment of reasonable categories of customers and service by cable operators. Thus, for example, as suggested in the Notice, we do not believe that Congress intended a per se prohibition on differences in rates between seasonal and full-time subscribers. We also find that uniform, non- predatory bulk discounts to multiple dwelling units, including apartment buildings, hotels, condominium associations, hospitals, universities, and trailer parks, could form a valid basis for distinctions among subscribers. Introductory or promotional rates universally applied at a given time but subsequently discontinued would also not be prohibited. And, as is suggested by Section 623(e), discussed further below, reasonable discounts may be made to senior citizens or other economically disadvantaged groups and charges may be set to facilitate the reception of service by hearing impaired individuals. As we have previously discussed in our tier "buy-through" proceeding, technological differences in the service offered within a geographic area, such as might result from the staged rebuilding of a system, would also not conflict with this provision. 10. Though the parties do not address the issue, it is conceivable that SBC-MV may have viewed its rate classification scheme as a promotion and, therefore, not subject to the uniformity requirement. As stated above, "[i]ntroductory or promotional rates universally applied at a given time but subsequently discontinued [are not] prohibited." While the evidence before us is not sufficient to permit us to resolve whether the classification scheme constituted a promotion, SBC-MV might have sought by its scheme to preserve the subscriptions of a particularly price-sensitive segment of its subscriber base by holding down the rates for this group during a period of rate restructuring that would otherwise have resulted in significant and immediate higher prices for service. Therefore, such a plan, if found to exist, could amount to a promotion. However, some aspects of the scheme do not resemble a promotion. For example, a promotion, by definition, must operate only for a reasonable, finite period. It cannot be determined from the facts before us whether and when the plan, when initiated, was intended to end. SBC-MV claims that the number of subscribers affected by its rate classification scheme was continually diminishing as subscribers changed service and that the scheme would have expired, eventually, under its own terms. The intervention of the local rate order caused SBC-MV to end the plan. Therefore, even if it is found to have started as an allowable promotion, at some point thereafter the rate classification plan may have ceased to be a promotion and thereby ceased to be an allowable exception to the uniformity requirement. We remand this issue to the County with instructions that it determine, consistent with the analysis here, whether SBC- MV's rate classification scheme constituted a promotion at any time and therefore an allowable exception to the uniformity provision of Section 623(d). 11. Even if the County finds that SBC-MV's rate classification scheme does not constitute a legitimate exception to the uniformity requirement of Section 623(d) and therefore violates Section 623(d), it must apply an appropriate remedy. It did not do so here. Neither the 1992 Cable Act nor the Commission's rules articulate specific remedies that an authorized regulatory body may implement in response to violations of the geographic uniformity requirement or proven instances of discrimination. Although the County could properly order SBC-MV to cease offering the rate classifications, as it did, the County could not order subscriber refunds other than those resulting from a review of a properly completed Form 393, since to do otherwise goes beyond the scope of the County's authority under the Act and the Commission's implementing regulations. The County's remedy, if it concludes that SBC-MV's rates violate Section 623(d), is to require SBC-MV to submit a revised Form 393 that accurately accounts for the number of subscribers receiving each of the three rates that it charged for the basic service tier. SBC-MV's Form 393 appears to reflect only the $13.95 rate and not the grandfathered rates. In other words, SBC-MV must adjust the number of subscribers that it lists on Line 103 of Form 393 to reflect the different rates that it was actually charging for the basic tier. Those subscribers who paid a grandfathered rate for the basic tier should not be counted as full subscribers. Instead, those subscribers should be accounted for on Form 393 by a number that reflects the same proportional relationship that exists between the rate they were paying and the prevailing rate. For instance, a subscriber who received the grandfathered rate of $6.95 would not be included as one subscriber, but instead as 695/1395ths of a subscriber. Parts of SBC-MV's Form 393 affected by this weighted average need to be amended to reflect the change. Once it amends its Form 393, SBC-MV's revenues will no longer be overstated in the context of determining its maximum rates. The County then would be able to order refunds based on the revised Form 393 from the date the rate classification scheme was terminated by SBC-MV back to the date the County finds that the scheme ceased to be a valid promotion. No refunds may be ordered for any period in which the County may find a valid promotion existed, since such promotional rates are inherently temporary and are not to be reflected in SBC-MV's Form 393. 12. No subscriber refund is available under our rules to remedy a violation of the geographic uniformity provision, other than such refunds as would result from review of an amended Form 393. Subscriber refunds, under the Commission's rules, must only be used to return the difference between unreasonable rates and reasonable rates to the subscribers; they must not be used as de facto penalties or forfeitures. Although the County is correct in asserting that it has the authority to impose fines and forfeitures, such remedies are reserved, under the Commission's rules, to cure instances where a cable operator has not complied with the terms of a franchising authority's decision, such as an order rolling back rates or a request for supplemental information, or where an operator has attempted to mislead the franchising authority. 13. SBC-MV's attempt to grandfather the basic tier rates for certain classes of subscribers does not appear to violate, and the County has not alleged that it does violate, any federal anti-discrimination law. Therefore, to the extent it wishes to seek a further remedy than that set forth in paragraphs 11 and 12 herein or to the degree it finds Section 623(d) was not violated, the County must rely on either state or local law for any finding that SBC-MV's rate classification scheme is illegal discrimination, as well as for any remedy for such alleged discrimination. The County has alleged that SBC-MV's rate classification scheme violates both a local statute and the local franchise agreement entered into between the County and SBC-MV. If local laws have been violated, the proper remedy would also have to be found under local law. Because the resolution of this issue must rest with an interpretation of applicable local law and not federal law, a state or local court is the appropriate forum to hear this matter. III. Hourly Service Charge A. Background 14. Upon the recommendation of its cable consultant, the County rejected SBC- MV's calculated Hourly Service Charge ("HSC") of $23.59 and prescribed an alternative HSC of $11.25. The County set the rate for SBC-MV's HSC after receiving what it believed to be an inadequate or incomplete justification for SBC-MV's own derived HSC. SBC-MV claims that the rate set by the County is impermissibly low because it falls below the $13.00 hourly rate paid to its service personnel and therefore would not even allow SBC-MV to recoup what it pays out to its employees on an hourly basis. It is the County's position that absent proof to the contrary, it was reasonable for the County to assume that SBC-MV's hourly payments for contract labor are less than its payments to its own employees and, accordingly, established an average wage of $11.25. Furthermore, the County asserts that SBC-MV repeatedly refused to provide it with additional necessary information to verify the basis for SBC-MV's own derived HSC, particularly information related to the cost and use of contract labor. SBC-MV counters that it has provided all the necessary information to the County to justify its proposed HSC and that this HSC should be accepted by the County. It appears from the pleadings that this is an issue which has perpetuated a continuing disagreement between the two parties that has lasted a number of months and has resulted in the County setting SBC-MV's HSC at a rate derived by the County's consultant, rather than at a rate based on the figures supplied on SBC-MV's Form 393. B. Discussion 15. Generally, the Commission's rules require us to leave regulation of basic tier service to the sound discretion of the certified local franchising authorities. Although local franchising authorities have broad authority to enforce compliance with their requests for information and may prescribe rates, they must exercise this authority in accordance with the Commission's rules. However, the cable operator ultimately bears the burden of proving the reasonableness of all of its regulated rates. If SBC-MV's claim is accurate that the HSC adopted by the County falls below the hourly wage paid to its employees, it is possible that the County's HSC was not based upon SBC-MV's actual costs. Because this outcome would contravene the intent of the 1992 Cable Act and the Commission's rules, the Commission is unable to conclude the County's HSC is reasonable, based upon the record before us. As a condition of the stay that we granted in this case, we required SBC-MV to submit to the County, within 10 days of the release of the stay order, the information regarding SBC-MV's use of contract labor that the County had previously requested. Because SBC-MV has informed us that this information has been provided to the County as required, we will hereby remand to the County the proper determination of SBC-MV's HSC with the instruction to the County to render a decision based on the best information available. In this instance, as in most, the best information available should be that information contained on and offered in support of a cable operator's FCC Form 393. However, because the burden to justify its rates is borne by the cable operator, it is the cable operator's duty to make sure that it complies with a franchising authority's request to provide documentation and supporting evidence to prove the reasonableness of its rates. In the event that the information submitted by SBC-MV does not fully comply with the terms of our stay order, the County is not required under either the terms of this order or under the Commission's rules to withhold a final decision on SBC-MV's HSC until the information is presented. Instead, the County may set SBC-MV's HSC based on the best information available at the time. IV. A/B Switches A. Background 16. The County set a rate of $3.00 per switch for the sale of A/B switches to subscribers by SBC-MV. SBC-MV had previously been charging $10.00 for each switch. SBC-MV claims that A/B switches are not items properly subject to regulation by the County because they are used by subscribers only to receive off-the-air broadcast signals and not used for the reception of basic tier service. The County contends, however, that SBC-MV has not borne its burden of proving that A/B switches are not used for the reception of basic tier service. The County also asserts that the price it has set for A/B switches is in line with the market price for A/B switches offered by other vendors in the community. B. Discussion 17. Under the Commission's rules, rates for equipment that is used to receive basic tier service and that is offered for sale by cable operators are regulated. Regulated equipment ". . . consists of all the equipment in a subscriber's home that is used to receive the basic tier. . . . Such equipment shall include, but is not limited to: (1) converter boxes; (2) remote control units; (3) connections for additional television receivers; and (4) other cable home wiring." This list of equipment is not intended to be an exhaustive list of all possible types of regulated equipment, but all such equipment, at a minimum, "must be used to receive the basic service tier." While the Commission has interpreted the phrase "equipment used to receive the basic service tier" broadly so as to comport with Congressional intent, the switches at issue are simply not used to receive cable service. A/B switches are used by subscribers to switch off cable service and to receive, instead, off- the-air broadcast signals. The switches are used only by cable subscribers who choose not to watch cable programming. We note also that the switches are available from other sources in the County. In fact, the County prescribed a rate for sale of A/B switches by SBC-MV that was representative of the prices offered for such switches by other vendors in the community. So, not only are the A/B switches not "used to receive the basic service tier," but competitive sources for such switches exist in the community through which subscribers may obtain them. Accordingly, we conclude the County's determination that A/B switches constitute regulated equipment is unreasonable and we remand the County's decision regarding the regulation of A/B switches for further proceedings consistent with this ruling. V. PEG Access Fee A. Background 18. Under the terms of its franchise agreement, SBC-MV is required to charge an additional fee to subscribers that is used to support channels designated for public, educational and governmental purposes (i.e., PEG channels). According to SBC-MV, SBC- MV's 1.5 percent PEG access fee was not accounted for as an internal cost (i.e., included in the per channel rates derived in Worksheets 1 and 2 of FCC Form 393) in deriving its maximum permitted rate for basic tier service. SBC-MV claims that it did not include the PEG access fee in its basic rate calculations because this fee had traditionally been treated as an external cost added onto and itemized on a subscriber's bill in the same manner as the franchise fee. The County claims that it was unable to determine from the face of SBC- MV's FCC Form 393 whether the PEG access fee had been accounted for or not and that SBC-MV had declined to provide further clarification of the problem upon request by the County. The County's Rate Order also did not explicitly account for the inclusion of this fee as either an internal cost or as an allowable external cost. It is the County's position that if SBC-MV can demonstrate that it did not include the PEG access fee in the per channel rates derived in Worksheets 1 and 2 of FCC Form 393, then the County will recalculate SBC- MV's permitted rate based on the corrected numbers and extend SBC-MV's time for compliance accordingly, assuming this can be done without affecting the one-year limit on subscriber refunds. B. Discussion 19. A cable operator's permitted per channel charges for regulated programming services may be adjusted for changes in external costs. Our regulations provide that the operator may adjust its charges to the extent that certain external cost increases exceed the rate of inflation. However, except in the case of franchise fees, the operator should include these external costs in its initial rate calculations on FCC Form 393. Franchise fees are the only external costs that should not be included in programming revenue when calculating an operator's initial permitted rates. PEG access fees and external costs other than franchise fees should be included in the per channel rates calculated in Worksheets 1 and 2 of a cable operator's FCC Form 393. Thereafter, any future changes in external costs greater than the rate of inflation should be allowed as adjustments to an operator's permitted charges. Adjustments to SBC-MV's permitted charges should be made according to the Commission's rules for the treatment of external costs. Therefore, SBC-MV should be allowed to account for its PEG access fee as an internal cost in setting its initial regulated programming rates. The County has explicitly offered to allow SBC-MV to resubmit for approval a revised FCC Form 393 that includes a PEG access fee allocation. Because the County will allow this resubmission, we remand this issue to the County for final resolution on the condition that SBC-MV make every effort to provide this revised filing to the County as expeditiously as possible. VI. Bulk Basic Rates A. Background 20. The County has ordered SBC-MV to justify all of the various bulk basic rates that it charges in the area. The County has forewarned SBC-MV that in the event that the County finds any of these rates to be unreasonable it will reduce the unreasonable rates to the lowest bulk rate offered. The County claims that it has simply prescribed an appropriate and lawful remedy that it may take in the event that SBC-MV is unable to demonstrate that its current bulk rates are either grandfathered or otherwise justified under the Commission's rules. If SBC-MV can demonstrate that its bulk rates are lawful, the County will release SBC-MV from refund liability for these bulk rates. It is SBC-MV's position that this review is unnecessary, for, irrespective of grandfathered rates already in place, it may negotiate new bulk rates as long as these new rates are uniform among Multiple Dwelling Units ("MDUs") of similar size and for contracts of similar duration. B. Discussion 21. Franchising authorities have the authority to regulate bulk basic rates to ensure compliance with the uniform rate provisions of the 1992 Cable Act. In its Rate Order, the County informed SBC-MV of its intention to regulate its bulk basic rates, the standards of review it will use, and the prospective remedy for nonconformance. The County has asked SBC-MV to provide it with information that would allow the County to make a determination regarding the reasonableness of SBC-MV's bulk rates, but it has not ordered SBC-MV to modify any those rates. Although the County has not yet acted on SBC-MV's various bulk discounts, any action the County does take must comport with our rules. Under our rules, cable operators may offer different bulk rates to MDUs of different sizes and may vary bulk rates based on the duration of the contracts, provided the operator can justify the rate differences based on relative cost savings. Operators must, however, offer the same rates to MDUs of the same size with contracts of similar duration. Accordingly, the County may order the rates of an MDU reduced to a lower rate established by the operator for an MDU of the same size under the same conditions. The County may not, however, simply reduce all bulk rates offered by SBC-MV to the lowest bulk rate. In the event the County renders a particular decision regarding SBC-MV's bulk discounts that SBC-MV believes is unreasonable, SBC-MV will have the opportunity to appeal that decision to the Commission at the proper time. Therefore, since a decision by the Commission on this issue at this time would be premature, we remand this issue to the County for further disposition. 22. Accordingly, IT IS ORDERED that all of the issues raised in the following proceedings: (1) the appeal by SBC Media Ventures, Inc. of the local Rate Order adopted by Montgomery County, Maryland; (2) the Motion for Declaratory Ruling filed by Montgomery County; and (3) the pleadings regarding the County's Rate Order filed by Mr. William J. Franklin, a resident of Montgomery County, a subscriber to SBC-MV's cable television service and a participant in the local ratemaking process, are consolidated into one proceeding. 23. IT IS FURTHER ORDERED that the appeal filed by SBC Media Ventures, Inc. IS REMANDED. 24. IT IS FURTHER ORDERED that the provision of Montgomery County's Rate Order governing rate discrimination IS REMANDED to the local franchising authority for further proceedings consistent with this opinion. IT IS FURTHER ORDERED that the provision of Montgomery County's Rate Order governing SBC Media Ventures' regulated hourly service charge IS REMANDED to the local franchising authority for further proceedings consistent with this opinion. IT IS FURTHER ORDERED that the provision of Montgomery County's Rate Order regarding A/B switches IS REMANDED to the local franchising authority for further proceedings consistent with this opinion. IT IS FURTHER ORDERED that Montgomery County's Rate Order regarding PEG access fees IS REMANDED to the local franchising authority for further proceedings consistent with this opinion. IT IS FURTHER ORDERED that Montgomery County's Rate Order regarding bulk rate discounts IS REMANDED to the local franchising authority for further proceedings consistent with this opinion. 25. IT IS FURTHER ORDERED that the Franklin Petition for Partial Review with regard to the negative-option billing issue IS DENIED. IT IS FURTHER ORDERED that the Franklin Petition for Partial Review with regard to the rate discrimination issue IS DENIED. 26. This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission's rules. 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau