$//Grant of Disney Channel Waiver Request, DA 94-1346 $//FOR RECORD ONLY FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 IN REPLY REFER TO: DA 94-1346 November 30, 1994 Mr. Frederick Kuperberg Senior Vice President Business and Legal Affairs The Disney Channel 3800 West Alameda Avenue Burbank, California 91505-6070 Dear Mr. Kuperberg: This is in response to your letter of November 23, 1994, requesting expedited clarification of the Commission's notice requirements as applied to the scheduled addition of The Disney Channel to cable programming service tiers ("CPSTs") prior to January 1, 1995. According to your letter, The Disney Channel has held discussions with numerous cable operators regarding the reconfiguration of The Disney Channel from an expensive per channel offering to a more affordable and widely distributed CPST service. In particular, The Disney Channel has been negotiating to add The Disney Channel to CPSTs "as soon as the Commission's going forward' rule revisions become effective." Accordingly, one large unnamed multiple system operator ("MSO") discussed in your letter plans to move The Disney Channel to a regulated CPST on December 31, 1994, and to adjust its rates in accordance with the Commission's revised going forward regulations on January 1, 1995. You request expedited clarification of the Commission's notice requirements to allow the MSO to provide initial notice of these service and rate adjustments to subscribers using alternative means, including newspaper and on-screen announcements. According to your letter, this particular MSO uses cycle billing and it would be impossible for the MSO to comply literally with the Commission's subscriber notification rules because it is no longer possible to include such notification in a billing cycle which will be delivered to all customers at least 30 days prior to December 31, 1994. You state that, even if a separate mailing could be prepared, such a mailing would be unduly costly and burdensome. Pursuant to Sections 76.964 and 76.309(c)(3)(i)(B) of the Commission's rules, cable operators are required to provide subscribers and local franchising authorities with thirty days written notice of any rate or service change. These rules are intended in part to provide subscribers ample time to react and, if they so elect, to cancel any service they no longer wish to receive due to the rate or service change. We believe, however, that, under the limited circumstances described in your letter, and given the transitional nature of your request, a waiver of our notice provisions is appropriate. We note that adding a channel to a CPST (or to a basic service tier where an operator offers only one tier of regulated cable service) on January 1, 1995, as provided in our Sixth Order on Reconsideration, Fifth Report and Order, and Seventh Notice of Proposed Rulemaking in MM Docket Nos. 92-266 and 93- 216, FCC 94-286 (released November 18, 1994) ("Sixth Reconsideration Order"), and literal compliance with the referenced notice regulations, is not feasible given the time frame between the release of Sixth Reconsideration Order and the effective date of our revised going forward rules adopted therein. We also believe that the conditions to this waiver described below will adequately protect subscribers from undue harm. We therefore waive our notice requirements contained in Sections 76.964 and 76.309(c)(3)(i)(B) of the Commission's rules with respect to the addition of The Disney Channel to CPSTs prior to January 1, 1995, with the corresponding rate increase effective on January 1, 1995. We limit this waiver, however, to the circumstances described in your November 23, 1994 letter, including but not limited to an operator's compliance with the substitute advance notice procedures described in your letter, namely newspaper advertisements in each affected cable community, on-screen messages on a daily basis, notifying local franchising authorities as soon as practicable, and written notice to subscribers beginning in mid to late December. Because our notification rules are intended in part to provide subscribers with the opportunity to cancel any service they no longer wish to receive due to a rate or service change, we will require, as a further condition of this waiver, that, if any subscriber cancels his or her subscription to the relevant CPST within thirty days after the date of the first bill reflecting the increased rate, the operator must refund to that subscriber the incremental dollar amount attributable to the addition of The Disney Channel to the CPST from December 31, 1994 (the date The Disney Channel will be added to the CPSTs) to the date the subscriber cancels the CPST. Sincerely, Meredith J. Jones Chief, Cable Services Bureau