FOR FCC RECORD ONLY $// Order, Cable Act of 1992, certification, DA 94-1382//$ $/ 600.623 Regulation of Rates/$ $/ 76.905 Standards for Effective Competition/$ $/ 76.906 Presumption of No Effective Competition/$ $/ 76.910 Franchising Authority Certification/$ $/ 76.911 Petition for Reconsideration/$ $/ 76.914 Revocation of Certification/$ Before the FEDERAL COMMUNICATIONS COMMISSION DA-94-1382 Washington, D.C. 20554 In the Matter of: ) ) CLINTON CABLE LIMITED ) PARTNERSHIP ) ) Petition for Reconsideration ) ) of Certification of ) Eagle Township ) to Regulate Basic Cable Service Rates ) FCC Community ID No. (MI1315) ) MEMORANDUM OPINION AND ORDER Adopted: December 1. 1994 Released: December 2, 1994 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On November 15, 1993, Clinton Cable Limited Partnership ("Clinton") filed a timely Petition for Reconsideration of Certification challenging the certification of Eagle Township ("Eagle") to regulate rates for basic cable service and associated equipment. Eagle filed an objection to Clinton's petition for reconsideration to which Clinton filed a reply. In addition, Clinton filed an additional pleading pursuant to the Commission's July 29, 1994 Order. 2. Section 623(a)(4) of the Communications Act of 1934, as amended, allows franchising authorities to become certified to regulate basic cable service rates of cable operators which are not subject to effective competition. For purposes of the initial request for certification, local franchising authorities may rely on a presumption that cable operators within their jurisdiction are not subject to effective competition unless the franchising authority has actual knowledge to the contrary. Certification becomes effective 30 days from the date of filing unless the Commission finds that the franchising authority does not meet the statutory certification requirements. Cable operators may file petitions for reconsideration of the franchising authority's certification within 30 days from the date such certification becomes effective. Regulation of rates is automatically stayed pending review of a timely filed petition for reconsideration alleging effective competition. II. DISCUSSION Clinton's Effective Competition Claim 3. Clinton argues that its cable system is subject to effective competition because its system has less than 30 percent penetration in Eagle Township, its franchise area. Clinton claims that it serves only 148 of the 704 "homes" in its franchise area, or 21 percent of the total number of "homes." Clinton updates the numbers somewhat in its Supplement of August 19, 1994, in which it notes that there actually are 746 "homes" in Eagle Township. As supporting documentation Clinton provides a copy of the relevant 1990 Census housing data which indicates that there are 746 "housing units" in Eagle Township. In addition, Clinton provides a copy of a subscriber printout dated October 21, 1993, which demonstrates that Clinton has 148 subscribers. Finally, Clinton provides a declaration under penalty of perjury by a responsible official certifying to the accuracy of the data included in the petition. 4. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition, as defined by Section 76.905 of the Commission's rules, is present within the franchise area. Clinton has failed to meet this burden. Specifically, Clinton inappropriately relied upon "housing unit" data rather than "household" data to support its effective competition claim. Horizon's claim is inappropriately based on the number of housing units (that is, occupied and vacant units) within the franchise area. Our rules, however, require the use of data reflecting the number of "households" (i.e., occupied housing units) in the franchise area. See Third Order on Reconsideration, MM Docket Nos. 92-266 and 92-262, 9 FCC Rcd 4316, 4324 (1994) ("Third Recon Order"). As Clinton has failed to base its effective competition claim on household data as required by our rules, we will deny its petition. Other Matters 5. In its objection to Clinton's petition, Eagle argues that Clinton is not subject to effective competition because Clinton has "redefined" its franchise area. Eagle alleges that Clinton has made an affirmative decision to limit its service area even though its franchise does not restrict service to a specific area of the township. According to Eagle, Clinton's actual service area consists of 210 households, of which Clinton serves 148. Under this redefined franchise area, Eagle concludes that Clinton actually serves 70 percent of the households in the service area. In light of this, Eagle argues that Clinton's showing of effective competition must be based on its "redefined" franchise area. Clinton denies Eagle's allegation asserting that the terms of its franchise agreement with Eagle require Clinton to expand into unserved areas of the Township when the population density reaches a level of 35 households per cable mile. Clinton states that not only has it complied with the franchise agreement, but that it has expanded the number of households it serves in Eagle Township by 24% over the last two years. Clinton argues that the mere presence of unserved areas within the franchise area does not limit service to specific communities. In light of our decision that Clinton has failed to rely on appropriate housing data for purposes of demonstrating effective competition, we see no need to address Eagle's argument at this time. III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the petition for reconsideration filed by Clinton Cable Limited Partnership challenging the certification of Eagle Township to regulate Clinton's basic cable service rates IS DENIED. 8. IT IS FURTHER ORDERED that the automatic stay imposed by Section 76.911(c) of the Commission's Rules, as amended, 47 C.F.R.  76.911(c) IS TERMINATED. 9. IT IS FURTHER ORDERED that, Clinton SHALL FILE the required rate justifications on the applicable forms with Eagle Township, MI within thirty (30) days of the release date of this Memorandum Opinion and Order or within thirty (30) days of receipt of notice from the franchising authority that it is regulating Clinton's rates, whichever is later. 10. This action is taken pursuant to delegated authority pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau