FOR FCC RECORD ONLY $// Order, Cable Act of 1992, certification, DA 94-1383//$ $/ 600.623 Regulation of Rates/$ $/ 76.905 Standards for Effective Competition/$ $/ 76.906 Presumption of No Effective Competition/$ $/ 76.910 Franchising Authority Certification/$ $/ 76.911 Petition for Reconsideration/$ $/ 76.914 Revocation of Certification/$ Before the FEDERAL COMMUNICATIONS COMMISSION DA 94-1383 Washington, D.C. 20554 In the Matter of: ) ) HORIZON CABLE I LIMITED ) PARTNERSHIP ) ) Petition for Reconsideration ) ) of the Certification of ) Handy Township, MI ) to Regulate Basic Cable Service Rates ) FCC Community ID No. (MI0612) ) 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, Horizon Cable I Limited Partnership ("Horizon") filed a timely petition for reconsideration challenging the certification of Handy Township, MI ("Handy") to regulate Horizon's rates for basic cable service and associated equipment. Handy filed an opposition to which Horizon filed a reply. On August 19, 1994, Horizon filed a supplement to its original petition pursuant to a recent Commission 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. Such certification becomes effective 30 days from the date of filing unless the Commission finds that the authority does not meet the statutory certification requirements. Cable operators may file petitions for reconsideration of the franchising authority's certification within 30 days of 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 Horizon's Effective Competition Claim 3. Horizon states that it is subject to effective competition because its system has less than 30 percent penetration in Handy Township, its franchise area. Horizon states that it serves 274 of the 1,957 "homes" within its franchise area, or 14 percent of the total number of homes. As support, Horizon submits a copy of the relevant 1990 Census data which reveals that there are 1,957 "housing units" within Handy Township. In addition, Horizon submits a computer printout of its subscriber data which reflects that there are 274 subscribers as of October 21, 1993. Horizon also submits a declaration under penalty of perjury from its general manager. 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 its franchise area. Horizon has failed to meet this burden. Specifically, Horizon 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"). Horizon's claim is based on the number of housing units (occupied and vacant). As Horizon 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 opposition to Horizon's petition, Handy states that Horizon is not subject to effective competition because it has "redefined" its franchise area. As support, Handy attaches as Exhibit A, a map of Handy Township, with handwritten notations that it claims shows Horizon's alleged "franchise area" for purposes of the "effective competition" standard. According to Handy, Horizon's actual service area consists of 432 households, of which Horizon serves 274. Under this redefined franchise area, Handy argues that Horizon actually serves 63 percent of the households and, therefore, is not subject to effective competition. In reply, Horizon denies Handy's allegation asserting that the terms of its franchise agreement with Handy requires Horizon to expand into unserved areas of the township when the population density reaches a level of 20 households per cable mile. Horizon states that not only has it complied with the franchise agreement, but it has expanded beyond the franchise requirement. Horizon argues that "[r]ather than restricting its service to a small portion of the franchise area, Horizon has expressed a willingness to provide service to additional homes within the franchise area as the population density increases," and that the mere presence of unserved areas within the franchise area does not limit service to specific communities. In light of our decision that Horizon has failed to rely on appropriate housing data for purposes of demonstrating effective competition, we see no need to address Handy's argument at this time. III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the Petition for Reconsideration filed by Horizon Cable I Limited Partnership challenging the certification of Handy Township, MI 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 Horizon SHALL FILE the required rate justifications on the applicable forms with Handy Township within thirty (30) days of the release date of this Memorandum Opinion and Order or within thirty (30) days of receipt of notice from Handy Township that it is regulating Horizon's rates, whichever is later. 10. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's Rules, as amended, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau