FOR FCC RECORD ONLY $// MO&O, Cable Act of 1992, DA 94-1385//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 94-1385 ) HORIZON CABLE I LIMITED ) PARTNERSHIP ) ) Petition for Reconsideration ) ) of the Certification of ) Victor Township, MI ) to Regulate Basic Cable Service Rates ) (MI1061) ) MEMORANDUM OPINION AND ORDER Adopted: December 2, 1994 Released: December 5, 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 Victor Township ("Victor") to regulate rates for basic cable service and associated equipment. Victor filed an objection to petition for reconsideration to which Horizon filed a reply. Victor filed a response on January 7, 1994. Both Horizon and Victor filed supplements 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 that 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 they have 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. Rate regulation is automatically stayed pending review of a timely-filed petition for reconsideration alleging the presence of effective competition. II. DISCUSSION 3. Horizon argues that its cable system is subject to effective competition because it serves fewer than 30 per cent of the households in Victor Township, its franchise area. Specifically, Horizon states that it serves 222 of the 936 "homes" within its franchise area, or 23 percent of the total number of homes. As supporting documentation, Horizon submits a copy of the relevant page from the 1990 Census data which indicates that there are 936 "housing units" in Victor Township. In addition, Horizon submits a copy of a computer printout which indicates that Horizon served 222 subscribers. Finally, Horizon submits a declaration from the cable system's general manager. Horizon's Effective Competition Claim 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. Horizon has not met 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"). 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 its objection to Horizon's petition, Victor argues that Horizon is not subject to effective competition because Horizon has made an affirmative decision to serve only limited sections of its franchise area. According to Victor, Horizon's actual service area consists of 452 households, of which Horizon serves 222. Under this redefined franchise area, Victor argues that Horizon actually serves 49 per cent of households. Thus, Victor argues that Horizon has not demonstrated that its system is subject to effective competition. In reply, Horizon denies affirmatively restricting its cable service to limited areas of Victor Township. Horizon points out that its franchise agreement with Victor requires Horizon to expand into unserved areas of the Township when the population density reaches a level of 40 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 concludes that the mere presence of unserved areas within the franchise area is insufficient evidence that a cable operator has limited 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 Victor'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 Victor Township to regulate basic cable 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 Horizon Cable I Limited Partnership SHALL FILE the required rate justifications on the applicable forms with Victor 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 Victor Township that it is regulating Horizon'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