$/ FOR FCC RECORD ONLY /$
$// MO&O, Cable Act of 1992, DA 94-1457//$

$/ 300.623 Regulation of Rates /$
$/ 1.106 Petitions for Reconsideration /$
$/ 76.906 Presumption of no effective competition /$
$/ 76.910 Franchising authority certification /$
$/ 76.911 Petition for reconsideration of certification /$
                                    
                               Before the
                    Federal Communications Commission
                         Washington, D.C.  20554
                                    

In the Matter of:     )          DA 94-1457
     )
C-TEC CABLE SYSTEMS OF MICHIGAN, INC.  )
     )
Petition for Reconsideration     )
     )
of the Certification of Deerfield Township, Michigan    )
to regulate basic cable rates (MI1609) )


MEMORANDUM OPINION AND ORDER
    

Adopted:  December 12. 1994      Released:  December 13. 1994

By the Chief, Cable Services Bureau:

I.  INTRODUCTION

     1.    On January 21, 1994, C-TEC Cable Systems of Michigan, Inc. ("C-TEC") filed
a timely Petition for Reconsideration challenging the certification of Deerfield Township,
Michigan ("Deerfield") to regulate rates for basic cable service and associated equipment.   
Deerfield filed an Answer to Petition for Reconsideration ("Answer") to which C-TEC filed a
Reply.  Both parties filed additional pleadings 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 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.    C-TEC argues that its cable system is subject to effective competition because
it serves fewer than 30 percent of the households in Deerfield, its franchise area.  C-TEC
claims that it currently serves only 45 of the 1,548 households (that is, occupied housing
units) in Deerfield, or 2.9 percent of the total number of households.  As supporting
documentation, C-TEC provides 1990 Census data which shows that there are 1,548
households in Deerfield.  C-TEC also submits a computer print-out with sufficient subscriber
information to support its claim that it serves 45 subscribers in the franchise area.

     4.    Deerfield's Answer disputes the boundaries of C-TEC's franchise area.  Noting
that the township is served by two cable operators -- C-TEC and D.F. Cablevision -- and that
each operator has an exclusive and separate franchise area, Deerfield claims that C-TEC's 
franchise area consists of no more than approximately 100 homes in the southwest section of
Deerfield.  Within this area, approximately 47 homes subscribe to C-TEC, resulting in a 47
percent subscribership rate. 

     5.    C-Tec filed a Reply to Deerfield's Answer which disputes Deerfield's
characterization of its franchise area.  C-Tec maintains that neither C-TEC, nor D.F.
Cablevision, has an exclusive franchise or a franchise that limits its service area.  C-TEC also
denied Deerfield's allegation that C-TEC has affirmatively restricted its service to specific
areas of the Deerfield Township franchise area.  Rather, C-TEC asserts that it is interested in
expanding service to new areas of the franchise area whenever it becomes economically
feasible to do so.  

     6.    We are unpersuaded that the appropriate franchise area for purposes of effective
competition is something less than the entire Township of Deerfield.  First, Deerfield's claim
that C-TEC has a separate and exclusive franchise to serve the southwest section of Deerfield
is unsupported.  The unexecuted franchise agreement between Deerfield and C-TEC attached
to Deerfield's Answer states in the "Grant of Franchise" provision that Deerfield ". . . grants
to C-TEC, subject to the provisions herein contained, a non-exclusive franchise to engage in
the business of operating and providing a cable television system within the Township. . . ."  
Deerfield cites no provision of the franchise agreement, nor other evidence, supporting the
proposition that C-TEC's franchise area is other than the Township of Deerfield.

     7.    To the extent that Deerfield suggests that C-TEC has affirmatively redefined its
franchise area to encompass a smaller portion of the Township, we find no evidence to
support such an assertion.  Deerfield provides insufficient evidence to support a claim that
C-TEC has made an affirmative decision to limit its service to a specified portion of the
Township.  Without providing adequate support for its claims, Deerfield merely concludes
that C-TEC has decided not to serve the entire franchise area because C-TEC has not
expanded to fill its entire franchise area.  However, "[t]he fact that a franchise area has not as
yet been filled out by construction of a system would not by itself be taken as redefining the
service area."  Moreover, C-TEC states that it has urged Deerfield to notify C-TEC of
unserved communities in its franchise area that it would be economically feasible to serve. 
Therefore, we conclude that Deerfield has failed to sustain its burden of proof that C-TEC has
redefined its franchise area.
     
     8.    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.  C-TEC has met this burden.
     
     9.    We find that C-TEC appropriately relied on data reflecting the number of
households as required by our rules.  Relying on this data, C-TEC has submitted sufficient
evidence demonstrating that its cable system serving Deerfield, its franchise area, serves 45 of
the 1,548 households, or 2.9 percent of the households within its franchise area.  Thus, we
find C-TEC's system serving the Township of Deerfield is subject to effective competition. 
Accordingly, its Petition for Reconsideration is granted.

III.  ORDERING CLAUSES

     10.   Accordingly, IT IS ORDERED that the Petition for Reconsideration filed by
C-TEC Cable Systems of Michigan, Inc. challenging the Certification of the Township of
Deerfield, Michigan IS GRANTED.

     11.   IT IS FURTHER ORDERED that the certification of the Township of
Deerfield, Michigan to regulate C-TEC's basic cable rates IS RESCINDED.

     12.   This action is taken pursuant to delegated authority pursuant to Section 0.321
of the Commission's Rules.



     FEDERAL COMMUNICATIONS COMMISSION


     Meredith J. Jones
     Chief, Cable Services Bureau