$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 94-1518//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) DA 94-1518 ) C-TEC Cable Systems of Michigan, Inc. ) ) Petition for Reconsideration ) ) of the Certification of ) Cascade Charter Township, MI (MI1343) ) to Regulate Basic Cable Service Rates ) MEMORANDUM OPINION AND ORDER Adopted: December 19, 1994 Released: December 20, 1994 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On October 29, 1993, C-TEC Cable Systems of Michigan, Inc. ("C-TEC") filed a timely petition for reconsideration, challenging the certification of Cascade Charter Township ("Cascade") to regulate C-TEC's basic cable service and associated equipment rates. Cascade filed an opposition to C-TEC's petition to which C-TEC filed a reply. In addition, both parties filed supplemental 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 the 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 thirty 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 thirty days from the date such certification becomes effective. Regulation of rates 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 Cascade, the franchise area. Specifically, C-TEC claims that it serves 129 of the 1,314 households (that is, occupied housing units) in its franchise area, or 10.0 percent of the total number of households. As supporting documentation, C-TEC submits a copy of a computer print-out with sufficient subscriber information to show that it serves 129 households in the franchise area. In addition, it submits a copy of the relevant page of the 1990 Census data which shows that there are 1,314 occupied housing units in Cascade Township. Finally, C-TEC provides a declaration under penalty of perjury from a responsible official certifying the accuracy of the data included in the petition and the supplement to the petition. 4. Cascade contends that C-TEC has made an affirmative decision to redefine its franchise area. As C-TEC has no subscribers in the portions of the Township served by a second system, TCI Cablevision of West Michigan, Cascade argues that the franchise area, for purposes of determining the existence of effective competition, is that area actually served by C-TEC which Cascade contends contains 157 households. Thus, because C-TEC serves 131 of the 157 households, or 83 percent of the households in this "redefined" franchise area, Cascade argues that C-TEC is not subject to effective competition. 5. In response, C-TEC contends that it has not acted in any way to restrict its franchise area. C-TEC further argues that permitting a redefinition of the franchise area simply because it does not as yet provide cable service to all portions of the Township would amount to an improper substitution of a "homes passed" test for the appropriate count of "households" test. Thus, C-TEC contends that Cascade has not met its burden of demonstrating a "redefinition" of the franchise area. 6. As a preliminary matter, we are unpersuaded that the appropriate franchise area for purposes of effective competition is something less than the entire Township. Cascade provides insufficient evidence to support its claim that C-TEC has made an affirmative decision to limit its service area to the area it actually serves. The only support that Cascade presents for its position is the fact that C-TEC does not now offer service in certain portions of the Township. As the Commission stated in the First Recon. Order, "the 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." Cascade has offered no evidence showing that C- TEC has refused to provide service beyond the area currently served. As such, we find that Cascade has failed to sustain its burden of proof that C-TEC has redefined its franchise area. Thus, for purposes of evaluating the presence of effective competition, the relevant area here is the entire area authorized by the franchise, namely the entire Township. 7. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. The 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. 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 Cascade, its franchise area, serves 129 of the 1,314 households, or 10.0 percent of the households within its franchise area. Thus, we find C-TEC's system serving Cascade Charter Township is subject to effective competition. Accordingly, its petition is granted. IV. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that the petition for reconsideration, filed by C- TEC Cable Systems of Michigan, Inc. challenging the certification of Cascade Charter Township, Michigan to regulate C-TEC's rates, IS GRANTED. 9. IT IS FURTHER ORDERED that the certification of Cascade to regulate the basic cable service rates of C-TEC IS RESCINDED. 10. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau