$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 94-1571//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 94-1571 ) SBC Cable Co. ) ) ) Petition for Reconsideration ) ) of the Certification of ) Shelby County Board of Commissioners ) Shelby County, Indiana ) to Regulate Basic Cable Service Rates ) (IN0133) MEMORANDUM OPINION AND ORDER Adopted: December 27, 1994 Released: December 28, 1994 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On November 9, 1993, SBC Cable Co. ("SBC") filed a timely petition for reconsideration challenging the certification of Shelby County Board of Commissioners, Shelby County, Indiana ("Board") to regulate rates for basic cable service and associated equipment. In addition, SBC filed additional information in response to a Bureau request for clarification. The Board did not file an opposition to SBC's petition. 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. SBC argues that its cable system is subject to effective competition because it serves fewer than 30 percent of the households in the unincorporated areas of Shelby County, its franchise area. SBC states that it serves only 1,798 of the 8,114 households (that is, occupied housing units) in Shelby County or 22.16 percent of the total number of households. As supporting documentation, SBC provides 1990 Census data which shows that there are 8,114 households in SBC's franchise area in Shelby County. SBC explains that it arrived at this household number by taking the total number of households in Shelby County (14,761) and subtracting the total number of households in Shelbyville, (6,133) with which SBC has a separate franchise agreement, and the incorporated towns of Morristown (359) and St. Paul (155). This calculation yielded 8,114 households in SBC's franchise area. SBC also submits a computer print-out with sufficient information to indicate that SBC has 1,798 subscribers. This number was based on the total number of subscribers served by SBC's cable system in (7,039) reduced by the number of subscribers who live Shelbyville (4,705) with which SBC has a separate franchise as well as those subscribers who live in Hope, Indiana (536) which is located in another county. This calculation yielded a total of 1,798 subscribers. SBC also explains that one of the 1,798 subscribers actually represents a multiple dwelling unit single point billing account. In an attached chart, SBC demonstrates that this single account actually represents an additional 11 billing units. Arguably, this brings the total of subscribers to 1,809. Nonetheless, a comparison of this number to the total number of households in SBC's franchise area yields a penetration rate of 22.29 percent. Finally, SBC 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. SBC has met that burden. SBC appropriately relied on data reflecting the number of households as required by our rules. Relying on this data, SBC has submitted sufficient evidence demonstrating that its cable system serving Shelby County, its franchise area, serves no more than 1,809 of the 8,114 households, or 22.29 percent of the households within its franchise area. Thus, we find that SBC's system serving Shelby County is subject to effective competition. Accordingly, its petition is granted. III. ORDERING CLAUSES 5. Accordingly, IT IS ORDERED that the petition for reconsideration filed by SBC Cable Co. challenging the certification of Shelby County Board of Commissioners, Shelby County, Indiana to regulate SBC Cable's basic cable rates IS GRANTED. 6. IT IS FURTHER ORDERED that the certification of Shelby County Board of Commissioners, Shelby County, Indiana to regulate the basic cable rates of SBC Cable Co. IS RESCINDED. 7. 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