$/ For FCC Record Only/$ $// Order, Cable Act of 1992, certification, DA 94-1572//$ $/ 600.623 Regulation of Rates/$ $/ 76.905 Standards for Effective Competition/$ $/ 76.906 Presumption of No Effective Competition/$ $/ 76.910 Franchising Authority Certification/$ $/ 76.911 Petition for Reconsideration/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 94-1572 ) HORIZON CABLE I LIMITED ) PARTNERSHIP ) ) Petition for Reconsideration ) ) of the Certification of ) Vevay Township, MI ) to Regulate Basic Cable Service Rates ) FCC Community ID No. (MI0614) ) MEMORANDUM OPINION AND ORDER Adopted: December 27, 1994 Released: December 28, 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 Vevay Township, Michigan ("Vevay") to regulate rates for basic cable service and associated equipment. In addition, Horizon submitted a supplement to its petition containing supporting documentation pursuant to a recent Commission Order. Horizon later filed a second supplement. Vevay did not file an opposition to Horizon's petition to reconsideration. 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. Regulation of rates is automatically stayed pending review of a timely-filed petition for reconsideration alleging the presence of effective competition. II. DISCUSSION 3. Horizon states that its cable system is subject to effective competition because it has less than 30 per cent penetration in Vevay Township, its franchise area. Horizon, in its most recent supplement, claims that it serves only 307 of the 1,231 "occupied housing units" in its franchise area, or 24.9 percent of the total number of "occupied housing units". As supporting documentation, Horizon submits a copy of the relevant page from the 1990 Census data which indicates that there are 1,231 occupied housing units in Vevay Township. In addition, Horizon submits a copy of a computer printout which indicates that it serves 307 subscribers in Vevay Township. 4. In its opposition, Vevay argues that Horizon has made an affirmative decision to limit its actual service area, despite the fact that its franchise agreement does not restrict service to a specific area of the Township. It argues that Horizon's current area radiates out of the City of Mason along select roads to serve "population nodes," but does not extend into less developed areas. This "redefined area" has a total of 697 households of which 307, or 44 percent, subscribe to Horizon's cable system. As supporting documentation, Vevay submits a map illustrating Horizon's actual service area in relation to its authorized area of service. 5. In reply, Horizon argues that it has not affirmatively redefined its franchise area. It argues that the terms of its franchise agreement with Vevay require it to expand into unserved areas of the township when the population density reaches a level of 60 households per cable mile. It argues that it is in full compliance with the franchise agreement. Horizon also argues that it plans to expand its service by approximately 35 percent during the next year. Finally, Horizon argues that the mere presence of unserved areas of a franchise area, by itself, is not sufficient evidence that a cable operator has redefined its franchise area. 6. As a preliminary matter, we are unpersuaded that the relevant franchise area for purposes of determining the presence of effective competition in this case is some area other than the entire Vevay Township. Vevay merely argues that because Horizon does not serve its entire franchise area, it has chosen to redefiine its franchise area. However, as the Commission has stated previously, "[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." Accordingly, we find that Vevay has not demonstrated that Horizon has made an affirmative decision to redefine its franchise area. 7. 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, exists in the franchise area. Horizon has met this burden. Horizon appropriately relied on data reflecting the number of households as required by our rules. Relying on this data, Horizon has submitted evidence demonstrating that its cable system serving Vevay Township, its franchise area, serves 307 of the 1,231 occupied housing units, or 24.9 per cent of the households in its franchise area. Thus, we find that Horizon's system serving Vevay Township is subject to effective competition. Accordingly, Horizon's petition is granted. III. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that the petition for reconsideration filed by Horizon Cable 1 Limited Partnership challenging the certification of Vevay Township, MI to regulate basic cable rates IS GRANTED. 9. IT IS FURTHER ORDERED that the certification of Vevay Township, MI to regulate Horizon Cable's basic cable service rates IS RESCINDED. 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