$/ FOR FCC RECORD ONLY /$

$// MO&O, Cable Act of 1992, DA 94-1390//$
$/ 300.623 Regulation of Rates /$
$/ 1.106 Petitions for Reconsideration /$
$/ 76.906 Presumption of no effective competition /$
$/ 76.910 Franchising authority certification /$
$/ 76.911 Petition for reconsideration of certification /$


                                Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                          Washington, D.C.  20554

In the Matter of                        )                   DA-941390
                                   )
BUENAVISION TELECOMMUNICATIONS     )
OF BOYLE HEIGHTS, INC.             )
                                   )
Petition for Reconsideration                 )
of Certification of the                 )
City of Los Angeles, California              )
to Regulate Basic Cable Rates (CA1285)       )


                       MEMORANDUM OPINION AND ORDER

Adopted:  December 5, 1994              Released:  December 5, 1994

By the Chief, Cable Services Bureau:

I.  INTRODUCTION

     1.   On December 7, 1993, Buenavision Telecommunications of Boyle Heights,
Inc. ("Buenavision") filed a timely petition for reconsideration challenging the certification of
the City of Los Angeles ("City") to regulate Buenavision's rates for basic cable service and
associated equipment.  The City filed an opposition to Buenavision's petition.  In addition,
both parties filed responses to requests from the Cable Services Bureau for additional
information.  Also in response to a Bureau request, Buenavision submitted a letter on
November 21, 1994 clarifying certain aspects of its earlier submissions.

     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 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.  Such certification becomes effective 30 days
from the date of the filing unless the Commission finds that the authority does not meet the
statutory certification requirements.  Cable operators may file petitions for reconsideration
of the franchising authority's certification within 30 days of the date such certification
becomes effective.  Regulation of rates is automatically stayed pending review of a timely-
filed petition for reconsideration alleging effective competition.

II.  DISCUSSION

     3.   Buenavision claims that its system is subject to effective competition because
fewer than 30 percent of the households in its franchise area subscribe to its cable service. 
Specifically, Buenavision claims that, as of October 31, 1993, it served 2,321 subscribers in
an area with 23,014 "households."  As support, Buenavision submits a copy of its "Schedule
of Subscribers and Services" which indicates that its system served 2,321 subscribers as of
October 31, 1993.  In addition, Buenavision provides a copy of a "Boyle Heights Address
Count" which includes a list of addresses for residences, multiple dwelling units, and
commercial entities within the franchise area.  This count indicates that there are 23,014
addresses within the franchise area.  Buenavision also provides data from the "Los Angeles
County 1990 Census Population and Housing Counts by Major and Minor Statistical Areas"
which shows that there are 24,733 "dwelling units" in Boyle Heights.  Thus, Buenavision
apparently has determined that it serves either 10.1% or 9.4% of the "households" in its
franchise area, depending on which household count is used.

     4.   For its part, the City only argues that Buenavision's level of penetration is not
a function of competition between two or more multichannel video programming distributors. 
It states that it has determined that effective competition does not exist in Los Angeles and
this knowledge is "based upon [councilmembers'] intimate knowledge of the services
available in their Council district; and moreover from the first-hand anecdotal evidence and
complaints they have received from their constituents."  Accordingly, the City urges the
Commission to revise its effective competition standards to permit the City to regulate rates.

     5.   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.  Buenavision has failed to meet this burden.  Buenavision has not
demonstrated that its effective competition claim is based on the correct housing data.  Our
rules require the use of data reflecting the number of "households" (i.e., occupied housing
units) in the franchise area.  Buenavision has not submitted sufficient evidence that its
penetration level was measured using this data.

     6.   Specifically, we cannot accept either of Buenavision's household counts.  In its
November 21, 1994 letter to the Bureau, Buenavision acknowledges that the 24,733 total for
"dwelling units" in Boyle Heights does not exclude vacant housing units.  Similarly,
Buenavision's "Boyle Heights Address Count" does not provide conclusive evidence of the
total number of households in the franchise area.  As mentioned above, the address count
includes a total of 23,014 residences, multiple dwelling units, and commercial entities within
the franchise area.  There is no indication that these residences and multiple dwelling units
are occupied.  Furthermore, Buenavision improperly relied on the number of commercial
addresses to support its effective competition claim.  The three alternative tests for effective
competition are based on the term "household."  As the Commission stated previously, "[a]s
used in the Cable Act, we presume that Congress did not intend "households" to have a
different meaning than in the 1990 Census .  .  .  ."  As the 1990 Census does not include
commercial entities in the count of "households," we find that Buenavision's inclusion of
commercial entities was inappropriate.   Accordingly, since neither of Buenavision's
household counts was determined in accordance with the Commision's Rules, its petition is
denied.

III.  ORDERING CLAUSES

     7.   Accordingly, IT IS ORDERED that the petition for reconsideration filed by
Buenavision Telecommunications of Boyle Heights, Inc. challenging the certification of the
City of Los Angeles to regulate Buenavision's basic cable service 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 Buenavision SHALL FILE the required
rates jusitifications on the appropriate rate forms with the City of Los Angeles within 30 days
of the release date of this Memorandum Opinion and Order or within 30 days of receipt of
notice from the City of Los Angeles that it is regulating Buenavision's basic cable service
rates, whichever is later.
     
     10.  This action is taken pursuant to delegated authority under Section 0.321 of the
Commission's Rules, 47 C.F.R.  0.321.

     
                         FEDERAL COMMUNICATIONS COMMISSION




                         Meredith J. Jones
                         Chief, Cable Services Bureau