FOR FCC RECORD ONLY $// Order, Cable Act of 1992, [ City, State ], DA 95-22 //$ $/ 300. 623 Regulation of rates /$ $/ 1.106 Petition for Reconsideration /$ $/ 76.905 Standards for Effective Competition /$ $/ 76.905 Presumption of no Effective Competition /$ $/ 76.910 Franchising Authority Certification /$ $/ 76.911 Petition for Reconsideration /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 95-22 ) ) MOUNTAIN BROOK CABLEVISION, INC. ) ) Petition for Revocation ) of Certification of ) the City of Vestavia Hills, Alabama (AL0497) ) to Regulate Basic Cable Service Rates ) MEMORANDUM OPINION AND ORDER Adopted: January 9, 1995 Released: January 10, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On February 3, 1994, Mountain Brook Cablevision Inc., ("Cablevision") filed a petition for revocation challenging the certification of the City of Vestavia Hills, Alabama, ("the City") to regulate rates for basic cable service and associated equipment. The City submitted a letter opposing Cablevision's petition to which Cablevision filed a reply. In addition, both parties filed supplements pursuant to a recent Commission 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 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 franchise authority has actual knowledge to the contrary. Such certification becomes effective 30 days from the date of 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. Once the period for filing petitions for reconsideration has elapsed, cable operators may file petitions for revocation. However, regardless of its grounds, a petition for revocation does not automatically trigger a stay of rate regulation. II. DISCUSSION 3. In its petition, Cablevision states that its system is subject to effective competition because it serves fewer than 30 percent of the households within the City of Vestavia Hills, the franchise area. Specifically, Cablevision states that it serves 95 of the 7,710 households (that is, occupied housing units) in the City, or 1.2 percent of the total number of households. As supporting documentation, Cablevision provides household data derived from the 1990 Census Report for the City of Vestavia Hills which indicates that there are 7,710 households in the franchise area. Cablevision also submits a copy of a computer print-out with sufficient subscriber information to support its claim that it serves 95 households in the franchise area. 4. The City concedes that Cablevision was issued a nonexclusive franchise to serve the entire City of Vestavia Hills consisting of approximately 7,710 households. The City's objection to Cablevision's petition, however, is based on its contention that Cablevision has made an affirmative decision to limit its actual service area to a subdivision within the City consisting of 95 homes. As such, the City claims that Cablevision has "redefined" the franchise area for purposes of the effective competition standard. In support of this argument, the City claims that despite entering into a franchise agreement with Cablevision in October of 1987, Cablevision has yet to offer (and does not appear to be planning to offer) services to any household outside of the aforementioned subdivision. Furthermore, the City claims that, because Cablevision allegedly refuses to offer competing services to any household served by the City's alternative CATV provider, TCI Cablevision, the franchise area used to measure effective competition should be the 95 homes currently served. Using this standard, the City argues that Cablevision serves 100 percent of the households, and therefore, is not subject to effective competition. 5. In reply, Cablevision argues that it has never limited service within the franchise area, nor does it intend to do so. In fact, Cablevision claims that "it has experienced steady subscriber growth during a very difficult period for the cable industry." Cablevision also argues that should the Commission find that Cablevision has redefined its franchise area, the Commission should also find that Cablevision meets the competing provider test for effective competition set forth in the 1992 Cable Act and our rules. Cablevision offers statistical information in support of this claim. 6. As a preliminary matter, we are not persuaded that the appropriate franchise area for purposes of effective competition in this case is some area other than the entire City of Vestavia Hills. The City does not provide adequate evidence to support its claim that Cablevision has made an affirmative decision to limit its service to the subdivision in which Cablevision serves 95 households. One basis for the City's conclusion stems from a claim that "Cablevision has never attempted to offer service to any house served by TCI." The City, however, does not substantiate this claim with any evidence (such as a refusal by Cablevision to expand into those areas or any other evidence). In its opposition, the City also asserts that an unnamed "local cable official" made the comment that "expansion of Cablevision's service would only result in a price war." Such a comment might, under appropriate circumstances and taken together with other facts, be some evidence of intent to limit a franchise area. Here, however, the City gives no indication as to who made this alleged statement, or when, or to whom, or under what circumstances. Nor is it clear how the City came upon this allegation. Therefore, we are unable to give the allegation much weight. Finally, we remind the City that "[t]he fact that a franchise area has not yet been filled out by construction of a system would not by itself be taken as redefining the service area." In light of foregoing, we do not find that Cablevision has made an affirmative decision to limit its service area. Therefore, we will not address its argument that it meets the competing provider effective competition test in any such alleged redefined 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, is present within the franchise area. Cablevision has met this burden. Specifically, Cablevision appropriately relied on data reflecting the number of households as required by our rules. Relying on this data, Cablevision has submitted sufficient evidence demonstrating that its cable system serving the City, its franchise area, serves 95 of the 7,710 households in the City of Vestavia Hills, or 1.2 percent of the total number of households. Thus, we find Cablevision's system serving the City of Vestavia Hills is subject to effective competition. Accordingly, its petition is granted. III. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that the petition for revocation filed by Mountain Brook Cablevision, Inc., challenging the certification of the City of Vestavia Hills, Alabama, to regulate its basic cable service IS GRANTED. 9. IT IS FURTHER ORDERED that the certification granted to the City of Vestavia Hills, Alabama, to regulate Mountain Brook Cablevision Inc.'s basic cable rates IS RESCINDED. 10. This action is being 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 6