$/ FOR FCC RECORD ONLY /$
$// MO&O, Cable Act of 1992, DA 95-50//$

$/ 300.623 Regulation of Rates /$
$/ 1.106 Petitions for Reconsideration /$
$/ 76.906 Presumption of no effective competition /$
$/ 76.910 Franchising authority certification /$
$/ 76.911 Petition for reconsideration of certification /$

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

In the Matter of:                       )              DA 95-50
                                        )
TELESAT CABLEVISION, INC.               )
                                        )
Petition for Reconsideration            )
                                        )
of Certification of                     )
Hillsborough County, Florida            )
to Regulate Basic Cable Service Rates   )
(FL0996)                                )

                       MEMORANDUM OPINION AND ORDER

Adopted:  January 13, 1995                   Released:  January 17, 1995

By the Chief, Cable Services Bureau:

I.  INTRODUCTION

     1.   On November 30, 1993, Telesat Cablevision, Inc. ("Telesat") filed a timely
petition for reconsideration challenging the certification of Hillsborough County, Florida
("the County") to regulate rates for basic cable service and associated equipment.  The
County filed its opposition to Telesat's petition for reconsideration, and Telesat then filed a
reply.  On August 19, 1994, Telesat submitted a supplement to its petition 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 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 of 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.   Telesat 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 Hillsborough
County, its franchise area.  The supplement to Telesat's petition shows that the cable system
currently serves 3,535 of the 195,271 households (that is, occupied housing units) in the
franchise area, or 1.8 percent of the total number of households.  As supporting
documentation, Telesat provides 1990 Census data which indicates that there are 195,271
households in the franchise area.  Telesat also submits a computer print-out with sufficient
subscriber information to support its claim that it serves 3,535 subscribers in the franchise
area.  Finally, Telesat provides an affidavit under penalty of perjury by a responsible official
certifying the accuracy of the data included in the petition and supplement.

     4.   The County claims that Telesat's effective competition claim is inappropriately
based on areas unserved by Telesat's cable system.  First, the County argues that Telesat has
made an affirmative decision to redefine its service area.  Specifically, it states that Telesat
was granted a county-wide franchise on June 1, 1988, but that Telesat has not attempted to
expand beyond three specific geographic areas identified in the franchise agreement as
Telesat's Primary Service Areas.  The County further argues that the Quarterly Activity
Reports submitted by Telesat for January through September of 1993 indicate that Telesat's
penetration rate as of September, 1993 was actually 42 percent.  As supporting
documentation, the County provides a map of the Primary Service Areas A, B, and C,
quarterly activity reports submitted by Telesat to the County for the reporting periods of
January through March, and July through September, and an affidavit by a responsible
official certifying the accuracy of the data included in the response.    

     5.   In reply, Telesat states that its effective competition claim is properly based on
the entire franchise area.  It argues that it has not made an affirmative decision to redefine its
franchise area.  Telesat states that the Primary Service Areas were created by the County,
and that Telesat was required by agreement to meet build-out requirements in these areas
before serving other areas in the County.  Telesat also contends that the County's own
evidence contradicts its assertion that the restricted area exception is appropriate in this case. 
For example, Telesat points to the Hillsborough County "Cable Television Administration
Quarterly Activity Report" which lists the total number of dwellings in Telesat's franchise
area as 219,421 and the total number of subscribers as 3,565, which amounts to a penetration
level of 1.6 percent.  Telesat further argues that the County's Quarterly Activity Report
does not indicate that Telesat has restricted its franchise area to the Primary Service Areas. 
Rather, the County uses the total number of homes in the unincorporated areas of the County
to describe Telesat's franchise area.  Finally, Telesat maintains that "the limits of its actual
service area are shaped by competitive forces, because the County has granted franchises to
two other cable operators for all of the unincorporated areas of Hillsborough County."

     6.   As a preliminary matter, we are unpersuaded that the appropriate franchise
area for purposes of effective competition is something less than the entire unincorporated
areas of Hillsborough County, Florida.  The County provides insufficient evidence to support
its claim that Telesat has made an affirmative decision to redefine its franchise area.  For
example, the County has presented no statements from Telesat, or other evidence indicating a
refusal to expand service to other areas within the franchise area.  The County merely
concludes that Telesat has decided not to serve the entire franchise area because Telesat has
not yet initiated any extension of its system beyond the Primary Service Areas.  We
recognize that, by contract, Telesat is obligated to meet certain build-out requirements in the
Primary Service Areas prior to expanding into other areas within its franchise.  We also
recognize that Telesat has, in fact, satisfied its build-out requirements in the Primary Service
Areas.  However, we remind the County that "[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."  Therefore, we find that the County has failed to sustain its burden of proof
that Telesat has redefined 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, is present within the
franchise area.  Telesat has met this burden.  

     8.   Telesat appropriately relied on data reflecting the number of households as
required by our rules.  Relying on this data, Telesat has submitted sufficient evidence
demonstrating that its cable system, serving the unincorporated areas of Hillsborough
County, Florida, its franchise area, serves 3,535 of the 195,271 households, or 1.8 percent
of the households, within its franchise area.  Thus, we find that Telesat's system serving
the unincorporated areas of Hillsborough County, Florida is subject to effective competition. 
Accordingly, its petition is granted.

III.  ORDERING CLAUSES

     9.   Accordingly, IT IS ORDERED that the petition for reconsideration filed by
Telesat Cablevision, Inc. challenging the certification of Hillsborough County, Florida to
regulate basic cable rates IS GRANTED.

     10.  IT IS FURTHER ORDERED that the certification of Hillsborough County,
Florida to regulate Telesat Cablevision, Inc.'s basic cable service rates IS RESCINDED.   

     11.  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