$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 95-53//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 95-53 ) WHITE RIVER CABLEVISION ) ) Petition for Reconsideration ) of Certification of ) the County of Bartholomew, Indiana ) to Regulate Basic Cable Service Rates ) (FCC Community ID No. IN0002) ) ) MEMORANDUM OPINION AND ORDER Adopted: January 17, 1995 Released: January 18, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On October 14, 1993, White River Cablevision ("White River") filed a timely petition for reconsideration challenging the certification of the County of Bartholomew ("The County") to regulate rates for basic cable service and associated equipment. In addition, both parties submitted supplements containing supporting documentation pursuant to a recent Commission Order. On January 6, 1995, White River filed a response to the Bureau's requests for clarifying information. 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 as defined by the Communications Act of 1934. 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 such effective competition unless they have 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. Rate regulation is automatically stayed pending review of a timely filed petition for reconsideration alleging effective competition as defined by the Communications Act of 1934. II. DISCUSSION 3. White River argues that its cable system is subject to effective competition because it serves fewer than 30 per cent of the "households" in the unincorporated areas of the County of Bartholomew, its franchise area. White River claims that it serves only 154 total basic subscribers of the 9,922 "occupied housing units" in its Bartholomew County franchise area, or less than 2 per cent of the total number of "occupied housing units." As supporting documentation, White River provides a copy of the 1990 Census data which shows that there are 24,192 occupied housing units in the County of Bartholomew. To calculate the number of occupied housing units in the unincorporated areas of the County, White River subtracts the number of occupied housing units in the incorporated areas of Clifford (110), Columbus (12,850), Edinburgh (152), Elizabeth (166), Hartsville (139), Hope (769), and Jonesville (84). White River also submits a computer print-out with subscriber information to support its claim that it serves 154 subscribers in its franchise area. 4. In its opposition to White River's motion to dismiss, and its supplemental pleading, the County argues that White River miscalculates its penetration level in violation of the Commission's rules. The County argues that, for purposes of determining an operator's penetration level, the Commission's rules require that the number of homes actually served must be compared to the number of homes the operator chooses to pass, not the number of homes the operator is authorized by franchise to pass. The County argues that White River miscalculates its penetration level because it looks to the total number of "homes" in the unincorporated areas of the County, but does not contend that it passes or has made service available to all homes in the unincorporated areas of the County. In addition, the County claims that it has made a preliminary review of the areas in which White River offers service and determined that White River has systematically limited the area in which it offers service to a small portion of the northernmost part of the County. The County claims that White River has held a franchise to serve the entire County since 1989, and does not appear to be planning significant expansion of its service area. As supporting documentation, the County submits a copy of the franchise agreement, and a map of the County, which the County claims illustrates the portion of the County to which White River offers service. The County also provides an affidavit from a responsible official attesting to the authenticity of the copy of the map and veracity of the claims in the opposition papers. 5. In reply to the County's opposition, White River argues that while it serves only a small portion of the County, it has repeatedly tried to expand its service beyond the current franchise area. White River also argues that its current service area has been limited, not by White River's conduct, but rather by surrounding competition from other cable operators which serve the areas directly adjacent to White River's service area. White River adds that the Commission's description of an "affirmative action" to limit the service area clearly precludes a situation such as this where the cable operator is limited by external competition and continues to attempt expansion. 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 unincorporated areas of the County of Bartholomew. Specifically, the County has not provided sufficient evidence demonstrating that White River has made an affirmative decision to restrict its service. The County does not submit evidence demonstrating an affirmative decision not to expand. (Such evidence could include, e.g., refusals of requests to expand service, or clear and unambiguous statements from the cable operator indicating an intent not to expand.) Rather, the County argues that, based upon its preliminary review, it has determined that White River has systematically limited the area in which it offers service to a small portion of the County, and that White River has held a franchise since 1989 and does not appear to be planning significant expansion of its service area. Such an argument, without more is insufficient to support a claim that a cable operator 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. White River has met its burden. White River appropriately relied on data reflecting the number of households as required by our rules. Relying on this data, White River has submitted sufficient evidence demonstrating that its cable system serving the unincorporated areas of the County of Bartholomew, its franchise area, serves 154 of the 9,922 occupied housing units, or less than 2 per cent of the households in its franchise area. Thus, we find that White River's system serving the County of Bartholomew is subject to effective competition. Accordingly, White River's petition is granted. III. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that the petition for reconsideration filed by White River Cablevision challenging the certification of the County of Bartholomew, IN to regulate White River Cablevision's rates IS GRANTED. 9. IT IS FURTHER ORDERED that the certification of the County of Bartholomew to regulate White River Cablevision's basic cable service rates IS RESCINDED. 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