$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 95-142//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 95-142 ) BUENAVISION TELECOMMUNICATIONS ) OF BOYLE HEIGHTS, INC. ) ) Petition for Reconsideration ) ) of Cable Services Bureau Order ) Denying Petition for Reconsideration ) of the City of Los Angeles, California's ) Certification to Regulate Basic Cable ) Service Rates (CA1285) ) ORDER ON RECONSIDERATION Adopted: February 2, 1995 Released: February 3, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On December 27, 1994, Buenavision Telecommunications of Boyle Heights, Inc. ("Buenavision") filed a timely petition requesting reconsideration of a Memorandum Opinion and Order ("Order") adopted by the Cable Services Bureau ("the Bureau") pursuant to delegated authority. The Order denied Buenavision's petition for reconsideration challenging the certification of the City of Los Angeles ("the City") to regulate Buenavision's rates for basic cable service and associated equipment. In its petition, Buenavision requests that the Commission grant its petition for reconsideration, find that Buenavision is subject to effective competition, and rescind the City's certification to regulate basic cable service rates. 2. Section 405 of the Communications Act of 1934, as amended, allows parties to petition for reconsideration of an order, issued by the Commission or its delegated authority. Such a petition must be filed within 30 days from the date of public notice of that action. To warrant consideration, a petition for reconsideration must state the specific form(s) of relief sought by the petitioner and allege with particularity the respects in which the contested action should be changed. The petition should also cite findings of fact or conclusions that the petitioner believes to be in error, and indicate how the petitioner believes they should be changed. II. BACKGROUND 3. 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. Rate regulation is automatically stayed pending review of a timely-filed petition for reconsideration (filed pursuant to Section 76.911 of the Commission's rules) alleging the presence of effective competition. 4. In its original petition for reconsideration, Buenavision argued that its Los Angeles system was subject to effective competition in its franchise area. Buenavision based its claim of effective competition on the allegation that its system's subscriber penetration rate was less than 30% of the "households" in its franchise area. To support its claim, Buenavision submitted a copy of its "Schedule of Subscribers and Services" which indicated that its system served 2,321 subscribers as of October 31, 1993. Buenavision also provided a copy of a "Boyle Heights Address Count" which included a list of addresses for residences, multiple dwelling units, and commercial entities within the franchise area. This count indicated that there were 23,014 addresses within the franchise area. In addition, Buenavision provided data from the "Los Angeles County 1990 Census Population and Housing Counts by Major and Minor Statistical Areas" which indicated that there were 24,733 "dwelling units" in Boyle Heights. Using these figures, Buenavision argued that the ratio of total Buenavision subscribers in relation to the total number of "addresses" or "dwelling units" in the franchise area yielded a subscriber penetration rate of either 10.1% or 9.4% of the "households" in its franchise area, depending on which housing data was used. Because both penetration rates fell below 30%, Buenavision argued that its system was subject to effective competition, and that the City's certification to regulate Buenavision's basic cable rates and associated equipment should be rescinded. 5. In its Order, the Bureau denied Buenavision's petition for reconsideration because Buenavision, in deriving its penetration rate, inappropriately relied upon "dwelling unit" data, rather than household ("occupied housing unit") data, to determine the total number of households in its franchise area. Specifically, the Bureau found that Buenavision's dwelling unit" count inappropriately included vacant housing units. In a November 21, 1994 letter to the Bureau, Buenavision acknowledged that the 24,733 total for "dwelling units" in Boyle Heights did not exclude vacant housing units, and that it was impossible for Buenavision to base its count of households on data that excluded vacant housing units. The Bureau also found that Buenavision could not rely on its address count to support its claim because Buenavision did not indicate whether the address count excluded vacant housing units. Moreover, the address count inappropriately included commercial addresses. Because Buenavision failed to base its claim on "household" or "occupied housing unit" data, the Bureau rejected Buenavision's claim of effective competition. 6. In its petition, Buenavision now argues that use of recently located "household" (occupied housing unit) data confirms that its system's penetration level falls below 30%. Specifically, Buenavision submits a copy of the Los Angeles County Department of Regional Planning Census data which demonstrates that there are 23,895 occupied housing units in Buenavision's franchise area. In addition, Buenavision submits updated subscribership data which indicates that Buenavision serves a total of 2,563 subscribers as of December 1, 1994. This yields a penetration level of 10.7%. Buenavision argues that the public interest warrants acceptance of this new data because it demonstrates that Buenavision is subject to effective competition based on an extremely low penetration level. III. DISCUSSION 7. Generally, reconsideration is appropriate where the petitioner shows either a material error or omission in the original order or raises additional facts not known or not existing until after the petitioner's last opportunity to present such matters. A petition for reconsideration which relies on facts or information not previously presented to the Commission or its delegated authority may be considered if the Commission or designated authority determines that consideration of such facts is required in the public interest. 8. In its original petition, Buenavision based its effective competition claim on addresses and dwelling unit data which inappropriately included vacant housing units. In this petition, however, Buenavision now submits household (i.e., occupied housing unit) data in support of its effective competition claim. 9. Relying on this household data, we find that, at most, Buenavision currently serves 2,563 subscribers in an area with 23,895 households (i.e., occupied housing units). This yields a penetration level of 10.7%. In light of this, we find that Buenavision has submitted sufficient evidence demonstrating that it serves fewer than 30% of the households in its franchise area. Accordingly, its cable system is subject to effective competition and its petition is granted. Other Matters 10. In its petition, Buenavision also argues that the Bureaus's Order is based on material errors. As Buenavision has now submitted sufficient evidence demonstrating that its cable system is subject to effective competition, it is unnecessary to address these additional arguments. IV. ORDERING CLAUSES 11. Accordingly, IT IS ORDERED that the petition for reconsideration, filed by Buenavision Telecommunications of Boyle Heights, Inc. challenging the Cable Services Bureau Order Denying the Petition for Reconsideration of the City of Los Angeles, California's Certification to Regulate Basic Cable Service Rates, IS GRANTED. 12. IT IS FURTHER ORDERED that the certification of the City of Los Angeles, California to regulate Buenavision Telecommunications of Boyle Heights, Inc.'s basic cable service rates IS RESCINDED. 13. This action is taken under 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