FOR RECORD ONLY $// Appeal ORDER in Town of New Durham, NH, DA 95-149//$ $/76.913 Assumption of jusrisdiction by Commission/$ $/76.922 Rates for the basic service tier/$ $/76.944 Commission Review of Franchising Authority Decision/$ $/76.950 Complaints regarding CPS tiers/$ $/76.951 Standard complaint form/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-149 In the Matter of: ) ) COMMUNITY TV CORPORATION ) ) Appeal of Local Rate Order ) of the Town of New Durham, NH ) ) ORDER Adopted: February 3, 1995 Released: February 6, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. Community TV Corporation ("Community"), the franchisee in the above matter, filed on October 14, 1994 an appeal of the local rate order adopted on September 14, 1994 by its local franchising authority, the Town of New Durham, New Hampshire ("New Durham"). New Durham has not filed any opposition to Community's appeal. The rate order established a new regulated rate schedule for Community's basic service tier rates as well as for its cable programming service tier rates and for associated equipment. New Durham's rate order required Community to implement certain rate reductions and to issue refunds to subscribers, dating back to September 1, 1993. 2. In its appeal, Community first argues that New Durham does not have the authority to regulate Community's cable programming service tier rates. As support for its contention, Community notes that the 1992 Cable Act limits the jurisdiction of local franchising authorities to the regulation of basic service tier rates and associated equipment. 3. Community also argues that New Durham issued its rate order regarding Community's Form 393 before New Durham completed the collection of data it had requested of Community. Specifically, on July 5, 1994, New Durham advised Community that it was extending its initial 30-day review period by an additional ninety days. On August 30, 1994, New Durham told Community that it would be accepting public comment on the "reasonableness" of Community's basic service tier rates and equipment and installation rates through October 3, 1994. On September 14, 1994, the same day that New Durham issued its rate order, it issued a letter requesting clarification of Community's calculation of its benchmark rate, its number of channels on both the basic service and cable programming service tiers, and several other items on Community's Form 393. Thus, Community asserts that the local franchising authority never fully considered all available data before issuing its order. 4. Under our rules, the Commission hears appeals of local rate orders issued by local franchising authorities on whether the franchising authorities have acted in a manner consistent with the 1992 Cable Act and our rules. Appeals on local or state matters, such as whether a franchising authority has complied with local procedures on pleading cycles or hearings, should be heard by local or state courts. In hearing appeals of local rate orders on matters subject to our jurisdiction, the Commission will not conduct a de novo review, but instead will sustain the franchising authority's decision as long as there is a reasonable basis for that decision. Therefore, the Commission will reverse a franchising authority's decision only if it determines that the franchising authority acted unreasonably in applying the Commission's rules in rendering its local rate order. If the Commission reverses a franchising authority's decision, it will not substitute its own decision but instead will remand the issue to the franchising authority with instructions to resolve the case consistent with the Commission's decision on appeal. II. DISCUSSION A. Cable Programming Rates 5. Regulation of cable rates is conducted by either the Commission or by the state and local authorities depending on the tier of service involved. The basic service tier is the tier of service which includes, at a minimum, the local broadcast channels along with any public, education, and governmental channels. There can only be one basic service tier offered to a subscriber, but there can be more than one cable programming service tier. Cable programming service tiers are tiers of service which include all video programming distributed over the system that is not on the basic service tier and that is not offered on a per channel or per programming basis. The basic service tier and associated equipment are subject to regulation by the local franchising authority, upon certification by the Commission. Regulation of cable programming service tiers is conducted by the Commission. 6. After reviewing Community's Form 393, New Durham established a schedule of rates for both the basic service tier and the cable programming service tier, and ordered corresponding refunds. Although the Commission will uphold the decisions of franchising authorities if there is a reasonable basis for doing so, the Commission also must enforce the regulatory framework we have adopted pursuant to the 1992 Cable Act. As a local franchising authority, New Durham does not have the authority to regulate Community's cable programming service tier rates or order refunds for its cable programming service tier. If New Durham believed that Community's cable programming service tier rate exceeded its maximum permitted rate, its proper course of action was to have filed a FCC Form 329 rate complaint with the Commission. New Durham overstepped the bounds of its authority when it prescribed rates for Community's cable programming service tier. It should have limited its decision to rates for the basic service tier and associated equipment. Therefore, we are remanding this issue to New Durham with instructions to enter a ruling consistent with these findings. B. Timing of New Durham's Rate Order 7. Community does not challenge New Durham's application of our procedural rules regarding franchising authorities' time periods for review of existing cable rates. Instead, Community contends that New Durham acted unreasonably in applying its own notice and comment rules. As support for its contention, Community notes that, prior to the expiration of the public comment period established by New Durham, the local franchising authority simultaneously issued its rate order and a request for clarification regarding certain items on its Form 393. Community's complaint stems from New Durham's failure to comply with its own procedures regarding public comment and the solicitation of additional information. The resolution of this issue requires an interpretation of applicable local law and not federal law; thus, a state or local court is the appropriate forum to hear this matter. III. Ordering Clauses 8. IT IS ORDERED that Community TV Corporations's appeal of the Town of New Durham's local rate order, regarding the issue of Community TV's cable programming service tier rates is REMANDED to the local franchising authority for resolution in accordance with the terms of this Order. 9. Accordingly, IT IS FURTHER ORDERED that Community TV Corporations's appeal of the Town of New Durham's local rate order, regarding the issue of New Durham's issuance of its rate order prior to the completion of the collection of data that it had requested from Community is DISMISSED. 10. This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission's rules. 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau