$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 95-178//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 95-178 ) HUNTER'S CREEK COMMUNICATIONS ) CORP., dba HUNTER'S CREEK ) CABLEVISION ) ) Petition for Revocation ) ) of Certification of ) Orange County, Florida ) to Regulate Basic Cable Service Rates ) (FL1012) ) MEMORANDUM OPINION AND ORDER Adopted: February 7, 1995 Released: February 8, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On September 12, 1994, Hunter's Creek Communications Corp., dba Hunter's Creek Cable ("Hunter's Creek") filed a petition for revocation challenging the certification of Orange County, Florida ( the "County") to regulate the system's rates for basic cable service and associated equipment. On October 4, 1994, Hunter's Creek filed a request for stay from local regulation by the County. The County filed a Motion to Dismiss and an opposition to the petition. 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 franchising authority has 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 revocation of the franchising authority's certification at any time after the date such certification becomes effective. Regardless of its grounds, however, a petition for revocation does not automatically stay a franchising authority's power to regulate basic cable rates. II. DISCUSSION Hunter Creek's Effective Competition Claim 3. Hunter's Creek 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 Orange County, its franchise area. Hunter's Creek claims that it serves only 1.29 percent of the 237,876 residential units or "households" in the County. As supporting documentation for its residential unit number, Hunter's Creek provides data from the Orange County Cable Communications Department Cable TV Statistical Report. This document, however, apparently lists a total of 237,876 "dwelling units" passed by all the cable systems operating in Orange County. Hunter's Creek also submits a computer printout with subscriber information which purports to support the number of subscribers to its cable system in the franchise area as of September 1, 1994. According to this computer printout, Hunter's Creek served 1,658 subscribers. 4. In its objection to Hunter's Creek's petition, the County argues that Hunter's Creek is not subject to effective competition because it has "redefined" its franchise area. The County alleges that Hunter's Creek has made an affirmative decision to limit its service area to specific areas in the County even though its franchise does not restrict service to a specific area of the County. According to the County, Hunter's Creek's actual service area consists of 1,820 residential units, of which Hunter's Creek serves 1,441. As support, the County submits color-coded maps of the County, for August 22, 1991 and April 27, 1993, which show what the County alleges as Hunter's Creek's actual "franchise area" for purposes of the effective competition standard. According to the County, these maps demonstrate that Hunter's Creek has made an affirmative decision to limit its service to a "pocket" of territory within the south central portion of the unincorporated area. It argues that a comparison of the two maps demonstrates that Hunter's Creek's service area has remained stagnant, thereby leading to the conclusion that Hunter's Creek has not been steadily expanding its service area. Within this redefined franchise area, the County argues that Hunter's Creek actually serves 79.18 percent of residential units, and therefore is not subject to effective competition. 5. As a preliminary matter, we are not persuaded that the appropriate franchise area for purposes of effective competition is something less than the entire unincorporated areas of Orange County. The County has not submitted sufficient evidence, such as statements from the cable operator or evidence of refusals by Hunter's Creek to expand its cable service. Rather, the County merely argues that Hunter's Creek has not expanded its service throughout its franchise area. As the Commission has stated previously, however, "[t]he fact that franchise area has not yet been filled out by construction of a system would not by itself be taken as redefining the service area." 6. 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. Hunter's Creek did not support its effective competition claim with data reflecting the number of "households" in the franchise area, as required by our rules. See Third Order on Reconsideration, MM Docket Nos. 92-266 and 92-262, 9 FCC Rcd 4316, 4324 (1994). Nonetheless, we note that in Telesat Cablevision, Inc., Petition for Reconsideration of Certification of Orange County, Florida to Regulate Basic Cable Service Rates (FCC Community ID No. FL0851), DA 95-177, (released February 8, 1995), Telesat Cablevision, another cable operator which also serves the unincorporated areas of Orange County, states that, based on the 1990 Census, there are 160,356 households (i.e., occupied housing units) in the unincorporated areas of Orange County. In addition, in CableVision Industries Limited Partnership, et. al., Revocation of Certification of the Certification of Orange County, Florida to Regulate Basic Cable Rates, DA 95-179, (released February 8, 1995), CableVision Industries ("CVI"), a third operator which also serves the unincorporated areas of Orange County, asserts that there are 120,999 households in the unincorporated areas of Orange County. Both Telesat and CVI are able to demonstrate how they arrived at their respective numbers and we are unable to conclude that one number is more accurate than the other. However, we note that Hunter's Creek, which has the same franchise area as the other two operators, would meet the low penetration test for effective competition using either the household figures presented in Telesat's petition (160,356) or the household figures presented in CVI's petition (120,999). If the household figure (160,356) in Telesat's petition is applied to the number of subscribers Hunter's Creek serves (1,658), Hunter's Creek penetration level would be 1.03 percent. If the household figure (120,999) presented in CVI's petition is used, Hunter's Creek's penetration level would be 1.37 percent. Thus, we find that Hunter's Creek's system serving the unincorporated areas of Orange County is subject to effective competition. Accordingly, its petition is granted. III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the petition for revocation filed by Hunter's Creek Communications Corp., dba Hunter's Creek Cable challenging the certification of Orange County to regulate Hunter's Creek's basic cable rates IS GRANTED. 8. IT IS FURTHER ORDERED that the certification of Orange County to regulate the rates for basic cable service and associate equipment of Hunter's Creek Communications Corp., dba Hunter's Creek Cable IS RESCINDED. 9. This action is taken pursuant to 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