WPCq 2BJ Z Courier3|xBoldCG TimesX@`7X@HP LaserJet 4_230_1HPLAS4.PRS 4x  @\_)^X@2W 6F<, 3|xCourierCourier Boldimes BoldCG Times ItalicCG Times Bold ItalicCourier BoldCourierCourier BoldCG TimesCG Times BoldCG Times Italic?xxx,)x `7X8wC;,Xw PE37XPD7zC;,c!Xz_ pi7XdddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d<|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`LCourierCourier BoldCG TimesCG Times BoldD.PRSx  @\uX@2$ f Z",tB^ f ^;C]ddCCCdCCCCddddddddddCCY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYd4dddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d<|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`L"i~'K2^$(8<><q*"xxxxWWxxxWWkkxxx2f c\unZq",tB^ f ^;LhddCCCdCCCCddddddddddCCdxLdxxoxxxCCCddCddYdYFdo88d8odddLL8oYdYLdddd4dddddCddddddddd8dddddYYYYYL8L8L8L8oddddoooozYddddxYdxddddXXddXddXdddddooL8ddddLdkdddx8xPxdxDx8ppoddLLdpLpLpLodxLx8xdopoopoxdxLxLxLdxdoodxdxdCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddLdYYddddddCddddCCCkkd88ddzzdddsssCkdC"d~d9dCCzCddoddCdYds`zUvdddCCCCzozoYNzYYYN8YooYdYzzdzddzYzYzozzzNdzzzYzzzzCCdddddddzzzzCzdYC\   pxtll\tll@\@\`L<?xxx,2x6X@`7X@?xxx,)x `7Xa8wC;,Xw PE37XPD`7zC;,c!Xz_ pi7XbV"G($,hG PE37hPDcW!I($,`DhI_ pi7h6uC;,,cXu&_ x7XX4wC;,<Xw*0 x]7X@` A. ` ` (#` \\`WWWWWSSS0000W`WWWWWOW````S\C:\WPCFH{TD.999\WP}WP{PJ.1=' E87 Y- #Xw PE37XP# $/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 95188//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$  Y`-$/ 76.911 Petition for reconsideration of certification /$#x6X@`72X@#  X- #Xw PE37XP#   #Xw PE37XP# #Xw PE37XP#X01Í ÍX01Í Í (2#Xw PE37XP#Before the W FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554  Y - In the Matter of:Th)ppDA 95188xx 0  Y -Th)  Y -CECILTON CATV, INC.hh@h)pp   x` `  hh@h)  YY-Petition for ReconsiderationTh)  YB-of Certification of hh@h)pp  xx 0  Y+-Cecil County, Maryland (MD0334)Th)  Y-to Regulate Basic Cable Service RatesTh)  Y-}  MEMORANDUM OPINION AND ORDERă  Y- Adopted: February 8, 1995ThReleased: February 9, 1995  X-  Y- By the Chief, Cable Services Bureau:  X]- I.xINTRODUCTION  Y/-x1.` ` On March 15, 1994, Cecilton CATV, Inc. ("Cecilton") filed a letter challenging the certification of Cecil County, Maryland ("The County") to regulate rates for  Y-basic cable service and associated equipment.d Yz-ԍx#Xw PE37XP# ` ` Cecil County filed its Certification of Franchising Authority to Regulate Basic Cable Rates and Initial Finding of Lack of Effective Competition ("FCC Form 328") on  YM!-March 3, 1994. The certification became effective on April 2, 1994 .d On March 31, 1994, the County filed an opposition to the letter. On May 4, 1994, Cecilton filed a pleading styled as a "petition for reconsideration." On May 18, 1994, the County filed an opposition to the "petition" to which Cecilton filed a reply. In addition, both parties submitted supplemental pleadings  Y -pursuant to the Commission's July 29, 1994 Order.m M X&-ԍx#Xw PE37XP# ` ` Cable Operators' Petitions for Reconsideration and Revocation of Franchising  Y'-Authorities' Certifications to Regulate Basic Cable Service Rates, 9 FCC Rcd 3656 (1994)  Yx(-("Effective Competition Order"). m " 0*0*0*!"Ԍ  YO-x2.` ` 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 as defined by the Communications  Y -Act.  Y'-ԍx#Xw PE37=9XP#` ` Communications Act of 1934  623(a)(4), 47 U.S.C.  543(a)(4). ñ 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" 0*0*0* "  Y-effective competition unless they have actual knowledge to the contrary.H Yy-ԍx#Xw PE37=9XP#` ` 47 C.F.R.  76.906, 76.910(b)(4). Õ Certification becomes effective 30 days from the date of filing unless the Commission finds that the  Y-franchising authority does not meet the statutory certification requirements.-KzH Y-ԍx#Xw PE37=9XP# ` ` 47 C.F.R.  76.910(e). Certification becomes effective unless the Commission determines that: (1) the franchising authority will not adopt and administer rate regulations that are consistent with the Commission's regulations; (2) the franchising authority lacks the legal authority to adopt, or the personnel to administer, rate regulations; (3) procedural laws and regulations applicable to rate regulation proceedings by the franchising authority do not provide a reasonable opportunity for consideration of the views of interested parties; or (4) the cable system in question is subject to effective competition.  Y] -47 C.F.R.  76.910(b). See 47 U.S.C.  543(a)(4). - Cable operators may file petitions for   reconsideration of the franchising authority's certification within 30  Y-days from the date such certification becomes effective.O H Y-ԍx#Xw PE37=9XP# ` ` 47 C.F.R.  1.106, 76.911; Report and Order and Further Notice of  Y-Proposed Rulemaking, in MM Docket No. 92266, 8 FCC Rcd 5631, 5693 (1993) ("Rate  Y-Order"). O Rate regulation is automatically stayed pending review of a timelyfiled petition for reconsideration alleging effective  Yv-competition as defined by the Communications Act.vH Y=-ԍx#Xw PE37=9XP#` ` 47 C.F.R.  76.911(c). Æ x  XH- II. x DISCUSSION  X -x` `  Procedural Issueshh   Y -x3.` ` In its opposition to the petition for reconsideration, the County argues that Cecilton's petition was untimely and should, therefore, be dismissed on procedural grounds. Specifically, the County argues that its certification became effective on April 2, 1994; Cecilton's petition was filed on May 4, 1994, exactly thirtytwo (32) days after the effective date of the County's certification. The County argues that, as Cecilton's petition was filed two days late, it should be dismissed as untimely.  YK-x4.` ` Cecilton responds by stating that the Commission's rules are ambiguous with regard to the filing of petitions for reconsideration challenging certification. As such, Cecilton claims that the filing period commences after an event or action akin to a Commission "public notice" or release announcing the effective date of certification by franchising authorities. Despite receiving no such "notice" Cecilton argues that the filing deadline could not have occurred prior to the first business day after the expiration of 30 days following the date of the County's certification. Specifically, Cecilton claims that because the County's certification became effective on Saturday, April 2, 1994,"0*((" commencement of the filing period rolls over onto the next business day or April 4, 1994. Therefore, as the filing period began on April 4, 1994, Cecilton concludes that its May 4, 1994 petition was timely. In the alternative, Cecilton argues that its March 9, 1994 letter (filed with the Commission on March 15, 1994) should constitute a petition for reconsideration while the May 4, 1994 petition should be regarded as a supplement thereto.  Yv-x5.` ` We will treat Cecilton's March 9, 1994 letter as a timely petition for reconsideration of the County's certification in this case. In so doing, we note that Cecilton's March 9, 1994 letter was clearly a challenge to the County's certification and was taken as such by the County, which filed an opposition. In light of this, we will treat the March 9, 1994 letter as a petition for reconsideration and Cecilton's May 4, 1994 filing as a supplement thereto. As such, we need not address the timeliness issues raised by the parties.  X -x` `  Effective Competition Claim   Y - x6.` ` Cecilton states that its system serving Cecil County is subject to effective competition as defined by the Communications Act because the system serves fewer than  Yy-30% of the households within the unincorporated areas of Cecil County, its franchise area.`yH Y-ԍ x#Xw PE37=9XP#` ` The Cable Act (Communications Act of 1934  623(a)(2), 47 U.S.C.  543(a)) and the Commission's rules (47 C.F.R.  76.905(a)) provide that only the rates of cable systems that are not subject to effective competition may be regulated. One of the bases by which a cable system will be deemed subject to effective competition is if fewer than 30 percent of the households in the system's franchise area subscribe to the system's cable service. Communications Act of 1934  623(l)(1)(A), 47 U.S.C.  543 l(1)(A), 47 C.F.R.   Yi-76.905(b)(1). æ Specifically, Cecilton claims that it serves 1,239 of the 18,142 households (i.e., occupied  YK-housing units) fKH Y-ԍx ` ` As the Commission stated recently, "we presume that Congress did not intend "households" to have a different meaning than in the 1990 Census that would include vacant  Y-units." Third Order of Reconsideration, in MM Docket Nos. 92266 and 92262, 9 FCC  Y-Rcd 4316, 4324 (1994) ("Third Recon. Order"). The count of "households" in the 1990  Y-Census reflects only occupied housing units.  See Bureau of the Census, 1990 Census of Population and Housing, Summary Population and Housing Characteristics, Maryland, table 5 at 73. in its franchise area, or 6.83 percent of the total number of households. As  Y4-supporting documentation, Cecilton provides 1990 Census data{ 4H Y#-ԍx` ` As the Commission has stated recently, the 1990 Census data is an appropriate  Y#-source for household data. Cable Operators' Petitions for Reconsideration and Revocation of  Y$-Franchising Authorities' Certifications to Regulate Basic Cable Service Rates, 9 FCC Rcd 3656 (1994).{ which shows that there are"4 0*(("  Y-24,725 households in all of Cecil County. H Yy-ԍ x` ` As noted above, Cecilton is authorized to serve the unincorporated areas of Cecil County. Therefore, the number of households within the incorporated areas must be excluded from this total. To calculate the number of households in the unincorporated areas of the County, Cecilton takes the total number of households in Cecil County (24,725) and from that number subtracts the number of households within the incorporated areas of Cecilton (195), Chesapeake City (290), Elkton Town (3,333), Charlestown Town (228), Northeast Town (812), Rising Sun (504), Perryville (980), and Port Deposit (241). This calculation yields a total of 18,142 households in the unincorporated areas of Cecil County. In addition, Cecilton submits a copy of its Churn Report, dated January 31, 1994, which demonstrates that Cecilton has 1,239 subscribers. Further, Cecilton acknowledges that it does not serve its entire franchise area, the unincorporated areas of Cecil County, although its franchise provides the right to do so. Cecilton, however, claims that it has not expanded service outside of its current franchise area because of the presence of three other cable operators in its franchise area, each of which has a nonexclusive, countywide franchise to serve the unincorporated areas of Cecil  Y -County.  LH Y-ԍx` ` Cecil County has issued nonexclusive franchises to four cable operators (Cecilton CATV, Inc., TeleCommunications, Inc., TeleMedia Company of Maryland, and Armstrong Communications, Inc.) Each operator is authorized to serve all of the  Y-unincorporated areas of Cecil County.  See Cecilton Petition for Reconsideration at  8. This, Cecilton argues, has imposed restrictions on Cecilton's expansion.  Y -x7.` ` In its opposition, Cecil County claims that Cecilton has made an affirmative decision to limit its service area to a small portion of the County not served by any other operator. It also claims that Cecilton has had its franchise since 1989, but does not appear to be planning significant expansion.  Y4-x8. ` ` In response, Cecilton claims that it has not affirmatively decided to limit its service area. Indeed, it states that it would choose to pass more homes in the franchise area, but that such expansion would require overbuilding existing systems operated by competitive franchisees in Cecil County. It argues that no bank would provide Cecilton the necessary financing for overbuilding another cable system and that such an undertaking is prohibited under Cecilton's loan agreement. Cecilton argues that because Cecil County has authorized four competing cable operators to provide service on a Countywide basis, Cecilton has been inhibited from further expansion. Cecilton states it would gladly expand its operations "should Cecil County for some reason rescind or refuse at some point to renew the franchise  Ye-of one of the other operators in the County." eH Y$-ԍx` ` See Cecilton Reply to Opposition to Petition for Reconsideration at note 4.  Y7- x9.` ` In the absence of a demonstration to the contrary, cable systems are presumed"7n 0*((="  Y-not to be subject to effective competition as defined by the Communications Act.}H Yy-ԍ x#Xw PE37=9XP#` ` 47 C.F.R.  76.906. } 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  Y-Commission's rules, is present within its franchise area.zH Y-ԍx#Xw PE37=9XP#` ` 47 C.F.R.  76.911(b)(1). Ã Cecilton has failed to meet this  Y-burden.I,H Y -ԍx` ` We draw no conclusion as to whether Cecilton has provided the Commission with sufficient evidence alleging effective competition based on the competing provider test. Communications Act of 1934  623(l)(1)(B), 47 U.S.C.  543(l)(1)(B); 47 C.F.R.  76.905(b)(2). We recognize that there are four multichannel video programming distributors within Cecil County. However, to date, the Bureau has not been asked to determine that competition exists within the franchise area due to their presence. Should any of the operators submit new pleadings alleging effective competition under this second test, it will be considered at that time.   Yv-x10.` ` In the First Order on Reconsideration, the Commission clarified the definition  Ya-of "franchise area" for purposes of determining effective competition.a= H XO-ԍ x` ` First Order on Reconsideration, Second Report and Order, and Third Notice of  Y9-Proposed Rulemaking, MM Docket No. 92266, 9 FCC Rcd 1164 ("First Reconsideration  Y$-Order").  Generally, "[a]  YJ-franchise area is the area a system is granted authority to serve in its franchise."XJH Y-ԍx ` ` Id.  at 1180. X The Commission stated, however, that a more restrictive definition of "franchise area" may be more appropriate under limited circumstances, such as when an operator, "has itself, through its own conduct, selfdefined the areas to be served to such an extent that this redefined area  Y -accurately portrays the operator's 'franchise area.'"O xH Y-ԍx ` ` Id. at 1181.O Under this standard, the franchising authority has the burden of showing that the operator has made an "affirmative decision. . .  Y -to restrict service."F +H X!-ԍx ` ` Id.F  Y-x11.` ` The record in this case demonstrates that Cecilton has made an affirmative decision to limit its franchise area. Specifically, Cecilton acknowledges that, as part of its loan agreement, it agreed not to overbuild other cable systems which are within its franchise area. By this action, Cecilton has made an affirmative decision not to expand into areas of the franchise area which are being served by other cable operators. As Cecilton has chosen"60*(()" to restrict its service area in this manner, we do not believe that it is appropriate for Cecilton to base its effective competition claim on the authorized area of servicethe entire  Y-unincorporated areas of Cecil County.H YK-ԍx ` ` Cecilton argues that unlike the example the Commission gives in the First  Y6-Recon. Order, it has not limited its service area "to a specific community." This argument lacks merit. Nowhere in its discussion of the redefined franchise area exception did the Commission state that a redefinition could occur where a cable operator made an affirmative decision to serve a specific community.  As Cecilton has not alleged facts which would allow us to determine whether it faces effective competition based on its redefined area, we will deny its petition. Should Cecilton choose to submit the appropriate information to support its effective competition claim, it may do so by filing a petition for revocation pursuant to  Yv-Section 76.914 of the Commission's rules.Sv!H YH -ԍx ` ` 47 C.F.R.  76.914.S  XH- IV. ORDERING CLAUSES  Y -x 12.` ` Accordingly, IT IS SO ORDERED that the petition for reconsideration filed by Cecilton CATV, Inc. challenging the certification of Cecil County, Maryland to regulate  Y -Cecilton CATV, Inc.'s rates IS DENIED.  Y -x13.` ` IT IS FURTHER ORDERED that the automatic stay imposed by Section  Y -76.911(c) of the Commission's rules, as amended, 47 C.F.R.  76.911(c) IS  Y- TERMINATED .  Yg-x14.` ` IT IS FURTHER ORDERED that Cecilton CATV, Inc. SHALL FILE the required rate justifications on the appropriate rate forms with Cecil County within 30 days of  Y:-the release date of this Memorandum Opinion and Order or within 30 days of receipt of notice from Cecil County that it is regulating Cecilton CATV Inc.'s basic cable service rates, whichever is later.  Y-x15.` ` This action is taken pursuant to delegated authority under Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321.  Y-x` `   hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones  Y(-x` `  hhChief, Cable Services Bureau#Xw PE37=9XP# "0*(("Ԍ