FOR RECORD ONLY
$//Appeal ORDER, Century Cable, East Haddam, CT, DA 95-221//$
$/76.986 A La Carte Offerings/$
$/76.944 Commission Review of Franchising Authority Decisions/$


                               Before the
                    FEDERAL COMMUNICATIONS COMMISSION
                         Washington, D.C. 20554


                                                  DA 95-221


In the Matter of:     )
     )
CENTURY CABLE         )     East Haddam, CT
MANAGEMENT CORPORATION)     Haddam, CT
     )     Lyme, CT
Petition for Review of Local           )  Old Lyme, CT
Rate Order of the State of Connecticut )  Salem, CT
Department of Public Utility Control   )  


                                   ORDER

Adopted:  February 10, 1995            Released:  February 13, 1995

By the Chief, Cable Services Bureau:

I.   INTRODUCTION

     1.    On September 16, 1994, Century Cable Management Corporation ("Century")
filed with the Commission a Petition for Review of Rate Order ("Petition") of the Connecticut
Department of Public Utility Control ("the State").  Century also filed an Emergency Petition
for a Stay of Enforcement Pending Review of the local rate order on August 26, 1994.  This
petition for a stay of the local rate order was granted on October 6, 1994, pending resolution
of the appeal.  The local rate order establishes a new rate schedule for Century's basic
service tier and directs Century to implement certain rate reductions and to issue refunds to
subscribers, dating back to September 1, 1993.  As part of its decision setting Century's basic
tier rates, the State found Century's collective or package offering of four channels (TNT,
CNN, WTBS and Discovery), known as the Century Select package, to be a regulated tier of
service.

     2.   The sole issue raised by Century in its Petition centers on the proper regulatory
treatment of Century's a la carte package offering.  Century argues that the State's decision to
treat its a la carte package as a regulated tier of service is contrary to the objectives of the
1992 Cable Act and the Commission's a la carte rules and, therefore, the State's adverse
ruling on Century's a la carte offering should be overturned.  In response, the State asserts
that it properly applied the Commission's guidelines on a la carte packages in treating
Paragon's package as a regulated tier.

     3.   Under our rules, rate orders made by local franchising authorities may be
appealed to the Commission.  In ruling on appeals of local rate orders, 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 is determined 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.  With respect to a determination
made by a franchising authority on the regulatory status of an a la carte package as part of its
final decision setting rates for the basic service tier, the Commission has stated that "the
Commission will defer to the local authority's findings of fact if there is a reasonable basis
for the local findings," and the Commission "will then apply FCC rules and precedent to those
facts to determine the appropriate regulatory status of the [a la carte package] in question."


II.  DISCUSSION

     4.    Century objects to the State's finding in the local order that the channels
comprising the Century Select a la carte package must be treated as regulated channels. 
Century argues that its a la carte package complies with the Commission's a la carte rules in
effect at the time the package was created and that the City's reliance upon the 15
interpretive guidelines announced by the Commission in March 1994 to determine the
regulatory status of Century's a la carte channels constituted "retroactive rulemaking."

     5.    The a la carte package at issue was first offered to Century's subscribers on
September 1, 1993, when Century restructured the service offerings on its system serving the
towns of East Haddam, Haddam, Lyme, Old Lyme, and Salem, Connecticut.  Century states
that its restructuring involved eliminating its 7 channel "Silver" tier and its 8 channel "Gold"
tier and offering four channels, TNT, CNN, WTBS and the Discovery Channel, on an
individual basis and also as a package that Century alleges is not subject to rate regulation. 
Century moved the remaining channels from the two cable programming services tiers to its
basic service tier.

     6.    The facts presented in this appeal closely resemble the facts presented in one of
our recently issued letter of inquiry orders on a la carte packages, Century Cable TV, Muncie,
Indiana, LOI-93-18, DA 94-1354 (Cab. Serv. Bur., released Dec. 2, 1994) ("Century of
Muncie"), in which we resolved the regulatory status of an la carte package offered by
Century on its Muncie, Indiana, system that is essentially the same as the a la carte package at
issue in this appeal.  Specifically, the a la carte package at issue in Century of Muncie was a
four channel package, made up of channels formerly available on two cable programming
service tiers, which was offered as part of a restructuring.  In that case, we found we could
not say that it was clear that the a la carte package at issue was not a permissible non-rate
regulated offering under our rules.  We further concluded that in light of the prior confusion
over what constituted a permissible non-rate regulated a la carte offering, it would be
inequitable to subject the operator to refund liability or to require the operator to restructure
its tiers so as to return the channels offered in the a la carte package to regulated tiers. 
Instead, we found that the a la carte package at issue may be treated as a new product tier
under the Commission's Implementation of Sections of the Cable Television Consumer
Protection and Competition Act of 1992: Rate Regulation, Sixth Order on Reconsideration
and Fifth Report and Order, MM Docket Nos. 92-266 and 93-215, FCC 94-286 (released
November 18, 1994) ("Going Forward Order").

     7.    We find that the State's determination that Century's a la carte package is a
regulated tier is inconsistent with the action taken in the letter of inquiry orders, and in
particular, in Century of Muncie.  We further find that, in accordance with Century of Muncie,
Century's a la carte package should not be treated as a rate regulated tier of service. 
Accordingly, we are remanding this issue to the State so that it can enter an order consistent
with our findings in Century of Muncie.


III. ORDERING CLAUSES

     8.    Accordingly, IT IS ORDERED that the Petition for Review of the local rate
order, with respect to the issue of the regulatory status of Century's a la carte package, is
REMANDED to the State for resolution in accordance with the terms of this Order.

     9.    IT IS FURTHER ORDERED that our stay of the local order which was
granted pending the resolution of this appeal is hereby VACATED.

     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