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A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8: J2J>8 &>>,,,,,,,,`` 8888,,,,,,,,,,zz&&>>>r2f gZr",tB^ f ^;C`ddCCCdCCCCddddddddddCCdxxxsCYoxxdoxxooCCCddCddYdY8dd88Y8ddddLL8dYYYLYdYd4dddddCddddddddd8xdxdxdxdxdYxYxYxYxYC8C8C8C8dddddddddoYxddddoYdxdxdxdxdXXddxxXxdxdxXdddddddD8ddddCdddddp8pHodp8p8dxddddxLxLxddLdLdLddpHp8odddddddodpLpLpLdoddddododxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCd]]ddddddFddddFCCddd88ddzzdddkddCddF"ddd9dCCzCdzdoddCdYds]zUvdYYCCCCzzzozoYzNoYdYC8YooYdYzzdzddoYoYzzozzzzzCdoozYzzzzCCddddzdddooozCsdYC\   pxtll\tll@\@\`L Y-  #Xw PE37XP#FOR FCC RECORD ONLY $// Order, Cable Act of 1992, certification, DA 995236//$ $/ 600.623 Regulation of Rates/$ $/ 76.905 Standards for Effective Competition/$ $/ 76.906 Presumption of No Effective Competition/$ $/ 76.910 Franchising Authority Certification/$ $/ 76.911 Petition for Reconsideration/$ $/ 76.914 Revocation of Certification/$  Y -(J Before the  X -W # PE37BP##Xw PE37XP#FEDERAL COMMUNICATIONS COMMISSION  X -#Xw PE37XP#Washington, D.C. 20554 X01Í ÍX01Í Í҃  Y -In the Matter of:j)pp  DA95236 j) MIDTENNESSEE CABLE j) LIMITED PARTNERSHIPj)  Yc-D/B/A HICKORY HILL CABLEVISIONV ) ` `  hh,V ) Petition for Reconsiderationj) j) of the Certification ofj) City of Kingsport, Tennesseej) to Regulate Basic Cable Ratesj)  Y-(TN0534)j) Ã  X}-} MEMORANDUM OPINION AND ORDERă  XO-Adopted: February 14, 1995hh,VReleased: February 15, 1995  Y!- By the Chief, Cable Services Bureau:  X- I.INTRODUCTION  Y -1.` ` On November 19, 1993, MidTennessee Cable Limited Partnership ("MidTennessee") filed a timely petition for reconsideration challenging the certification of the City of Kingsport, Tennessee ("City") to regulate rates for basic cable service and associated  Y#-equipment.)#D Y%-ԍThe City filed its "Certification of Franchising Authority to Regulate Basic Cable Service Rates and Initial Finding of Lack of Effective Competition" ("FCC Form 328") on September 20, 1993. The certification became effective on October 20, 1993. ) The City did not file an opposition to MidTennessee's petition.  Yi$-Ԍ Y-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  Y-operators which are not subject to effective competition.u1 YK-ԍCommunications Act of 1934  623(a)(4), 47 U.S.C.  543(a)(4).u 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  Y-knowledge to the contrary.Yy1 Y-ԍ47 C.F.R.  76.906, 76.910(b)(4).Y Certification becomes effective 30 days from the date of filing unless the Commission finds that the franchising authority does not meet the statutory  Y_-certification requirements. L_*1 Y: -ԍ47 C.F.R.  76.910(e). Certification becomes effective unless the Commission determines that: (1) the franchising authority will not adopt or 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)  Y-the cable system in question is subject to effective competition. 47 C.F.R.  76.910(b). See  Y-also 47 U.S.C.  543(a)(4).  Cable operators may file petitions for reconsideration of the franchising authority's certification within 30 days from the date such certification becomes  Y1-effective.1> 1 Y -ԍ47 C.F.R.  1.106, 76.911; Report and Order and Further Notice of Proposed  Y -Rulemaking, MM Docket No. 92266, 8 FCC Rcd 5631, 5693 (1993). Petitions for reconsideration may allege that the cable operator is not subject to rate regulation because: (1) effective competition exists; or (2) the franchising authority does  Y -not meet the certification standards set forth in the 1992 Cable Act.G 1 Y-ԍ47 C.F.R.  76.911.G Rate regulation is automatically stayed pending review of a timelyfiled petition for reconsideration alleging the  Y -presence of effective competition.J 1 Y-ԍ47 C.F.R.  76.911(c).J  X - II.DISCUSSION  Yy-3.` ` MidTennessee challenges the City's certification based on two grounds. First, MidTennessee alleges that the City lacks the legal authority to regulate MidTennessee's rates and therefore does not meet the certification standards. Specifically, it argues that under Tennessee law, a municipality cannot regulate a cable operator unless the municipality  Y-has granted that operator a franchise to provide cable television service,>1 Y '-ԍMidTennessee cites Tenn. Code Ann.  759102 (1977) for this proposition. MidTennessee"0*(( " states that on November 20, 1987 and on December 7, 1991, certain unincorporated sections of Sullivan County, TN were annexed to the City. It states that it previously provided cable  Y-service to these sections pursuant to a franchise agreement with Sullivan County.  YK-ԍSee MidTennessee Petition at 23; October 29, 1987 Memorandum from Jeff Fleming, Planner, to Joe May, City Attorney; November 23, 1987 Memorandum from Jeff Fleming, Planner. MidTennessee maintains that it has continued service to these newly annexed areas but has not yet been granted a franchise from the City despite continued negotiations since 1987. As support for its factual contentions, MidTennessee submits an affidavit from a responsible official which provides a chronology of events surrounding the annexation of portions of Sullivan County to the City. Based on these facts and its interpretation of Tennessee law, MidTennessee argues that because it does not have a franchise with the City, the City does not have the requisite legal authority to regulate MidTennessee's rates. Moreover, MidTennessee argues that the Commission lacks the power to vest such regulatory authority in  Y -the City.  M Y-ԍMidTennessee Petition at 4, citing Rate Order, 8 FCC Rcd 5631, at  6566.  Y -4.` ` In addition, MidTennessee argues that even if it were subject to rate regulation by the City, its cable system is subject to effective competition because it serves  Y -fewer than 30 percent of the households in the City, its alleged franchise area.p _  YX-ԍThe 1992 Cable Act (Communications Act of 1934  623(a)(2), 47 U.S.C.  543(a)(2) and the Commission 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 operator 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 cable service of the cable system. Communications Act of 1934  623(l)(1)(A), 47 U.S.C.  543(l)(1)(A); 47 C.F.R.  76.905(b)(1). p Specifically, MidTennessee claims that it serves only 251 of the 16,742 households (that is, occupied  Yy-housing units)w 9y'  YQ-ԍBoth the Cable Act and the Commission's rules require that effective competition be demonstrated based on the number of "households" in the franchise area. Communications Act of 1934  623(l)(1), 47 U.S.C.  543(l)(1); 47 C.F.R.  76.905 (b). As the Commission stated recently, "we presume that Congress did not intend households' to have  Y!-a different meaning than in the 1990 Census that would include vacant units." Third Order  Y"-on Reconsideration, MM Docket Nos. 92266 and 92262, 9 FCC Rcd 4316, 4324 (1994)  Y#-("Third Recon. Order"). The count of "households" in the 1990 Census reflects only  Y$-occupied housing units. See Bureau of the Census, U.S. Dept. of Commerce, 1990 Census of Population, CP11B, Appendix B at B8.w in the City, or 1.5 percent of the total number of households. As supporting documentation, MidTennessee provides the affidavit of a responsible official at MidTennessee, and correspondence between officials at MidTennessee and the City. The"K( 0*(( " affidavit gives a chronology of events surrounding the annexation of portions of Sullivan  Y-County to the City, states the 1990 census data for "homes" in the City,|  Yb-ԍThe 1990 census indicates that there are 16,742 housing units in the City. | and states the number of subscribers to MidTennessee's system within the City. The correspondence relates to discussions between MidTennessee and the City regarding a franchise agreement for cable services.  Yv-5.` ` First, we can not find that MidTennessee is subject to effective competition. In the absence of a demonstration to the contrary, cable systems are presumed not to be  YH-subject to effective competition.GHy Yr -ԍ47 C.F.R.  76.906.G 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  Y -franchise area.G * Y-ԍ47 C.F.R.  76.911.G MidTennessee has failed to meet this burden. The Communications Act of 1934, as amended, and the Commission's rules require that claims of effective competition  Y -be based on the franchise area.  Ya-ԍCommunications Act of 1934  623(l)(1), 47 U.S.C.  543(l)(1); 47 C.F.R.  76.905(b). The Commission has stated that generally, a "franchise  Y -area" "is the area a system operator is granted authority to serve in its franchise." u Y-ԍFirst Order on Reconsideration, Second Report and Order, and Third Notice of  Y-Proposed Rulemaking, in MM Docket No. 92266, 9 FCC Rcd 1164, 1180 (1993). MidTennessee's effective competition claim is apparently based on the total number of "housing units" within the entire City of Kingsport. However, as MidTennessee does not have operating rights for the City of Kingsport as a whole, its comparison of subscribers that it serves to the number of households in Kingsport cannot be relied on. Accordingly, its effective competition claim must be denied.  Y-6.` ` As to the legal authority of the City of Kingsport to engage in rate regulation with respect to this system, we are not persuaded that such authority does not exist. While the manner in which any such authority may be exercised remains in dispute and subject to negotiation between MidTennessee and the City of Kingsport, the absence of a current franchise agreement does not necessarily indicate that such authority ultimately is lacking. We note, however, that the City did not file an opposition to MidTennessee's petition. The record is thus left somewhat incomplete. Given the situation, we are not persuaded that this is yet a situation where the Commission would be required to assume jurisdiction under"| 0*(("  Y-Section 76.911(e) of its rules.a Yy-ԍ47 C.F.R.  76.911(e). This rule requires that, in cases where the Comission upholds a certification challenge alleging the failure of the franchising authority to meet the  YK-certification requirements (i.e., legal authority to regulate rates), the Commission must notify the franchising authority of the revisions necessary to secure approval of certification and provide the franchising authority an opportunity to amend its certification in order to secure approval. However, pending approval of the franchising authority's certification. the Commission must assume jurisdiction over basic cable service rates in that franchise area. Accordingly, if at such time as the City attempts to exercise its authority, MidTennessee continues to dispute the legal authority of the City, a petition  Y-for revocation pursuant to Section 76.914 of the Commission's rulesG Yt -ԍ47 C.F.R.  76.914.G could then properly be filed with the issues more properly joined. ` `  X- III.ORDERING CLAUSES  Y_-7.` ` Accordingly, IT IS ORDERED that the petition for reconsideration filed by MidTennessee Cable Limited Partnership, challenging the certification of the City of  Y2-Kingsport, Tennessee to regulate MidTennessee's basic cable service rates IS DENIED.  Y -8.` ` 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.  Y -9.` ` This action is taken pursuant to delegated authority under Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321.  Y9-` `   FEDERAL COMMUNICATIONS COMMISSION ` `  Meredith J. Jones ` `  Chief, Cable Services Bureau