FOR FCC RECORD ONLY
$//Tootlevision vs. Community Cable TV, MO&O, DA95-238//$
$/628(a) Competition and diversity, standing/$
$/76.970 Commercial leased access rates, part-time service/$
$/76.970 Commercial leased access rates, part-time rates/$
     
                                     
                                Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                         Washington, D.C. 20554  
     DA 95-238  
     


In the Matter of:     )     
     )     
Petition for Relief of)
HARRY TOOTLE dba TOOTLEVISION    )     CSR-4129-L
     )
Vs.  )
     )
COMMUNITY CABLE TV/ PRIME   )    
CABLE OF NEVADA et al.      )
     )
For Leased Access Channels       )



                       MEMORANDUM OPINION AND ORDER

Adopted: February 14, 1995                        Released: February 16, 1995          
      

By the Chief, Cable Services Bureau:


I.   Introduction

     1.  On September 8, 1993 Harry Tootle d/b/a Tootlevision ("Tootlevision") filed a
Petition for Relief pursuant to the Section 76.975 of the Commission's rules alleging that
Community Cable TV/ Prime Cable of Nevada ("Prime Cable") was in violation of various
sections of the Federal Communication Commission's leased access and program carriage
rules as well as certain other statutory and regulatory provisions.  On October 22, 1993,
Prime Cable filed an opposition to Tootlevision's petition.  Prime Cable asserts that the
petition is defective as a matter of law and that it seeks relief the Commission has no
authority to grant.  Prime Cable also questions the intent of Tootlevision in filing the Petition.

     2.  On November 11, 1993, Tootlevision filed an "Addendum" to its petition
reiterating an allegation from its original petition that Prime Cable has violated the
Commission's leased access rules by refusing to offer leased access channels on other than a
full time/full channel basis, by quoting rates for channels on a full time/full channel basis
only, and by imposing certain technical requirements that are excessive.  On December 10,
1993, Prime Cable filed a response to the addendum asserting that it had fulfilled its
obligation under the leased access rules.

II.  Background

     3.  In 1984, Congress amended the Communications Act of 1934 to add, among other
things, a requirement that cable operators with 36 or more activated channels set aside part of
their channel capacity for use by programmers that are not affiliated with them.  This
requirement is called the commercial leased access or "leased access" requirement.  The Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable Act")
revisited the leased access requirement and directed the Commission to establish, among other
things, rules for determining maximum reasonable rates for leased access.  Pursuant to that
Congressional directive, the Commission established rules applicable to leased access channel
rates in its May 3, 1993 order for Implementation of Sections of the Cable Television
Consumer Protection and Competition Act of 1992; Rate Regulation, MM Docket 92-266,
(the Rate Order), 8 FCC Rcd 5631 (1993), at  531-538. See also, 47 C.F.R.  76.970.   

     4.  In the Rate Order, the Commission developed procedures for cable operators to
follow in determining the maximum reasonable rate that a cable operator may charge any
nonaffiliated programmer for leased access.  Under the Commission's rules, maximum
reasonable rates are to be developed by cable operators for three categories of programs. 
The three program categories are: (1) pay-per-event or pay-per-channel programs; (2)
programming where more than fifty percent of the capacity is used to sell products to
subscribers; and (3) all other programs. The highest implicit net fee that a cable operator
charges any nonaffiliated non-leased access programmer within each category is to be
calculated, using procedures described in our rules, on a monthly basis.  The highest implicit
net fee thus determined for each of the three program categories becomes the maximum
monthly rate that the operator may charge a programmer for leased access for that program
category.

     5.  The Commission determined that certain issues associated with obtaining leased
access should be left for negotiations between the parties.  For example, in establishing the
maximum reasonable rates for leased access, the Commission noted that lower rates could be
negotiated.  With respect to channel placement and tier access, the Commission also stated
that this should be left in the first instance to negotiation between the parties.  The
Commission further noted its belief that cable operators should accommodate all leases, i.e.,
leasing an hour on a regular leased channel, leasing a whole channel, or leasing for use as a
subscription service.  The Commission's rules provide some guidance for establishing rates
for these shorter lease periods, stating that maximum rates can be calculated by prorating the
monthly maximum rate.

     6.  Pursuant to the 1992 Cable Act, the Commission in the Rate Order developed an
administrative dispute resolution process for the purpose of expediting resolution of disputes
concerning leased access requirements.  Under this procedure, any person aggrieved by the
failure or refusal of a cable operator to make leased access capacity available or to charge
rates for such capacity as mandated by the 1992 Cable Act and Commission's rules may file
a petition for relief with the Commission.

III.  The Pleadings 

       7.  In its petition, Tootlevision, an operator of a low-power UHF TV station serving
the Las Vegas, Nevada area, alleges that Prime Cable has caused Tootlevision financial
hardship and mental anguish and has failed to provide leased access channels on other than a
full channel/full time basis, in violation of Sections 76.970(d) & (d), 76.971(a)(1)(iii), and
76.977(a) of the Commission's rules.  Violations of 47 U.S.C.  531, 543(b)(7)(ii), and
548(a) are also alleged.

       8.   In support of these allegations, Tootlevision asserts that it has tried without
success to negotiate an arrangement for carriage of programming on the cable system of
Prime Cable, which serves Las Vegas, Nevada and adjacent areas.  Enclosed with the
petition is correspondence between Tootlevision and Prime Cable during these negotiating
efforts.  This correspondence shows that Tootlevision initially inquired about arrangements
for carriage as a local broadcast station. Prime Cable responded by asserting that the low
power station did not qualify for must carry under the Commission's must carry rules. 
Tootlevision also inquired about a leased access channel rate, which elicited a quotation by
Prime Cable of $85,000 per month.  When Tootlevision requested "a schedule of rates for
each classification,"  Prime Cable responded by again quoting the $85,000 per month rate
and stating that it "has no obligation to lease capacity on less than a full channel/full time
basis." Following a further inquiry about pricing, terms and conditions for the three
categories of channels set out in the rules, Prime Cable reiterated that it "will not lease time
on less that a full month basis" and submitted a proposed channel lease agreement along with
the following monthly rate quotes:





     Pay-per-program or pay channels       $ 182,083.44
     Direct sales/home shopping channels 14,108.64 plus 15% of gross revenues
     All other channels                     78,594.12 per month

     9.  Prime Cable argues in its Opposition that the petition is defective and should be
dismissed, because it does not show that Prime Cable has failed or refused to make leased
access channels available in violation of the Commission's rules.  It also seeks dismissal
because the petition was filed shortly after the leased access rules became effective on
September 1, 1993, and asserts that to find otherwise would imply an obligation to comply
with the leased access rules before they became effective.  The opposition also asserts that
Prime Cable has not violated any of the statutory or regulatory provisions cited.

     10.  In an addendum to the petition, Tootlevision asserts that Prime Cable's refusal to
quote rates for channels on other than a full time basis has placed a prohibitive financial
barrier on distribution of its programming.  It claims that the prices quoted for full time/full
channels and the technical requirements for connection are excessive, in violation of the
Commission's leased access rules.  In a response to the addendum, Prime Cable asserts that
it has fulfilled its obligations under the 1992 Cable Act and the leased access rules to provide
reasonable terms and conditions for use of leased access capacity.

IV.   Discussion.

     11.  We will treat Tootlevision's petition and the addendum to that petition as raising
essentially two issues.  The first issue is whether Prime Cable has an obligation under the
statute and our leased access rules to provide leased access capacity on less than a full
channel/full time basis. Since this issue is answered affirmatively, a second issue concerns
the establishment of reasonable part time rates to be applied for part time channels.  In this
order, the specific issues are resolved on the record consistent with the current rules
applicable to leased access channels.

     A.  The Obligation to Offer Less Than Full Time Channels.
     
     12.  We address, first, whether cable operators have an obligation to provide leased
access channels on a less than full channel/full time basis.  As noted above, provisions of the
1984 and 1992 Cable Acts have established a requirement that cable operators set aside part
of their channel capacity for use by programmers not affiliated with them.  The
Commission's rules implementing those statutory provisions include procedures to be
followed by cable operators for determination of the maximum monthly rates for those
channels, and require cable operators to maintain for Commission inspection sufficient
supporting documentation for those rates.  Under these rules, cable operators must establish
and make available on request by prospective leased access programmers a schedule of
maximum monthly leased access rates for three separate categories of channels.

     13.  An essential purpose of these leased access provisions is the promotion of
competition in the delivery of diverse sources of video programming and the widest possible
diversity of information sources, consistent with the growth and development of cable
systems.  The Commission addressed these goals when it developed the leased access rules. 
In its Rate Order the Commission indicated an awareness that leasing issues may need to be
addressed in various ways as required by the kinds of services involved.  It declined to
undertake a comprehensive resolution of all such issues that may be presented, stating that
many of such issues "can better be resolved in a more specific concrete factual setting."  It
observed further that the legislative history of the 1992 Act shows that Congress intended
leased access to provide programmers a genuine outlet for their product, and expressed a
belief that cable operators should be required to accommodate various leasing arrangements
in a reasonable manner.

     14.  Consistent with these goals, the Commision, in adopting leased access rules
designed to implement these Congressional concerns, anticipated a need for channel capacity
to be made available in less that full month increments, as indicated by the last sentence of
Section 76.790 (d), which states that "Maximum rates for shorter periods can be calculated
by prorating the monthly maximum rate."  This provision, found in the rule addressing
rates, is thus clearly rooted in the Congressional concern for the accommodation of various
leasing arrangements on a reasonable basis.  Accordingly, we conclude that the leased access
statutory provisions of the 1984 and 1992 Cable Acts, and our leased access rules
implementing that legislation, require that cable operators accommodate requests for leases of
less than full channel/full time access channel capacity on channels required by the statute to
be set aside for leased access.  Consistent with that requirement, Prime Cable will be ordered
to offer part time leased access channel capacity to Tootlevision in increments that will
reasonably accommodate Tootlevision's request for part time leased access programming.

     B. Part Time Rates for Part Time Channel Capacity. 

     15.  As noted above, Prime Cable provided Tootlevision with a schedule of rates for
full time leased access channels for the three categories described in our rules. 
Tootlevision alleges that the full time rates offered by Prime Cable place prohibitive financial
barriers on the distribution of its programming and are excessive.  It asserts that Prime Cable
has thus failed to provide the price, terms and conditions for carriage of its programs, in
violation of Section 76.970 (e) of the rules.  It requests that the Commission require Prime
Cable to substantiate the prices quoted by submitting to the Commission for inspection
additional information and documentation in accordance with Section 76.975 (e) of the
rules.  Prime Cable, maintaining its position that it has no obligation to lease channel
capacity on other than a full time basis,  has offered no rates or schedule of rates applicable
to the part time channel capacity Tootlevision desires to lease.  Prime Cable asserts that its
provision of rates for full time channels fulfills its obligations under our leased access rules.
     
     16.   Section 76.970(e) of the rule provides that on request, a cable operator must
provide a schedule of leased access rates to prospective leased access programmers.  It
further provides that cable operators must maintain for Commission inspection sufficient
supporting documentation to justify the scheduled rates, including contracts, calculations and
adjustments supporting those rates. Although Prime Cable has provided a schedule of rates
applicable to its full time leased access channels, it has provided no information or
calculations on which the Commission may base a determination of the reasonableness of
those rates.  In order to make such a determination, Prime Cable will be required to provide
to the Commission for inspection, pursuant to Section 76.970(e) of the rules, sufficient
supporting documentation to justify the scheduled rates, including contracts and calculation of
the implicit net fees, and justifications for any adjustments made.

     17. As noted, Prime Cable has not provided rates or a schedule of rates for part time
access leases. Consistent with the conclusion herein that Prime Cable must offer less than full
time leased access channels, Prime Cable will be required to establish a schedule of rates
applicable to part time use of leased access channels.  The schedule or rate card for part time
use shall include rates for different times of day pursuant to which, if all times were used,
the sum of the part time charges for any single leased access channel would not exceed its
maximum monthly rate for a leased access channel calculated in accordance with Section
76.970 or our rules.  Such rate structure shall be reasonably reflective of empirical time of
day values and should not serve merely as a mechanism to retard use.  In order to monitor
compliance with this requirement, Prime Cable will also be required to maintain on file
adequate records, consistent with Section 76.970(e) of our rules, which show the total
monthly revenues derived from all part time users of each leased access channel, the
maximum monthly charge for a full leased access channel, and the documentation and
calculations used for deriving the maximum monthly charge in accordance with Section
76.970 of the rules.  We reserve the right to review Prime Cable's part time rates to assure
that they both encourage use and provide reasonable and adequate compensation within the
"implicit fee" structure.  The issue addressed here is among significant issues now before the
Commission on reconsideration.  In this order, we resolve the issues presented in
accordance with the current rules applicable to leased access channels.  
        
D.  Miscellaneous Other Matters

   18.  Other miscellaneous matters have been raised by the petition.  For example, it is
alleged that Prime Cable may be exercising control over a government access channel in
violation of Section 611 of the Communications Act, as amended.  The petition contains no
specific information that supports this allegation, and therefore we will not consider this
issue.  The petition further asserts that a PEG channel is being carried by Prime Cable on
channel 31 and not in the basic tier, in violation of Section 623(b)(7)(A)(ii) of the Act. 
Prime Cable argues in response that the Commission has no jurisdiction over content of a
cable system's basic tier unless the local franchise authority has requested the Commission to
exercise such jurisdiction, which has not occurred here.  The record before us contains no
information about the make-up of Prime Cable's basic tier or even whether channel 31 is part
of its basic tier, nor does it show whether Prime Cable's franchise requires carriage of PEG
channels.  We decline to address this issue in this context.  It is also alleged that Prime
Cable's actions have impeded petitioner's efforts to increase the availability of cable and
satellite programming in rural and other areas not currently able to receive such
programming, in violation of Section 628(a) of the Act.  Prime Cable asserts that petitioner
has not shown that he is a multichannel video programming distributor, and that he therefore
has no standing to seek relief under Section 628.  We believe this order grants the essential
elements of relief that the petitioner seeks, namely the requirement that Prime Cable offer it
part time leased access channel capacity pursuant to part time rates.  Therefore, we need not
consider in this order whether petitioner may have standing under Section 628 of the Act.

   19.  Finally, the petition asserts that Prime Cable has imposed certain technical
standards that are excessive and in violation of Section 76.971 (b) of the rules.  In view of
the relief granted by this order, we believe it sufficient at this time to remind both parties
that Section 76.971 (b) provides that cable operators may not apply program production
standards to leased access channels that are higher than those applied to PEG channels. 
These standards should be readily ascertainable, as they should be applied by Prime Cable to
the PEG channels currently on its system.  Accordingly, we expect that Prime Cable will
apply those standards in its carriage of Tootlevision's programming, as required by that rule.

V.  Ordering Clauses

   20.  For the foregoing reasons, IT IS ORDERED that the Petition for Relief of Harry
Tootle d/b/a as Tootlevision is GRANTED in PART, as described above, and in all other
respects, is DENIED.

   21.  IT IS FURTHER ORDERED that COMMUNITY CABLE TV/ PRIME CABLE
OF NEVADA (herein "Prime Cable"), within 20 days from the effective date of this order,
shall file with the Commission supporting contracts in effect for the calendar year prior to
December, 1993, the number of subscribers for the Las Vegas, Nevada system as of
December 31, 1993, and any other relevant documentation, to justify the calculation of the
maximum monthly implicit net fee for leased access as provided Section 76. 970(e) of our
rules.  

   22.  IT IS FURTHER ORDERED that Prime Cable, within 20 days from the
effective date of this order, shall establish a schedule of rates, or rate card for different times
of day pursuant to which, if all times were used, the sum of the part time charges for any
single leased access channel would not exceed its maximum monthly rate for a leased access
channel calculated in accordance with Section 76.970 of our rules.

   23.  IT IS FURTHER ORDERED that Prime Cable shall maintain on file adequate
records, consistent with Section 76.970(e) of our rules, which show the total monthly
revenues derived from part time users of each leased access channel, together with the
maximum monthly charge for a full leased access channel and the documentation and
calculations used for deriving the maximum monthly charge in accordance with Section
76.970 of the rules.

   24.  IT IS FURTHER ORDERED that the petition is DISMISSED with respect to
Barbara Greenspun, Brian Greenspun, Harris Bass, Steve Schorr and Rudolph H. Green
individually.

   25. This action is taken 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