$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 95-268//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 95-268 ) MERCOM, INC. AND ITS SUBSIDIARY, ) COMMUNICATIONS AND ) CABLEVISION, INC., ) D/B/A RIVER RAISIN CABLEVISION ) ) Petition for Reconsideration ) ) of Cable Services Bureau Order ) Denying Petition for Reconsideration ) of the City of Monroe, Michigan's ) Certification to Regulate Basic Cable ) Service Rates (MI0765) ) ORDER ON RECONSIDERATION Adopted: February 17, 1995 Released: February 21, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On January 11, 1995, Mercom, Inc. and its subsidiary, Communications and Cablevision, Inc., d/b/a River Raisin Cablevision, ("Mercom") filed a timely petition requesting reconsideration of a Memorandum Opinion and Order ("Order") adopted by the Cable Services Bureau ("the Bureau") pursuant to delegated authority. The Order denied Mercom's petition for reconsideration challenging the certification of the City of Monroe ("the City") to regulate rates for basic cable service and associated equipment. In its petition, Mercom requests that the Bureau grant its petition for reconsideration, find that Mercom is subject to effective competition, and rescind the City's certification to regulate basic cable service rates. The City did not file an opposition to Mercom's January 11, 1995 petition. II. BACKGROUND 2. Section 405 of the Communications Act of 1934, as amended, allows parties to petition for reconsideration of an order issued by the Commission or its delegated authority. Such a petition must be filed within 30 days from the date of public notice of that action. To warrant consideration, a petition for reconsideration must state the specific form(s) of relief sought by the petitioner and allege with particularity the respects in which the contested action should be changed. The petition should also cite findings of fact or conclusions that the petitioner believes to be in error and indicate how the petitioner believes they should be changed. 3. Section 623 (a)(4) of the Communications Act of 1934, as amended, allows franchising authorities to become certified to regulate the basic cable service rates of cable systems that are not subject to effective competition. For the 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 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 reconsideration of the franchising authority's certification within 30 days from the date such certification becomes effective. Rate regulation is automatically stayed pending review of a timely-filed petition for reconsideration (filed pursuant to Section 76.911 of the Commission's rules) alleging the presence of effective competition. 4. In its original petition for reconsideration, Mercom argued that its system was subject to effective competition in its franchise area. Mercom based its claim of effective competition on the allegation that its system's subscriber penetration rate was less than 30% of the "homes" in its franchise area. To support its claim, Mercom submitted evidence which indicated that its system served 77 subscribers in a franchise area consisting of 8,840 "housing units." Mercom also submitted a declaration under penalty of perjury by a responsible official certifying to the accuracy of the data included in the petition. Using these figures, Mercom argued that the ratio of total Mercom subscribers in relation to the total number of housing units in the franchise area yielded a subscriber penetration rate of less than 1%. Because the penetration rate fell below 30%, Mercom argued that its system was subject to effective competition, and that the City's certification to regulate Mercom's basic rates and associated equipment should be rescinded. 5. In its Order, the Bureau denied Mercom's petition for reconsideration because Mercom, in deriving its penetration rate, inappropriately relied upon "housing unit" data, rather than household ("occupied housing unit") data, to determine the total number of households in its franchise area. Specifically, the Bureau found that Mercom's "housing unit" count inappropriately included vacant housing units. Because Mercom failed to base its claim on "household" or "occupied housing unit" data, the Bureau rejected Mercom's claim of effective competition. 6. In its petition, Mercom now argues that the use of "household" (i.e., occupied housing unit) data confirms that its system's penetration level falls below 30%. Specifically, Mercom submits updated subscribership data which indicates that Mercom serves a total of 70 subscribers as of October, 1994. In addition, Mercom provides the complete citation to the relevant page of 1990 Census data which demonstrates that there are 8,430 occupied housing units in Mercom's franchise area. This yields a penetration level of .83%. Mercom argues that the public interest warrants acceptance of this new data because it demonstrates that Mercom is subject to effective competition based on a low penetration level. III. DISCUSSION 7. Generally, reconsideration is appropriate where the petitioner shows either a material error or omission in the original order or raises additional facts not known or not existing until after the petitioners last opportunity to present such matters. A petition for reconsideration which relies on facts or information not previously presented to the Commission or its delegated authority may be considered if the Commission or delegated authority determines that consideration of such facts is required in the public interest. 8. In its original petition, Mercom based its effective competition claim on housing unit data which inappropriately included vacant housing units. In this petition, however, Mercom now submits sufficient household (i.e., occupied housing unit) data in support of its effective competition claim. 9. Relying on this household data, we find that Mercom serves 70 subscribers in an area with 8,430 households (i.e., occupied housing units). This yields a penetration level of .83%. In light of this, we find that Mercom has submitted sufficient evidence demonstrating that it serves fewer than 30% of the households in its franchise area. Accordingly, its cable system is subject to effective competition and its petition is granted. IV. ORDERING CLAUSES 10. Accordingly, IT IS ORDERED that the petition for reconsideration filed by Mercom, Inc. and its subsidiary, Communications and Cablevision, Inc. d/b/a River Raisin Cablevision challenging the certification of the City of Monroe, Michigan to regulate basic cable rates, IS GRANTED. 11. IT IS FURTHER ORDERED that the certification of the City of Monroe, Michigan to regulate the basic cable service rates of Mercom, Inc. IS RESCINDED. 12. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau