$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 95-269//$ $/ 300.623 Regulation of Rates /$ $/ 1.106 Petitions for Reconsideration /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ $/ 76.911 Petition for reconsideration of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 95-269 ) WB CABLE ASSOCIATES, LTD. ) ) Petition for Revocation ) ) of the City of Boca Raton's Certification ) to Regulate Basic Cable Service Rates ) (FL0278) MEMORANDUM OPINION AND ORDER Adopted: February 17, 1995 Released: February 21, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On December 29, 1994, WB Cable Associates, Ltd. d/b/a West Boca Cablevision ("West Boca") filed a petition for revocation challenging the certification of the City of Boca Raton ("Boca Raton" or "the City") to regulate West Boca's rates for basic cable service and associated equipment. In its petition, West Boca alleges that its cable system serving the City is subject to effective competition. The City has not filed an opposition to West Boca's petition. 2. 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. After the 30-day deadline for filing petitions for reconsideration has elapsed, cable operators may challenge a franchising authority's certification by filing a petition for revocation. However, regardless of its grounds, the filing of a petition for revocation does not automatically trigger a stay of a franchising authority's power to regulate basic cable rates. 3. On December 13, 1993, West Boca filed a petition for reconsideration challenging the City's certification. In that petition, West Boca alleged that its cable system serving Boca Raton, its franchise area, was subject to effective competition because its system served fewer than 30% of the households in the franchise area. To support its claim, West Boca submitted evidence indicating that its system served 198 subscribers in a franchise area consisting of 33,134 "existing dwelling units." By using these figures, the ratio of total West Boca subscribers in relation to the total number of homes in the franchise area yielded a subscriber penetration rate of less than 1%. Because this number was less than 30%, West Boca argued that its system should be exempt from rate regulation and that the City's certification to regulate West Boca's basic rates and associated equipment should be rescinded. 4. In a Memorandum Opinion and Order ("Order"), the Bureau denied West Boca's petition because West Boca submitted no evidence clarifying whether its use of "existing dwelling units" excluded vacant housing units. As the Bureau explained, in order to demonstrate the presence of effective competition, our rules require the use of data reflecting the number of households (i.e., occupied housing units) in the franchise area. Because West Boca failed to submit evidence demonstrating that its effective competition claim was based on "households," the Bureau rejected West Boca's petition. As a result, the automatic stay imposed on the City's certification to regulate rates was terminated and West Boca was ordered to file the applicable rate justifications with the City of Boca Raton. The Bureau, however, invited West Boca to file a petition for revocation "[s]hould West Boca wish to submit more specific information sufficient to demonstrate the presence of effective competition." III. DISCUSSION 5. In its petition for revocation, West Boca states that it serves 223 of the 26,297 households (i.e., occupied housing units) in its franchise area. This yields a penetration level of less than 1%. As support, it submits 1990 Census data which shows that there are 26,297 households in Boca Raton. West Boca also submits a computer print-out with sufficient subscriber information to support its claim that it serves 223 subscribers in the franchise area. West Boca now argues that when using occupied housing unit data, its subscriber penetration level still remains below 30% in its franchise area. Specifically, dividing 26,297 total households (that is, occupied housing units) by West Boca's subscriber figure of 223 yields a subscriber penetration rate of less than 1%. As such, West Boca argues that its system is not subject to regulation by the City of Boca Raton. 6. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. 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 its franchise area. West Boca has met this burden. Specifically, West Boca appropriately relied on data reflecting the number of households (i.e., "occupied housing units") as required by our rules. According to this data, there are 26,297 occupied housing units in its franchise area. A comparison of West Boca subscribers in relation to the total number of households in West Boca's franchise area yields a subscriber penetration level of less than 1%. Thus, we find that West Boca's system serving the City of Boca Raton is subject to effective competition. Accordingly, its petition is granted. IV. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the petition for revocation filed by WB Cable Associates, Ltd. challenging the certification of the City of Boca Raton to regulate WB Cable Associates, Ltd.'s basic cable rates IS GRANTED. 8. IT IS FURTHER ORDERED that the certification of the City of Boca Raton to regulate West Boca's basic cable service rates IS RESCINDED. 9. 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