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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** FOR RECORD ONLY $// Appeal Order in City of Albany, CA, DA-948//$ $/76.986 A La Carte Offerings/$ $/76.944 Commission Review of Franchising Authority Decision/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-948 In the Matter of: ) ) CENTURY CABLE OF ) NORTHERN CALIFORNIA ) ) Appeal of Local Rate ) Orders of the City of ) Albany, California ) ORDER Adopted: April 26, 1995 Released: April 27, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On March 8, 1995, Century Cable of Northern California ("Century"), filed with the Commission an appeal of two local rate orders adopted by the City of Albany California ("City") on February 6, 1995. The City opposes Century's appeal. In the two local orders, the City established Century's rates for basic cable service, equipment, installations and hourly service charges. As part of these decisions setting Century's basic tier rates, the City found Century's package offering ("Century Select" package) of certain individually offered ("a la carte") channels to be a regulated tier of service and, therefore, included those channels as regulated channels for purposes of the local orders. In the first local rate order, the City ordered Century to make refunds to subscribers for all payments made in excess of the rates set forth in the local order for the period September 1, 1993 through July 14, 1994 in reference to the Form 393 filing by Century. In the second local rate order, the City ordered Century to make refunds to subscribers for all payments made in excess of the rates set forth in the local order dating back to July 15, 1994 in reference to the Form 1200 filing by Century. 2. The FCC Form 393 is the official form used by regulators to determine whether an operator's regulated rates for programming, equipment and installations were reasonable during the time period from September 1, 1993 until July 14, 1994. The FCC Form 1200 series are the official forms used to determine whether regulated rates for programing, equipment and installations are reasonable under the revised benchmark rules which apply to Century beginning July 15, 1994. 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. The Commission will reverse a franchising authority's decision only if the Commission determines 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 City's finding that the channels comprising its Select Century a la carte package (consisting of CNN, Turner Network Television, and The Discovery Channel) must be considered a rate regulated offering. Century argues that the facts are essentially indistinguishable from the facts in several of our Letter of Inquiry decisions in which we held that an a la carte package may be deemed a new product tier and should not be treated as a rate regulated tier for purposes of calculating a system's basic rate. 5. The Century a la carte package at issue was first offered to subscribers on September 1, 1993, when Century restructured the service offerings on its system which serves the City. Century states that its September 1, 1993 restructuring involved offering three channels that previously had been offered on its former cable programming service tier on an individual basis and also as a package that Century alleges is not subject to rate regulation. 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, Dimension Cable Services, Oceanside, California, 10 FCC Rcd 7311 (Cab. Serv. Bur. 1994). In Dimension Cable Services, we found we could not say that it was clear that the Preferred Dimension package offered by Dimension on its Oceanside, California system 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 Dimension to refund liability or to require Dimension to restructure its tiers so as to return the channels offered in the a la carte package to regulated tiers. Instead, we found that, on a prospective basis, the Preferred Dimension package 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, MM Docket No. 92-266, Sixth Order on Reconsideration, MM Docket No. 93-286, Fifth Report and Order, 10 FCC Rcd 1226 (1995) ("Going Forward Order"). 7. We find that the City's determination in its local rate orders that the channels comprising Century's a la carte package must be included as regulated channels is inconsistent with the action taken in Dimension Cable Services. We further find that, in accordance with Dimension Cable Services, Century's a la carte package should not be treated as a rate-regulated tier of service. Century's a la carte package should be treated as a new product tier. Accordingly, Century's appeal on this issue is granted and we remand the local rate order to the City for further proceedings consistent with this ruling. III. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that Century's appeal, with respect to the issue of the regulatory status of its a la carte package issue IS GRANTED. IT IS FURTHER ORDERED that Century's appeal, with respect to this issue, IS REMANDED to the City for resolution in accordance with the terms of this Order. 9. 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 (1993). FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau