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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** FOR FCC RECORD ONLY $// Order, Cable Act of 1992, certification, DA 94-1024//$ $/ 600.623 Regulation of Rates/$ $/ 76.905 Standards for Effective Competition/$ $/ 76.906 Presumption of No Effective Competition/$ $/ 76.910 Franchising Authority Certification/$ $/ 76.911 Petition for Reconsideration/$ $/ 76.914 Revocation of Certification/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA-95-1024 ) AMERICABLE INTERNATIONAL - ) INDIANA, INC. ) ) Petition for Reconsideration ) ) of the Certification of ) Town of Albany, Indiana ) to Regulate Basic Cable Rates ) (IN0151) ) MEMORANDUM OPINION AND ORDER Adopted: May 3, 1995 Released: May 5, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On November 22, 1993, Americable International - Indiana, Inc. ("Americable") filed a timely petition for reconsideration challenging the certification of the Town of Albany, Indiana ("the Town") to regulate rates for basic cable service and associated equipment. The Town did not file an opposition to Americable's petition. On December 14, 1993 Americable filed a supplement to its petition. In addition, both parties submitted information in response to Bureau staff requests regarding the current status of rate regulation in the Town. 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 operators which are not subject to effective competition. To qualify for certification, a franchising authority must confirm that it has the legal authority and personnel to regulate rates, that it will adopt and administer regulations that are consistent with the Commission's rules, and that interested parties will be provided with a reasonable opportunity to comment during rate proceedings. Certification becomes effective 30 days from the date of filing of the certification 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. II. DISCUSSION 3. Americable alleges that the Town fails to meet the certification standards set forth in Section 623 of the Communications Act of 1934, as amended. Specifically, Americable argues that the Town has adopted cable rate regulations that are inconsistent with the regulations prescribed by the Commission. Americable contends that Town Ordinance Number 1993-19, which authorizes the Town to adopt the cable television rate regulations as established by the Federal Communications Commission, has four defects which are inconsistent with the Commission's regulations. First, Americable argues that the Town's ordinance contains tolling provisions in excess of those permitted by the Commission's regulations. Specifically, Americable alleges that the Town's ordinance not only allows the Town an initial 30-day period of review from the date the cable operator submits a cost-of- service showing with its schedule of rates, but that it also allows the Town to toll the initial period for 240 more days. Second, Americable claims the Town's ordinance provides for the ordering of refunds even where the cable operator may have justified its costs pursuant to a cost-of-service showing under the Commission's regulations. Third, Americable alleges that the Town's ordinance fails to provide the one year limitation for refund liability which is set forth in the Commission's rules. Finally, Americable argues that the Town's ordinance fails to provide for notice and opportunity to comment by the cable operator, prior to the issuance of a refund order. As support for its factual contentions, Americable submits a copy of Ordinance Number 1993-19. 4. We will address Americable's arguments in inverse order. First, we find that Americable's argument that the Town's ordinance inappropriately fails to require a specific notice and comment period prior to the issuance of a refund order lacks merit. Section 76.942(a) of the Commission's rules requires franchising authorities to give an operator notice and an opportunity to comment prior to issuing a refund order. The Town's ordinance does not include a specific provision requiring such notice and opportunity to comment. Section 7 of the Town's ordinance simply provides in relevant part as follows: The Town may order the cable operator to refund to subscribers a portion of previously paid rates under the following circumstances: A. A portion of the previously paid rates have been determined to be in excess of the permitted basic cable service tier charge or above the actual cost of equipment; or B. The cable operator has failed to comply with a valid rate order issued by the Town. However, a local franchising authority is not required to specifically adopt in writing each and every rate provision promulgated by the Commission in order to comply with the certification provisions of the Communications Act of 1934, as amended. As the Commission stated previously, in order to adopt regulations consistent with those promulgated by the Commission, it is sufficient for a franchising authority to adopt a rule "stating that the local franchising authority will follow the rate regulations promulgated by this Commission." The Town's ordinance does contain such a provision. Section 1 of the Town's Ordinance states in relevant part as follows: A. That the Town Council and Council members hereby adopt the rules and regulations set forth by the Federal Communications Commission pursuant to Section 623(b) of the Cable Television Consumer Protection and Competition Act of 1992 (47 U.S.C. [] 543(b)) for the review of the basic service tier of cable television services and equipment necessary for the provision of such service tier. Such rules and regulations promulgated by the Federal Communications Commission are found in Exhibit A attached hereto. Moreover, we note that both parties acknowledge that the Town has not commenced regulation of Americable's basic rates. Specifically, Americable has not submitted any rate justification forms, and consequently, the Town has neither had an opportunity to review Americable's rates nor issue a rate order. When the Town commences regulation of Americable's rates, it must act, under its ordinance, in accordance with its rules and those of the Commission. In accordance with these rules, the Town will be required to provide cable operators with notice and an opportunity to comment before ordering a refund order. Accordingly, we find that the absence of a specific notice and opportunity to comment provision in the Town's ordinance is not grounds for rescission of the Town's certification in this case. 5. For the same reasons, we do not believe that the failure of the Town's ordinance to include a specific provision limiting refunds to one year constitutes grounds for the rescission of the Town's certification. As noted above, the Town's own rules require it to follow the rules set forth by the Commission "for the review of the basic service tier of cable television services and equipment necessary for the provision of such service tier." The Town has also not commenced rate regulation and, therefore, there is no evidence that the Town has or will act in a manner that is inconsistent with the Commission's rules with respect to ordering rate refunds. Accordingly, we find that Americable's arguments on this issue lack merit. 6. Next, we do not believe that the Town's ordinance impermissibly allows for refunds to be ordered where a cable operator has justified its rates through a cost-of-service showing, as Americable asserts. Americable's allegation is again based on the language contained in Section 7 of the Town's ordinance. However, there is nothing in this provision which states that the Town may order refunds even though a cable operator has permissibly justified its rates through a cost-of-service showing. Moreover, Americable points to nothing in any other section of the ordinance which allows the Town to take such action. Accordingly, we find that this argument also lacks merit. 7. Finally, we address Americable's argument that the Town's certification should be rescinded due to its adoption of rules that are inconsistent with those of the Commission with regard to the period of review for cost of service cases. While Section 1 of the Town's ordinance demonstrates the Town's clear intent to adopt cable rate regulations consistent with those of the Commission, Section 4 of the Town's ordinance incorrectly states the time period allowed for review of cost-of-service cases by the franchising authority. Section 4 of the Town's Ordinance states in relevant part as follows: A. That the Town of Albany, Delaware County, Indiana, shall establish that the period for review of the basic service tier of cable television services and the equipment necessary to provide said basic tier of service shall be ninety (90) days from the submission by the grantee of information and forms prescribed by the Federal Communications Commission for a showing of cost- of-service, as defined by the Federal Communications Commission. B. In the event that additional time for review of the cost-of-service showing submitted by the grantee is necessary, the Town of Albany or their designee shall issue a brief written order prior to the end of the ninety (90) day review period with a copy of said order to be sent by Certified United States Mail to the grantee, providing for an additional one hundred fifty (150) day period for review of rates of the basic service tier and the equipment necessary to provide said basic tier of service. During the extended review period and before taking action on the proposed rate, the Town Council shall hold at least one public hearing in which interested citizens may express their views and record objections. On the other hand, Section 76.933(a) of the Commission's rules provides for an initial 30- day period for review of rate justifications submitted to the franchising authority. This period may be tolled for either an additional 90 days in cases not involving cost-of-service showings, or an additional 150 days in cases involving cost-of-service showings. We note that the initial 90-day period of review for cost-of-service cases referred to in Section 4 of the Town's ordinance is inconsistent with the initial period allowed under our rules. This reference in Section 4 is also inconsistent with the Town's stated intent to adopt regulations that are consistent with those of the Commission. Nonetheless, we do not believe that the Town's certification should be rescinded in this case. First, the Town has indicated that it intended to adopt rules that are consistent with those of the Commission. Second, we note that Americable has not been harmed by this inconsistency as the Town has not initiated rate regulation (i.e., Americable has not submitted rate justification forms and the Town has not commenced any review proceedings of Americable's rates). As such, the Town has not administered its rules in a manner that is inconsistent with our rules, and it will not have an opportunity to do so until rate regulation is initiated. Accordingly, we do not believe that rescinding the Town's certification would be justified at this time. We do, however, note that the Town should correct the inconsistency in Section 4 of its ordinance before rate regulation is initiated. Should the Town fail to correct the inconsistency before initiating rate regulation, Americable may then file a petition for revocation based on the Town's failure to adopt and administer regulations that are consistent with those of the Commission. III. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that the petition for reconsideration filed by Americable International - Indiana, Inc., challenging the certification of the Town of Albany, Indiana to regulate Americable's basic cable service rates IS DENIED. 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