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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 95-1137//$ $/ 300.623 Regulation of Rates /$ $/ 76.914 Petitions for Revocation /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) DA 95-1137 ) Petition for Revocation ) ) FLORIDA CABLEVISION ) MANAGEMENT, CORP. ) D/B/A CABLEVISION INDUSTRIES ) ) of Certification of ) Collier County, Florida ) to Regulate Basic Cable Service Rates) (FL0107, FL0577) ) MEMORANDUM OPINION AND ORDER Adopted: May 19, 1995 Released: May 23, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On March 16, 1995, Cablevision Industries ("CVI") filed a petition for revocation challenging the certification of Collier County, Florida ("the County") to regulate rates for basic cable service and associated equipment. On April 17, 1995, the County filed an opposition to CVI's petition for revocation. 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 that are not subject to effective competition. For 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 alleging the presence of effective competition. Once the period for filing petitions for reconsideration has elapsed, cable operators may challenge a franchising authority's certification by filing a petition for revocation. Regardless of the grounds, however, the filing of a petition for revocation does not automatically trigger a stay of a franchising authority's ability to regulate basic cable rates. II. BACKGROUND 3. In a prior proceeding, the Commission denied CVI's first petition for revocation challenging the County's certification to regulate basic cable service rates. In its first petition, CVI claimed that it was subject to effective competition under the low penetration test because it served fewer than 30 percent of the households (i.e., occupied housing units) in the unincorporated areas of Collier County, its franchise area. The County filed an opposition to CVI's petition and a supplement to its opposition. The County claimed that CVI's effective competition claim was inappropriately based on areas unserved by CVI's cable system. Specifically, the County argued that CVI had made an affirmative decision to redefine its franchise area. The County further argued that CVI's claim was contradicted by data in its petition which indicated "saturation" levels greater than 30 percent for two communities within its franchise area. The Commission denied CVI's petition based on its finding that CVI had failed to provide appropriate household data. In light of this finding, the Commission declined comment regarding whether CVI had redefined its franchise area. III. DISCUSSION 4. In the instant petition, CVI argues that its cable system is subject to effective competition because it serves fewer than 30 percent of the households in the unincorporated areas of Collier County, its franchise area. Specifically, CVI claims that it serves 14,838 of the alleged 61,487 households in its franchise area, or 24.13 percent of the total number of households. As supporting documentation, CVI provides 1990 Census data which shows that there are a total of 61,703 households in Collier County. CVI also submits a computer print-out with sufficient subscriber information to show that there are 12,381 "basic subs" and 2,457 "commercial equivalent subs" for a total of 14,838 "total equivalent subs" in the unincorporated areas of the County. Finally, CVI provides a copy of the franchise agreement, a letter from the County dated November 4, 1993 notifying CVI of the County's certification to regulate basic cable rates, a chart showing the County's data on dwelling units as of March 31, 1994, and an affidavit under penalty of perjury by a responsible official certifying the accuracy of the data included in the petition. 5. The County claims that CVI has failed to demonstrate that it is subject to effective competition in its franchise area. First, the County claims that CVI's use of subscriber data from December 31, 1994 was inappropriate under the guidelines provided in the Effective Competition Order. It argues that according to the Effective Competition Order, an operator must "rely on subscriber data as of, or approximately as of, the time of certification, but no earlier than two months before the request for certification was filed." The County further argues that CVI's effective competition claim is inappropriately based on areas unserved by CVI's cable system. Specifically, the County states that CVI has made an affirmative decision to redefine its service area. It argues, as it did in its opposition to CVI's first Petition for Revocation, that CVI has chosen to limit its actual service area to specific communities in the County despite the fact that the franchise agreement does not restrict service to these specific unincorporated areas. The County also argues that CVI has elected not to expand or overbuild its system even though it specifically requested, and was granted a franchise that overlaps with the franchise of another cable operator. In addition, the County argues that figures in CVI's original petition which provide values for what is described therein as "saturation" indicate that CVI's penetration rate is actually 55 percent in Immokalee and 86 percent in Golden Gate (two areas within CVI's franchise area, the unincorporated area of the County). As supporting documentation, the County simply provides a copy of its original opposition in response to CVI's original Petition for Revocation, and an additional map of CVI's franchise area. 6. As a preliminary matter, we find that CVI's use of subscriber data from December 31, 1994 was appropriate under the guidelines provided in the Effective Competition Order. The County refers to language from the Effective Competition Order which prohibits the use of subscriber data taken earlier than two months prior to the filing of a request for certification by the franchising authority. However, this language does not prohibit the use of more recent subscriber data taken after the filing of a request for certification, and the County fails to cite to any other language in the Effective Competition Order which would suggest that the data provided by CVI is inappropriate. Accordingly, we accept CVI's use of more recent subscriber data. As we discuss infra, CVI's evidence demonstrates that its cable system is subject to effective competition, regardless of which subscriber figure is used. 7. However, we note that in the instant petition, CVI inappropriately includes commercial subscriptions in its subscriber count. As the Commission stated in the Third Recon. Order, "[a]s used in the Cable Act, we presume that Congress did not intend "households" to have a different meaning than in the 1990 census ..." The 1990 Census defines the term "household" to include only occupied housing units. Thus, as this definition does not include commercial entities, such entities may not be counted in either the subscriber or household totals for purposes of effective competition. If CVI's figure for "commercial equivalent subs" is excluded from the subscriber total, this results in a subscriber count as of December 31, 1994, of only 12,381 CVI subscribers in the unincorporated areas of the County. 8. Second, we are unpersuaded that the appropriate franchise area for purposes of effective competition is something less than the entire unincorporated area of Collier County, Florida. The County provides insufficient evidence to support its claim that CVI has made an affirmative decision to redefine its franchise area. The County concludes that CVI has decided not to serve the entire franchise area because, the County claims, CVI's actual service area is limited to certain communities in the county, and CVI has not expanded beyond these communities despite its ability to do so under the franchise agreement. The County's argument is, in essence, that CVI has failed to expand into all areas of its franchise area. However, as the Commission has ruled previously, "[t]he fact that a franchise area has not as yet been filled out by construction of a system would not by itself be taken as redefining the service area." 9. Next, the County argues that the "saturation" data provided by CVI in its subscriber printout and in its report to an official cable television directory demonstrate that CVI's penetration rate is actually greater than 30% based on the number of subscribers in the specific communities it serves and the number of homes passed by CVI's system. These communities, however, are a part of CVI's total franchise area. As such, in the absence of a demonstration that CVI has made an affirmative decision to limit service to these particular communities, evidence of "saturation" levels in these communities is immaterial to the issue of whether CVI faces effective competition in its entire franchise area. The County does not provide any specific evidence to indicate that CVI has made an affirmative decision to restrict its service. Therefore, we find that the County has failed to sustain its burden of proof that CVI has redefined its franchise area. 10. Turning to CVI's petition, 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. CVI has met this burden. CVI appropriately relied on data reflecting the number of households as required by our rules. Relying on this data, CVI has submitted sufficient evidence demonstrating that its cable system serving the unincorporated areas of Collier County, Florida, as of December 31, 1994, serves 12,381 of the 51,777 households, or 23.91% of the households, within its stated franchise area. Thus, we find that CVI's system serving Collier County, Florida is subject to effective competition. Accordingly, its petition is granted. IV. ORDERING CLAUSES 11. Accordingly, IT IS ORDERED that the petition for revocation filed by Cablevision Industries challenging the certification of Collier County, Florida to regulate basic cable rates IS GRANTED. 12. IT IS FURTHER ORDERED that the certification of Collier County, Florida to regulate Cablevision Industries' basic cable service rates IS RESCINDED. 13. 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