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A. a.(1)(a) i) a)Documentg2%i em$$R%PleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:><q*"xxxxWWxxxWWkkxxxFx6X@`7X@8wC;,=9Xw PE37XPD7zC;,BXz_ pi7XV"G($,hG PE37hP6uC;,~Xu&_ x7XX            2E Y-#Xw PE37XP#$/ FOR FCC RECORD ONLY /$ $// MO&O, Cable Act of 1992, DA 951141//$ $/ 300.623 Regulation of Rates /$ $/ 76.914 Petitions for Revocation /$ $/ 76.906 Presumption of no effective competition /$ $/ 76.910 Franchising authority certification /$  Y_-`(#(#X     ă XH-T  X1-/#Xw PE37XP#Before the W FEDERAL COMMUNICATIONS COMMISSIONTWashington, D.C. 20554  Y -T P#Xw PE37XP# Њx` `  hh@hpp  DA 951141  Y -X01Í ÍX01Í ÍX01Í ÍX01Í ÍIn the Matter of hh@h) x` `  hh@h)  Yy-CITY OF PHILIPPI, WEST VIRGINIA@h)ppCSR4289R x` `  hh@h)  YK-Petition for Special Reliefhh@h) x` `  hh@h)  Y-for Exemption from State and Federal@h) pp  xx  Y-Rate Regulation hh@h) x` `    Y-T  X-}  MEMORANDUM OPINION AND ORDER T T  Y|-TP Adopted: May 22, 1995hh @ Released: May 24, 1995  YO-By the Chief, Cable Services Bureau:  X"- I.xINTRODUCTION  Y-x1.` ` On July 29, 1994, the City of Philippi, d/b/a Philippi Communications ("Philippi") filed a Petition for Special Relief ("Petition"), in which it requested that the Commission rule that its cable system is not subject to federal or state rate regulation, on the grounds that it is a governmentowned cable system operating within the jurisdiction of the  Y"-local government.s" Y%-ԍxThe City's petition was placed on public notice on August 4, 1994.s The State of West Virginia Cable Television Advisory Board ("Board") submitted an Opposition ("Opposition") to Philippi's Petition on August 8, 1994. In this Opposition, the Board opposed Philippi's effort to divest the Board of the authority to regulate Philippi's basic cable television rates in those areas outside of the City of Philippi"S%y0*0*0*&" (the "City"). The Board, however, did not oppose Philippi's Petition with regard to the rates charged within the City.  X-  X-II.xBACKGROUND  Y-x2.` ` Section 623(a)(1) of the Communications Act of 1934, as amended, provides that "[n]o Federal agency, State or franchising authority may regulate the rates for cable service of a cable system that is owned or operated by a local government or franchising authority within whose jurisdiction that cable system is located and that is the only cable  Y1-system located within such jurisdiction."!11 Y -ԍxCommunications Act of 1934  623(a)(1); 47 U.S.C.  543(a)(1). We note that the Communications Act of 1934, as amended, also exempts those cable systems which are subject to effective competition. Communications Act of 1934, as amended,  623(a)(2), 47 U.S.C.  543(a)(2). One of the bases by which a cable system is deemed subject to effective competition is if the cable system is operated by a franchising authority and the cable system offers video programming to at least 50% of the households in the franchise area. Communications Act of 1934  623(l)(1)(c), 47 U.S.C.  543(l)(1)(c). Philippi does not claim effective competition under this test nor does it provide facts sufficient to allow us to make that determination.!  Y -x3.` ` In its petition, Philippi contends that it is not subject to state or federal rate regulation because its cable system falls within the provisions of Section 623(a)(1) of the Communications Act, as amended, in two separate franchise areas one within the City of Philippi, as well as one in the unincorporated areas of Barbour County, which is the County in which the City is located. With respect to its franchise area within the City, Philippi provides an affidavit from Joseph P. Mattaliano, City Manager of the City, who states that Philippi is owned and operated by the City, through its Municipal Building Commission. In addition, Philippi asserts that the City is authorized under state law to act as the cable  YK-system's franchising authority for the area within its city limits. K  Y-ԍxPhilippi cites West Virginia Law, under which "the franchising authority shall be the municipality in which a cable system is to be constructed, operated, acquired, or extended . . . ." W. Va. Code  5184(d).  Mr. Mattaliano also states that the Philippi cable system is the only such system operating within the City.  Y-x4.` ` Philippi also argues that the rates it charges in the franchise area that is outside of the City are not subject to federal or state rate regulation under Section 623(a)(1) of the Communications Act of 1934, as amended. Philippi submits a copy of its franchise  Y-agreement with Barbour County which authorizes Philippi "to serve those persons in the"D 0*(("  Y-areas outside of the municipal areas in Barbour County." Yy-ԍxAgreement between Barbour County Commission and the City of Philippi, dated January 23, 1991. Exhibit No. 5, Petition. There is no indication that the area described is actually limited to one mile outside of the City of Philippi. As support for its argument that it is not subject to rate regulation within this franchise area, Philippi asserts that under West Virginia law, the City's municipal power, including its power as franchising authority, may  Y-be extended beyond the city limits.K Y-ԍxPhilippi derives this assertion of extraterritorial jurisdiction from West Virginia statutory law which it asserts authorizes municipalities to exercise extraterritorial power up to a maximum of one (1) mile outside of their corporate limits when the same is "necessary to the reasonably efficient exercise of such powers and authority within the corporate limits of the municipality." W. Va. Code  81219. Philippi asserts that, pursuant to this law, the City's power as franchising authority may be extended to cover those areas that its cable system serves outside of the limits of the City.  Y_-x5.` ` The Board does not dispute Philippi's claim that, within the boundaries of the City, Philippi's cable system is not subject to federal or state rate regulation under Section 623(a)(1) of the Communications Act of 1934, as amended. However, the Board does dispute Philippi's claim with respect to the area that its cable system serves outside of the City. Specifically, the Board argues that Philippi's claim with respect to the area outside of the City lacks merit because the extraterritorial powers granted by the West Virginia state law on which Philippi relies do not extend to the proprietary function of operating a cable system. Rather, the Board argues that the statute grants municipalities the authority to exercise power only in terms of governmental functions within the one mile zone when such power is "necessary to the reasonably efficient exercise of such powers and authority within the corporate limits." Since Philippi's franchise area outside the city limits is not "within its jurisdiction," as required by Section 623(a)(1), the Board argues that Philippi is not exempted from rate regulation in this franchise area.  X- III. xDISCUSSION  X-x A.` ` The City of Philippi Franchise Area  Y-x6.` ` We find that the rates charged by Philippi within the City are not subject to federal or state rate regulation pursuant to Section 623(a)(1) of the Communications Act of 1934, as amended. As noted earlier, this provision applies in cases where: a) a cable system is owned and operated by a local government or franchising authority; b) within whose jurisdiction that cable system is located; and c) that cable system in question is the only cable system located with such jurisdiction. Here it has been demonstrated that Philippi's cable system is owned and operated by the City. In addition, the City has been empowered by the State of West Virginia to act as a franchising authority to the cable system"  0*((" in question. Thus, the cable system is located within the City's jurisdiction. Finally, the cable system in question is the only cable system located within the City. In light of these circumstances, we find that the rates charged by Philippi within its City of Philippi franchise area are not subject to federal or state regulation. Accordingly, with respect to the City of Philippi franchise area, Philippi's petition is granted. "v0*(("  X-  x B.` ` The Barbour County Franchise Area  Y-x7.` ` We, however, do not agree that the rates charged by Philippi in its franchise area in Barbour County are not subject to federal or state regulation. Specifically, we note that Philippi's authority to serve the unincorporated areas of Barbour County, including the areas Philippi serves within one mile of the city limits, derives from a franchise agreement with Barbour County and not with the City. The franchise agreement clearly states that "the Barbour County Commission has the full authority to grant the franchise right in the  YH-unincorporated areas of Barbour County. . ."EH Y -ԍxExhibit 5, Petition.E As such, with respect to areas outside of the City, Philippi's cable system is subject to the jurisdiction of Barbour County and not that of the City. Therefore, the requirements of Section 623(a) of the Communications Act of 1934, as amended, have not been met. In light of these circumstances, we can not find that the rates charged by Philippi's cable system in its Barbour County franchise area (including the one mile area outside of the City) are exempt from federal or state regulation. Accordingly,  Y -with respect to these areas, Philippi's petition is denied.v5 y Y-ԍxPhilippi's argument that its rates both within the City and outside of the city limits are not subject to regulation appears to be based on an assumption by Philippi that the requirement of a uniform rate structure throughout a cable system's "geographic area" set forth in Section 623(d) of the Communications Act of 1934, as amended, prohibits it from charging rates within the City that are different from those charged outside of the city limits.  Yu-See Communications Act of 1934,  623(d), 47 U.S.C.  543(d). We note, however, that in  Y`-its Report and Order and Further Notice of Proposed Rulemaking, 8 FCC Rcd 5631, 5897 (1993), the Commission clarified that "for purposes of administration of Section 623(d),  Y4-geographic area means franchise area."v  X- "v 0*(("  X-IV.xORDERING CLAUSES  Y- x8.` ` Accordingly, IT IS ORDERED that the Philippi Communications' Petition for  Y-Special Relief, seeking exemption from state and federal rate regulation, is GRANTED with  Y-regard to Philippi's franchise area within the City of Philippi, West Virginia; and DENIED  Y- with regard to Philippi's franchise area encompassing unincorporated areas of Barbour County outside of the city limits of the City of Philippi, West Virginia.  YK-x9.` ` 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. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau