NOTICE ********************************************************* NOTICE ********************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file how2ftp. File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** August 11, 1995 DA 95-1798 Released: August 16, 1995 Mark J. Palchick, Esq. Baraff, Koerner, Olender & Hochberg 5335 Wisconsin Avenue, N.W. Suite 300 Washington, D.C. 20015-2003 Dear Mr. Palchick: This letter is in response to your May 19, 1995 letter, requesting Bureau clarification that the 30 day subscriber notification requirements of Sections 76.309(c)(3)(i)(B) and 76.964(b) of the Commission's rules do not apply when a customer affirmatively requests a new product tier ("NPT") in response to a door-to-door sales offer. If these rules are found to apply to your situation, you alternatively request waiver of the 30 day advance notification requirement. Your letter states that you represent a cable operator that is in the process of rebuilding one of its systems by expanding channel capacity from 34 channels to 80 channels through the creation of fiber optic nodes. You state that the operator is rebuilding its system in sections with the first section being completed within the next 30 days and the final section being completed within two years. According to your letter, as each section is completed and additional channel capacity becomes available to subscribers served by the completed sections, the operator intends to offer an NPT to subscribers with the additional capacity. You state that the operator wishes to sell the NPT primarily on a door-to-door basis because the operator believes this is the best way to present the options available to a subscriber in a clear and concise manner. You note that Sections 76.309(c)(3)(i)(B) and 76.964(b) of the Commission's rules require an operator to provide 30 days advance written notice to subscribers, through announcements on the cable system and in writing, prior to making a change in rates, programming services or channel positions. However, you state that when a customer chooses to subscribe to an NPT through a door-to-door sale, the operator would like to avoid also having to provide subscribers with 30 days' notice of the price and service change. In your view, it would be consistent with the intent of the Commission's rules to permit operators to avoid having to provide subscribers with 30 days notice of the price and service change when a customer chooses to subscribe to an NPT through a door-to-door sale. You believe that the purpose of the notification requirement is to ensure that when an operator makes a change to an existing rate or service, subscribers will have sufficient opportunity to cancel services in reaction to the changes. This concern does not exist in this case, you note, because the operator does not intend to change existing services, but only intends to offer new services in the form of an affirmatively marketed NPT. In order to fully address the issues raised in your letter, it is necessary to examine each of our rules which require a 30 day advance notice period for subscribers. First, we will address the concerns raised in your letter in relation to Sections 76.309(c)(3)(i)(B) and 76.964(b) of our rules. Second, we will discuss your concerns as they pertain to Section 76.309(c)(3)(i)(A) of our rules. First, we find that the subscriber notice requirements embodied in Sections 76.309(c)(3)(i)(B) and 76.964(b) do not require operators to provide written notice to customers at least 30 days before the service is provided, when an operator offers an NPT and a subscriber affirmatively requests a subscription to the NPT in accordance with the Commission's negative option billing rules. These subscriber notice requirements apply when an operator makes a change to an existing rate or service. That is, when an operator makes any change in rates, programming services, or channel positions on an existing tier, the operator is required to provide 30 days advance written notice to subscribers through announcements on the cable system and in writing prior to making the change. Specifically, Section 76.964(b) states that: [c]able systems shall give 30 days written notice to both subscribers and franchising authorities before implementing any rate or service change. Such notice shall state the precise amount of any rate change and briefly explain in readily understandable fashion the cause of the rate change (e.g., inflation, changes in external costs or the addition/deletion of channels). When the change involves the addition or deletion of channels, each channel added or deleted must be separately identified. Moreover, Section 76.309(c)(3)(i)(B) provides that: [c]ustomers will be notified of any changes in rates, programming services or channel positions as soon as possible through announcements on the cable system and in writing. Notice must be given to subscribers a minimum of thirty (30) days in advance of such changes if the change is within the control of the cable operator. These provisions would require 30 days advance written notice to subscribers where there is any change in rates or service. While the addition of a new programming service technically falls within the category of "any rate or service change," it is clear from the context of these rules that the Commission intended to require notice for any rate or service change to existing tiers. We find that both rules apply to rate and service changes which affect services already received by existing subscribers, and are intended to ensure that subscribers have the opportunity to cancel existing services in reaction to changes in those services. Accordingly, we agree that these notice requirements do not apply when an operator does not intend to change an existing service, but only intends to provide a new service to a subscriber after the subscriber has affirmatively elected to receive the new service. Second, Section 76.309(c)(3)(i)(A) of the Commission's rules requires an operator to provide written information at the time of installation of service and at least annually regarding: (1) products and services offered; (2) prices and options for programming services and conditions of subscription to programming and other services; (3) installation and service maintenance policies; (4) instructions on how to use the cable service; (5) channel positions and programming carried on the system; and (6) billing and complaint procedures. Section 76.309(c)(3)(i)(B) requires that a cable operator notify subscribers 30 days in advance of any significant changes in the information required by Section 76.309(c)(3)(i)(A). Therefore, these rules would require your client to provide subscribers with written notice of the offering of its NPT 30 days before the service is made available. We find that the precise information required by Section 76.309(c)(3)(i)(A) that applies to the offering of the NPT (for example, the price of the NPT and the channels offered on the NPT) must be provided to subscribers in writing whenever an NPT is offered. A literal reading of our rule would also require that such notice occur 30 days before the NPT is made available to a subscriber. However, we find that it would be unnecessary for a subscriber who affirmatively requests the NPT at the time of the door-to- door sale to wait 30 days before receiving the NPT, provided that the subscriber, at the time of a door-to-door sale, receives the written information required by Section 76.309(c)(3)(i)(A). Accordingly, we grant your request for waiver of the requirement that subscribers be given 30 days advance notice of the availability of an NPT, so long as subscribers are provided with all applicable written information required by Section 76.309(c)(3)(i)(A) at the time of the door-to-door marketing of the NPT. This is a blanket waiver which is available to all similarly situated operators seeking to offer NPTs. Sincerely, Meredith J. Jones Chief, Cable Services Bureau