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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** I.$// MO&O, Cable Act of 1992, DA 95-2364//$ $/ 300.623 Regulation of Rates /$ $/ 76.910 Franchising authority certification /$ $/ 76.914 Petition for revocation of certification /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matters of: ) DA 95-2364 ) JOPPA ASSOCIATES, L.P., d/b/a ) CONSOLIDATED CABLEVISION ) ) Petitions for Revocation ) ) of the Certification ) to regulate basic cable service rates ) in the Cities of: ) Benton Charter Township, Michigan ) FCC Community ID No. (MI0200); and ) St. Joseph, Michigan ) FCC Community ID No. (MI0566) ) CONSOLIDATED ORDER Adopted: November 13, 1995 Released: December 4, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. By this order, we consolidate two petitions for revocation filed by Joppa Associates, L.P., d/b/a Consolidated Cablevision ("Consolidated") and rule on the merits of each petition. In deciding this matter, we have reviewed all of the pleadings filed in the separate proceedings and have determined that the petitions are sufficiently similar to justify the resolution of all the issues raised by Consolidated and the Cities of Benton Charter Township, Michigan and St. Joseph, Michigan (the "Cities") in one consolidated order. 2. On September 28, 1994, Consolidated filed a Petition for Revocation with respect to each of the Cities. On October 13, 1994, the Cities each filed an Opposition to Consolidated's petition. On November 3, 1994, Consolidated filed a Reply in Support of its petition with respect to the City of St. Joseph. On November 4, 1994, Consolidated filed a Motion to Accept Late Filing and a Reply in Support of its petition with respect to Benton Charter Township. On November 28, 1994, the Cities each filed a Motion for Leave to File Reply and a Reply responding to Consolidated's replies in support of its petitions for revocation. Finally, on December 7, 1994, Consolidated filed Oppositions to the November 28, 1994 motions filed by the Cities. 3. Section 623(a)(4) of the Communications Act of 1934, as amended, ("Communications Act") allows franchising authorities to become certified to regulate basic cable service rates of cable operators that 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 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. After that time period has expired, a cable operator may challenge a franchising authority's certification by filing a petition for revocation. Grounds for revocation of a franchising authority's certification include, inter alia, the nonconformity of state and local laws to the Commission's rate regulations. If the Commission, after granting the franchising authority reasonable opportunity to comment and cure any minor nonconformance, determines that state and local laws and regulations are not consistent with the Commission's rules, the Commission shall revoke the certification of the franchising authority. In such cases, the Commission will assume jurisdiction over basic service rates until the franchising authority becomes recertified. II. DISCUSSION 4. In its petitions, Consolidated asserts that, because they ignored established Commission precedent, the Cities have willfully failed to administer their rate regulations in a manner that is consistent with the Commission's regulations. Specifically, Consolidated argues that after reviewing Consolidated's FCC Form 1210, which Consolidated filed to obtain approval of proposed rate increases, the Cities rejected Consolidated's proposed increases for its basic service tier, ruling that Consolidated had to take into account revenue earned from home shopping channels in calculating its proposed rate adjustments. Consolidated argues that the Commission had previously ruled that home shopping channel revenues are irrelevant to rate increases such as those sought by Consolidated. Consolidated alleges that: [t]he City's reason for denying Consolidated's requested rate increase is not based on any good faith understanding of an ambiguous rule. Instead, the City's denial was a willful decision on the part of the City to depart from an unambiguous determination made by the Commission. . . . Given the fact that Consolidated acquired the System on the eve of regulation, saving it from inevitable bankruptcy, Consolidated cannot afford and the Commission should not tolerate the City's gamesmanship and its willful disregard of the Commission's Rules. In its reply, Consolidated again argues that the Cities' rate decisions indicate a willful disregard of the Commission's regulations necessitating revocation of the Cities' certification to regulate basic cable service rates. 5. In their oppositions, the Cities argue that their rate decisions do not violate Commission policy or regulations and, therefore, revocation of certification is unwarranted. Specifically, the Cities state that each: . . . correctly applied provisions in the 1992 Cable Act and the Commission's Rules in requesting information from Consolidated concerning its revenues from programmers, including the nine home shopping channels on the basic tier. Thus, the [Cities were] correct on the law and had a rational basis supporting [their] rejection of Consolidated's requested rate increase. The Cities argue that since the reasoning underlying their rate determinations was valid, the Commission cannot revoke their certification to regulate basic cable service rates. 6. Section 76.914(a)(2) of the Commission's rules provides that the Commission will revoke a franchising authority's certification if, after being given an opportunity to cure a defect, the franchising authority does not do so and thereby fails to fulfill one of the three certification requirements. One such certification requirement is that a franchising authority adopt and administer rate regulations which are consistent with those of the Commission. Although we found in the Appeal Order that the Cities' action with respect to the rate filings was inconsistent with the Commission's interpretation of its regulations, we do not believe that revocation of the Cities' certification is warranted at this time. We note that Consolidated's petitions are based on the allegation that local rate orders, and not local regulations, are inconsistent with the Commission's rules. Section 76.944 of our rules provides a remedy for such claims in the form of a right to appeal rate decisions issued by local franchising authorities to the Commission. Consolidated has pursued this remedy. The Appeal Order remands these matters to the local franchising authorities to allow them to correct the rate orders on which Consolidated bases its revocation claims in this proceeding. This is the appropriate procedure set forth in our rules and we fully expect the Cities to comply with the Appeal Order on remand. Moreover, even if we were to view the Cities' rate orders as inconsistent regulations, the Cities have not been given an opportunity to cure this defect as required by Section 76.914(a)(2) of our rules. 7. Given the extensive overlap between Consolidated's rate appeals and its petitions for revocation, we believe that it is appropriate that we exercise our discretion and withhold action on Consolidated's decertification request at this time, without prejudice to its being refiled, should circumstances warrant. In the interim, specific issues, if any, relating to rate setting by the Cities may continue to be brought to the Commission's attention through the rate appeal process set forth in our rules. III. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that the Petition for Revocation filed by Joppa Associates, L.P., d/b/a Consolidated Cablevision against Benton Charter Township, Michigan IS DISMISSED WITHOUT PREJUDICE. 9. IT IS FURTHER ORDERED that the Petition for Revocation filed by Joppa Associates, L.P., d/b/a Consolidated Cablevision against the City of St. Joseph, Michigan IS DISMISSED WITHOUT PREJUDICE. 10. This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau