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A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:><q*"xxxxWWxxxWWkkxxx  Y-ԍ Application at 810.> Second, the City argues that the Bureau should have interpreted the "marketplace failure" of Comcast's individual offerings as conclusive evidence that the individual channels contained in the package were not realistic service options, but, rather, were options which were created to evade rate  Y -regulation.;  Y!-ԍ Id. at 46.; Third, the City claims that the Bureau should have deferred to the City's finding that Comcast's Value Pak was not a legitimate a la carte package, and the Bureau  Y-should have required Comcast to demonstrate the reasonableness of its rates.;o Y$-ԍ  Id. at 67.; Finally, the City argues that Comcast should be subject to refund liability as a result of overcharges for"l"0*((+"  Y-its collective offering.; Yy-ԍ  Id. at 78.; The City requests that the Commission overturn the Bureau's decision and order that Comcast's Value Pak, and the channels comprising it, be deemed  Y-subject to regulation as of September 1, 1993, and to order refunds accordingly.={ Y-ԍ  Id. at 1011.=  X- V.xDiscussion  Y_-x12.` ` On the basis of the analysis set forth above,I_. Y> -ԍ See supra,  810.I we believe it was reasonable for  YH-the Bureau to permit Comcast to treat the package as a new product tier. This is consistent  Y1-with the Commission's conclusions concerning a la carte packages in the Going Forward  Y -Order, which was released the same day as the Comcast LOI Order. In the Going Forward  Y -Order, the Commission determined that a la carte packages are subject to regulation as cable  Y -programming service tiers. However, the Commission also stated: Xx"In [some] cases [where it was not clear whether packages were permissible under the rules in existence at the time], we think it is fair, in light of the uncertainty created by our test, to allow cable operators to treat existing packages as NPTs even though it would not qualify under the rules we establish today, provided that such packages involve only a small number of  YQ-migrated channels."Q Y-ԍ Going Forward Order at  51. See also 47 C.F.R. 76.986(c) (permitting new product tier treatment if package meets conditions of new product tier or "operator had reasonable grounds to believe the collective offering involving only a small number of migrated channels complied with the Commission's requirements as of the date it was first offered").  Furthermore, the revised rules provide for treatment as a new product tier if the collective offering was created between April 1, 1993 and September 30, 1994, involved only a small number of channels on basic service tiers or cable programming service tiers, and the  Y-operator had reasonable grounds to believe the collective offering complied with the  Y-Commission's requirements as of the date it was first offered.y8  Y#-#Xw PE37=9XP#э See id.; 47 C.F.R. 76.986(c).y Here, Comcast's package satisfies the new product tier criteria since it was created during the relevant time period, involved only four channels, and it cannot be said that it was clear that Comcast's Value Pak was not a permissible package. Contrary to the City's assertion, rather than granting a" 0*(("  Y-waiver of the Commission's rules, the Bureau's action in this case was clearly contemplated  Y-by the rules and policies announced in the Going Forward Order.  Y-x13.` ` Likewise, we are not persuaded by the City's argument that the Bureau should have considered the low number of subscribers to the individual channels in Comcast's collective offering as conclusive evidence that the individual channels were not realistic service options. The Bureau did consider the subscribership to individual channels and stated that this, together with other factors, tends to show that the per channel offering does not  YJ-constitute a realistic service choice.q J Y -ԍ See paragraph 9, supra; Comcast LOI Order at  19.q However, even though it found that Comcast's package may not have satisfied the Commission's requirements for a permissible a la carte offering,  Y -the Bureau determined that its test had been unclear.r! { YH -ԍ See paragraph 10, supra; Comcast LOI Order at  21.r Given the ambiguity in our rules, it was appropriate for the Bureau to treat the evidence of subscribership as probative, but not conclusive.  Y -x14.` ` The City asserts that in its Comcast LOI Order, the Bureau should have deferred to the City's determination that Comcast's Value Pak was not a legitimate a la carte package. We disagree. With respect to appeals of local rate determinations made by franchising authorities on the regulatory status of an a la carte package as part of its final decision setting rates for the basic service tier, the Commission has stated that "the  YO-Commission will defer to the local authority's findings of fact if there is a reasonable basis for the local findings," and the Commission "will then apply FCC rules and precedent to those facts to determine the appropriate regulatory status of the [a la carte package] in  Y -question."" . Y-#Xj\  P6G;+XP##Xw PE37=9XP#эxSecond Reconsideration Order, 9 FCC Rcd 4119 at 4217. The Bureau's decision in this case was based on a matter of law rather than fact and, therefore, the City would not be entitled to deference with respect to its legal conclusion on the regulatory status of the a la carte package in question. Moreover, deference on the a la carte issue would defeat the Commission's interest in ensuring that its regulations are implemented consistently on both the federal and state levels.  Y-x15.` ` The City's arguments that the Bureau failed to require Comcast to demonstrate the reasonableness of its rates and that Comcast should be subject to refund liability are also without merit. Because we have found that Comcast's Value Pak a la carte package was arguably a permissible collective offering under our rules as they existed when the package was created, and because the package may be treated as a new product tier under our current rules, there is no basis on this record to review Comcast's rates nor to order refunds pursuant to Sections 76.945 and 76.942 of the Commission's rules. Instead, the Bureau has""0*(( " determined that Comcast's Value Pak offering is in compliance with our rules for new  Y-product tiers as announced in the Going Forward Order.n# Yb-ԍ See Comcast LOI Order at  23 and 47 C.F.R. 76.986(c).n  Y-x16.` ` In view of the foregoing considerations, we affirm the Cable Service Bureau's  Y-determinations in the Comcast LOI Order and we find that reconsideration of the Cable  Y-Services Bureau's Comcast LOI Order is not justified. We therefore deny the City's Application for Review.  XN-  X7-VI.xOrdering Clause s  Y -x17.` ` Accordingly, IT IS ORDERED that the City's Application for Review IS  Y -DENIED .  Y -x18.` ` IT IS FURTHER ORDERED that the staff of the Cable Services Bureau shall send copies of this decision to the authorized representatives of the parties by certified  Y-mail, return receipt requested.  X=- x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhWilliam F. Caton  Y-x` `  hhActing Secretary