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File how2ftp (.txt & .wp) is in directory /pub/Bureaus/Miscellaneous/Public_Notices/ ***************************************************************** ******** $//ORDER, Petition for Special Relief, UNITED CABLE TELEVISION, DA 96-172/$ $/76.922(d) Rates for the basic service tier, price cap requirements/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 96-172 In the Matter of: ) ) United Cable Television of ) CSR No. 4528-R East San Fernando Valley, Ltd. ) ) Petition for Special Relief ) MEMORANDUM OPINION AND ORDER Adopted: February 12, 1996 Released: February 21, 1996 By the Chief, Cable Services Bureau: I. Introduction 1. On February 24, 1995, United Cable Television of East San Fernando Valley, Ltd., ("United Cable") filed a Petition for Special Relief with the Cable Services Bureau requesting authorization to treat increases in the pole attachment fees charged by the City of Los Angeles Department of Water and Power (the "Department") as external costs for purposes of 47 C.F.R.  76.922(d)(3). On June 15, 1995, the National Cable Television Association, Inc. ("NCTA") filed comments in support of United Cable's petition. 2. In this Order, we find that United Cable has failed to show that it would suffer significant economic hardship from the Department's increases in pole attachment fees as required by Section 76.922(d)(3) of the Commission's rules, and we therefore deny United Cable's request to treat the Department's pole attachment fee increases as external costs. II. Facts 3. United Cable states that it supplies cable television to 85,216 subscribers in the City of Los Angeles. The Department owns utility poles within United Cable's service area to which United Cable must attach its cable. United Cable states that it could not provide cable television service to subscribers in Los Angeles without the ability to attach its cable to the Department's poles. 4. On December 27, 1994 the Department notified United Cable of an increase in pole attachment fees. Effective July 1, 1995, the Department's pole attachment fees doubled from $5.00 to $10.00 per pole for the 14,056 poles owned by the Department on which United Cable rents space. United Cable states that use of these poles is essential to its cable service, that the Department's pole attachment fees are not regulated on the federal or state level, and that it lacks bargaining power with the Department. United Cable asserts that as a result of this 100 percent increase, it will pay the Department $70,280.00 per year more in 1996 than it paid in 1994. 5. NCTA states in its comments that it agrees that United Cable should be permitted to treat pole attachment expenses as external costs. It asserts that the Commission's reasons for denying external cost treatment to increases in pole attachment fees are not applicable in this case. Specifically, it argues that because the fees are not regulated, the operator has no recourse to a regulatory agency to demonstrate unreasonableness; the fees are unavoidable expenses beyond the control of the operator; the fees are imposed by a governmental entity; and Congress has expressed its concern over rate increases of this type. NCTA states that the Department's rate increase of 100 percent constitutes an exorbitant fee increase for which a waiver was contemplated by the Commission when it adopted Section 76.922(d)(3), and United Cable's petition should be granted. NCTA also urges the Bureau to use this petition "as a vehicle to grant a blanket waiver for cable operators similarly-situated." III. Discussion 6. Section 76.922(d)(3), 47 C.F.R.  76.922(d), provides that permitted rates for regulated cable programming may be adjusted for inflation, changes in the number of regulated channels and changes in external costs. Section 76.922(d)(3) limits adjustments for changes in external costs to certain designated categories of costs. Changes in pole attachment fees are not among the designated external costs for which adjustments are permitted to subscribers' cable service rates. 7. However, in fashioning this rule the Commission considered the impact of increases in pole attachment fees and provided an instance when such increases may be considered external costs for purposes of section 76.922(d). In the Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed Rulemaking, MM Docket No. 92-266, 9 FCC Rcd 4119 (1994) (Second Order on Reconsideration), the Commission generally denied external cost treatment of pole attachment fees because, unlike franchise fees or taxes, pole attachment fees are not imposed by the government, nor are they a cost over which the legislative history of the 1992 Cable Act expresses explicit concern. In denying external cost treatment to pole attachment fees, however, the Commission noted that "some pole attachment fees are regulated under the 1978 Pole Attachment Act, 47 U.S.C.  224." The Commission stated that it will consider the need for special relief "in instances of significant hardship resulting from unusually large pole attachment fee increases imposed by utilities or other pole providers not subject to regulation under the Pole Attachment Act." The Commission stated that its standard for finding an instance of significant economic hardship in this regard may include, but will not be limited to, "showings regarding both the magnitude of the increases in pole attachment fees and the impact of the increase on the operator." 8. United Cable points out that because the Department is a water and power company owned and operated by the City of Los Angeles, a political subdivision of the State of California, it is not subject to regulation under the 1978 Pole Attachment Act. It also states that the Department's pole attachment fees are not subject to regulation by the State of California. It argues that the one-time 100 percent fee increase demanded by the Department is, on its face, extraordinarily high, and that this rate is well above the rates charged by investor-owned utilities in Los Angeles which are regulated by the State of California. 9. We find that while United Cable has indicated the magnitude of the fee increase, it has not provided any specific evidence regarding the impact of the increase upon United Cable, nor has it provided any other evidence sufficient to show significant economic hardship resulting from the Department's increases in pole attachment fees. In the absence of such a showing, we do not have grounds to grant the relief sought. Accordingly, we deny United Cable's petition for special relief requesting authority to treat the pole attachment fee increases imposed by the Department as external costs for purposes of our rules. IV. Ordering Clause 10. Accordingly, IT IS ORDERED, pursuant to 47 C.F.R.  76.922(d), that United Cable Television of East San Fernando Valley, Ltd.'s Petition for Special Relief requesting authorization to treat pole attachment fee increases imposed by the City of Los Angeles Department of Water and Power as external costs for purposes of rate adjustments IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau