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Commission`(# DA 9776 ă  yxdddy %#C\  P6QP#Before the Federal Communications Commission  yO} Washington, D.C. 20554 X01Í ÍX01Í Í҃  X-#Xj\  P6G;9XP#  X-In the Matter of hh@)  X- x` `  hh@)  X-Falcon Enstar Communicationshh@) CUID Nos.ppNC0358 (Walstonburg)  Xu-x` `  hh@)hppNC0359 (Grifton)  X^ -Order Dismissing  hh@)hppNC0360 (Hookerton)  XG - Complaints` `  hh@)hppNC0362 (Snow Hill)  X0 -x` `  hh@)hppNC0363 (Greene County)  X -; ORDER ĐTT  X-TPX` hp x (#%'0*,.8135@8:would be satisfied only when "the per channel offering provides consumers with a realistic  Xm- xKservice choice." In the Second Order on Reconsideration, we identified several factors that local  x[franchising authorities and the Commission should consider in assessing whether an a la carte  xpackage enhances consumer choice and therefore does not constitute an evasion of rate regulation.  X*- xFinally, in the Sixth Order on Reconsideration, Fifth Report and Order, and Seventh Notice of"*4 ,N(N(ZZ"  X- xZProposed Rulemaking, MM Docket Nos. 92266, 93215, FCC 94286 (1994) ("Going Forward  X- x^Order"), the Commission reconsidered its regulatory treatment of a la carte offerings.  xySpecifically, we determined that such packages are cable programming tiers within the meaning  x0of Section 3(1)(2) of the 1992 Cable Act and therefore will be subject to our general rate  xregulation rules. We established criteria for the creation of New Product Tiers ("NPTs"), which  xicannot include channels taken from regulated tiers. We concluded, however, that cable operators  xymay treat existing packages as NPTs, so long as such packages involve only a small number of migrated channels.  X5- ` x6.` ` In Falcon Cable TV, Port Orchard, Washington, 10 FCC Rcd 998 (1994), we  xconcluded that the movement of six channels to an a la carte tier was not a clear evasion of rate  X - xregulation. In #Xj\  P6G;9XP#Falcon Cable TV, Southern Shores, North Carolina#Xj\  P6G;9XP#, 10 FCC Rcd 1002 (1994),  xwe concluded that the a la carte tier, which started with seven channels and was enlarged to  X - xinclude ten channels, was a regulated tier. The Port Orchard Order found that the operator's  xrestructuring of its CPST into the basic tier and an a la carte tier of six channels did not  xxconstitute an evasion of rate regulation. It concluded that those channels not placed on the basic  xservice tier could be treated as a NPT and that there was no CPST in that community as of  X- xSeptember 1, 1993 that was subject to rate regulation. More recently, in Falcon Holding Group,  Xn- xInc., 10 FCC Rcd 7267 (1995), we dismissed numerous complaints against the operator  xZconcerning a la carte tiers consisting of two to six channels which were restructured in essentially  XB-the same way as the tier addressed in the Port Orchard Order.  X- ` x7.` ` Based on an analysis of the Commission's Rate Order, application of the factors  X- x-established in the Second Order on Reconsideration to the available information, a review of our  X- xtreatment of NPTs in the Going Forward Order, and our previous treatment of similar  X- x-complaints, we conclude that the subject tiers may be treated as NPTs under our Going Forward  X- x Order.k \z_ yO;- xԍWe have excused one violation, i.e., migrating channels from rateregulated tiers, in only those situations where,  {O- x=as here, the new product tier is established as an outgrowth of our change in our a la carte policy. See Going  {O-Forward Order at Para. 51.k   Channel lineup cards for the period in question indicate that as of March 15, 1993,  xzFalcon offered basic service consisting of ten channels, a tier(a) service of 5 channels and a  xtier(b) service of 14 channels, all of which would have been considered regulated tiers under the  xFCC rules. In addition, Falcon offered six a la carte premium services. As of September 1,  x1993, Falcon offered only the basic tier service which consisted of the twentynine channels  xconsolidated from the previous tiers and the six a la carte premium channels. Subsequently,  xFalcon changed its channel lineup to create five new a la carte channels which were sold for  X#- x{$2.00 each or at a discount package rate of $5.95. #z_ {O#-ԍSee Channel lineup and rate card dated October 27, 1993, which was attached to the complaints.   All five channels were taken from the  xyregulated basic tier. That change prompted the filing of the complaints. The a la carte package  xprice offers a 40.5% discount from the per channel total of $10.00. A subscriber can purchase  x.two out of five a la carte channels and still save $1.95 off the package price. This combination  xappears to offer a realistic service choice. Although several of the factors established in the"!~ ,N(N(ZZ "  X- xSecond Order on Reconsideration favor regulation of the tier, "z_ {Oy- xԍI.e. (1) No nonpremium a la carte packages were offered prior to rate regulation; (2) no selection of package  xchannels was offered; (3) the introduction of the package resulted in avoiding rate regulation; (4) 100% of the  xchannels in the package were removed from regulated tiers; (5) the channels were removed from a lower tier; and (6) the channels were not previously offered a la carte. as was the case in Port Orchard   X- x and Falcon Holding Group, we conclude that the restructuring in issue was similar to that  X- x<considered in the Port Orchard Order and the Falcon Holding Group Order and falls within the  X-guidelines contained in the Going Forward Order.  X- `  x8.` ` Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's  x=Rules, 47 C.F.R.  0.321, that the a la carte packages discussed above, which are the subject of  Xg-the referenced complaints, may be treated as new product tiers under our Going Forward Order.  X;- ` 4x 9.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's  xRules, 47 C.F.R.  0.321, that the abovereferenced FCC Form 329 complaints pending against Falcon's rates for the a la carte tiers are DISMISSED. ` hpx@FEDERAL COMMUNICATIONS COMMISSION x@Elizabeth W. Beaty x@Chief, Financial Analysis and Compliance Division x@Cable Services Bureau