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FFFFFFF6FFFFFF60++++++@+++++000000050000000"5@^!)22SN!!28!2222222222888,\HCCH=8HH!'H=YHH8HC8=HH^HH=!!/2!,2,2,!222N2222!'22H22,006!!!!()!22H,H,H,H,H,YCC,=,=,=,=,!!!!H2H2H2H2H2H2H2H2H2H2H,H2H2H2H2H282H2H,H,C,C,C,=,=,=,H2H2HH2H2H2H2(2!2!!!2'H2==)H2H2H2YHC!C)8'8'N#-2!,22222KK2LL2K!!,,2d!!22bd!,d!t!77778c7August 15, 1994fZP0 {Ob#-  xԍ See Third Order on Reconsideration in MM Docket Nos. 92266 and 92262 ("Third Recon. Order"), 9 FCC   4316, 433839 (1994) (authorizing requests by local franchising authorities for assistance in reviewing cost of service showings for BST rates); 47 C.F.R.  76.933(d). f. The Commission granted the Cities' petitions and agreed to review Tele X-Media's BST cost of service filings..Z P0 {Om'- xxԍ See Letters CSR No. 4405R dated April 28, 1995, and CSR No. 4433R dated May 4, 1995, from Jacqueline  xSpindler, Deputy Chief, Financial Analysis and Compliance Division, to Patrick Miles Jr., Esq., Counsel for the Cities.. ",))ZZ"Ԍ X- ` 3ԙx2.` ` On December 15, 1995, TeleMedia filed FCC Form 1230s, seeking to justify its  xCPST and BST rates through the simplified small system cost of service procedures under the  xSixth Report and Order and Eleventh Order on Reconsideration, MM Docket Nos. 92266 and  X- x93215, 10 FCC Rcd 7393 (1995) ("Small System Order"). yO4- xԍ 10 FCC Rcd 7393 (1995). TeleMedia initially filed FCC Form 1220s on August 15, 1994 to justify its rates, however, those filings are superseded by the later filed FCC Form 1230s. In this Order we grant TeleMedia's  X- xjrequest for small   system relief under the Small System Order and, based on our review of Tele xMedia's FCC Form 1230 filings, deny the pending CPST complaints and find the CPST and BST rates to be not unreasonable. x  XL- ` x3.` ` Under the Communications Act and the Commission's rules, the Commission must  X5- xreview a cable operator's rates for its CPST upon the filing of a valid complaint.}5  {O -ԍ Communications Act  623(c), as amended, 47 U.S.C.  543(c)(1993). } The filing of  xa valid complaint triggers an obligation on behalf of the cable operator to file a justification of  xits CPST rates. Additionally, once a franchising authority has been certified by the Commission,  X - xthe cable operator is required to file a justification of its BST rate with the franchising authority.O  yOS-ԍ 47 C.F.R.  76.930 and 76.933.O  xUnder the Commission's rules, an operator may attempt to justify its CPST and BST rates  x>through a benchmark showing, a cost of service showing, or a small system cost of service  xshowing. In any case, the operator has the burden of demonstrating that its rates are not  X-unreasonable.XB yO-ԍ 47 C.F.R.  76.956(b) and 76.934.X  Xf- ` 4x4.` ` Under cost of service regulation, a cable system's rates are reviewed under  x traditional rate of return analysis. Cost of service regulation imposes heavy burdens upon  xxregulators and the regulated entity because of the significant administrative and compliance costs  X!- xassociated with this regulatory model.S \! {O- x ԍ See Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992, Rate  xregulation, MM Docket No. 92266, Report and Order and Further Notice of Proposed Rulemaking, 8 FCC Rcd 5631  {O6-("Rate Order").S The Commission recognized that some local franchising  xauthorities may have resources and personnel sufficient to conduct a review of the ratesetting  xjustification based on the benchmark approach, but not to examine a cost of service showing.  xThe Commission also understood that this concern may have discouraged certification by many  X- xKlocal franchising authorities.3   {Ol#-ԍ Id.3 Therefore, it established procedures under which the Commission,  xif requested by the local franchising authority in a petition for special relief under Section 76.7  X-of the Commission's rules, will issue a ruling that makes cost determinations for the BST.\   {O&-ԍ Third Recon. Order, 9 FCC Rcd at 4338.\" ,-(-(ZZo"Ԍ X- ` Aԙx5.` ` The Commission's original rate regulations took effect on September 1, 1993. The  X- x-Commission subsequently revised its rate regulations effective May 15, 1994.Z ^ {Ob- xԍ 47 C.F.R.  76.922(b). See also Second Order on Reconsideration, Fourth Report and Order and Fifth Notice  {O,- xof Proposed Rulemaking, MM Docket No. 92266, 9 FCC Rcd 4119, 4190, (1994) ("Second Order on  {O-Reconsideration"). Z In a further effort  x?to offer small cable companies administrative relief from rate regulation, the Commission  xamended the definition of small cable companies and small systems and introduced a simplified  X- x>form of small system rate relief in the Small System Order. Cable systems serving 15,000 or  xLfewer subscribers, and owned by a company having 400,000 or fewer subscribers, may elect to  xuse the small cable system rate mechanism in lieu of other Commission rate processes, provided  xZthe Commission has not reached a final resolution on the rate complaints filed against the system.  xLOperators attempting to justify their rates through small system relief must file FCC Form 1230.  x.FCC Form 1230 requires that the Operator Selected Per Subscriber Monthly Programming Rate  X - xPer Channel (FCC Form 1230, Line A11) not exceed the Per Subscriber, Per Channel Monthly  X - x{Programming Costs (FCC Form 1230, Line A6).i   {O-ԍ See the instructions for Line A11, FCC Form 1230, page 3.i If the maximum rate established on FCC Form 1230 does not exceed $1.24 per channel, the rate shall be presumed reasonable. x  X - ` x6.` ` On December 15, 1995, TeleMedia filed FCC Form 1230s seeking to justify its  xCPST and BST rates through the simplified small system cost of service procedures under the  X- x Commission's Small System Order. We find that TeleMedia is a company with fewer than  xy400,000 total subscribers and that the system in question serves fewer than 15,000 subscribers,  xmaking them eligible for small system relief. Further, TeleMedia's filing shows that its actual  XO- x.rate per channel for regulated cable service (FCC Form 1230, Line A11) does not exceed its per  xsubscriber, per channel monthly programming costs (FCC Form 1230, Line A6) and the  x Maximum Permitted Rate (FCC Form 1230, Line A10) does not exceed $1.24. We, therefore,  X -find the rates to be not unreasonable.   yO;- x[ԍ These findings are based solely on the representations of the operator. Should information come to our  xattention that these representations were materially inaccurate, we reserve the right to take appropriate action. This  xOrder is not to be construed as a finding that we have accepted as correct any specific entry, explanation or argument made by any party to this proceeding not specifically addressed herein.  X- ` x7.` ` Accordingly, IT IS ORDERED, pursuant to 47 C.F.R. Section 76.934 of the Commission's rules, that TeleMedia's request for small system relief IS GRANTED.  X- ` x8.` ` IT IS FURTHER ORDERED that the BST rate charged by TeleMedia during the period under review with respect to each of the abovereferenced CUID numbers IS JUSTIFIED.  XR- ` x9.` ` IT IS FURTHER ORDERED, pursuant to 47 C.F.R. Section 76.933(d) of the  xzCommission's Rules, that this decision is binding on each of the captioned local franchising  xauthorities, the Cities of Tawas City and East Tawas, the Townships of Alabaster and Baldwin,"$h ,-(-(ZZz"  xand the Charter Townships of AuSable and Oscoda, Michigan and the cable operator, TeleMedia Company of Saginaw Bay.  X- ` `x10.` ` IT IS FURTHER ORDERED that the CPST rates charged by TeleMedia during the period under review for the abovereferenced CUID numbers ARE JUSTIFIED.  Xv- ` Bx11.` ` IT IS FURTHER ORDERED that the complaints against the CPST rate charged  xby TeleMedia during the period under review with respect to the abovereferenced CUID numbers ARE DENIED.  X - ` x12.` ` These actions are taken pursuant to delegated authority under Section 0.321 of the Commission's rules, 47 C.F.R. 0.321. x` `  hh,FEDERAL COMMUNICATIONS COMMISSION x` `  hh,Elizabeth W. Beaty x` `  hh,Chief, Financial Analysis and Compliance Division  XK-x` `  hh,Cable Services Bureau#Xw PE37-XP#