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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 ) In the Matter of: ) Petition for Relief of ) ) LORILEI COMMUNICATIONS, INC. ) d/b/a THE FIRM ) CSR-4749-L ) Against ) ) MARCUS CABLE ASSOCIATES, L.P. ) Glendale/Burbank, California ) ) For Commercial Leased Access ) ) ) MEMORANDUM OPINION AND ORDER Adopted: May 27, 1997 Released: May 30, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1. Lorilei Communications, Inc., d/b/a The Firm ("The Firm"), has filed this petition for relief alleging that Marcus Cable Associates, L.P., Glendale/Burbank, California ("Marcus") has violated the Commission's rules which require a cable operator to provide information pertaining to its rates for commercial leased access and which prohibit a cable operator from exerting editorial control over leased access programming. Marcus filed an opposition. BACKGROUND 2. In 1984, Congress amended the Communications Act of 1934 by adding, among other things, a commercial leased access requirement, pursuant to which cable operators with 36 or more activated channels must set aside part of their channel capacity for use by video programmers that are not affiliated with them. The Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") revisited the leased access requirement and directed the Commission to establish rules for determining maximum reasonable rates for, and reasonable terms and conditions for the use of, commercial leased access channels. Pursuant to that Congressional directive, the Commission established regulations applicable to leased access channels in its proceedings in Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992; Rate Regulation (the "Rate Order"), and clarified certain issues in Order on Reconsideration of the First Order and Further Notice of Proposed Rulemaking (the "Recon. Order"). The Commission revised, among other things, the formula used to calculate permissible commercial leased access rates in Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992, Leased Commercial Access, Second Report and Order and Second Order on Reconsideration of the First Report and Order (the "Second Report"). In the Rate Order and the regulations promulgated thereunder, which were in effect at the time of this petition, the Commission adopted the "highest implicit net fee" as the formula for determining the maximum reasonable rates for commercial leased access and required cable operators to provide their commercial leased access rates upon request. SUMMARY OF PLEADINGS 3. In its petition, The Firm states that, on April 24, 1996, it requested information from Marcus regarding its commercial leased access rates, including full-time and part-time rates. The Firm states that, by letter dated April 26, 1996, Marcus explained that it was in the process of developing its commercial leased access rates and that it would supply the requested information when the rates were finalized. The Firm next states that it gave Marcus seven business days within which to provide the requested information or, if Marcus failed to do so, The Firm would file a complaint with the Commission. Rather than providing its commercial leased access rates, Marcus sent a questionnaire to be completed by The Firm stating that the questionnaire would help Marcus determine the proper commercial leased access rate applicable to The Firm. The Firm informed Marcus that Commission rules did not require it to complete a questionnaire as a prerequisite to obtaining a cable operator's list of commercial leased access rates and, subsequently, on May 24, 1996, filed this complaint. The Firm alleges that Marcus failed to provide its commercial leased access rates within seven business days as required by Section 76.970(e), as amended by the Recon. Order. The Firm further alleges that Marcus violated Section 76.971(e) of the Commission's rules by attempting to exercise editorial control over The Firm's leased access programming. The Firm requests that the Commission order Marcus to provide its commercial leased access rates immediately and annually for the next five years. The Firm also asks the Commission to order Marcus to provide a copy of its leased access agreement and to penalize Marcus by issuing a notice of apparent liability in the amount of $150,000 payable to The Firm as compensation for expenses and lost revenues. The Firm calculated the amount of damages by estimating that the Commission will need 15 months to resolve its complaint and assessing $10,000 for each month. 4. In its opposition, Marcus states that, in response to The Firm's first request for information, it explained that it was in the process of developing commercial leased access rates in conformity with the Commission's Recon. Order which had been recently released. Marcus further states that, although it was unable to provide the information at the time requested, it has now complied with The Firm's request. Marcus asserts that, on July 19, 1996, it provided The Firm with information concerning its leased access rates, channel capacity, technical fees, and a copy of the cable system's standard leased access contract. Marcus further asserts that it did not violate Section 76.970(e) of the Commission's rules by not providing information in response to either the Firm's initial or second request within seven business days. Marcus argues that the Commission's amendment of Section 76.970, which imposed the seven day response requirement, did not become effective until July 10, 1996, well after the dates of The Firm's requests. As a result, Marcus argues that The Firm's requests were governed by the more flexible standard contained in Section 76.970(e) prior to amendment which required cable operators to provide information upon request. Marcus argues that the Commission has interpreted the standard "upon request" to mean "as soon as practicable." 5. Marcus next argues that it did not attempt to exercise editorial control over The Firm's leased access programming in violation of Section 76.971(e) of the Commission's rules by requesting Marcus to complete a questionnaire. Marcus asserts that the questionnaire that The Firm was asked to complete is sent to all potential leased access programmers and assists the operator in obtaining information essential to the leased access carriage relationship. Marcus argues that The Firm has not alleged any facts, nor does the questionnaire contain any questions, which support The Firm's contention that Marcus attempted to exert editorial control. Finally, Marcus asserts that The Firm mistakenly requests the Commission to order Marcus to pay a penalty in the amount of $150,000 to The Firm. Marcus asserts that forfeitures are assessed by the Commission and paid to the Commission, not to petitioners. In any event, Marcus argues that a forfeiture would be inappropriate in this case because, at the time of The Firm's request, the Commission had recently amended its rules governing commercial leased access and the application of the new rules was unclear. Marcus argues that, under such circumstances, and because Marcus has not engaged in any willful or repeated violations of the commercial leased rules, sanctions are not appropriate. DISCUSSION 6. We will deny The Firm's petition for relief alleging violations of the Commission's commercial leased access regulations. As noted above, The Firm's petition is governed by the commercial leased access regulations established pursuant to the Rate Order. With regard to the provision of commercial leased access rates, we find that Marcus has complied with The Firm's request and it has provided information pertaining to leased access rates, channel capacity, technical fees, and a copy of its standard leased access agreement. When the petition was filed, Section 76.970(e) required cable operators to provide a schedule of leased access rates to prospective leased access programmers "[u]pon request." We find that Marcus's initial response, which was received by The Firm within two days of its request, was reasonable in light of the fact that, at the time, the Commission had recently issued its Recon. Order which proposed to amend the formula by which commercial leased access rates are calculated. We note that any leased access rates charged by Marcus for commercial leased access commencing on and after April 11, 1997 must be calculated using the "average implicit fee" formula adopted by the Commission in its Second Report. Moreover, we further note that the Second Report requires cable operators to provide prospective leased access programmers with information pertaining to leased access rates, among other things, within 15 calendar days of the date on which a request for such information is received. 7. With regard to The Firm's argument that the questionnaire was an attempt by Marcus to exercise editorial control, the questionnaire contains questions relating to the nature of the leased access service, technical criteria, and the proposed business arrangement. We find that our rules at the time the complaint was filed did not prohibit asking for such information. The Commission, however, recently examined this issue and concluded that to prevent cable operators from discouraging leased access use it would generally prohibit cable operators from asking for any information prior to responding to requests for leased access information. 8. The Firm requests relief in the form of compensation for time expended, costs incurred, and lost revenues in bringing this action before the Commission. Specifically, The Firm requests $150,000 in compensatory damages. Nothing in the Communications Act of 1934, as amended, nor the 1992 Cable Act, provides for recovery of costs associated with the filing of a petition for relief with the Commission relating to the statutory leased access provisions or the Commission's leased access regulations. Accordingly, The Firm's request for compensation for such costs and revenues will be denied. ORDERING CLAUSES 9. Accordingly, IT IS ORDERED that the petition filed by Lorilei Communications, Inc., d/b/a The Firm (CSR-4749-L) against Marcus Cable Associates, L.P. pursuant to Section 76.970(e) of the Commission's rules then in effect, 47 C.F.R. 76.970(e) IS DISMISSED. 10. IT IS FURTHER ORDERED that the petition filed by The Firm pursuant to Section 96.971(e) of the Commission's rules then in effect, 47 C.F.R. 76.971(e) IS DENIED. 11. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R. 0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau