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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 ) ) ADVANTAGE VIDEO & MARKETING, INC., ) Petitioner, ) ) vs. ) CSR 4520-L ) ADELPHIA CABLE COMMUNICATIONS ) Respondent, ) ) For Leased Access Channels ) MEMORANDUM OPINION AND ORDER Adopted: May 27, 1997 Released: May 30, 1997 By the Chief, Cable Services Bureau: I. The Pleadings 1. Advantage Video & Marketing, Inc. (herein "Advantage") filed with the Federal Communications Commission a petition for relief alleging that Adelphia Cable Communications (herein "Adelphia") has failed to make commercial channel capacity available in accordance with 47 C.F.R.  76.970 and 76.971. Advantage asserts further that Adelphia refused to provide part time leased access services pursuant to an hourly rate developed by a prorating of Adelphia's maximum monthly leased access rate to an hourly rate. 2. Adelphia has filed a response to the petition asserting that it is not required by regulations to develop part time rates from a direct proration of its monthly rate. It contends that the leased access regulations have been interpreted to allow different part time rates for different day parts, provided that the total of the part time rates for one month does not exceed the maximum monthly rate determined in accordance with Section 76.970 of the rules. Adelphia further asserts that it negotiated part time rates with Advantage, and that Advantage leased five half hour slots per week at a rate of $87.50 per half hour and expressed interest in leasing time for other programming. Adelphia submitted for the record a schedules of part time leased access rates for leased access services for its cable systems in Broomall and Radnor, Pennsylvania. 3. Advantage subsequently submitted a new claim for "complete reimbursement of over payments, made during the time that Adelphia has not complied" with Section 76.970. Advantage stated that it (a) began part time leasing on Adelphia's Delaware County system on January 23, 1995 for presentation of programming called The Mainline Real Estate Show and (b) leased a total of 49 hours at a rate of $175 per hour pursuant to a rate card made available by Adelphia and (c) had made payments to Adelphia totalling $8,575 as of May 28, 1995. 4. Advantage further states that it had not been provided with the rate schedules submitted for the record, but if it had been, it would have scheduled enough additional hours of service to have qualified for an $18.59 average hourly rate under the new rate schedules. Advantage claims over payments of $156.41 per hour, which is the difference between the $175 hourly rate it paid for the 49 hours of service taken and the $18.59 average hourly rate applicable when a larger volume of service is taken. Advantage asserts that it effectively paid for more than 75 hours of service but received a total of only 49 hours of service, and overpaid in the amount of $7653.79 as of May 28, 1995. Advantage requests reimbursement for the alleged overpayment and a grant of immediate temporary relief because of the alleged excessiveness of the overcharges. 5. Advantage submitted a second letter to the Commission asserting Adelphia's general manager informed Advantage that, for purposes of determining appropriate rates, The Mainline Real Estate Show belongs in the home shopping/infomercials category and not the "all other" rate category as previously indicated. Advantage asserts that The Mainline Real Estate Show properly belongs in Adelphia's "all other" programming category. Adelphia defends placing The Mainline Real Estate Show in the home shopping/infomercial rate category. II. Background 6. 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, MM Docket 92-266, (the Rate Order), 8 FCC Rcd 5631, 5956-5961 (1993). The Commission revisited these regulations 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, CS Docket 96-90, 62 Fed. Reg. 11364, March 12, 1997 ("Second Report"). 7. In the Rate Order, the Commission initially developed a maximum implicit fee calculation procedure for cable operators to use to determine the maximum reasonable rate that a cable operator may charge non-affiliated programmers for leased access. The Commission also separated leased access programming into three distinct rate categories: "(1) Programming for which a per-event or per channel charge is made, (2) Programming more than fifty percent of the capacity of which is used to sell products directly to customers; and (3) All other programming." The Commission required cable operators to calculate maximum monthly access rates for each of these three categories of programmers. IV. Discussion 8. The primary issue presented is whether Adelphia has overcharged for the leased access services provided to Advantage as alleged. In order to resolve this issue, we first determine whether Adelphia applied to The Mainline Real Estate Show the proper rate category pursuant to our initial leased access regulations then in effect . A. Application of the Proper Category of Leased Access Charges 9. The rate schedules submitted by Adelphia identify four categories of rates applicable to its full time and part time leased access services. Those rate categories, with one exception not pertinent here, closely track the rate categories initially adopted by the Commission. Adelphia argues that rate Category 2, "Programming of which more than 50% of the capacity is used to sell products directly to consumers," properly applies to The Mainline Real Estate Show presented by Advantage. Advantage, on the other hand, argues that Category 3, "All other programming," should be applied to its programming. 10. Advantage alleges that The Main Line Real Estate Show is sponsored by real estate agents representing licensed brokers who have exclusive rights to sell properties, that no homeowners appear on the program to sell their own properties, that Advantage does not own any of the properties listed for sale, that its phones are not involved in providing property information beyond that shown in the programs, and that Advantage does not receive a real estate commission nor does it participate in the real estate sales in any way. Advantage states further that the ads help real estate agents achieve personal recognition in the community, and that it charges its customer less than $40 for an ad, while prices for real estate shown on the program ranges from $90,000 to $2,300,000. Advantage asserts that its programming is not involved in direct sales. It also asserts that its programming is not an infomercial and does not provide phone numbers for credit card sales as a part of the program. According to Advantage, the programming involves the showcasing of agents and of the homes they represent for entertainment and information of value for the community in general. 11. Adelphia concedes that "Advantage Video is not itself involved in direct selling of the real estate" being advertised. Adelphia argues that, although Advantage's programming does not involve direct sales to customers, the programming should nonetheless be priced under rate Category 2 because it constitutes "infomercials." It asserts that infomercials provide program-length information about a commercial product, often including a phone number and/or address where subscribers can receive further information and/or purchase the product, and that the programmer may or may not directly sell the product to subscribers. Adelphia asserts that the programming offered by Advantage should be considered infomercials, because the programming involves the promotion of the sale of homes including the address and phone number of the realtor from whom one may receive further information and make a purchase. It asserts further that the entire content of the programming is commercial in nature and is made up of a continuous series of real estate offerings. 12. Section 612(c)(2) of the Communications Act prohibits a cable operator from considering the content of leased access programming except "to the minimum extent necessary to establish a reasonable price for the commercial use of designated channel capacity by an unaffiliated person." Section 76.970(f) of our rules in effect when these events arose required cable operators to separate leased access programming into three separate categories. Under Section 612(c)(2) of the Communications Act, a cable operator may inquire into programming content only as far as necessary to determine which of our rate categories should be applied. 13. Based on the record before us, we conclude that rate Category 2, "Programming of which more that 50% of the capacity is used to sell products directly to consumers," should not have been applied to The Mainline Real Estate Show. First, as noted above, Adelphia concedes that "Advantage Video is not involved in direct selling of the real estate" being advertised on The Mainline Real Estate Show. Once it was determined that such programming did not involve direct selling, Adelphia had all the information necessary to determine that rate Category 2 did not apply to that programming. Section 612(c)(2) of the Communications Act precluded further inquiry by Adelphia about programming content, such as whether that programming consisted of advertising, or the kind or amount of advertising presented. B. The Issue of Overcharges 14. Having determined that Category 3 rates for "All other programming" should be applied to The Mainline Real Estate Show, we now consider whether Adelphia overcharged Advantage for that programming as alleged. Advantage began taking service on Adelphia's Delaware County system on January 23, 1995, paying $175 per hour for programming carried between 8:30 p.m. and 9:00 p.m. on a Monday, Wednesday and Friday schedule. By the time it filed the petition on May 31, 1995, Advantage had paid $8,575.00 for 49 hours of service. 15. Rate schedules for the "Delaware County" system on which The Mainline Real Estate Show is being carried were not provided for the record. Instead, Adelphia supplied for the record rate schedules which on their face apply to systems serving communities identified as Radnor and Broomall, Pennsylvania, respectively. Moreover, the record does not show that the Radnor and Broomall systems are the same as the Delaware County system on which The Mainline Real Estate Show is being carried. Moreover, the Radnor and Broomall schedules list hourly rates of $73.59 for Radnor and $178.22 for Broomall, respectively, for from one to thirty hours of service per month in the 6:00 p.m. to 12:00 midnight time slot. None of these listed rates is consistent with the $175 hourly rate which Advantage was charged for service provided on the Delaware County system. 16. Because of these discrepancies, we cannot determine from this record which Category 3 rates should apply to the leased access services provided by the Delaware County system to Advantage. Also, the record does not identify the quantity of services Adelphia provided to Advantage between the date service began and the release of this order. For that reason, we will require Adelphia to provide Advantage with an accounting of all leased access services provided to Advantage. This accounting shall show in detail (a) all services provided to Advantage between April 1, 1995 and the release date of this order, (b) the charges actually billed and collected for all periods of such services, (c) the schedules of Category 3 charges in effect for all such periods of services and the systems to which such schedules apply, (d) the differences, if any, between the charges actually billed and collected and the Category 3 charges properly applied to such services, and (e) the sum of the differences in the charges collected and the charges properly applied. In the event that the sum of the charges actually collected exceeds the sum of the charges properly applied, the accounting shall also show that a reimbursement has been made to Advantage of the total amount that exceeds the correctly billed amount. 17. Finally, Advantage seeks a reimbursment on the grounds that it was not provided with Adelphia's volume sensitive rates that became effective on December 31, 1994, and that it would have requested more programming time had it been aware of the lower rates available for increased usage. Advantage asserts, in effect, that increased usage would have qualified it for discounted rates applicable to higher volume usage, which would have resulted in a lower "average hourly rate" than was actually paid. Advantage requests an order for reimbursement based upon an assumed "average hourly rate" applied to a larger volume of service than was actually taken. We decline to require Adelphia to make reimbursement based on some speculative quantity of services which was not actually provided. V. Ordering Clauses 18. For the foregoing reasons, IT IS ORDERED that the petition of Advantage Video & Marketing, Inc. (herein "Advantage") IS GRANTED in part as described in paragraphs 13 through 17 above, and in all other respects IS DENIED. 19. IT IS FURTHER ORDERED that Adelphia Cable Communications (herein "Adelphia") shall, within thirty days of the release date of this order, (1) provide Advantage with an accounting of all services provided by the Deleware County system to Advantage, which shall show in detail (a) all services provided to Advantage up to the release date of this order, (b) the charges actually billed and collected for all periods of services from April 1, 1995 to the release date of theis order, (c) the schedules of Category 3 charges properly applied for all such periods of services, (d) the differences, if any, between the charges actually billed and collected and the Category 3 charges that that properly applied for such services, and (e) the sum of the differences in charges collected and the charges properly applied, and (2) to the extent that the sum of the charges actually collected exceeds the sum of the charges properly applied, the accounting shall also show a reimbursement to Advantage of the total excessive amount. 20. 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