WPC" 2MB%RK<3|jTimes New RomanTimes New Roman BoldP\  P6Q9XP#"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+99999999S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d"" X} yO-ԍCoaxial Response at 4.> Coaxial, however, states that it "does not  xbelieve it must provide leased access programmers free advertising space in its cable guide or on  X|-local avails as technical support for use of its channel."1 |} {O-ԍId.1  XN- ` x7.` ` Regarding rates for leased access, Coaxial argues that under Commission rules,  X7- xcable operators are able to charge market rates for leased access on their channels.j 7z} {Ob#-ԍ Coaxial Response at 5 citing Rate Order at 59495952.j Coaxial  xstates that Matthews erroneously calculated and significantly understated the permitted pro rata  xrate that Coaxial would be allowed to charge for Matthews' programming. Coaxial notes that  x=under Commission rules, "a cable operator's parttime rate may take into account the particular  xtime of day programming is shown so that the pro rata hourly rate may be exceeded for prime"  ,-(-(ZZ;"  X- xtime so long as the revenue received for all parttime usage does not exceed the fulltime rate."&} {Oy- xԍCoaxial Response at 5. See also TV24, Inc. v. Comcast Cablevision of West Florida, Inc., 10 FCC Rcd 3512  yOC- xY(1994) (a cable operator may develop a parttime rate schedule which recognizes the varying values of different day  xwparts in which parttime programmers may program as long as the rates do not exceed the maximum reasonable rate  {O- xas calculated on a monthly basis from the highest implicit fee); TVSarasota, Inc. v. Paragon Communications, 10  xwFCC Rcd 991 (1994) (cable operators may be allowed to charge different timeofday rates so long as the differences  {Oe-have a reasonable basis).    &  xCoaxial asserts that Matthews would be charged $150 per half hour under Coaxial's parttime rate  X- xjcard calculated on a purely pro rata basis scaled for prime time use.F} yO - xԍCoaxial also states that Matthews' Saturday and Sunday timeslots would be $40 per half hour, according to its parttime rate schedule. Coaxial further notes that  xits monthly revenue from parttime leasing will not exceed the maximum monthly rate for fulltime use.  Xv- ` x8.` ` Coaxial also states that it has not improperly demanded editorial control of  xMatthews' programming. Coaxial, however, admits that it made some suggestions to Matthews  xabout its programming based on its own unsuccessful experience with used car advertising.  xCoaxial states that it only suggested to Matthews that it might consider soliciting used car dealers  xxin addition to individuals because commercial dealers would provide a more consistent and higher  xvolume of purchasers for advertising space. According to Coaxial, its suggestions were made in good faith with the aim of assisting Matthews.  X - ` x9.` ` Coaxial states that it will provide technical support for Matthews. According to  xCoaxial, receipt of the special equipment that it needed in order to assist Matthews was delayed  xdue to supplier delays. Once the equipment was received, Coaxial states that the installation of  x=both the equipment and the software proved to be timeconsuming. Coaxial reports that it has  xbeen ready and willing to assist Matthews in operating the equipment. However, Coaxial notes  xthat it has not yet determined a charge for this technical support because it involves capital cost  xand operation of new equipment. Coaxial adds that it will provide complete documentation in order to support its charges.  X- ` x10.` ` Finally, Coaxial argues that its request that Matthews commit to an initial  xprogramming run of 13 weeks is reasonable and comports with Commission rules. Coaxial states  x[that Matthews' programming will displace popular prime time local origination programming on  xchannel 7. According to Coaxial, the minimum 13 week run is necessary in order to achieve at  xleast a minimal level of stability in its programming schedule. Coaxial also cites the economic  xrisk involved and notes "[t]here is no real financial security if a parttime channel lessee is  xallowed to substitute interested [sic] programming for popular adsupported local programs simply  xby paying the perhour rate for a week or two and then walking away leaving the cable operator  X7- xto pick up the pieces.">7} yO&-ԍCoaxial Response at 9.> Coaxial notes that the Commission has recognized that cable operators"7. ,-(-(ZZ{"  X- xjhave a right to impose reasonable business conditions on leased access users.^} {Oy-ԍCoaxial Response at 8 citing Rate Order at 5937.^ According to  xCoaxial, minimum commitment terms are a standard business practice in many commercial transactions.  X- ANALYSIS AND DECISION  Xv- ` ~ x11.` ` Based on the information in the record before us in this proceeding, Matthews'  xpetition will be granted in part and denied in part. We disagree that Coaxial has not made leased  xaccess channel capacity available to Matthews on Coaxial's system. Coaxial states that it has  xbeen willing to provide channel capacity in the past and remains willing to do so in the future.  xkIt appears from the information before us that Coaxial has not denied leased access channel  x-capacity to Matthews; instead the situation between the parties appears to be one of an ongoing  xxnegotiation process. While the negotiation process appears to be a lengthy one, we trust that the  x>parties can come to an agreement now that certain difficulties have been overcome such as securing and installing the new equipment.  X- ` ox12.` ` Regarding leased access rates, we agree with Coaxial that a cable operator may  x[develop a parttime rate schedule which recognizes the varying values of different day parts in  Xb- x which parttime programmers may wish to air their programming. In its Second Report and  XM- xOrder, the Commission affirmed its decision "to require that cable operators prorate their  xmaximum fulltime rate when determining their maximum permitted parttime rate, and to allow  X!- xoperators to adjust parttime rates according to timeofday pricing." !Z} {O,- xԍSecond Report and Order at  70. The Commission recently clarified its leased access rate rule for parttime  xprogramming: "The maximum commercial leased access rate that a cable operator may charge for parttime channel  xplacement shall be determined by either prorating the maximum fulltime rate uniformly, or by developing a schedule  xof and applying different rates for different times of the day, provided that the total of the rates for a 24hour period  {ON- xdoes not exceed the maximum daily leased access rate." Second Report and Order, Appendix D, Revised Rules,  {O-Section 76.970(g).    Matthews asserts that  x\Coaxial has not provided it with a schedule of leased access rates and Matthews, therefore,  x0calculated its own rates based on its understanding of the rules. Coaxial disagrees with  xMatthews' calculations and asserts that Matthews understated the permitted pro rata rate that it  xwould be allowed to charge for Matthews' programming. We note that Coaxial has now worked  xout its implicit fee calculations and submitted those calculations with its response in this  X- xzproceeding.D} yO "-ԍCoaxial Response, Exhibit E.D Coaxial calculated its rates in accordance with the highest implicit fee formula  x[which was in effect at the time this petition was filed. The Commission has recently revised its  x>rules for calculating the leased access rate for leased access programming to implement the  XR- x"average implicit fee" formula.yRh } {Ok&-ԍSee Second Report and Order, Appendix, Revised Rules, Section 76.970(c)(d).y Coaxial has also devised its parttime rate card as calculated  xon a pro rata basis scaled for prime time use according to the rules in effect at the time of the"; ,-(-(ZZ"  X-petition's filing.D} yOy-ԍCoaxial Response, Exhibit F.D  X- ` x13.` ` Based on the information before us, we cannot find a violation with regard to the  xZleased access rate calculations submitted by Coaxial in its response to Matthews' petition. At the  xtime the petition was filed, the parties had not come to an agreement on the rates to be charged.  xIn the interim, new calculation rules came into effect and Coaxial is required to provide new rates  xor rate cards based upon this new method of calculation. Consequently, we do not believe that  xjit would serve any purpose to rule on the now outdated highest implicit fee calculations. With  xregard to the amount of time that Coaxial took to respond to Matthews' request for a schedule  xof leased access rates, we note that under the rules in effect at the time, cable operators were to  X - xiprovide a schedule of rates "[u]pon request" to prospective leased access programmers.R X} {O# -ԍSee 47 C.F.R. 76.970(e) (1995). R In this  xcase, Matthews' requested a rate schedule from Coaxial in July and Coaxial did not respond until  xyNovember of the same year when it submitted its response to the instant petition. Because the  xleased access rules in effect at that time were somewhat unfamiliar to most cable operators, as  x]well as to programmers, we do not find that Coaxial's response time in this matter was so  xjunreasonable as to require us to impose formal sanctions. We note that the new rules in effect  xfor leased access provide that the cable operator must provide such information within 15  Xy- xycalendar days of the date on which a request for leased access information is made.xy} {O-ԍSee Second Report and Order, Appendix D, Revised Rules, Section 76.970(h).x Because  xwe have no information before us to indicate that the parties at issue have resolved their dispute  x<with regard to leased access rates, we hold that any future inquiries or negotiations regarding full  xand parttime leased access rates should be resolved under our new rules and we caution Coaxial to adhere to the mandated response time under these rules.  X- ` x14.` ` In addition, we disagree with Matthews that Coaxial exercised improper editorial  xcontrol over its programming. Coaxial did not refuse to air Matthews' programming if Matthews'  xdid not alter its programming format. It appears from the record that Coaxial was not planning  xjto compete with Matthews' programming, but instead was advising Matthews on the choice of its format based on Coaxial's past unsuccessful experience with used car advertising.  Xe- ` #x15.` ` With regard to technical support, Coaxial has stated that the special equipment it  xordered to accommodate Matthews has arrived and is operational. We note that Coaxial intends  xto charge a fee for the support it provides to Matthews because of the capital cost and operation  xjof the recently acquired new equipment. The Commission's rules state that cable operators are  xrequired to provide unaffiliated leased access users the minimal level of technical support  xznecessary for users to present their programming, provided that the programmers reimburse  X- x<operators for the reasonable cost of any technical support that operators actually provide.L|} {O'-ԍSee 47 C.F.R. 76.971(c). L The",-(-(ZZ"  xCommission recently has clarified that this provision entitles cable operators to charge an  xadditional fee only for the reasonable cost of providing technical support to a leased access  X- x[programmer that is not also provided to nonleased access programmers on the system.} {OK-ԍSecond Report and Order at  114 and Appendix D, Revised Rules, Section 76.971(c).  ċ We  x\have no information before us to indicate whether or not the special equipment that Coaxial  xpurchased for Matthews' would also be provided to nonleased access programmers. As such,  xKwe note that the Commission's clarification on the costs of technical support that can be charged  xLmust be taken into consideration by Coaxial if Matthews' decides to pursue leased access time on Coaxial's system.  X1- ` ox16.` ` Finally, we disagree with Coaxial that it is reasonable to request that Matthews  xcommit to an initial programming run of 13 weeks in order to secure a parttime lease with the  xcable system. We do not accept Coaxial's rationale that it is seeking a limited guarantee in the  xform of this programming commitment because Matthews' programming would be displacing  x>advertisersupported popular prime time local origination programming on channel 7. With  X - xregard to specific channel placement, the Commission has stated in its Second Report and Order  X - xthat the cable operator should have the discretion to select the channel location of a leased access  X- xchannel, so long as the choice is reasonable.QZ} {O-ԍSecond Report and Order at  89.Q Specifically, the Commission has given  xconsiderable flexibility to cable operators regarding the placement of parttime leased access  Xd- xprogramming.=d} {O-ԍId. at  69.= For instance, cable operators that have at least one channel designated for part xtime leased access use that is not substantially filled by parttime programmers will not be  xrequired to open another parttime channel, despite the fact that comparable time slots are not  X- xavailable on the partially programmed parttime channel.1~} {ON-ԍId.1 Thus, while Coaxial may place  xMatthews' programming on any reasonable channel choice, it does not have to displace popular  xLprogramming on channel 7 unless it desires to do so. We also note that while the Commission  x0has not specifically addressed the issue of a maximum contract length for leased access  X-programming, the Commission has declined to establish a minimum contract length.>} {O-ԍId. at  110.>  X-  ORDERING CLAUSES  Xg- ` } x17.` ` Accordingly, IT IS ORDERED , pursuant to 612 of the Communications Act of  x/1934, as amended (47 U.S.C. 532), that the petition (CSR4603L) filed by Matthews Media  X9- x[Productions against Coaxial Communications regarding its cable system in Columbus, Ohio IS  X"-GRANTED IN PART AND DENIED IN PART to the extent indicated herein. " ,-(-(ZZ"Ԍ X- ` x18.` ` This action is taken pursuant to authority delegated by 0.321 of the Commission's rules, 47 C.F.R. 0.321.  "M  x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau  X1-