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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 ) ) DENVER AREA EDUCATIONAL ) TELECOMMUNICATIONS CONSORTIUM, INC., ) Petitioner, ) ) vs. ) CSR 4595-L ) TELECOMUNICATIONS, INC., TCI OF COLORADO, INC., ) TCI CABLEVISION OF CENTRAL CONNECTICUT, TCI ) CABLEVISION OF COLORADO, INC., TCI CABLEVISION OF ) FLORIDA, INC., TCI CABLEVISION OF LOS ANGELES) COUNTY, TCI CABLEVISION OF OAKLAND COUNTY, INC., ) TCI CABLEVISION OF SANTA CRUZ COUNTY, ) TRIBUNE-UNITED CABLE OF OAKLAND COUNTY, UNITED ) ARTISTS CABLE ADVERTISING, UNITED ARTISTS CABLE ) CORPORATION OF EAST SAN FERNANDO VALLEY, UNITED ) CABLE TELEVISION OF BALDWIN PARK, INC., UNITED ) CABLE TELEVISION OF BALTIMORE, L.P., UNITED CABLE ) TELEVISION OF JEFFERSON COUNTY, INC.,UNITED CABLE ) TELEVISION OF LOS ANGELES INC., UNITED CABLE ) TELEVISION OF SANTA CRUZ, INC., UNITED CABLE ) TELEVISION CORPORATION OF EASTERN CONNECTICUT, ) UNITED CABLE TELEVISION OF COLORADO, INC., UNITED ) CABLE TELEVISION OF EAST SAN FERNANDO,LTD., UCTC ) OF LOS ANGELES COUNTY, INC., HERITAGE CABLEVISION ) OF TENNESSEE, INC., MOUNTAIN STATES VIDEO, ) MOUNTAIN STATES VIDEO, INC., MOUNTAIN STATES VIDEO ) COMMUNICATIONS CO. INC., COLORADO CABLEVISION) COMPANY AND AMERICAN TELEVENTURE, INC., ) Respondents, ) ) For Leased Access Channels ) MEMORANDUM OPINION AND ORDER Adopted: June 30, 1997 Released: July 3, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1. The Denver Area Educational Telecommunications Consortium, Inc. (herein "DAETC") filed against Tele-Communications, Inc. and the other companies listed in the caption (herein collectively called "the TCI Companies") an emergency petition for waiver of 47 C.F.R.  76.975(h), which would permit carriage of its leased access programming on seven of the TCI cable systems listed in the caption without full payment of newly imposed rates, pending resolution of a concurrently filed underlying petition for relief. In The Denver Area Educational Telecommunications Consortium, Inc. v. Telecommunications, Inc., et al., 10 FCC Rcd 13746 (CSB 1995) ("Denver Consortium"), we found that DAETC was not likely to succeed on the merits of its underlying petition for relief filed concurrently with the emergency petition and denied the petition. DAETC subsequently filed a petition for reconsideration of Denver Consortium, to which the TCI Companies have filed a reply. 2. Concurrently with the filing of the emergency petition, DAETC also filed against the TCI Companies a petition for special relief, pursuant to 47 C.F.R.  76.7 and 76.795, for alleged violations of 47 C.F.R.  76.970. DAETC alleged that the TCI Companies violated Section 76.970 by increasing their rates for leased access channels in excess of the level permitted by Section 76.970. We will address DAETC's petition for reconsideration of our denial in Denver Consortium of its emergency petition for waiver and then the underlying petition for relief. However, a brief discussion of the background of our leased access regulations is provided first. BACKGROUND 3. 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, FCC 97-27, released February 4, 1997 ("Second Report"). 4. In the Rate Order, the Commission developed a highest implicit net fee formula for determining the maximum monthly rate that the operator may charge a programmer for leased access. Subsequently, in the Second Report, released after our decision in Denver Consortium, the Commission identified problems with the highest implicit fee formula based on comments of interested parties and replaced that formula with an average implicit fee formula. THE PETITION FOR RECONSIDERATION 5. DAETC requests reconsideration of our decision in Denver Consortium, which denied its emergency petition for waiver, on the grounds that this case is indistinguishable from two prior cases in which waivers of 47 C.F.R.  76.975(h) were issued. DAETC also argued that in denying its petition we unfairly relied on information to which it was denied access and had no opportunity to rebut. We will dismiss DAETC's petition for reconsideration of our decision in Denver Consortium. 6. DAETC's petition for reconsideration fails to present any information which was not already considered in our decision to deny its emergency waiver request. More importantly, in Denver Consortium we declined to grant a waiver of Section 76.975(h) of the rules, which if granted would have permitted DAETC to obtain leased access channel without full payment of rates that no longer have any application and which must now be recalculated under the new average implicit fee formula adopted in the Second Report. In this regard, DAETC has acknowledged that a different formula for calculating maximum leased access rates is now applicable and requests that the TCI Companies be required to submit new rates under the current rules. The TCI Companies are obligated by the recent revisions of Section 76.970 to provide DAETC a schedule of leased access rates that do not exceed rates calculated under the new average implicit fee formula set forth in Section 76.970 of the rules, within fifteen days of any request from DAETC for such rates. For these reasons, we see no need to revisit the matters decided in Denver Consortium. 7. In Denver Consortium, we based our finding that the TCI Companies had made a prima facie showing that their rates were developed in compliance with our rules then in effect on calculations submitted by the TCI Companies. TCI submitted its calculations with a request that they be withheld from public inspection pursuant 47 C.F.R.  0.459. The TCI Companies requested such confidential treatment on the grounds that those calculations contain confidential and proprietary material, the disclosure of which would cause substantial competitive harm to TCI. Since DAETC never made any request pursuant to 47 C.F.R.  0.461 to inspect those documents, we reject the notion that our reliance on those documents was unfair to DAETC. In any event, those calculations no longer have any application because of the recent changes to the formula for calculating leased access rates. THE PETITION FOR RELIEF 8. At the time of the filing of the underlying petition for relief which we now address, DAETC, a nonprofit corporation, provided public affairs programming on leased access channels on the basic tier of seven TCI cable systems in six locations: Baltimore; Boulder and parts of the Denver suburbs; portions of suburban Detroit; parts of Los Angeles; Santa Cruz County, California, and some of the suburbs of Hartford, Connecticut. Because DAETC's carriage contracts with the TCI Companies were about to expire, the TCI Companies proposed new leased access rates. DAETC alleges that under new rates proposed by the TCI Companies it would be required to commence paying the TCI Companies over $240,000 each month in order to continue carriage of its programming. DAETC asserted that it could not afford to pay anything close to the proposed rates and that, absent special relief, it would suffer irreparable injury by being forced to go off the air upon expiration of the contracts. 9. DAETC requested an order from the Commission requiring the TCI Companies to produce for Commission review all documentation purporting to support the proposed leased access rates in order to verify whether those rates were calculated correctly under Section 76.970 of the Commission's rules. DAETC also requested a ruling (a) requiring that it be charged a negative amount (i.e., receive payments from the TCI Companies), equal to the lowest per subscriber fee that the TCI Companies pay to a non- affiliated programmer on the same tier as its programming, and (b) finding that the contracts then in effect, which were about to expire between DAETC and the TCI Companies, established a market rate in DAETC's services areas. DAETC requested an alternative ruling, in the event it is determined that the TCI Companies' rates are consistent with Section 76.970, suspending application of Section 76.970, enjoining the TCI Companies from charging rates calculated in accordance with Section 76.970, revising the fee formula to provide that leased access operators are entitled to payments equal to the lowest per subscriber fee paid by the operator to a non-affiliated programmer on the corresponding tier, barring cable operators from charging rates in excess of prevailing market rates, and finding that DAETC's existing agreements establish a market rate in its service area. 10. The TCI Companies filed an opposition to the petition for special relief. The TCI Companies provided information for the record regarding their proposed rates and the methodology of their calculation, and asserted that their rates complied with the highest implicit fee formula then required by Section 76.970 of the rules. The TCI Companies also described DAETC's programming as consisting of two to four hours of taped programming run continuously, twenty-four hours a day, seven days a week, except that on weekends the programming may include several hours of infomercials. The TCI Companies stated that DAETC's programming was being carried in the seven cable systems pursuant to two litigation settlement arrangement contracts that were due to expire, thus creating the need for leased access rates developed pursuant to Section 76.970 of the rules. DISCUSSION AND ANALYSIS 11. We will also dismiss DAETC's petition for relief. In Denver Consortium, we found that the information submitted by the TCI Companies made a prima facie showing that the TCI Companies developed their leased access rates in compliance with the requirements of Section 76.970. In particular, we found that the TCI Companies followed the highest implicit formula methodology initially established in the Rate Order and applicable at the time those rates were developed and the petition was filed. DAETC has submitted nothing in its petition for reconsideration that suggests that our preliminary view of the TCI Companies' rates was in error. Futhermore, in view of the fact that the Commission in the Second Report adopted an average implicit fee formula for calculating leased access rates, any further review of the TCI Companies' rates developed under the discontinued highest implicit fee formula would serve no useful purpose. Lastly, we note that the Second Order 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. Now that the Second Report has been released, we expect cable operators to follow the outlined procedures therein for responding to requests for leased access rates. ORDERING CLAUSES 12. For the foregoing reasons, IT IS ORDERED, pursuant to authority delegated by 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the petition for reconsideration and the petition for relief filed by Denver Area Educational Telecommunications Consortium, Inc. in File No. CSR 4595-L ARE HEREBY DISMISSED. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau