******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) )CSR-4619-L DANIEL A. MEAZELL ) ) v. ) ) TIME WARNER ENTERTAINMENT -- ) ADVANCED/NEWHOUSE CO., d/b/a ) TIME WARNER CABLE ) ) ) ) MEMORANDUM OPINION AND ORDER Adopted: July 1, 1997Released: July 3, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1.Daniel A. Meazell ("Meazell") filed this petition pursuant to Section 76.975(b) of the Commission's rules for relief alleging that Time Warner Entertainment -- Advanced/Newhouse Co., d/b/a/ Time Warner Cable ("Warner Cable") has violated the Commission's leased access rules. Warner Cable 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"). The instant petition is governed by the Rate Order and the regulations promulgated thereunder which were in effect at the time the petition was filed. SUMMARY OF PLEADINGS 3.In his petition, Meazell states that on May 9, 1994, he requested from Warner Cable leased access channel capacity, information pertaining to Warner Cable's leased access rates, and a leased access agreement. Meazell further states that 13 months later, on June 26, 1995, Warner Cable provided information pertaining to its commercial leased access rates, terms and conditions, a sample leased access agreement, and an application for channel usage. Meazell further states that he returned the completed application on July 5, 1995. Meazell alleges that only after he completed his application and over one month later, Warner Cable informed him that it would not provide billing and collection services and that Warner Cable has engaged in delaying tactics. 4.Meazell further contends that on September 15, 1995, he again contacted Warner Cable to inquire about billing services and that Warner Cable did not respond. Meazell asserts that he filed this petition as a result of Warner Cable's failure to respond to his September 15, 1995 letter. Meazell alleges that in addition to failing to provide billing and collection services, Warner Cable failed to provide technical support, failed to disclose technical specifications and any fees for such services, and failed to provide premium or pay-per-view leased access channel capacity. With respect to Meazell's request for premium and pay-per-view leased access capacity, Meazell contends that Warner Cable's refusal to provide billing and collection services for premium and pay-per-view leased access programming orders from Meazell's subscribers was a denial of commercial leased access. Meazell requests that the Commission direct Warner Cable as follows: provide billing and collection services; provide technical support as necessary; file its leased access rates for each program category with the Commission; refund any leased access payments in excess of the Commission's rules; negotiate in a good faith manner and on a timely basis with respect to its leased access services; and pay sanctions in the maximum amount permitted by law for each day Warner Cable fails to provide leased access channel capacity to Meazell. 5.In opposition, Warner Cable states that Meazell's May 9, 1994 request for leased access information was made on behalf of Veritas Entertainment, Inc. ("Veritas") and that Warner Cable promptly responded. Warner Cable further states that before negotiations were completed with Veritas, Meazell left the employ of Veritas and that Veritas eventually ceased expressing an interest in leasing capacity on Warner Cable's cable system. Warner Cable contends that Meazell first requested leased access information on his own behalf in Spring 1995 and Warner Cable responded to that request on June 26, 1995. Warner Cable alleges that on July 10, 1995 Meazell returned a partially completed application for channel capacity. Warner Cable states that it continued to negotiate with Meazell and informed him in August 1995 that Warner Cable wanted to find a third-party provider of billing and collection services for its leased access services. Warner Cable asserts that Meazell unilaterally terminated negotiations on or about August 30, 1995 and that Meazell's phone number subsequently was disconnected. Warner Cable states that it had no further communication with Meazell, except a letter from Meazell dated September 15, 1995 expressing his dissatisfaction with the pace of negotiations and a copy of this petition, which was served on Warner Cable on September 26, 1995. 6.Warner Cable contends that Meazell's request for pay-per-view leased access services was the first such request Warner Cable had received and that it needed time to develop a model for initial rates for billing and collection and technical support. Warner Cable asserts that on November 13, 1995, it forwarded, by registered mail, a schedule of rates for pay-per-view billing and collection services and fees for technical support services. Warner Cable also asserts that at that time it informed Meazell of its willingness to continue discussing Meazell's request for leased access services. 7.Warner Cable argues that the Commission has found that lengthy negotiation time periods may be reasonably necessary in processing leased access requests. Warner Cable further argues that much of the delay was caused by the fact that Warner Cable was dealing with Veritas, not Meazell, and that Meazell failed to provide the financial information and credit references in his application for leased access channel capacity. Warner Cable asserts that the Commission has recognized that cable operators may require leased access programmers to provide suitable guarantees with respect to their creditworthiness. Warner Cable argues that it never refused to provide Meazell with billing and collection services but informed Meazell that it might not be feasible for Warner Cable to provide such services and that it was exploring the possibility of a third-party provider. Warner Cable further argues that, pursuant to Section 76.971(f) of the Commission's rules, a cable operator may use third-party services where an operator can demonstrate that such third-party services represents a feasible alternative for the leased access user. Warner Cable contends that after searching for a third-party provider it determined that it would provide the requested support services to Meazell and informed him of that decision in November 1995. Warner Cable did not address the issue of refunds or of sanctions, both of which were raised by Meazell's petition. DISCUSSION Leased Access Rate Information Timing and Response 8.We will deny Meazell's petition. As noted above, Meazell's petition is governed by the commercial leased access regulations established pursuant to the Rate Order. As an initial matter, we find that Meazell's request for leased access information on behalf of Veritas will not be considered because at the time this petition was filed, Meazell was no longer employed by Veritas and was acting on his own behalf. With respect to Meazell's request on his own behalf, we note that when the petition was filed, Section 76.970(e) of the Commission's rules required cable operators "[u]pon request" to provide a schedule of leased access rates to prospective leased access programmers. There was no response time period provided for in the rules. We note that Warner Cable responded on June 26, 1995 to Meazell's request on his own behalf which was made "in the spring of 1995." Without additional information, we can not find that this time period was unreasonable under the circumstances. Warner Cable's response included the required information such as its leased access rates, a sample leased access agreement and an application for commercial use. 9.Warner Cable argues that Meazell himself caused any subsequent delay in processing his leased access request by not properly completing the application for commercial use. The Commission stated in the Rate Order that cable operators "should have discretion to require reasonable security deposits or other assurances from programmers who are unable to prepay in full for access to leased access channels [and that] it would be unfair to require the cable company to bear the financial risk of airing leased access programming without the provision of suitable guarantees." In the instant case, Warner Cable requested Meazell to complete the application for commercial leased access use which included information regarding the identity of the applicant, background and financial resources. We therefore find that the application was not a delay tactic to providing Warner Cable's initial leased access rate information but a reasonable request for financial assurances from Meazell. Billing and Collection and Technical Support Services 10.With respect to Meazell's request for information pertaining to Warner Cable's billing and collection services and technical support services for premium and pay-per-view leased access programming, we note that Section 76.971(f) of the Commission's rules in effect at the time of this petition permitted cable operators to employ third-party providers of billing and collection services if operators could demonstrate that it was cost-effective to do so. We further note that Section 76.971(c) of the Commission's rules in effect at the time of this petition required cable operators to provide leased access programmers with a minimal level of technical support and required leased access programmers to reimburse operators for the reasonable cost of any technical services provided. In this case, Warner Cable initially informed Meazell that it needed time to develop a cost model for premium and pay-per-view billing and collection services and that it would explore the possibility of utilizing the services of a third-party provider, but then determined that Warner Cable would provide the services itself. 11.Warner Cable informed Meazell of its intention to find a third-party provider on August 21, 1995 and on November 13, 1995, notified Meazell that Warner Cable would provide billing and collection services and provided information on its fees for technical support services. Despite the time period from when Warner Cable initiated its search for a third-party provider to its decision to provide the services itself, the record as a whole does not support a finding that Warner Cable attempted to avoid its obligation to provide leased access channel capacity to Meazell. The record indicates that during this period there was confusion regarding Meazell's continued interest in leased access. In the November 13, 1995 letter Meazell received the information that he had requested concerning support services as well as a statement from Warner Cable that it was prepared to continue the negotiations process. Refund and Sanctions 12.Since Warner Cable has provided the information requested and has indicated its willingness to continue negotiations, Meazell's petition, with a few exceptions, has been satisfied. The exceptions are Meazell's request that the Commission direct Warner Cable to issue refunds and to file its leased access rates with the Commission. With respect to Meazell's request that Warner Cable issue refunds, the record indicates that Meazell never paid any leased access fees to Warner Cable. Thus, no refund is due. We also note that leased access rates must now be calculated under the new rules in the Second Order. Finally, there is no requirement that Warner Cable file its leased access rates with the Commission. It is required to maintain, for Commission inspection, sufficient supporting documentation to justify its leased access rates. In light of the foregoing, we will deny Meazell's petition. We thus need not address the issue of sanctions. ORDERING CLAUSES 13.Accordingly, IT IS ORDERED that the petition filed by Daniel A. Meazell (CSR-4619-L) against Time Warner Entertainment -- Advanced/Newhouse Co., d/b/a/ Warner Cable, pursuant to Section 76.970 of the Commission's rules then in effect, 47 C.F.R. 76.970 IS DENIED. 14.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