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("Jones"){L {O- xԍJones Intercable, Inc. owns this system, according to the Television & Cable Factbook, Cable Volume No. 64,  yO-1996 Edition, p. D200. failed to  xyrespond satisfactorily to Lorilei's various requests for information concerning leased access on its system  xserving Yorba Linda and Anaheim Hills, California in violation of the Commission's commercial leased  S(- xLaccess rules.("{L yO- xKԍThis system is an operating twoway system, with 72 activated channels and 11 additional channels available  {O-but not in use. Id. In response, Jones contends that it provided the requested information to Lorilei, and that this petition should be denied.  S-M# BACKGROUND ă  S-  S`- ` 3x2.` ` In 1984, Congress amended the Communications Act by adding, among other things, a  xcommercial leased access requirement contained in 612, pursuant to which cable operators with 36 or  xmore activated channels must set aside part of their channel capacity for use by programmers that are not  S- xaffiliated with them.|{L yO&- xԍ The amount of channel capacity an operator must set aside is based on a system's activated channel capacity.  {O&-See 47 U.S.C. 532(b). The Cable Television Consumer Protection and Competition Act of 1992 (the "1992  S- xCable Act") revisited the leased access requirement and directed the Commission to establish, among other",((88*!"  S- xthings, rules for determining maximum reasonable rates for commercial leased access. {Oh-ԍ See Pub. L. No. 102385, 9, 10(a) and 10(b), 106 Stat. 1460 (1992); 47 U.S.C. 532(c)(4)(A) & (B) (1992). Pursuant to that  x=Congressional directive, the Commission established regulations, including rate regulations, applicable to  S- x>leased access channels, in the Report and Order and Further Notice of Proposed Rule Making in MM  S- xNDocket No. 92266 ("Rate Order").@Z yO-ԍ 8 FCC Rcd 5631 (1993).@ The Commission revisited these regulations in the Order on  xReconsideration of the First Report and Order and Further Notice of Proposed Rulemaking in MM Docket  S<- xNo. 92266 and CS Docket No. 9660 ("Recon. Order"),B< yO -ԍ 11 FCC Rcd 16933 (1996).B and again in the Second Report and Order and  S- x{Second Order on Reconsideration of the First Report and Order in CS Docket No. 9690 ("Second  S-Order").dz yO -ԍ FCC 9727 (released February 4, 1997), 62 FR 11364 (1997).d  S- ` x3.` ` The leased access regulations initially required, among other things, that cable operators  Sz- xprovide a schedule of rates "[u]pon request" to prospective leased access programmers.Az  yO$-ԍ47 C.F.R.  76.970(e).A In the recently  SR - xadopted Second Order, the Commission set a 15 day response time from the date of a written request for  S, - xleased access information. A 30 day response time was established for systems who qualify for "small  x\system" rate relief. Additionally, the regulations provide for the determination of maximum monthly  S - xkleased access rates by means of an average implicit fee formula, which is described in the regulations.g  {O-ԍSee Second Order, Appendix D, Revised Rules,  76.970.g  xyThe Commission also adopted procedures for resolution of disputes, providing for the filing of a petition  xfor relief within sixty days of an alleged violation of a leased access statutory or regulatory provision, and  Sd-for the filing of a response. d,  {O0-ԍSee Second Order, Appendix D, Revised Rules,  76.975 and 47 C.F.R.  76.975 (1996).  S<-  S- LORILEIS' PLEADING  S-  S- ` #x4.` ` According to Lorilei, it first requested information about Jones' leased access rates in July  x1996, when Jones informed it by letter dated July 31, 1996 that the rate was $50.00 per hour, and that  xthe available times were 5:00 pm 9:00 pm. On December 10, 1996, Lorilei informed Jones that it  xwanted to transmit 2 1/2 hours of material per month, including 1/2 hour between 5:00 pm and 5:30 pm  xand the remainder during daytime. Lorilei also inquired about the basis of the $50.00 per hour rate and  x>why only time periods between 5:00 pm and 9:00 pm were available. On December 16, 1996, Jones  xresponded by sending Lorilei a new rate card, which reflected much lower rates, but which also included  xa "tape insertion cost." Lorilei responded by letter dated December 18, 1996 asking whether or not this  xwas a flat charge, whether it was prorated, and what did it include. Lorilei repeated this request in a letter  xjfaxed to Jones on January 2, 1997, and Jones responded on January 3, 1997 with a faxed contract, which  xyincluded a tape insertion fee of $50.00 per insertion for the 4:00 pm cablecast and $25.00 for the 9:00 am"  ,p(p(88"  xtransmission. Lorilei faxed Jones another request on January 3, 1997, for an explanation of the tape  xinsertion charge, together with a question concerning the tape format used by Jones' system. Jones  xresponded by fax on January 9, 1997, explaining that " . . . we should be charged edit time, mileage, and  xa minimum 3 hour labor charge each time our half hour program was inserted . . . ." On January 10,  S`- xy1997, Lorilei responded by fax directing that its insertion charge be placed on "hiatus" pending resolution  xof the insertion charge issue, and stating that it was willing to pay for the actual labor costs of insertion,  xbut since it also was willing to provide any standard format tape, it " . . . felt that editing costs to dub our  xprogram would be inappropriate . . . " Thereafter, Lorilei tried twice unsuccessfully to elicit an answer  xfrom Jones concerning the insertion charge, and on January 29, 1997, Lorilei submitted an updated  xinsertion order. On February 20, 1997, Jones responded, stating that its usual $150.00 insertion charge  xwas being discounted to $25.00. Lorilei next contacted Jones' corporate attorney on February 21, 1997  xfor an explanation of the $150.00 charge, and for substantiation that someone had actually been charged this amount.  S - ` x5.` ` Lorilei claims that Jones initially supplied it with false and erroneous leased access rates  xin a willful and malicious attempt to circumvent the leased access rule. Lorilei adds that Jones has been  xless than "straightforward" concerning its actual costs for technical support, considering that, in its  xcontract, Jones stated that Lorilei would be charged $50.00 and $25.00 for technical support but in its  xjletter dated January 9, 1997, Jones said that Lorilei was being charged $40.00 and $25.00. Lorilei asserts  xthat Jones has not demonstrated that a $150.00 insertion charge was ever levied against any party, and  xLorilei claims that Jones' technical cost breakout is merely " . . . a boldfaced attempt to mitigate the high  S- xcharges levied by the system." " yO"- xԍLorilei notes that Jones' attorney stated on March 11, 1997 that other programmers transmitting on the system  xpursuant to commercial time sales or to local origination are not charged any additional technical support fees;  x;therefore, Lorilei contends that Jones cannot charge such fees to commercial leased access users alone, according to  {Oz-para. 114 of the  Second Report. Lorilei contends that Jones has attempted to blunt the effect of leased  xaccess, in violation of  76.970 of the Commission's rules. Lorilei asks that the Commission levy a fine  x.of $10,000.00 on Jones and that Jones be ordered either to provide proof of its $150.00 charge or that it  xyreimburse Lorilei $10,000.00 for Lorilei's attempts to gain access on Jones' system. Lorilei also asks that  xJones be ordered to reimburse Lorilei $10,000.00 for production costs, as well as $100,000.00 for lost  xincome during the period Lorilei was not being carried on the system. In addition, Lorilei asks that the  xCommission order Jones to keep all correspondence concerning leased access in its public file for the next five years.  "i}9   "i}9   S*- JONES' PLEADING  S-  S- ` x6.` ` According to Jones, it first received a request for leased access rates from Lorilei in July  x1996, and it promptly responded stating that its rate was $50.00 for half an hour, which included tape  xNinsertion. Jones received a second request from Lorilei in December 1996, and Jones replied that,  xyconsistent with the Commission's highest implicit fee formula, its rate for half an hour was $4.50, at 9:00  x{am, together with a $25.00 tape insertion charge, and it was $5.50, at 4:00 pm, with a $40.00 tape  x0insertion charge. Lorilei then offered a total payment of $30.00 for six playbacks of its halfhour  xinfomercial. Jones next faxed a memo back to Lorilei with an invoice and a lease agreement for $225.00,  xincluding the tape insertion/technical support charge, for six insertions. Lorilei, however, never signed  xthe lease agreement. Instead, it requested more information concerning the tape insertion charge on"" ,p(p(88$"  xJanuary 3, 1997. On January 9, 1997, Jones provided the requested explanation. Lorilei responded on  xJanuary 10, 1997, claiming that making a master tape is unnecessary and disputing various costs  xcomprising Jones' technical charges. On January 29, 1997, Lorilei again offered Jones $30.00 for six  x!transmissions of its infomercials, excluding any technical support payment. Jones responded on  xFebruary20, 1997 with another explanation of its technical support charge. Lorilei never signed a lease  S8-or responded. 8 yO- xYԍFurthermore, Jones explains that it considers having a signed lease agreement to be essential, because it specifies  xsecurity deposits, late fees, and payment terms, in addition to assuring the cable operator that the leased access  xprogrammer has complied with the applicable copyright laws and is not going to transmit programming containing nudity, indecency, or obscenity.   S- ` Qx7.` ` Jones notes that its procedure for preparing material such as Lorilei's infomercials is to  xtransfer it to a master tape and then to insert time codes, which accomplishes two things. It assures a  xseamless, professionallooking transition from one program source to another. It also provides a backup  xin the event that anything goes wrong when the tape is played, which is necessary if Jones is to guarantee  SH - x[its performance under its contractual obligations.a XH  yO- x-ԍJones admits that newer equipment might be more flexible, and that it might reuse the same master tape for  x;repetitive transmissions, but Jones states that it must have the discretion to make these technical decisions and that its equipment complies with all franchise requirements.a For a half hour program, the transfer takes about half  xan hour, plus a half hour playback time. Jones follows this procedure with all local origination  xprogramming, and for commercial programming it charges studio time ($150.00) to prepare the master  S - x=tape, while it only charges an hour of technician's time to leased access programmers.6X  yO@- x<ԍJones emphasizes, however, that no commercial nonleased access programmer is permitted to use its studio  xequipment for free, and that it is only used for local origination, by Jones itself, and by commercial clients at a commercial rate.6 After the master  xtape is prepared at Jones' studio in Walnut, California, it is then delivered to the unmanned Yorba Linda  xheadend for tone insertion and to be transmitted on Channel 35, Jones' parttime leased access channel.  xyThis trip is about 36 miles, oneway, and the round trip takes about 1 1/2 hours, for which Jones charges  xl$0.31 per mile for travel costs, or $11.16 for 36 miles. Moreover, it must be done by a technician  x=qualified to play the tape, who stays while it is running in order to make sure that it is transmitted. The  xcost of the technician's time varies. Jones charges for three hours. A technician with low seniority is paid  x.$9.00 per hour, which Jones rounds down from $27.00 to $25.00. After 4:00 pm, however, three hours  xzof time (at time and a half) is $40.50, which is rounded off to $40.00. According to Jones, neither the $25.00 charge nor the $40.00 reimburses Jones for its full labor costs or for its other miscellaneous costs.  S- ` Qx8.` ` Jones also explains that the $50.00 charge for technical support that it initially cited to  xLorilei was in error, and that it was corrected in the letter dated January 9, 1997. Jones adds that it never  xztried to levy the $150.00 charge on Lorilei, but that entities using Jones' editing services in connection  xwith commercial productions do have to pay it. In addition, Jones notes that, since it is the only local  xorigination programmer, Lorilei's argument that it does not charge local origination programmers for  x=technical support makes no sense. However, Jones adds that it does prepare a master tape for any local  x/event it produces (such as a football game). Jones also notes that any nonleased access commercial  xclients " . . . pay technical support fees at commercial rates, which are substantially more . . . " than those  xcharged to commercial leased access ("CLA") programmers. Jones adds that "[i]f a nonCLA client sought" ,p(p(88."  xto place a halfhour infomercial on Channel 35, Jones would follow exactly the same process as it follows with CLA programmers, except it would charge a commercial rate for preparation of the master tape."  "i}:   "i}:   S`-( DISCUSSION ă  S8-  S- `  x9.` ` At the time that Lorilei filed its complaint, the leased access rules permitted cable  x.operators to charge leased access users for providing the minimal level of technical support necessary to  S- xpresent their material on a cable system.C yO( -ԍ Former Section 76.971(c).C Under this standard, Jones developed a technical service fee  xbased on the average hourly rate for its cable technicians and adjusted this hourly cost figure by a factor  xof 50% to take account overtime hours. Jones charges for three hours of technician's time, to which it  SH - xLadds $0.31 per mile for travel costs. We believe this approach to be reasonable, particularly since Jones'  xstated policy is to charge $150.00 for studio time to commercial programmers, and only one hour of  xtechnician's time, at a base hourly rate of $9.00, to leased access programmers. We also note that in its  S - x=Second Order, the Commission clarified that cable operators are allowed to charge an additional fee only  S - xfor the reasonable cost of providing technical support to a leased access programmer that is not also  xLprovided to nonleased access programmers on the system. The Commission added that cable operators  xmay not impose a separate charge for the same kind of technical support that they already provide to non xleased access programmers because the maximum leased access rate represents what nonleased access  S -programmers implicitly pay for carriage, including technical costs common to all programmers.H X {O-ԍSecond Order at para. 114.H  S- ` x10.` ` Lorilei also has failed to demonstrate a pattern of abuse or any other justification for  xrequiring Jones to keep all correspondence regarding leased access in a public file for the next five years, and we shall deny its request for such an order.  SB-  S- ` ~x11.` ` In addition, we do not believe that Lorilei has demonstrated actual damages, or that it is  xkentitled to compensation for production costs or for the costs of its attempts to gain access on Jones'  xsystem. Neither the Communications Act of 1934, as amended, nor the 1992 Act, provide for such  xdamages or for such costs. Accordingly, Lorilei's request for these damages and costs will be denied, as  Sz- xMwill its request for lost profits. Jones is correct that the Commission provided in its Rate Order that  xLprogrammers are free to seek refunds later if, unlike Lorilei, they are willing at the time to accept carriage  S,-by an operator " . . . under the rates, terms and conditions set by the operator . . . ."W, yO-ԍ8 FCC Rcd at 5960. 47 C. F. R.  76.975(f).W  S-Ć"z,p(p(88M"  S-1 ORDERING CLAUSES  S-  S- ` x12.` ` Accordingly, IT IS ORDERED that the petition (CSR 4979L) filed March 21, 1997,  S-by Lorilei Communications, Inc., IS DENIED .  S`-  S8- ` Px13.` ` This action is taken pursuant to authority delegated by  0.321 of the Commission's rules. 47 C. F. R.  0.321.  S- x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau  X -# Xj\  P6G;9XP#