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Booth also filed a petition seeking a waiver of the $910 filing fee  xMthat it was required to submit under 47 C.F.R.  1.1106. Because this issue falls within the purview of the Commission's Office of the Managing Director, we have forwarded this request to that office for resolution. No oppositions were filed in this proceeding.  S- ` 2x2.` ` Section 623(i) of the Communications Act of 1934, as amended ("Communications Act"),  xrequires that the Commission design rate regulations that reduce the administrative burdens and the cost  S- xLof regulatory compliance for cable systems with 1,000 or fewer subscribers.G yO -ԍx47 U.S.C.  543(i).G Accordingly, in the course  xof establishing the standard benchmark and costofservice ratemaking methodologies generally available  x>to cable operators, the Commission adopted various measures aimed specifically at easing regulatory  S - xburdens for these smaller systems. x {O$!-  ԍxSee, e.g., Report and Order and Further Notice of Proposed Rulemaking in MM Docket No. 92266, FCC  {O!- x93177, 8 FCC Rcd 5631 (1993); Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of  {O"- xProposed Rulemaking in MM Docket No. 92266, FCC 9438, 9 FCC Rcd 4119 (1994); Fifth Order on  {O#- xReconsideration and Further Notice of Proposed Rulemaking in MM Docket Nos. 93215 & 93266, 9 FCC Rcd  {OL$- x5327 (1994); Eighth Order on Reconsideration in MM Docket Nos. 92266 & 93215, FCC 9542, 10 FCC Rcd 5179 (1995). In the Small System Order, the Commission further extended small  S- xzsystem rate relief to certain systems that exceed the 1,000subscriber standard.^  {O'-ԍxSmall System Order, 10 FCC Rcd at 7406.^ These   systems were" ,**88"  xldeemed eligible for small system rate relief because they were found to face higher costs and other  S-burdens disproportionate to their size. hm {O@-  >ԍxId. at 7407. More recently, Congress amended Section 623 of the Communications Act to allow greater  xideregulation for "small cable operators," defined as operators that "directly or through an affiliate, [serve] in the  xaggregate fewer than 1 percent of all subscribers in the United States and [are] not affiliated with any entity or  xKentities whose gross annual revenues in the aggregate exceed $250,000,000." Telecommunications Act of 1996  x-("1996 Act"), Pub. L. No. 104104,  301(c), 110 Stat. 56, approved February 8, 1996; Communications Act   x623(m), 47 U.S.C.  543(m). Pursuant to this amendment, the rate regulation requirements of Sections 623(a), (b)  xand (c) do not apply to a small cable operator with respect to "(A) cable programming services, or (B) a basic service  xhtier that was the only service tier subject to regulation as of December 31, 1994," in areas where the operator serves  {O -50,000 or fewer subscribers. Id.   S- ` }x3.` ` The Small System Order defines a small system as any system that serves 15,000 or fewer  Sb- xsubscribers.^bhm {O -ԍxSmall System Order, 10 FCC Rcd at 7406.^ The Commission recognized that systems with no more than 15,000 subscribers were  x/qualitatively different from larger systems with respect to a number of characteristics, including: (1)  xkaverage monthly regulated revenues per channel per subscriber; (2) average number of subscribers per  S- xmile; and (3) average annual premium revenues per subscriber.K. hm {O-ԍXxId. at 7408.(#K The magnitude of the differences between  x.the two classes of systems as to these characteristics indicated that the 15,000 subscriber threshold was  xthe appropriate point of demarcation for purposes of providing for substantive and procedural regulatory  Sr-relief.;r hm {O-ԍxId. ;  S" - ` x4.` ` Rate relief provided under the Small System Order and the Commission's rules is also  S - x=available only to a small system that is affiliated with a small cable company, which is defined as a cable  S - xoperator that serves a total of 400,000 or fewer subscribers over all of its systems. ^ R hm {O-  ԍxId. A small system is deemed affiliated with a larger cable company if the company "holds more than a  {O- x20 percent equity USESESUSinterest (active or passive) in the system or exercises de jure control (such as through a general  {OZ-partnership or majority voting shareholder interest)." Id. at 741213, n.88. The Commission  x\adopted this threshold because it roughly corresponds to $100 million in annual regulated revenues, a  xstandard the Commission has used in other contexts to identify smaller entities deserving of relaxed  S\- xjregulatory treatment.F \xhm {Ot -ԍxId. at 740911.F The Commission found that cable companies exceeding this threshold would find  xit easier than smaller companies to attract the financing and investment necessary to maintain and improve  S - xservice.C  hm {O#-ԍxId. at 7411.C In addition, the Commission determined that cable companies that exceeded the small company  xdefinition "are better able to absorb the costs and burdens of regulation due to their expanded  S-administrative and technical resources."C hm {O&-ԍxId. at 7409.C ". ,`(`(88"Ԍ S- ` ox5.` ` In addition to adopting the new categories of small systems and small cable companies,  S- xthe Small System Order introduced a form of rate regulation known as the small system costofservice  S- xmethodology.F hm {O-ԍxId. at 741828.F This approach, which is available only to small systems owned by small cable companies,  x[is more streamlined than the standard costofservice methodology available to cable operators generally.  xyIn addition, the small system rules include substantive differences from the standard costofservice rules  x[to take account of the proportionately higher costs of providing service faced by small systems. Eligible  x[systems establish their rates under this methodology by completing and filing FCC Form 1230. In order  xjto qualify for the small system costofservice methodology, systems and companies must meet the new  S- xsize standards as of either the effective date of the Small System Order, or on the date thereafter when  S-they file the documents necessary to elect the relief they seek.Zhm {O -ԍxId. at 7413. The effective date of the Small System Order was August 21, 1995.  SL - ` x6.` ` Cable systems that fail to meet the numerical definition of a small system, or whose  xjoperators do not qualify as small cable companies, may submit petitions for special relief requesting that  xthe Commission grant a waiver of its rules to enable the petitioning systems to utilize the various forms  S - x.of rate relief available to small systems owned by small cable companies.F hm {O`-ԍxId. at 741213.F The Commission stated that  S - xpetitioners should demonstrate that they "share relevant characteristics with qualifying systems.": ~hm {O-ԍxId.: Other  xlpotentially pertinent factors include the degree by which the system fails to satisfy either or both  xdefinitions and evidence of increased costs (e.g., lack of programming or equipment discounts) faced by  S4- xthe operator.:4hm {O-ԍxId.: If the system fails to qualify for relief based on its affiliation with a larger cable company,  xthe Commission will consider "the degree to which that affiliation exceeds our affiliation standards, and  xwhether other attributes of the system warrant that it be treated as a small system notwithstanding the  S- xpercentage ownership of the affiliate.";hm {O-ԍxId. ; The Commission also stated that "a qualifying system that seeks  xjto obtain programming from a neighboring system by way of a fiber optic link, but that is concerned that  xinterconnection of the two systems may jeopardize its status as a standalone small system, may file a  SD- xpetition for special relief to ask the Commission to find that it is eligible for small system relief."CD4 hm {O -ԍxId. at 7413.C The  x=Commission specifically stated that this list of relevant factors was not exclusive and invited petitioners  S-to support their petitions with any other information and arguments they deemed relevant.: hm {OZ#-ԍxId.:  S- II.xTHE PETITION  ST- ` x7.` ` According to its Petition, Booth operates cable systems serving fewer than 142,000  xzsubscribers across six states. Booth explains that consolidating the headends of two of its systems in",X ,`(`(88"  xLNorth Carolina its Boone system and its Alpine system into the headend for the Boone system will  x0reduce operating costs and will enable centralized service functions. It will also lower the cost of  S- xpurchasing equipment needed to expand program offerings.Ahm yO-ԍxPetition at 13.A Prior to consolidation, the Boone system  xserved approximately 11,200 subscribers and the Alpine system served approximately 8,300 subscribers.  S8- ` x8.` ` Thus, standing alone, the Boone system and the Alpine system separately qualify for small  xsystem regulatory treatment. Each system serves fewer than 15,000 subscribers and is affiliated with a  xsmall cable company serving fewer than 400,000 subscribers. After headend consolidation, the combined  S- xLentity the High Country system will serve a total of about 19,600 subscribers.BXhm {O -  LԍxId. at 34. Booth filed its Petition prior to consolidation of the Boone and Alpine systems which, according  xto a letter subsequently filed by Booth, was completed in January 1997. Letter dated June 23, 1997 from Christopher  xC. Cinnamon, counsel for Booth, to Julie Buchanan, Cable Services Bureau, Federal Communications Commission.  xxAccording to a recent letter filed by Booth, the consolidated system serves 19,454 subscribers and has an average  x<subscriber density of 21 subscribers per mile, an average monthly regulated revenue per subscriber per channel of  x$0.50, and an average annual premium revenue per subscriber of $26.80. Letter dated June 12, 1997 from  xxChristopher C. Cinnamon, counsel for Booth, to Julie Buchanan, Cable Services Bureau, Federal Communications Commission.  Booth argues that,  xxdespite its subscriber total, the High Country system will still share the attributes of a typical small system,  xincluding "a higher proportion of revenue from regulated service, low subscriber density, higher costs, and  SH - xLthe need for relief from administrative burdens and costs."@H b hm {OJ-ԍxId. at 7.@ Booth asserts that the characteristics of the  x<High Country system will closely resemble other systems entitled to small system treatment the relevant  x?characteristics being an average subscriber density of 27 subscribers per mile, an average monthly  x=regulated revenue of $0.53 per channel per subscriber, and an average annual premium revenue of $27.33  S - xper subscriber.D hm {O<-ԍxId. at 89. D Furthermore, Booth claims that its cost structure reflects that of a small cable company,  x/emphasizing that it does not benefit from programming discounts received by larger multiple system  SX- xoperators.@X hm {O~-ԍxId. at 9.@ Moreover, Booth notes the relatively costly nature of operating the High Country system in  S0- xa rural and mountainous area.:0hm {O-ԍxId.: Booth also argues that relief from having to file multiple costofservice  x>filings would significantly reduce the administrative burdens and costs for both the company and the  S-relevant local franchising authorities.Ahm {O*"-ԍxId. at 10.A  S- ` }x9.` ` In addition, Booth contends that the High Country system should be granted small system  xtreatment because its subscriber total does not exceed the 15,000 subscriber limit by a significant amount.  S@- x/It notes that the Commission, in Insight Communications Company, L.P. ("Insight"),Y@<hm yO'-ԍx11 FCC Rcd 1270 (Cable Serv. Bur. 1995).Y granted small"@,`(`(88"  xsystem treatment to a system serving 18,000 subscribers over seven franchise areas. According to Booth,  S- xthe High Country system exceeds the subscriber level of the Insight system by only 2,000 subscribers and  S-serves subscribers across 16 rural franchises.@hm yO-ԍxPetition at 11.@  Sb- III.xDISCUSSION  S- ` x 10.` ` As discussed above, a cable system that is entitled to small system relief is a system  xzserving 15,000 or fewer subscribers that is not owned by a cable company serving more than 400,000  S- xsubscribers over all of its systems._Xhm {O -ԍxSmall System Order, 10 FCC Rcd. at 7406._ Because Booth has approximately 142,000 subscribers, the High  xCountry system is affiliated with a small cable company with a total subscribership of less than 400,000.  xHowever, the system serves approximately 19,600 subscribers. Thus, the issue in this case is whether the Commission should waive the 15,000 subscriber limit used to define a small system under its rules.  S - ` x 11.` ` Our decision in Insight is instructive. In that decision, we granted small system status to  S - xjthree systems serving 16,348, 16,328 and 17,798 subscribers respectively.S hm {O^-ԍxInsight, 11 FCC Rcd at 1274.S Even though those systems  xhad subscriber totals in excess of the 15,000 ceiling, we determined that they were entitled to small system  S - xrelief because they had many of the defining characteristics of small systems. For instance, the Insight  S^- xjsystems generated between $45 and $52 per subscriber in annual premium revenues, a range closer to the  S6- xsmall system average than the average for large systems.: 6|hm {OR-ԍxId.: In addition, their subscriber density, ranging  xfrom 31 to 35 subscribers per mile, was close to the average density for small systems identified in the  S-Small System Order.:!hm {O-ԍxId.:  S- ` x 12.` ` Similarly, the High Country system possesses the same character as the typical small  Sp- x>system described in the Small System Order. The average annual premium revenue per subscriber of  xj$27.33 falls well below the average of $41 for small systems and also below the averages for the systems  S"- xgranted relief in Insight. Moreover, the average number of subscribers per mile served by the High  xzCountry system of 27 is less than the average density level of 35.3 identified for small systems in the  S- xSmall System Order and also less than the density level of systems granted relief in the Insight case.  xFurthermore, the High Country system faces higher costs than a typical cable system due to the lack of  xprogramming discounts and the expense of operating in a rural and mountainous area. Although the  xaverage monthly regulated revenue of $0.53 per channel per subscriber for the High Country system is  xcloser to the average of $0.44 for larger systems than the average of $0.86 for small systems, we do not  xbelieve that this single variance is sufficient to disqualify it for small system relief. Thus, we agree with  x  Booth's unopposed claim that the consolidation of the Boone and Alpine headends maintains the small system character of the individual systems prior to the consolidation. "!,`(`(88"Ԍ S- ` nx 13.` ` In addition, we note that the degree to which a system fails to meet the technical definition  x]of a small system is relevant to our determination that a waiver from the technical requirements is  S- xjustified.^"hm {O-ԍxSmall System Order, 10 FCC Rcd at 7412.^ Although the High Country system exceeds the 15,000 ceiling by more than 4,000 subscribers,  S- xthe margin above the ceiling is not significantly above the level of excess deemed acceptable in Insight.  Sb- xFinally, as we stated in Inter Mountain Cable, Inc. ("Inter Mountain"), the Commission seeks to encourage  S<- x.the interconnection of multiple small systems where subscribers will benefit._#<Zhm yO6-ԍx11 FCC Rcd 7081, 7086 (Cable Serv. Bur. 1996)._ According to Booth, the  xconsolidation of the Boone and Alpine headends will provide benefits to subscribers by resulting in better  S- x{customer service, expanded programming, and improved operating efficiencies.?$hm yOv -ԍxPetition at 3.? Thus, as in Inter  S- xzMountain, granting small system regulatory relief will further the Commission's goal.^%zhm {O -ԍxSee Inter Mountain, 11 FCC Rcd at 7086.^ Therefore, for all of the above reasons, we will grant Booth's Petition.  SP - IV.xSCOPE OF THE WAIVER  S - ` x 14.` ` As a result of our grant of the Petition, Booth's High Country system shall be deemed a  xysmall system for purposes of rate regulation. Accordingly, to the extent that High Country's BST and/or  S - xCPST offerings are subject to rate regulation,^& hm yO\-  !ԍxAs of the 1996 Act's enactment on February 8, 1996, rate regulation does not apply to a small cable  xZoperator with respect to CPSTs, or a BST that was the only service tier subject to regulation as of December 31,  x1994. For purposes of this provision, a "small cable operator" is defined as one that, directly or through an affiliate,  xserves in the aggregate fewer than 615,000 subscribers and is not affiliated with any entity whose gross annual  {O|- xrevenues exceed $250,000,000. 47 U.S.C.  543(m); Order and Notice of Proposed Rulemaking in CS Docket No.  x9685, 11 FCC Rcd 5937, 5947 (1996). As discussed above, small system relief under our rules is available only  xto systems that serve fewer than 15,000 subscribers and are not affiliated with a cable operator that serves more than  {O- x400,000 subscribers, absent a waiver. See supra paras. 34. Accordingly, a rate complaint that is filed concerning  xa cable system that is deemed a small system under our rules may not invoke rate regulation of the system's CPST, or of its BST if the BST was the only service tier subject to regulation as of December 31, 1994.^ rates for the High Country system may be set in accordance with the small system costofservice methodology.  S8- ` x15.` ` We next must determine the duration of the waiver. In the Small System Order, after establishing the new small system and small cable company definitions, the Commission stated:  `  ` XxX` ` To qualify for any existing form of [small system] relief, systems and  ` companies must meet the new size standards as of either the effective  ` date of this order or on the date thereafter when they file whatever  ` Udocumentation is necessary to elect the relief they seek, at their election.  ` . . . A system that is eligible for small system relief on either of the  `  dates described above shall remain eligible for so long as the system has  ` 15,000 or fewer subscribers, regardless of a change in the status of the  `  company that owns the system. Thus, a qualifying system will remain"&,`(`(88"  ` eligible for relief even if the company owning the system subsequently  ` exceeds the 400,000 subscriber cap. Likewise, a system that qualifies  ` )shall remain eligible for relief even if it is subsequently acquired by a  S-company that serves a total of more than 400,000 subscribers.'$E {O-  ԍxSmall System Order, 10 FCC Rcd at 7413. The quoted text was discussing a system's initial and continuing  xKeligibility for "any existing form of relief," which did not include the small system costofservice methodology.  {O- xHowever, later in the order the Commission applied the same eligibility standards to that methodology as well. Id. at 742728.x`  `    S8- ` 2x16.` ` The Commission adopted this grandfathering treatment for qualifying systems to enhance  S- xtheir value "in the eyes of operators and, more importantly, lenders and investors."C(hm {Od -ԍxId. at 7413.C As the Commission  xstated: "The enhanced value of the system thus will strengthen its viability and actually increase its ability  S-to remain independent if it so chooses.":)Fhm {O-ԍxId.: x` `  Sp- ` #x17.` ` Upon exceeding the 15,000 subscriber threshold, a system that has established its rates in accordance with the small system costofservice methodology:  ` XxX` ` . . . may maintain its then existing rates. However, any further  ` adjustments shall not reflect increases in external costs, inflation or  ` channel additions until the system has reestablished initial permitted rates  S -in accordance with our benchmark or costofservice rules.H* hm {O-ԍxId. at 742728. Hx`  S0- ` #x18.` ` Since the High Country system exceeds 15,000 subscribers, there is no obvious numerical  xlimit to serve as a cutoff for its continued eligibility for small system treatment. However, it is reasonable  xto presume that the system will continue to grow. Thus, we must place some duration on the waiver,  xLsince the alternative would be to grant small system status indefinitely, regardless of the eventual size of  xthe system. This latter alternative is clearly inconsistent with the Commission's decision to limit small system relief to systems that are in need of it due to their relatively small size.  S- ` x19.` ` Therefore, as we have ordered in the context of a similar waiver situation, the Booth  S- xwaiver will terminate two years from the date of this order, subject to the conditions set forth below.`+j hm {O -ԍxSee Insight, 11 FCC Rcd at 127476.`  x>During the waiver period, Booth may file only one Form 1230 for each franchise area it serves. This  x=should afford Booth adequate regulatory certainty for the foreseeable future, while still ensuring that the  x\system is not permitted to charge rates indefinitely under a scheme designed for smaller systems. Of  xcourse, Booth may seek continued eligibility for small system treatment by filing a petition for special relief at the end of the waiver period. " +,`(`(88k"Ԍ S- ` x20.` ` Limiting the waiver period to two years means that any Form 1230 to be filed by Booth  xjmust be submitted with the appropriate regulatory authorities within two years of the date of this order.  xIn any franchise area where the system is currently subject to regulation, Booth may reestablish its  xmaximum permitted rates by filing Form 1230 at any time in the next two years. Where the system is  xnot currently subject to regulation but becomes subject to regulation within the next two years, Booth then  xmay file Form 1230 within the normal response time. Where the system is not now subject to regulation,  xyand does not become subject to regulation until more than two years from now, Booth will not be eligible for small system treatment under this waiver.  S- ` x21.` ` After filing its initial Form 1230 and giving the required notice, Booth may set its actual  xyrates in the franchise area at any level that does not exceed the maximum rate, subject to the standard rate  xreview process. Subsequent increases, not to exceed the maximum rate established by the Form 1230,  S - x[shall be permitted, subject to the 30 days' notice requirement of the Commission's rules.,\ hm {O -  ԍxSmall System Order, 10 FCC Rcd at 7426. Under the small system rules, rate increases taken after the  xinitial Form 1230 has been approved are not subject to further regulatory review, as long as the rate is no higher than  {O-that permitted by the previouslyfiled form. Id. As noted, the  xLmaximum rate established by the initial Form 1230 shall be a cap on the system's rates during the waiver  xperiod. If the system reaches that cap and subsequently wishes to raise rates further, it will have to justify  xthe rate increase in accordance with our standard benchmark or costofservice rules. Alternatively, the  xsystem can file another petition for special relief and seek continued treatment as a small system. Limiting  xjBooth to a single Form 1230 filing for each franchise area provides further assurance that the system will not have grown too large to be establishing rates under the small system costofservice methodology.  S- V.xORDERING CLAUSES  S- ` x22.` ` Accordingly, IT IS ORDERED that the Petition for Special Relief filed by Booth  xNAmerican Company with respect to the consolidation of its Alpine and Boone systems is hereby  S@- GRANTED .  S- ` x23.` ` This action is taken pursuant to delegated authority under Section 0.321 of the  S-Commission's rules.F-hm yOT-ԍx47 C.F.R.  0.321.F x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@Meredith J. Jones x` `  hh@Chief, Cable Services Bureau