Before the Federal Communications Commission Washington, D.C. 20554 In re: ) ) Lorilei Communications, Inc. d/b/a The Firm) ) vs. )CSR-4847-L ) Liberty Cable ) South Gate, California ) ) For leased Access Channels ) MEMORANDUM OPINION AND ORDER Adopted: July 31, 1997 Released: August 4, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1.Lorilei Communications, Inc. d/b/a The Firm ("Lorilei") has filed the above-captioned petition pursuant to the Commission's rules against Liberty Cable Communications ("Liberty") regarding its cable system in South Gate, California, alleging violations of the leased access rules. Liberty filed a response to Lorilei's petition. 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, 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, 11 FCC Rcd 16933 (1996) ("Second Report"). See also Order on Reconsideration of the First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 16933 (1996) ("Recon. Order"). ARGUMENTS OF THE PARTIES 3.Lorilei describes itself as an advertising agency/video production company which produces thirty minute programs to air on commercial leased access channels. Lorilei alleges that it requested from Liberty on several occasions certain leased access information including full time leased access rates, part time leased access rates by day part, the channel number on which leased access programming would appear, the number of cable subscribers reached by leased access, the available access capacity, and a sample leased access contract. Lorilei states that it received rate information from Liberty, offering leased access at $75 per half hour as the standard rate. Lorilei asserts further that it never received any of the other requested information regarding leased access on Liberty's system. 4.Lorilei alleges the $75 per half hour rate quoted by Liberty would produce a full time rate of $108,000 per month. Lorilei stated that this rate exceeds by approximately $100,000 per month a leased access rate quoted to it by another cable operator having roughly the same number of subscribers at Vicksburg, Mississippi. Lorilei argues that this rate disparity demonstrates that Liberty "willfully, wantonly, and fraudulently seeks to mislead potential unaffiliated programmers by greatly over exaggerating the rate one must pay for access to its system," in violation of Section 76.970 of the Commission's rules. Lorilei also alleges that Liberty failed to provide leased access information with seven business days as required by the Commission's leased access regulations as modified in the Recon Order, also in violation of Section 76.970. 5.Lorilei also states that it has incurred expenses in pursuing its efforts to obtain leased access on Liberty's cable system. In preparing and filing the instant petition Lorilei asserts that it suffered lost revenues in the amount of $10,000 per month from missed opportunities in the Southern California market during the pendency of this petition. Lorilei requests an order assessing a $10,000 per day penalty for each day starting on the date the petition was filed and ending when Liberty establishes compliance with the Commission's leased access regulations. 6.In a response by its General Manager, Liberty states that its leased access channel is operable Monday through Thursday from 5 p.m. to 7 p.m. only, which "are the only times that we have budgeted to present any programming of any kind, whether it is local origination, public access or leased access. This has been our standard times of cable casting since 1983." Liberty further states that the $75 per half hour rate quoted to Lorilei "was set over six years ago based solely on what the other cable systems surrounding us in Los Angeles County charges . . . Our rates are set by our market, not anything else." Finally, Liberty asserts that all the information requested by Lorilei was supplied to Lorilei with the exception of a sample leased access contract, and that a copy of its contract was sent to Lorilei with a copy of the response. DISCUSSION AND ANALYSIS A. Timeliness of Response to Request for Rates and Information 7.Section 76.970(e) of our rules in effect when Lorilei initially placed a request for leased access rates and other information with Liberty required cable operators to provide certain information within seven business days of a prospective leased access programmer's request. Lorilei states that it initially requested leased access rates from Liberty on July 23, 1996. However, Lorilei supplied for the record only a copy of a written request sent by facsimile dated September 6, 1996, which is also the date shown on Liberty's response. In this response, Liberty quoted the $75 per half hour rate, provided the number of subscribers served by the system, and stated that no other programming uses the channel, that only one channel is "used exclusively for public access," and that Liberty does not use contracts for leased access programming. We find, based on the record, that in providing this information, Liberty fully responded to Lorilei's request for information as set out in its facsimile dated September 6, 1996 and within the seven business days then required by our leased access regulations. B. Maximum Reasonable Leased Access Rates 8.The validity of leased access rates are not tested, as Lorilei suggests here, by comparison with rates available on another cable system in another region of the company. Instead, at the time these rates were quoted, leased access rates were not permitted to exceed maximum rates developed under the highest implicit fee formula then incorporated in Section 76.970 of our rules. In the Rate Order, the Commission rejected market place rate making for leased access services and mandated use of the highest implicit fee formula incorporated in Section 76.970 of our rules in effect at the time Liberty was requested to provide rates to Lorilei. We point out further that the Commission, in the Second Report, replaced the highest implicit fee formula with an average implicit fee formula, which now applies to leased access services. The Commission also provided substantial guidance in the Second Report for developing rates for part time leased access service. We will direct Liberty to provide Lorilei with schedules of full and part time leased access rates that comply with the requirements of the Second Report within 15 calendar day from the release date of this Order. Finally, we note in this connection that Section 76.970(h) provides that a cable operator is required to provide information regarding leased access set-aside capacity, rate schedules, rates associated with technical and studio costs, and, if specifically requested, a sample leased access contract pursuant to the request of prospective leases access programmers such as Lorilei. 9.We reject the suggestion by Liberty's General Manager that, because of budgetary limitations, a cable operator may provide a leased access channel only for a few hours per day during only a few days of the week. First, leased access programmers are responsible for compensating cable operators for any channel capacity utilized pursuant to rates derived from the implicit fee methodology incorporated in Section 76.970 of the rules. Furthermore, the amount of channel capacity that a cable operator must set aside is based on a system's activated channel capacity, with the minimum being ten percent of such channels for systems having 36 or more activated channels. Concerning part time leased access channels, the Commission in the Second Report emphasized that operators are required to accomodate all leased access requests as long as capacity exceeds demand, in order to assure leased access programmers access until the statutory set-aside of channels is met. C. Request for Monetary Penalties and Other Administrative Sanctions 10.Finally, Lorilei requests compensation for the costs incurred in filing the instant petition and imposition of various other monetary and administrative sanctions against Liberty. Nothing in the Commission's rules provides for recovery of costs or damages associated with the filing of a petition for relief with the Commission for alleged violations of the Commission's regulations applicable to leased access channels. Accordingly, Lorilei's request for compensation will be denied. Finally, we decline to impose monetary and administrative sanctions in the instance case. However, we note that while the leased access rules were in a state of flux when the complaint was filed, they did not permit a market rate fixing of leased access charges as maintained by Liberty. We expect Liberty to closely follow Commission criteria in setting future leased access rates. ORDERING CLAUSES 11.For the foregoing reasons, IT IS ORDERED pursuant to 47 C.F.R.  76.975(f) that respondent Liberty shall, within fifteen days from the release date of this order, provide to Lorilei a schedule of full and part time leased access rates developed in compliance with Section 76.970 of the Commission's rules as modified by the Second Report together with other information regarding leased access set-aside capacity, rate schedules, rates associated with technical and studio costs, and, if specifically requested, a sample leased access contract, as required by Section 76.970(h) of the rules. 12.IT IS FURTHER ORDERED, that the petition for relief of Lorilei Communication, Inc., in File No. CSR 4847-L (a) IS GRANTED in part insofar as indicated above and (b) IS DENIED insofar as it requests compensation for costs incurred in bringing this matter before the Commission and other forms of relief. 13.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