******************************************************** 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 ) ) OLE T. V. NETWORK, INC. ) Petitioner ) ) vs. ) CSR-4718-L ) MIAMI TELECOMMUNICATIONS, INC., ) Respondent ) MEMORANDUM OPINION AND ORDER Adopted: August 27, 1997 Released: August 29, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1. Ole T. V. Network, Inc. ("Ole") has filed a petition pursuant to  76.970 of the Commission's rules alleging that Miami Telecommunications, Inc. ("TCI") has failed to make a leased access channel available on its cable system serving Miami, Florida to Ole at rates consistent with the Commission's commercial leased access rules. TCI did not file a timely response to the petition, stating that its current staff was unable to locate a copy of Ole's petition and that they had no recollection of its service. 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"). In the Rate Order and the regulations promulgated thereunder, which were in effect at the time of this complaint, the Commission adopted the "highest implicit net fee" as the formula for determining the maximum reasonable rates for commercial leased access. OLE'S PLEADING 3. The issue raised by the instant petition is whether or not TCI violated the Commission's commercial leased access rules because of its failure to provide Ole with a leased access channel at rates consistent with the Commission's rules. According to Ole, it is presently not carried by TCI, but it had been available as part of TCI's expanded basic service to 17,000 school rooms in Dade County, Florida since June 1994, during which period it transmitted Spanish language educational programming to the Miami area. Ole notes that it was totally advertiser supported, and that it carried 24 hour variety programming. Ole adds that 72.4% of TCI's franchise area is Hispanic. However, on August 30, 1995, TCI removed Ole from its system (substituting Argentinean programming), after Ole refused to pay $26,341.00 per month for carriage by TCI. Ole notes that this represents an increase of 56% from the $16,900.00 per month that it had been paying TCI for carriage. Ole requests that the Commission review TCI's new rates to determine whether or not they were correctly calculated. If not, Ole requests that the Commission order refunds for any overpayments, and if TCI's rates are correct, Ole requests special relief in the nature of ". . . an order suspending the application of the new rules and enjoining TCI from charging Ole TV rates calculated according to the procedures of 47 C. F. R. Section 76.970, and barring cable operators from charging lease rates in excess of prevailing market rates for commercial channels in a particular franchise area." Finally, Ole requests that the Commission enjoin TCI from future violations of the leased access rules, and that it issue monetary forfeitures against TCI to discourage it from any future violations of the rules. DISCUSSION 4. The issue presented herein is whether or not TCI's increased rates for leased access exceeded the maximum reasonable part-time rate that may be established for a leased access channel, consistent with the requirements of our rules. In the Rate Order, the Commission rejected marketplace ratemaking for leased access channels and adopted instead a "highest implicit fee" formula for setting maximum reasonable rates that a cable operator may charge any non-affiliated programmer for leased access and developed a methodology for cable operators to follow in determining maximum reasonable rates. Subsequently, in the Second Order released after the filing of Ole's petition, the Commission identified problems with the highest implicit fee formula brought out in the comments of interested parties and replaced that formula with an average implicit fee formula. The Commission also clarified its guidelines for establishing rates for part-time leased access service. 5. According to Ole, TCI removed it from the system on August 30, 1995, because Ole refused to pay $26,341.00 per month for carriage, which constituted an increase of 56% from the $16,900.00 per month that Ole had been paying TCI for carriage. Ole's complaint regarding the reasonableness of TCI's leased access rates is governed by the requirements of the Rate Order and by  76.970 et seq. of the Commission's rules promulgated thereunder. The Commission having adopted this scheme of calculating rates for commercial leased access, pursuant to established administrative rulemaking processes, we decline to depart from it herein in favor of petitioner's scheme. In the above Rate Order, the Commission adopted a "highest implicit net fee" formula as the method by which commercial leased access rates would be calculated, and gave leased access users the option of paying cable operators any disputed rates and then later seeking refunds. 6. Because Ole chose not to pay TCI's increased rates subsequent to August 30, 1995, and seek a refund as contemplated by our rules, TCI is not subject to any potential refund liability to Ole. Furthermore, as noted, the formula for calculating leased access rates changed after August of 1995. Therefore, we find that there would be no purpose in having TCI justify its post 1995 rates, which are not now effective. However, TCI will be required to provide Ole, and any other potential leased access user, with new rates based upon the average implicit fee formula for the calculation of leased access rates adopted subsequent to the filing of Ole's petition in the Second Order and to follow the new guidelines for part-time rates. Moreover, any future inquiries or negotiations regarding leased access rates should be resolved under our new rules. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the petition (CSR-4718) filed October 27, 1995 by Ole T. V. Network, Inc. IS DISMISSED. 8. This action is taken pursuant to authority delegated by  0.321 of the Commission's rules. 47 C. F. R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau