WPC 2HB3X@R3|J (TT)Times New Roman (TT)Times New Roman (Bold) (TT)6QW XP#"5@^*7DTT77T^*7*/TTTTTTTTTT//^^^Jxooxf\xx7Axfxx\xo\fxxxxf7/7NT7JTJTJ7TT//T/TTTT7A/TTxTTJP!PZ*7777BD7TTxJxJxJxJxJooJfJfJfJfJ7/7/7/7/xTxTxTxTxTxTxTxTxTxTxJxTxTxTxTxT\TxTxJxJoJoJoJfJfJfJxTxTxxTxTxTxTBT7T777TAxTf/fDxTxTxTxo7oD\A\AN:*KT7JTTTTT.3}}T2T}277JJT77TT7J72t7[[[[^[e*B`^.wRTTn[Cfx`xWlRx[\[ceIfIs`Wx[rriwge*7DTT77T^*7*/TTTTTTTTTT//^^^Jxooxf\xx7Axfxx\xo\fxxxxf7/7NT7JTJTJ7TT//T/TTTT7A/TTxTTJP!PZ7TJTT7\777JJ:T7A7xx*7TTTT!T7.T^7TB[227`K*723T}}}Jxxxxxxoffff7777xxxxxxx^xxxxxx\TJJJJJJoJJJJJ////TTTTTTT[TTTTTTTTimes New Roman (TT)Times New Roman (Bold) (TT)Times New Roman (Italic) (TT)B&P2W Ez ZX X-#XP\  P6Q9XP#Apple LaserWriter II NTXLocal PrintAPLAIINT.WRSX\  P6G;"BPzB8B^dBYdYdYBdd88d8ddddBN8ddddY`(`l2BB!BBPRBddYYYYYYzYzYzYzYB8B8B8B8ddddddddddYdddddoddYYYYYzYzYzYddddddPdBdBBBdNdz8zRdddBRoNoNNF2ZdBYddddd7>d<d<BBYYdBBddBYBdYzzzzBBBBqodYYYYYYYYYYY8888dddddddndddddddy.C8*,gC\  P6QP2J=.,/&J\  P6Q&P.2N=.,&N4  pQ&7PC2,W XP\  P6QXP2z   < Z 3|a S- I. A. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)#&a\  P6G;/&P#xSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNI\\>>>\g0>03\\\\\\\\\\33gggQyyrg>Frgygrr>3>T\>Q\Q\Q>\\33\3\\\\>F3\\\\QX%Xc>0cT>>>0>>>>>>>>\3QQQQQwyQrQrQrQrQ>3>3>3>3\\\\\\\\\\Q\Z\\\g\QQQyQyQycyQtrQrQrQrQ\\\c\c\>3>\>>>\gcc\r3rIr>r>r3\l\\\\y>y>y>gFgFgFgcrMr3rT\\\\\\crQrQrQ\r>\gFr>\t0\\=!=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBT\>Q\\\\\3;\7;\7>>QQ\??n\\pBnnBmgg>Q\7"yyyy\njc\gnn\ S- I. A. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)#&a\  P6G;&P#"i~'^5>g\\>>>\g0>03\\\\\\\\\\>>ggg\yyrF\yrgyy>3>j\>\gQgQ>\g3>g3g\ggQF>g\\\QI(I_>0_j>>>0>>>>>>\>g3\\\\\QyQyQyQyQD3D3D3D3g\\\\gggg\\g\\\\pg\\\QQ_QyQyQyQyQ\\\_\gjF3FgF>Fgg__gy3ySy>yIy3ggg\\QQQgFgFgFg_y^y>yjgggggg_yQyQyQgy>ggFy>\0\\=2=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBa\>\\\\\\7>\7>\7>>\\\??n\\pBnnBsgg>\\7"yyyy\nlc\gnn\"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxd20KvpUk"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd/@Right Par 4Right Par 4,` hp x (#X` hp x (#0X` hp x (#0` hp x (#Right Par 5Right Par 5-` hp x (#X` hp x (#X` hp x (#` hp x (#Right Par 6Right Par 6.` hp x (#X` hp x (#0X` hp x (#0` hp x (#Right Par 7Right Par 7/` hp x (#X` hp x (#X` hp x (#` hp x (#2tK0B1(E2$,G3$PIRight Par 8Right Par 80` hp x (#X` hp x (#0X` hp x (#0` hp x (#Document 1Document 11` hp x (#X` hp x (#X` hp x (#` hp x (#Technical 5Technical 52` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 6Technical 63` hp x (#X` hp x (# X` hp x (#` hp x (#2O4lK5lL6$~L7lNTechnical 2Technical 24 Technical 3Technical 35 Technical 4Technical 46` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 1Technical 17 2W8$@O9$dQ:S;UTechnical 7Technical 78` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 8Technical 89` hp x (#X` hp x (# X` hp x (#` hp x (#toc 1toc 1:` hp x (#!(#B!(#B` hp x (#toc 2toc 2;` hp x (#` !(#B` !(#B` hp x (#2n`<W=Z>2\?P^toc 3toc 3<` hp x (#` !(# ` !(# ` hp x (#toc 4toc 4=` hp x (# !(#  !(# ` hp x (#toc 5toc 5>` hp x (#h!(# h!(# ` hp x (#toc 6toc 6?` hp x (#!(#!(#` hp x (#2pg@v`AaB4cCRetoc 7toc 7@ toc 8toc 8A` hp x (#!(#!(#` hp x (#toc 9toc 9B` hp x (#!(#B!(#B` hp x (#index 1index 1C` hp x (#` !(# ` !(# ` hp x (#2lDgEiFvkGlTlindex 2index 2D` hp x (#` !(#B` !(#B` hp x (#toatoaE` hp x (#!(# !(# ` hp x (#captioncaptionF _Equation Caption_Equation CaptionG 2nHrlIdmJ}mK`nendnote referenceendnote referenceH head1 #I'd#2p}wC@ #a1Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfJ$ a2Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfK/` ` ` 2qLoMoNKpOpa3Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfL:` ` `  a4Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfME` ` `  a5Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfNP  ` ` ` hhh a6Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfO[   2wPqQrKcsKua7Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfPf  a8Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfQq "i~'^09]SS999S]+9+/SSSSSSSSSS99]]]Sxnxxng?Snxgx]nxxxxn9/9aS9S]I]I9S]/9]/]S]]I?9]SxSSIC%CW9+Wa999+999999S9]/xSxSxSxSxSxxInInInInI>/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNM\\>>>\}0>03\\\\\\\\\\>>}}}\rryrr>Qygyrr\grrggF3FM\>\\Q\Q3\\33Q3\\\\FF3\QyQQFI3Ic>0cM>>>0>>>>>>\>\3r\r\r\r\r\yyQrQrQrQrQ>3>3>3>3y\\\\\\\\\gQr\\\\gQ\r\r\r\r\yQyQycyQnrQrQrQrQ\\\c\c\>3>\>>>\\ccyQg3gBg>g;g3y\jy\y\\\yrFrFrF\F\F\FccgBg3gM\\\\\\ygcgFgFgF\g>y\\Fg>g\n0\\=(=WddddddddddddddddddddddddddddddddddddddddNBnnB_\F\\\\\\3;\7;\7>>gg\??n\\pBnnBb\\>g\7"yyyy\njc\}nn\2iK+xKvzK|R] "i~'^ %,77\V%%%7>%7777777777>>>0eOIIOD>OO%*ODaOO>OI>DOOgOOD%%37%07070%777V7777%*77O77055;%;3%%%%%%%%%%%7O0O0O0O0O0aHI0D0D0D0D0%%%%O7O7O7O7O7O7O7O7O7O7O0O7O6O7O7O7>7O0O0O0I0I0I;I0OED0D0D0D0O7O7O7O;O7O;O7%%7%%%7M>;;O7DD,D%D%DO7AO7O7O7O7aOI%I%I%>*>*>*>;D.DD3O7O7O7O7O7O7gOO;D0D0D0O7D%O7>*D%O7E77%%WMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN(BB(37%07777j7#TT7!#TT7T!%%007n&&Bn77lCTn(nBB(A\\>>n%07\n!"IIIITTenn7TnB@;7>lBBn7"i~'^"(22TN"""28"2222222222888,\HBBH>8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d"""5@^.=f\\3==\i.=.3\\\\\\\\\\==iii\zzpG\zpfzz=3=k\=\fRfR=\f3=f3f\ffRG=f\\\RH(H`.====IK=\f\\\\\RzRzRzRzRG3G3G3G3f\\\\ffff\\f\\\\pf\\\RRRzRzRzR\\\\ffIfGfG=Gf\fz3zKff\RRfGfGN@.c\=\\\\\\7<\7\7==\\\==\\=\=7t=ddddido.Iii3[\\xdCpi_w[dfdmoPpP~j_d~~tqo.=f\\3==\i.=.3\\\\\\\\\\==iii\zzpG\zpfzz=3=k\=\fRfR=\f3=f3f\ffRG=f\\\RH(H`=\\\\=f===\\@\=G=.=\\\\(\=7\i=\Id77=ic.=7<\\zzzzGGGGipf\\\\\\RRRRR3333\f\\\\\d\ffff\f"5@^2BRdd$BBdq2B28dddddddddd88qqqYzoBNzoozzB8B^dBYdYdYBdd88d8ddddBN8ddddY`(`l2BB!BBPRBddYYYYYYzYzYzYzYB8B8B8B8ddddddddddYdddddoddYYYYYzYzYzYddddddPdBdBBBdNdz8zRdddBRoNoNNF2ZdBYddddd7>d<d<BBYYdBBddBYBdYzzzzBBBBqodYYYYYYYYYYY8888dddddddnddddddd"5@^2Boddȧ8BBdr2B28ddddddddddBBrrrdzNdzoȐB8BtdBdoYoYBdo8Bo8odooYNBodddYO,Oh2BB!BBPRBdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYYddddooPoNoNBNodo8RoodȐYYoNoNNF2ldBdddddd%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155<%%%%,-%77O1O1O1O1O1bII1C1C1C1C1%%%%O7O7O7O7O7O7O7O7O7O7O1O7O7O7O7O7=7O7O1O1I1I1I1C1C1C1O7O7OO7O7O7O7,7%7%%%7+O7CC-O7O7O7bOI%I-=+=+N&27%177777"SS7!TT7S!%%117n%%77ln%1n%!t%<<<<>l[O6Wls[77TTTH_%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155%T7,OOOOOO=7111111I111117777777<77777772\@ @XRy.C8*,gC\  P6QP 2J=.,/&J\  P6Q&P.2N=.,&N4  pQ&7PC2,W XP\  P6QXP.7UC2,PXU4  pQX.y.G8*,.G4  pQ0J=.,3V^&J*f9 xQ&XP,%,J,\  P6QJPI(!,,(\  P6Q,P{,C8*,3C*f9 xQX"5@^!)22SN!!28!2222222222888-\HCCH=7HH!'H=YHH7HC7=HH^HH=!!/2!-2-2-!222N2222!'22H22-006!!!!()!22H-H-H-H-H-YCC-=-=-=-=-!!!!H2H2H2H2H2H2H2H2H2H2H-H2H2H2H2H272H2H-H-C-C-C-=-=-=-H2H2HH2H2H2H2(2!2!!!2'H2==)H2H2H2YHC!C)7'7'N#-2!-22222KK2LL2K!!--2d!!22bd!-d!t!77778c7-FCC Rcd 5631, 5693 (1993) ("Rate Order").Ď  xRate regulation is automatically stayed pending review of a timelyfiled petition for reconsideration  S- x/alleging effective competition.K [ yO-ԍ47 C.F.R. 76.911(c)(1). K After the 30day deadline for filing petitions for reconsideration has  x>elapsed, cable operators may challenge the franchising authority's certification by filing a petition for  S- xrevocation.=  [ yO-ԍ47 C.F.R. 76.914.= However, regardless of its grounds, a petition for revocation does not automatically trigger  Sp-a stay of the franchising authority's power to regulate basic rates.@ p[ yO(-ԍ47 C.F.R. 76.914(d).@  S - III.xTHE BUREAU ORDER  S -  S - ` ax4.` ` Daniels based its certification challenge on the competing provider test for effective  xcompetition. Daniels argued that its system serving the City of Encinitas is subject to effective  xcompetition because its franchise area is: (1) served by Cox Communications ("Cox") and several direct  xbroadcast satellite ("DBS") providers each of which offers comparable programming to at least 50% of  x?the households in Encinitas, and (2) the number of households subscribing to Daniels, the smaller  x.multichannel video programming distributor ("MVPD"), exceeds 15% of the households in the franchise area.  S- ` x5.` ` In its opposition, Encinitas did not contest the fact that both Daniels and Cox have  xfranchises to serve the entire City of Encinitas. However, the City asserted that both Daniels and Cox  S@- x[affirmatively redefined their franchise areas. \@[ yO%- xԍAs the Commission has stated previously, the statutory language requires that effective competition be  {OP&- xYdemonstrated on a franchise area basis. First Order on Reconsideration, Second Report and Order, and Third Notice  {O'- xof Proposed Rulemaking, MM Docket No. 92266, 9 FCC Rcd 1164, 1180 (1994) ("First Order on"' ,`(`(;'"  {O- xReconsideration"). A franchise area is defined as the area a system operator is authorized to serve in its franchise.  {OZ- xId. Thus, demonstrations of effective competition generally must be made using household and subscriber data for  xLthe authorized area in the franchise. We also have stated that, for purposes of the low penetration effective  xcompetition test, a more restricted definition of a franchise area may be appropriate under limited circumstances,  xsuch as when an operator, "through its own conduct, selfdefine[s] the areas to be served to such an extent that this  {O|- xredefined area accurately portrays the operator's 'franchise area.'" Id. The franchising authority has the burden of  {OF- xyshowing that the operator has made an "affirmative decision . . . to restrict service. . . ." Id. However, as the  xCommission cautioned, the fact that a franchise had not yet been filled out entirely by system construction by the  {O-operator would not by itself be evidence that the service area had been redefined. Id.  The City argued that Daniels and Cox have been operating"@ ,`(`(88r"  xcable systems sidebyside for years and have failed to overbuild each other in a significant portion of the City.  S- ` x6.` ` The Bureau Order found that Daniels is subject to competing provider effective  xcompetition in its Encinitas franchise area. With regard to the City's franchise area redefinition argument,  S:- xthe Bureau Order concluded that the City had failed to offer persuasive evidence that Daniels' franchise  xarea for purposes of effective competition is less than the entire City of Encinitas. The Bureau concluded  S- x/that the facts alleged by the City are similar to those considered by the Commission in Valley Center  S- xCablesystems, L.P.j [ {O-ԍValley Center Cablesystems, L.P., 10 FCC Rcd 11940 (1995). j The Bureau Order, found that the City's argument that Daniels has failed to expand  S- xinto areas served by other cable operators is immaterial to the issue of whether Daniels has redefined its  Sx-franchise area. In this regard, the Bureau Order found that:  Xxit is uncontested that Daniels has substantially built out its system since receiving its  2franchise in 1978. In addition, the map submitted by Encinitas demonstrates that Daniels  Qhas built its system in several portions of Encinitas unconnected to its primary service  area, including several areas overbuilt by Daniels and Cox. The fact that Daniels has not  Rconstructed its cable plant in locations deemed most desirable by the City does not  ~obviate the fact that Daniels has significantly expanded its Encinitas cable system since  S:-1978.Q :4 [ yO-ԍDaniels Cablevision, 11 FCC Rcd at 11863.Q   S-  S- IVU#JII.xTHE PLEADING S  S- ` x7.` ` In its petition, the City does not allege that the Bureau Order incorrectly applied the  St- x<competing provider test, instead the City propounds three arguments purportedly requiring reconsideration  SL- xby the Bureau.@L [ yO!-ԍEncinitas Petition at 2.@ First, the City asserts that it has not been clearly established that Daniels has the legal  xright to serve all of Encinitas. The City states that Daniel's franchise agreement provides for service  S-within a "designated service area."7T [ {O$-ԍId. at 3.7 The City argues that:  ` psXxX` ` It is not at all clear that this area encompasses the entire City, or that the  ` pcompany has authority to build its system beyond this area without obtaining",`(`(88"  ` p%additional authorizations. Daniels does not appear to have substantially expanded  S-its service beyond the designated service area that is now part of Encinitas.J[ {O@-ԍId. at 3 (footnote omitted).J `  S- ` x8.` ` Second, the City argues that Daniels' petition for revocation was procedurally defective.  xMThe City states that, once a certification has been granted (and the 30day reconsideration period has  S8- xMpassed), the operator must petition the local franchising authority to declare that the cable operator's  S- xregulatory status has changed.7Z[ {O -ԍId. at 8.7 While the City acknowledges that the Commission has consistently held  xthat operators may file petitions for revocation directly with the Commission without first requesting  xdecertification from the local franchising authority, the City asserts that the legal basis for this decision  S- x=is not clear.2[ {O$ -ԍId. 2 In support of its argument, the City asserts that Section 76.914 provides that "in all cases  Sp- xof revocation" the Commission will assume jurisdiction over basic service rates.Yp~[ {O-ԍId. at 89, citing 47 C.F.R. 76.914(b).Y The City states that  xsuch a requirement would obviously be inappropriate if one assumed that Section 76.914 could be used  x\to eliminate rate regulation. Moreover, the City asserts that "[t]he Commission's rate orders identify  xkSection 76.915 as the section which sets out the procedures the operators may follow if they wish to  S - xterminate rate regulation in a particular community."y [ {O-ԍId. at 9. The City failed to indicate to which Commission order it refers.y The City asserts that there is good reason to  xlrequire cable operators to use Section 76.915 in seeking deregulation because that provision of the  xCommission's rules provides the average citizen with a real opportunity to present facts that may bear  SX-upon an effective competition determination.2X[ {O-ԍId. 2  S- ` ox9.` ` Third, the City continues to argue that Daniels has affirmatively redefined its Encinitas  x.franchise area. According to the City, five facts demonstrate that Daniels has affirmatively redefined its franchise area:  ` psXxX` ` (1) There is no evidence that there is any location within the City where  ` pSsubscribers have a choice between the two cable systems, and as far as the City is aware, there is not "headtohead" competition; `  ` pcXxX` ` (2) [Daniels] does not believe the City can force competition, since Daniels'  ` pfranchise provides that Daniels has no obligation to serve a site served by another cable operator; `  ` pXxX` ` (3) Daniels marketing material shows that Daniels is acting affirmatively to limit its service area within the City of Encinitas; ` "4 ,`(`(88["Ԍ ` p XxX` ` (4) Daniels is referring some potential customers in the City to Cox on the  ` pTground that the customers are outside of Daniels' service territory. This is a  ` pSprime example of the sort of affirmative action that demonstrates that [Daniels] has selflimited its franchise area; [and] `  ` pSXxX` ` (5) Moreover, there is no evidence suggesting Daniels expects to extend service  ` p to areas that Cox is serving. At the corporate level, the company has made  ` pstatements that it believes such actions would be futile. Moreover, at the  S- ` pcustomer level, there is no evidence of significant intrusions by Daniels into Cox's  ` pterritory or vice versa. The area served by Daniels has not changed significantly  Sp-from 1978, and certainly has not changed recently.\p[ {O - xԍId. at 45 (footnotes omitted). The City cites a Commission decision that refusal by a cable operator to provide  xcable service to subscribers is an indication that the cable operator intends to limit the extent of its franchise area.  {Oj -Id. at 56, citing Lake Cablevision, 10 FCC Rcd 9406 (1995). `  S - ` Bx10.` ` In its opposition, Daniels argues that the Bureau Order was correct in all respects and  x=must be upheld on reconsideration. In responding to the City's argument that the legal scope of Daniels'  xjEncinitas franchise area is something less than all of Encinitas, Daniels states that its initial franchise area  xincluded all of the unincorporated portions of San Diego County, with primary responsibility to serve then  S - xLunincorporated Encinitas.B [ yO-ԍDaniels Opposition at 23.B Thereafter, Encinitas incorporated as a separate municipal entity.1 |[ {O-ԍId.1 Daniels  SZ- xmaintains that it is uncontested, either in the Bureau Order or in the instant proceeding, that the City has  S4-taken no action since incorporation to limit the scope of Daniels' Encinitas franchise area.74[ {O-ԍId. at 3.7  S- ` nx11.` ` With regard to the City's procedural argument, Daniels asserts that the Commission's rules  xclearly provide cable operators with the option to file either a petition pursuant to Section 76.915 for  xchange in regulatory status with the local franchising authority, or to file a petition for revocation pursuant  Sl- xyto Section 76.914 directly with the Commission.7l[ {O-ԍId. at 7.7 In this regard, Daniels notes that the Commission has  SD- xaccepted significant numbers of petitions for revocation of certification pursuant to Section 76.914 of the  S- xCommission's rules.72 [ {O -ԍId. at 8.7 In addition, Daniels argues that the City's procedural argument is not properly a  xksubject for reconsideration. Daniels cites Section 1.106(c) of the Commission's rules as requiring that  xpetitions for reconsideration which rely on facts not previously presented to the Commission may be  S- xgranted only in limited circumstances.: [ {O%-ԍId. at 910.: Daniels asserts that such limited circumstances are not present  S|-in the instant proceeding.7|V [ {Or'-ԍId. at 9.7 "|,`(`(88"Ԍ S- ` ԙx12.` ` Finally, Daniels responds to each of the five facts allegedly demonstrating franchise area  xredefinition presented in the City's petition for reconsideration. First, Daniels asserts that, as correctly  S- x\found in the Bureau Order, the fact that Daniels has failed to expand into areas served by other cable  S- xoperators is not material to the issue of whether Daniels has redefined its franchise area.7[ {O-ԍId. at 4.7 Second,  xjDaniels states that the fact that the City cannot force Daniels to serve a particular portion of Encinitas is  xalso irrelevant to either a determination of effective competition or the issue of franchise area  S- xredefinition.1Z[ {O -ԍId.1 Third, Daniels strenuously disagrees with the City's characterization of Daniels' marketing  S- x.materials. Daniels states that the City attempts to turn the simple factual statement that Daniels serves  S- x"portions" of Encinitas, into proof of an affirmative decision to limit its Encinitas franchise area.9 [ {ON -ԍId. at 45.9 Fourth,  xDaniels asserts that the fact the Daniels referred an interested individual to a competing cable operator  xthat currently serves the area in which the individual's residence is located, was a matter of common  xcourtesy, not the relinquishment of the legal right to serve that, or any other, portion of Daniel's Encinitas  S" - xfranchise area.7!" ~[ {O@-ԍId. at 5.7 Finally, responding to the City's assertion that there is a lack of evidence that Daniels  xintends to compete on a headtohead basis with Cox in Encinitas, Daniels asserts that the burden of proof  S - xrests with the City to demonstrate that Daniels has affirmatively redefined its franchise area.9" [ {O-ԍId. at 56.9 Daniels  xstates that the fact that the City finds unsatisfactory the lack of headtohead competition does not satisfy  S - xthis burden.7# [ {O-ԍId. at 6.7 Daniels reasserts that it continues to consider opportunities to expand in Encinitas, and the  xfact that it has added only 243 subscribers in recent years is directly related to the City's planning policies  S2-which do not "encourage significant growth."c$24 [ {O-ԍId. at 6, quoting Encinitas Petition, Exhibit B at 2.c  S- ` x13.` ` In its reply, the City states that Daniels failed to rebut the City's evidence that Daniels and  S- xCox are dividing the market and not extending service into each other's service areas.=% [ yO -ԍEncinitas Reply at 3.= The City argues  xythat the absence of headtohead competition after years of operation is compelling evidence that Daniels  Sj-has limited its franchise area.7&jV [ {O`"-ԍId. at 4.7 The City concludes by arguing that:  ` pqXxX` ` The crux of the City's argument is that the [Commission] cannot infer that there  ` pis competition, or expansion, from the fact that there are areas where Daniels  ` p&seems to be supplying service near areas served by Cox and vice versa. This is  ` pbecause the truth is that the areas served are distinct subdivisions. Once one  ` poperator begins to serve a subdivision, the other does not serve it, and as a result,"z&,`(`(88"  ` pthere is no actual competition between the two cable operators and no expansion  S-into each others service territory.K'[ {O@-ԍId. at 5 (footnotes omitted).K `  S-  U#JI V.xDISCUSSION  S8- ` x14.` ` The City advances three arguments that reconsideration of the Bureau Order is required:  x(1) that Daniels's Encinitas franchise agreement does not clearly establish the right to serve all of the City  x\of Encinitas; (2) that Daniels' petition for revocation was procedurally defective; and (3) that Daniels  xmaffirmatively redefined its franchise area. Because we find that these arguments do not require  S-reconsideration, we uphold the Bureau Order.  SL - ` x15.` ` With regard to the City's first argument regarding the legal scope of Daniels' franchise  xMarea, we find that the City has improperly raised this issue as part of its petition for reconsideration. Section 1.106(c) of the Commission's rules states that:  ` pSXxX` ` A petition for reconsideration which relies on facts not previously presented to  ` pthe Commission or to the designated authority may be granted only under the following circumstances: ` XxX` ` `  S -  pDx` ` X (1) The facts fall within one or more of the categories set forth in 1.106(b)(2); or(#  9XxX` ` X (2) The Commission or the designated authority determines that  S-consideration of the facts relied on is required in the public interest.?(Z[ yO-ԍ47 C.F.R. 1.106(c).?  xSection 1.106(b)(2) provides that the Commission will entertain a petition for reconsideration which relies upon facts not previously presented:  ` pXxX` ` where the facts relate to events which have occurred or circumstances which have  ` pchanged since the last opportunity to present such matters; or the petition relies  ` pon facts unknown to the petitioner until after his last opportunity to present such  ` pmatters which could not, through the exercise of ordinary diligence, have been  S,-learned prior to such opportunity.B),[ yO-ԍ47 C.F.R. 1.106(b)(2).B `  S- ` x16.` ` The City failed to argue, or convey in any cognizable way, in the underlying proceeding,  x that Daniels' Encinitas franchise area as defined in its franchise agreement was anything less than the  xentire City of Encinitas. Accordingly, unless this information satisfies one of the categories set forth in  xSection 1.106(b)(2) of the Commission's rules, or we determine that the consideration of this argument  xis required by the public interest, we cannot consider this argument. We find that the City's argument  x>does not satisfy any of the categories enumerated in Section 1.106(b)(2). The legal scope of Daniels'  xfranchise area was established by a 1978 franchise amendment which extended primary service  xresponsibility for Encinitas as part of Daniels' countywide franchise. Indeed, the City attached several"!z),`(`(88U#"  xfranchise documents to its initial opposition in the underlying proceeding. The City had ample  xopportunity to brief this issue but did not do so. We cannot conclude that such arguments involve  x=recentlyoccurred facts, or facts that the City could not have discovered through the exercise of ordinary  xjdiligence. In its opposition, Daniels argued that the City's petition for reconsideration improperly raised  xarguments in violation of Section 1.106(c). The City failed to respond to this issue in its reply thereby  xLlosing an opportunity to enumerate reasons why the public interest demands consideration of this issue.  xjWe note for the record that the City failed to provide any evidence supporting its argument that the legal  xscope of Daniels' Encinitas franchise area is anything other than the entire City of Encinitas. Accordingly, we conclude that the public interest does not require that we consider this issue.  S-  Sp- ` x17.` ` The City also failed to raise its procedural argument in the underlying proceeding.  xMHowever, because the City's procedural argument can be interpreted as challenging the Commission's  S - xjurisdiction over Daniels' petition for revocation, we will consider the City's argument on reconsideration.* [ {O - xLԍSee Bender v. Williamsport Area School Dist., 475 U.S. 534, 54142 (1986) (claim of defect relating to jurisdiction may be raised at any time).  S - xThe City claims that the Commission's rules require that Daniels first seek rate deregulation by filing a  xpetition for change in regulatory status with the City. The City is incorrect. Section 76.915 of the  x.Commission's rules creates an optional deregulation procedure. The fact that Section 76.915 is intended  xas optional is demonstrated by the language of that provision which provides that "[a] cable operator that  SX- xbecomes subject to effective competition may petition the franchising authority for change in its regulatory  S2- x.status."Q+2"[ yO-ԍ47 C.F.R. 76.915(a) (emphasis added).Q The language of Section 76.914 makes equally clear that cable operators are permitted to seek deregulation directly from the Commission and provides that: XxX` ` A franchising authority's certification shall be revoked if: `  S-x` `  *hh*@*  eXxX` ` X (2) After being given an opportunity to cure the defect, a franchising  authority fails to fulfill one of the three conditions for certification, set  S-forth in 47 U.S.C. 543(a)(3), or any of the provisions of 76.910(b).T,[ yOl-ԍ47 C.F.R. 76.914(a)(2) (emphasis added).T Section 76.910(b)(4) of the Commission's rules provides that:  ` p%XxX` ` [t]o be certified, the franchising authority must file with the Commission a written  ` pcertification that . . . [t]he cable system in question is not subject to effective  ` pcompetition. Unless a franchising authority has actual knowledge to the contrary,  ` pbthe franchising authority may rely on the presumption in 76.906 that the cable  S-operator is not subject to effective competition.C-B[ yO#-ԍ47 C.F.R. 76.910(b)(4).C ` "-,`(`(88"Ԍ x[Thus, the Commission's regulations clearly contemplate cable operators bringing petitions for revocation  S- xbased on the presence of effective competition directly to the Commission.."[ yO@- xԍ Indeed, the Commission has previously reached this same conclusion in another effective competition  {O- xproceeding. See TKR Cable of Northern Kentucky, 11 FCC Rcd 9973, 9981 (1996) ("The Commission has  xyconsistently accepted petitions for revocation without the cable operator first presenting its case to the local franchising authority."). Daniels' petition for  xrevocation of the City's certification was properly brought with the Commission. Accordingly, the City's petition for reconsideration on this issue is denied.  S8- ` Qx18.` ` In arguing its third issue, the City strenuously maintains that Daniels has affirmatively  xredefined its franchise area to include only Daniels' current service area. In arguing franchise area  xredefinition, the City seems to misapprehend the requirements of the competing provider effective  xcompetition test. The City apparently believes that actual headtohead competition between competing  xMVPDs within a franchise area is necessary to satisfy the competing provider test. The City is incorrect.  xjThe competing provider test does not require that the Commission find actual headtohead competition.  xInstead, petitioning cable operators must show that the penetration, passage and comparable programming  S - xstandards enacted by Congress have been satisfied. The Bureau Order determined that Daniels had satisfied these requirements. The City does not refute this determination in its petition for reconsideration.  S - ` 3x19.` ` The City's franchise area redefinition arguments rest on two main facts. First, Daniels  xengages in little, or no, headtohead competition with its competitor, Cox. Second, Daniels has not  SZ- xexpanded to serve its entire franchise area. We do not find persuasive the evidence of franchise area  x?redefinition presented by the City. As discussed above, actual headtohead competition is not a  xrequirement of the competing provider test, nor, standing alone, indicative of franchise area redefinition.  xMoreover, the statement contained in Daniels' marketing materials that it serves "portions" of Encinitas  x is a factual statement and cannot reasonably be construed as affirmatively limiting Daniels' Encinitas  xfranchise area. Finally, the fact that Daniels referred a potential subscriber located in Cox's service area  xto Cox is a matter of customer service and business courtesy. To read into such referral the affirmative limitation of Daniels' franchise area is unreasonable.  S- ` Bx20.` ` The Bureau correctly concluded that the facts present in this proceeding are materially  S- xindistinguishable from the facts presented to the Commission in Valley Center. As the Commission stated  S-in Valley Center:  SV- `XxThe County's argument, without more, is simply an argument that a cable operator has  `not yet filled out its entire franchise area. This fact, if true, is insufficient to constitute  evidence by which we could conclude that a cable operator has redefined its franchise  oarea. Indeed, we note that the instant proceeding is not a case where the cable operator  has engaged in no expansion. . . . In light of these facts, we find that [Valley Center  3Cablesystem's] alleged failure to expand into areas served by other cable operators, by  Sf-itself, is not grounds upon which to reverse the Bureau's decision.Q/f[ {O$-ԍValley Center, 10 FCC Rcd at 11945.Q  The City has not convinced us that this reasoning is not equally applicable to the instant proceeding. " D/,`(`(88e""Ԍ S- ` x21.` ` In summary, the City had the burden of demonstrating that Daniels had affirmatively  S- x redefined its Encinitas franchise area.`0[ {O@-ԍFirst Order on Reconsideration, 9 FCC Rcd at 1180.` The City has raised no arguments, nor has it introduced new  S- xevidence which brings into question the reasoning and conclusions of the Bureau Order. In light of the foregoing, we find that the City's petition for reconsideration should be denied.  Sb-  S:-VI.xORDERING CLAUSES  S- ` x22.` ` Accordingly, IT IS ORDERED , that the petition for reconsideration of the Bureau Order  xgranting the petition for revocation of Daniels Cablevision Inc. d/b/a North County Cablevision, L.P. filed  S-by the City of Encinitas, California IS DENIED.  SL - ` x23.` ` This action is taken pursuant to delegated authority under Section 1.106 of the  S$ -Commission's rules, as amended.<1$ Z[ yO-ԍ47 C.F.R. 1.106.< x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones  S-x` `  hhChief, Cable Services Bureau#&a\  P6G;/&P#