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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: ) ) TCI OF NORTHERN IOWA ) CUID No. IA0108 ) ) Petition for Revocation of the Certification) of the City of Cedar Falls, Iowa ) to Regulate Basic Cable Service ) and Equipment Rates ) MEMORANDUM OPINION AND ORDER Adopted: November 5, 1997 Released: November 10, 1997 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. In the captioned proceeding, Westmarc Cable Holding, Inc. d/b/a TCI of Northern Iowa, Inc. ("TCI") filed a petition for revocation of the certification of the City of Cedar Falls, Iowa ("Cedar Falls") to regulate basic cable service and equipment rates. No oppositions were filed. 2. Section 623 of the Communications Act of 1934, as amended ("Communications Act"), provides that subscriber rates of cable television systems are subject to either local or federal regulation only where effective competition is absent. Section 623(l)(1)(C) of the Communications Act provides that a cable operator is subject to effective competition where: a multichannel video programming distributor operated by the franchising authority for that franchise area offers video programming to at least 50 percent of the households in the franchise area. Section 623(a)(4) of the Communications Act allows franchising authorities to become certified to regulate basic cable service rates of cable operators which are not subject to effective competition. Certification becomes effective 30 days from the date of filing, unless the Commission finds that the authority does not meet the statutory certification requirements. Cable operators may file petitions for reconsideration of the franchising authority's certification within 30 days from the date such certification becomes effective. Rate regulation is automatically stayed pending review of a timely-filed petition for reconsideration alleging the presence of effective competition. Once the period for filing petitions for reconsideration has elapsed, cable operators may challenge a franchising authority's certification by filing a petition for revocation. Regardless of its grounds, however, the filing of a petition for revocation does not automatically trigger a stay of a franchising authority's ability to regulate basic cable rates. II. DISCUSSION 3. TCI asserts that its cable system serving Cedar Falls is subject to municipal provider effective competition from the cable system operated by Cedar Falls Utilities ("CFU"). TCI states that the citizens of Cedar Falls voted in 1994 to authorize CFU to begin operating a cable system in competition with TCI. TCI states that CFU's cable system became operational in March 1996. TCI provides a copy of CFU's 1996 Annual Report and numerous newspaper articles on CFU's operations as evidence that CFU is municipally-owned, and that CFU operates a cable system within TCI's Cedar Falls franchise area. 4. With regard to the requirement that the municipally-owned cable system offer service to at least 50% of the households in the franchise area, TCI submits newspaper articles indicating that CFU's cable system passes approximately 10,000 households in Cedar Falls. In addition, TCI submits 1990 Census data indicating that Cedar Falls has 11,698 households. TCI also submits a letter from CFU indicating that as of March 24, 1997, CFU had 4,936 subscribers in Cedar Falls. TCI provides a copy of CFU's channel line-up which indicates that CFU offers 71 channels, including at least 5 broadcast channels and numerous non-broadcast channels. 5. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition, as defined by Section 76.905 of the Commission's rules, is present within its franchise area. TCI has met this burden. 6. The municipal provider test requires that at least 50% of the households in the franchise area be offered service by a municipally-owned cable system. TCI's evidence clearly establishes that CFU is owned by the City of Cedar Falls, and that CFU operates in TCI's Cedar Falls franchise area. With regard to the requirement that CFU offer service to at least 50% of the households in Cedar Falls, TCI's evidence indicates that there are 11,689 households in Cedar Falls. To satisfy the 50% passage requirement, TCI must establish that CFU's system offers service to at least 5,845 households in Cedar Falls (50% of 11,689 households). TCI provides evidence that CFU offers service to 10,000 households, or 86% of the total households in Cedar Falls -- significantly above the 5,845 households necessary to establish that CFU offers service to at least 50% of the households in the franchise area. Although not a requirement of the municipal provider test, we also note TCI's evidence that CFU actually provides service to 4,936 households, or 42% of the households in the Cedar Falls franchise area. 7. Although the municipal provider test does not contain a comparable programming requirement, we note that the programming of TCI and CFU are comparable. Each provider offers at least 12 channels of video programming, including at least one non-broadcast channel. 8. As TCI has submitted sufficient evidence demonstrating that its cable system serving the City of Cedar Falls is subject to municipal provider effective competition, its petition is granted. III. ORDERING CLAUSES 9. Accordingly, IT IS ORDERED that the petition for revocation filed by Westmarc Cable Holding, Inc. d/b/a TCI of Northern Iowa, Inc. challenging the certification of the City of Cedar Falls, Iowa to regulate TCI's basic cable service and equipment rates IS GRANTED. 10. IT IS FURTHER ORDERED that the certification granted to the City of Cedar Falls, Iowa to regulate Westmarc Cable Holding, Inc. d/b/a TCI of Northern Iowa, Inc.'s basic cable service and equipment rates IS REVOKED. 11. This action is taken pursuant to delegated authority pursuant to Section 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau