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                                Before the
                     Federal Communications Commission
                          Washington, D.C. 20554

In the Matter of:                    )
                                     )
FALCON CABLE SYSTEMS CO. II, L.P.    )           File No. CSB-A-0496
                                     )
Appeal of Local Rate Order Issued By )
City of Yoncalla, Oregon             )
(CUID OR0202)                        )


                      MEMORANDUM OPINION AND ORDER

   Adopted:  April 10, 1998                        Released:  April 14, 1998

By the Acting Chief, Cable Services Bureau:

I.      INTRODUCTION

  1.    On January 16, 1998 and pursuant to Section 76.944(b) of the Commission's rules, Falcon
Cable Systems Co. II, L.P. ("Falcon"), a franchised cable operator serving the City of Yoncalla, Oregon
("City"), filed an Appeal of a local rate order ("Order") issued by the City's cable regulatory authority,
the Regional Cable Commission ("Cable Commission").  The issue is whether the Cable Commission's
Order properly explained its rejection of Falcon's proposed rate for equipment.  The City filed its
Opposition to the Appeal on February 11, 1998, and Falcon filed its Reply on February 23, 1998.  With
its Opposition, the City filed a Motion to Allow Late Filing, to which Falcon has not objected, and which
we therefore grant.

  2.    Under the Communications Act, the Federal Communications Commission ("FCC")
reviews appeals of rate orders issued by local cable franchising authorities ("LFAs").  When considering
appeals, the FCC will not conduct a de novo review, but instead will sustain the LFA's decision as long
as it did not act unreasonably in applying FCC regulations.  If the FCC reverses an LFA's decision, it
will not substitute its own judgment, but will remand the case to the franchising authority with instructions
to resolve it consistent with the decision.

II.     PLEADINGS AND DISCUSSION

  3.    On August 22, 1997, Falcon submitted FCC Form 1205 to the City justifying certain
equipment rate charges.  On December 17, 1997, the Cable Commission determined that "Falcon's charge
for the 'lease of other equipment' related to the basic service tier exceeds the permitted charge."  The
Cable Commission held that Falcon failed to prove that its existing and proposed equipment leasing rates
complied with the Communications Act and FCC requirements governing equipment rates.  The Cable
Commission denied Falcon's proposed $0.89 charge, setting it instead at $0.00, the maximum permitted
rate ("MPR") that Falcon calculated in its Form 1205.

  4.    Falcon contends that the Order did not sufficiently explain the Cable Commission's
rejection or its decision to set the rate at zero.  Falcon argues that an LFA must affirmatively
demonstrate why an operator's proposed rate is unreasonable and why a prescribed rate is reasonable. 
Falcon requests that we remand the case to the City.  The City argues that the Order is sufficient because
it mentions a review of Falcon's Form 1205 and identifies Falcon's permitted charge, which Falcon may
not exceed under FCC rules.  The Cable Commission did not recompute the MPR, the City states, but
simply ordered Falcon to charge the MPR that Falcon offered. 

  5.    The Cable Commission's Order is sufficient.  FCC regulations do not allow an operator
to charge more than its MPR, nor do they require an LFA to explain why it accepts an operator's own
MPR calculation.  On its rate form, Falcon calculated its permitted rate for other leased equipment at
$0.00 while listing its actual charge at $0.89.  The Cable Commission did not reject Falcon's MPR, but
found that the proposed rate exceeded that amount.  It enforced the rule that Falcon may charge no more
than the MPR.  The Order properly and simply enunciated what Falcon already knew: the permitted
charge for other leased equipment is $0.00.  This case differs from two that Falcon cites in its Appeal. 
In Falcon Cablevision, the LFA rejected the operator's $45 MPR for its hourly service charge without
sufficient explanation and instead set it at $30.  In A-R Cable Services-ME, the LFA approved the
operator's MPR for installation and equipment, but ordered the operator to maintain rates below that
amount.  In both cases, the LFAs improperly required the operators to charge less than their MPR.  In
this case, the Cable Commission properly required Falcon to charge no more than its MPR.  The Cable
Commission held that Falcon failed to justify its rate, and we must sustain the LFA's decision because
it did not act unreasonably in applying our regulations.

III.    ORDERING CLAUSES

  6.    Accordingly, IT IS ORDERED that Falcon's Petition for Review of Rate Order IS
DENIED.

  7.    IT IS FURTHER ORDERED that the City's Motion to Allow Late Filing IS
GRANTED.

  8.    This action is taken by the Acting Chief, Cable Services Bureau, pursuant to authority
delegated by  0.321 of the Commission's rules.  47 C.F.R.  0.321.

                                 FEDERAL COMMUNICATIONS COMMISSION



                                 John E. Logan
                                 Acting Chief, Cable Services Bureau