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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 ) Petition for Relief of ) ) Cherish, Incorporated, d/b/a Cherish,) Petitioner, ) vs. ) CSR 5092-L ) Range Television Cable Co., Inc.,) Respondent ) ) For Leased Access Channels ) MEMORANDUM OPINION AND ORDER Adopted: October 15, 1998 Released: October 20, 1998 By the Chief, Cable Services Bureau: INTRODUCTION 1. Cherish, Incorporated, d/b/a Cherish ("Cherish") filed a petition for relief pursuant to 47 C.F.R.  76.975 alleging violations of the Commission's commercial leased access rules by Range Television Cable Co., Inc. ("Range"). Cherish is a video production company doing business in the Hibbing, Minnesota area, and produces thirty minute programs for classified advertisements, recreational vehicle dealers, real estate companies, service providers and others for presentation on a commercial leased access channel. Range, operator of a cable system in Hibbing, did not file a response to the petition. BACKGROUND 2. The 1984 Cable Act imposed on cable operators commercial leased access requirements designed to assure access to cable systems by unaffiliated third parties who have a desire to distribute video programming free of editorial control of cable operators. Channel set aside requirements were established proportionate to a system's total activated channel capacity. The 1992 Cable Act revised the leased access requirements and directed the Commission to implement rules to govern this system of channel leasing. In its 1993 Report and Order and Further Notice of Proposed Rule Making ("Rate Order"), the Commission adopted new rules for leased access addressing maximum reasonable rates, reasonable terms and conditions of use, minority and educational programming, and procedures for resolution of disputes. The Commission recently modified some of its leased access rules in the Second Report and Order and Second Order on Reconsideration of the First Report and Order ("Second Order"). PETITIONER'S ALLEGATIONS 3. Cherish contends that Range is in violation of the Commission's commercial leased rules for failing to provide, in response to written request, information regarding commercial leased access channels needed for presenting its video programming productions. Cherish states that Range was requested to provide its complete schedule of full time and part time leased access rates, its available leased access set aside channel capacity, its rates associated with technical and studio costs, and its sample leased access contract, consistent with the requirements of Section 76.970 (h) of the Commission's rules. Cherish asserts that Range's response indicated that a cable connection to its cable system headend would be very expensive because of costs for administration and engineering the system; quoted a monthly channel rate of $3,894.80; identified several other requirements necessary to accommodate the use of video tapes rather than a cable connection; and invited Cherish to reconsider its request. Cherish contends that Range failed to provide the requested rates for part time leased access channel capacity, rates for technical or studio costs, available channel capacity information, or a sample leased access contract. Cherish contends further that the rates for full time channel capacity provided by Range "are not in accordance with the FCC guidelines pertaining to fee schedules for leased access." 4. Cherish states it informed Range of questions regarding the accuracy of the monthly rate quoted; provided Range with its own determination of full time rates for a leased access channel placed on the cable system's basic tier and on the basic-plus tier; reiterated the request for part time service rates; requested leased access time from 8:00 a.m. to 10:00 p.m. seven days per week; and indicated that Cherish was ready to move forward with the project as soon as possible. 5. Cherish states further that Range subsequently indicated it would take from three to six months to provide the requested leased access channels, due to a required system upgrade completion, despite earlier indications that channels were currently available. After further discussions between the parties about whether the leased access channel could be accommodated on a public access channel and about guidance provided in the Commission's Second Report for calculating leased access rates, Range provided Cherish with new rates of $4,630.61 per month for 10 hours per day of air time and of $11,113.47 per month for 24 hours per day, plus unspecified "extra engineering, administrative and equipment costs," and a $2,500 one time headend equipment charge. 6. Cherish contends that the new air time rates also do not comply with the FCC guidelines. Cherish contends further that Range shows by its conduct a desire not to provide leased access channels, and has unreasonably delayed the provision of the requested leased access channels in order to take unfair advantage by distributing its own programming that is identical to programming listed on program schedules Cherish provided to Range shortly after discussions of leased access channels were initiated. Cherish asserts that Range still has not provided any part time rates. Cherish asks the Commission to calculate the correct rates, alleging that Range appears unable to do so. Cherish makes a claim for financial losses stemming from the delays in provision of channels and for reimbursement of expenses associated with its pursuit of leased access channel capacity and with filing the petition with the Commission. Finally, Cherish requests issuance of cease and desist orders and assessment of monetary penalties against Range, with such penalties being paid directly to Cherish as compensation for the alleged damages. As noted previously, no response to the allegations of the petition has been filed. DISCUSSION AND ANALYSIS A. Provision of Requested Leased Access Channel Information 7. Section 76.970(e) of our rules initially required that cable operators provide a schedule of rates "[u]pon request" to prospective leased access programmers. In its Second Report and Order, the Commission, recognizing the importance of prompt disclosure of leased access information and concluding that a reasonable response time was justified, modified its rules to set a fifteen calendar day response time from the date that a request for leased access information is made to the cable operator. The Commission also modified the rules to specify that a cable operator is required to provide, in response to a written request from a leased access programmer: 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 Cherish. 8. We find that Range failed to comply fully with the requirements of Section 76.970(h) of our rules. Cherish made a written request for a complete schedule of full time and part time leased access rates, its available leased access set aside channel capacity, its rates associated with technical and studio costs, and its sample leased access contract, consistent with the requirements of Section 76.970(h) of the Commission's rules on July 11, 1997. By letter dated July 18, 1997, Range informed Cherish of a "leasing fee of aprox. 3,894.80 per month"(sic). Although this initial response by Range to the written request of Cherish was well within the fifteen calendar day response time specified in the rule, that response included only a rate that applied to full time service. None of the other requested information, including part time leased access rates, available leased access set aside channel capacity, rates associated with technical and studio costs, or a sample leased access contract, was provided, as required by Section 76.970(h) of our rules. Subsequently, following other exchanges between the parties, Range, on August 12, 1997, provided a new monthly rate of $4,630.61 for 10 hours of service per day and a new monthly rate of $11,113.47 for 24 hours per day. Again, Range failed to provide part time leased access rates, available leased access set aside channel capacity, rates associated with technical and studio costs, or a sample leased access contract, as required by Section 76.970(h) of our rules. In view of this failure, Range will be directed to comply fully with this requirement promptly upon release of this order. B. Leased Access Dispute Resolution Procedure; Rates 9. Cherish disputes an assertion made by Range in an August 12, 1997 letter that the new rates are determined in accordance with the modified requirements announced in the Commission's Second Report, and asks the Commission to calculate the applicable leased access rates. The dispute resolution procedures adopted in the Second Report require that a cable operator's maximum leased access rate be determined by an independent accountant prior to the filing of a petition for relief alleging that a cable operator's leased access rate is unreasonable. In the event that the parties cannot agree on a mutually acceptable accountant, the rules require that the parties each select an independent accountant, who must then select a third independent accountant to perform the review. 10. The record does not show that these procedures have been followed in this case. More particularly, a determination of Range's maximum leased access rate by an independent accountant was not made prior to the filing of Cherish's petition as required by the Commission's dispute resolution procedures. The record shows instead that Range submitted the new rates to Cherish, who then filed the instant petition with the Commission, without either party following the dispute resolution procedures required by our rules. 11. We re-emphasize that full time and part time leased access rates schedules, the amount of available leased access set aside channel capacity, rates associated with technical and studio costs, and a sample leased access contract constitutes information that a potential programmer needs in order to pursue leased access on a particular cable system. Both full time and part time leased access rates are particularly important to potential leased access programmers for planning purposes. In view of Range's failure to comply fully with Section 76.970(h) by not providing all of the leased access information requested by Cherish, pursuant to Section 76.975(f), we will require that Range provide to Cherish, at no cost to Cherish, a report showing an independent accountant's determination that the full time and part time rates proposed by Range have been properly calculated in compliance with the requirements of Section 76.970 of our rules. In the event Cherish finds the accountant selected by Range to be unacceptable, then Cherish may follow the procedures set forth in Section 76.975(b)(2) for selecting a second independent accountant, who together with the accountant selected by Range selects a third independent accountant for preparation of the report required by this order. We believe these procedures will expedite the initiation of Cherish's proposed service, which has been unjustifiably delayed by Range's failure to provide to Cherish complete information, including a schedule of part time rates, in compliance with our rules. C. Prompt Provision of Leased Access Service 12. We reject the claim made by Range that it needs three to six months before leased access can be provided because of completion of a required system upgrade. The mandate of Section 612(b) for the designation and provision of leased access channels is a requirement that is proportionate to a system's total activated channel capacity. Range failed to provide any information necessary to establish that the statutory set-aside requirement does not apply to its cable system either before or after any system upgrade that may be under way or planned for the near future. Accordingly, we will require that Range make leased access channel capacity available to Cherish promptly following release of this order. D. Provision of Equipment and Technical Services 13. The Commission considered the level of technical support that cable operators are required to provide in the Rate Order. There the Commission noted that technical cooperation between the cable operator and the leased access programmer is likely to be necessary for the programming to be delivered over a cable system The Commission stated that operators will be required to provide programmers with "the minimal amount of technical support, whether it be equipment, technology or other miscellaneous support, which would be necessary for the programmer to present its material on the air." The Commission further explained this requirement by adding that a cable operator must offer to leased access programmers "the same services as would be offered to comparable programming services that use the operator's non-leased access channel capacity." 14. In the Second Report the Commission further clarified these requirements and made it clear that the leased access rate determined under Section 76.970 includes the cost of technical support ordinarily provided in common to other programmers. Under this clarification of the requirements of Section 76.971, a cable operator may not impose an additional charge for technical support ordinarily provided in common to other programmers. If an operator must purchase equipment not typically used by non-leased access programmers to accommodate a leased access programmer, the operator may either (1) purchase the equipment for itself and lease it to the programmer at a reasonable rate or (2) require the leased access user to purchase the equipment. Consequently, Range may impose charges in addition to the charges determined under Section 76.970 for the reasonable cost of other equipment and technical support actually provided to Cherish only if that equipment and technical support is not also provided with other non-leased access programming. It is not clear from this record whether Range provides equipment or technical services mentioned on this record to other programmers without charge. If that is the case, then such equipment and technical services must be provided to Cherish and other leased access users without charge. E. Request for Monetary Penalties and Other Sanctions 15. Finally, Cherish requests compensation for the costs incurred in filing the instant petition and imposition of various other monetary and administrative sanctions against Range. Nothing in the Communications Act of 1934, as amended, provides for recovery of costs associated with the filing of a petition for relief with the Commission for alleged violations of the statutory provisions or of the Commission's regulations applicable to leased access channels. Accordingly, Cherish's request for compensation for expenses associated with its pursuit of service from Range and with filing the instant petition will be denied. Finally, we decline to impose monetary and administrative sanctions in the instance case, because Cherish failed to establish the need for any such sanctions. ORDERING CLAUSES 16. For the foregoing reasons, IT IS ORDERED pursuant to 47 C.F.R.  76.975(f) that Range Television Cable Co., Inc. ("Range") shall, within fifteen days from the release date of this order, provide to Cherish, Incorporated ("Cherish") a complete schedule of full time and part time leased access rates, its available leased access set aside channel capacity, its rates associated with technical and studio costs, and its sample leased access contract, consistent with the requirements of Section 76.970 (h) of the Commission's rules. 17. IT IS FURTHER ORDERED, that Range shall, within ten days from the release date of this order, provide Cherish at no cost a report showing an independent accountant's determination that the full time and part time rates proposed by Range have been properly calculated in compliance with the requirements of Section 76.970 of our rules. 18. IT IS FURTHER ORDERED, that Range shall promptly, upon request by Cherish, enter into arrangements for leased access service with, and commence the provision of leased access service to, Cherish. 19. IT IS FURTHER ORDERED, that the petition for relief of Cherish (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. 20. 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 Deborah Lathen Chief, Cable Services Bureau