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

In the Matter of                )
                                )
WESTMARC CABLE HOLDING, INC.    )  File No. CSB-A-0542
d/b/a TCI OF NORTHERN IOWA      )  CUID IA0137
                                )
Appeal of Local Rate Order Issued By)
the City of Vinton, Iowa        )
                                 

                  MEMORANDUM OPINION AND ORDER

   Adopted:  January 25, 1999           Released:  January 27, 1999

By the Deputy Chief, Cable Services Bureau:

I.   INTRODUCTION

     1.   Pursuant to Section 76.944(b) of the Commission's Rules, Westmarc Cable Holding, Inc.,
d/b/a TCI of Northern Iowa  ("TCI-NI"), a franchised cable operator serving the City of Vinton, Iowa ("City"),
has filed an Appeal from a local rate decision issued by the City as the local franchising authority ("LFA"). 
The issue is whether the City rendered a written rate decision that properly explained its rejection of TCI-NI's
proposed rates.  The City did not file an opposition to the Appeal.  TCI-NI also filed a Request for Emergency
Stay of Rate Order, which is mooted by the grant of the operator's appeal in this order.          

     2.   Under the Communications Act, the Commission reviews appeals of rate orders issued by
LFAs.  When considering appeals, the Commission 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 Commission regulations.  If the
Commission 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.  DISCUSSION  

     3.   In a one-page decision dated May 18, 1998, and signed by the City Coordinator, the Vinton
City Council rejected a TCI-NI proposed annual rate adjustment rate increase set for June 1998.  The decision
stated that it is the opinion of the Council that "rates in Vinton should be reduced to be comparable to TCI rates
in cities that have competitive rates, such as Harlan where you offer 35 channel service for just $16.96/month
and Hawarden where your listed rate for 29 channel service is $18.95/month."

     4.   In its Appeal, TCI-NI argues that the City violated Commission regulations by not adequately
explaining its denial of the rate increase, thus denying the cable operator substantive due process.  Additionally,
in footnote 2 of its Appeal, TCI-NI asserts that the City's decision appears to address only the Company's basic
service rate, but indicates that to the extent that the decision also rejects the Company's proposed equipment
and installation rates, TCI-NI appeals that rejection as well.

     5.   The City of Vinton failed to issue a written decision affirmatively demonstrating why TCI-NI's
proposed annual rate adjustment rate increase for the basic service rate is unreasonable.  The purpose of
requiring a written order is to protect the due process rights of the cable operator by explaining why the rate
was disapproved and providing a basis to refile the rate or appeal the decision to the Commission.  As stated
in Valley Cable TV, Inc., the Commission has previously rejected local rate orders that summarily or vaguely
rejected an operator's proposed rates.  The City's denial of the proposed rate increase on the basis that there
should be rate comparability with other communities is not adequate, for the City's order fails to explain why
the operator's rates are unreasonable pursuant to the Commission's rules governing rates.  In Paragon
Communications, we stated that the Commission's Rules allow periodic rate adjustments for inflation, changes
in external costs, and changes in the number of regulated channels using either the quarterly or annual
adjustment method; the City's authority is to review the reasonableness of the cable operator's rates on the basis
of regulations adopted by the Commission; and the rules do not provide any other basis for rate decisions. 
Finally, the City's decision does not mention equipment and installation rates and gives no notice that those
rates are addressed by the decision.  We construe the rate decision as addressing only TCI-NI's Basic Service
Tier rates. 

III. ORDERING CLAUSES

     6.   Accordingly, IT IS ORDERED that TCI-NI's Appeal IS GRANTED and this case IS
REMANDED to the City for resolution in accordance with the terms of this Memorandum Opinion and Order.

     7.   IT IS FURTHER ORDERED that a Request for Emergency Stay of Rate Order in this same
matter, filed with the Commission by TCI- NI on June 19, 1998, IS DISMISSED as moot.

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

                         FEDERAL COMMUNICATIONS COMMISSION



                         William H. Johnson
                         Deputy Chief, Cable Services Bureau