******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) ) ) Northland Cable Television, Inc.) WA0119 (Moses Lake) ) ) Complaint Regarding ) Cable Programming Services Tier Rates) ) Petition for Reconsideration ) ORDER ON RECONSIDERATION Adopted: February 22, 1999 Released: March 3, 1999 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a Petition for Reconsideration of a Cable Services Bureau ("Bureau") order regarding the rates the above-referenced operator ("Operator") was charging for its cable programming services tier ("CPST") in the community referenced above. We have already issued an order in which we found that Operator's rates in effect prior to May 15, 1994, were reasonable ("First Order"). Next, we issued an Order in which we found Operator's rates for the period after May 14, 1994, were unreasonable ("Second Order"). On May 22, 1998, Operator filed a timely Petition for Reconsideration of our Second Order ("Petition"). 2. The Communications Act authorizes the Federal Communications Commission ("Commission") to review the CPST rates of cable systems not subject to effective competition to ensure that rates charged are not unreasonable on receipt of a complaint as to such rates and to determine correct rates and any refund liability. Throughout the rate regulation process initiated by the 1992 Cable Act, special attention has been given to the needs of small cable systems. 3. In the Telecommunications Act of 1996 ("1996 Act"), Congress amended Section 623 of the Communications Act and redefined a small cable operator as one that "directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000." The Commission's rules currently define one percent of all cable subscribers in the United States as equivalent to 617,000 subscribers. The Commission's rules also define an affiliated entity as one which "holds a 20 percent or greater equity interest, passive or active, in the operator or exercises de jure or de facto control over the operator." In the 1996 Act, Congress determined that, effective February 8, 1996, the Commission shall not apply its CPST rate regulation rules, promulgated under Sections 623(a), (b) and (c) of the Communications Act, to a small cable operator in any franchise area in which that operator services 50,000 or fewer subscribers. 4. In our Prior Order, we reviewed Operator's FCC Form 1200, 1210 and 1240, filed in response to a complaint filed against a CPST rate increase effective September 1, 1993. We did not review Operator's eligibility for small systems status. Instead, we reviewed Operator's FCC Forms 1200, 1210 and 1240 for the period beginning May 15, 1994. In our First Order we stated that "the findings in this Order do not in any way prejudge the reasonableness of the price for CPS service after May 14, 1994 under our new rate regulations". In our Second Order we found Operator's rates for the period May 15, 1994 through May 31, 1996 to be reasonable and for the period beginning June 1, 1996 to be unreasonable. Because Operator's actual CPST rate of $10.29, effective June 1, 1996 exceeded its revised MPR of $10.19, Operator incurred refund liability beginning June 1, 1996. 5. In its Petition, Operator argues that the Order was issued in error because Operator and its system serving Moses Lake qualify as a "small cable operator" as defined in Section 632 (m) of the Communications Act of 1934, as amended by the 1996 Telecommunications Act ("1996 Act"), and the Commission's rules thereunder. Our review reveals that Operator is a small cable company pursuant to Section 623(m)(2) of the Communications Act. Because Operator serves fewer than 50,000 subscribers in the franchise area in which the community listed above is located, the Operator's CPST rates in this community have effectively been deregulated by the 1996 Act. The complaint against the Operator in this community was filed prior to the passage of the 1996 Act. However, while we found that Operator's CPST rates in effect prior to the passage of the 1996 Act were reasonable, we also found that Operator's CPST rates effective after the 1996 Act were unreasonable. We conclude, given all of the circumstances presented including, in particular, the Congressional finding that post-1996 CPST rate regulation is unjustified for systems of this size, that Operator's CPST rate, effective June 1, 1996, was not subject to our regulation. Accordingly, we will grant Operator's Petition. We find this course of action not only consistent with Section 623 but necessary to implement the Congressional intent embodied in the small company provisions of the 1996 Act and to avoid futile adjudications. 6. Accordingly, IT IS ORDERED, pursuant to Section 1.106 of the Commission's rules, 47 C.F.R.  1.106, that the Petition for Reconsideration filed by Operator is GRANTED. 7. IT IS FURTHER ORDERED, that In The Matter of Northland Cable Television, Inc., DA 98-749 (Released April 22, 1998) IS VACATED. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 3.321, that the complaint referenced herein against the rates charged by Operator in the community set forth above IS DENIED. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau