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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 ) ) CENTURY COMMUNICATIONS CORPORATION ) File No. CSB-A-0621 ) CUID IN0124 Appeal of Local Rate Order Issued By ) Warrick County, Indiana ) MEMORANDUM OPINION AND ORDER Adopted: April 29, 1999 Released: April 30, 1999 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. Pursuant to Section 76.944(b) of the Commission's Rules, Century Communications Corporation ("Century"), a franchised cable operator serving Warrick County, Indiana ("County"), has filed an appeal from a local rate decision issued by the County as the local franchising authority ("LFA"). The issue involved in the appeal is whether, under Commission regulations, the County acted unreasonably when it rendered its written rate decision disallowing any portion of a basic service tier (BST) rate increase proposed by Century. The County did not file an opposition to the Appeal. Century also filed a Petition for Stay of Enforcement Pending Review, which is mooted by the grant of the operator's appeal in this order. 2. Under the Communications Act, the Commission reviews appeals of BST 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 two-page written Resolution dated March 29, 1999, and signed by the Board of Commissioners of Warrick County, the County rejected a proposed BST rate increase scheduled for May 1, 1999, submitted by Century by letter dated January 28, 1999. The County Resolution stated that the proposed rate increase was disapproved because the cable system operator had failed to provide FCC Forms 1240 and 1205 with its January 28th letter to the County, and because Century had violated its franchise agreement with the County by continually producing a picture that was distorted and whose signal quality was less than adequate. 4. In its appeal, Century asserts that both reasons cited in the Resolution are spurious, and that the County acted unreasonably in denying the rate increase. It contends that the FCC Form 1240 and 1205 were attached to its letter and justified the rate increase; that the size and weight of the package sent by Federal Express made it unlikely that only the one-page transmittal letter was received by the County; that on February 24, 1999, an attorney for the County had sent a letter to Century stating that its attempt to "increase" the rate was violative of the law since there had been no hearing before the County Commissioners, but that the letter from the Attorney did not mention that the FCC Forms had not been received by the County; and that the County never notified Century that the rate forms supposedly did not accompany the January 28th letter until issuance of the March 29th rate order. Regarding the County's denial of the proposed rate increase on the basis of inadequate signal quality, Century contends that such a ground is legally impermissible under Commission precedent discussed infra; that an LFA must have a reasonable basis, under the Commission's Rules, for denial of a proposed rate increase; and that if there is no dispute with the calculations presented in the cable operator's FCC Forms, the proposed rate derived from the forms must be approved. 5. The Warrick County rate order reflects that Century requested a rate increase through its January 28, 1999, letter but failed to include FCC Forms 1240 and 1205. The rate order also states that the County Commissioners reviewed the request and made a determination. Section 76.933(g) of the Commission's rules provides that the Commission's time periods for review of a rate filing under the annual filing system are tolled if the operator has submitted a facially incomplete filing and the franchising authority has notified the operator of the incomplete filing within 45 days of the date the filing is made. The record before us shows that counsel for the County advised Century by letter dated February 24, 1999, that the County Commissioners had not approved an increase in Century's basic rate and had not held a hearing. The letter does not mention that the rate filing was incomplete, and nothing else in the record suggests that the County timely advised Century about any problem with the completeness of its filing within the 45 day period. The County's statement in the rate order adopted on March 29, 1999, that Century failed to include FCC Forms in its rate filing does not satisfy the Commission's requirement that notice of a facially incomplete filing be made within 45 days. 6. The Warrick County rate order also fails to satisfy the Commission requirement that the franchising authority issue a written decision affirmatively demonstrating why Century'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 County's denial of the proposed rate increase on the basis of poor signal quality is not adequate, for the County's Resolution 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 LFA'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. In TCI Cablevision of Texas, Inc., we stated that an LFA may not arbitrarily reduce BST rates below permitted rate levels or deny a justified increase of the permitted rate in an effort to address quality of service issues, but must adhere to the Commission's Rules in reviewing rates. The LFA may address other, non-rate concerns through our rules on technical standards, our rules on customer service obligations, the LFA's own cable regulations, and the franchise agreement. Because the County did not adhere to the Commission's rate regulations, we find that it acted unreasonably in denying Century's requested rate increase. Consequently, we remand this matter to the County so that it can take further action consistent with this decision. III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that Century's Petition for Review of Local Rate Order IS GRANTED and this case IS REMANDED to the County for resolution in accordance with the terms of this Memorandum Opinion and Order. 8. IT IS FURTHER ORDERED that the Petition for Stay of Enforcement Pending Review in this same matter, filed with the Commission by Century on April 5, 1999, IS DISMISSED as moot. 9. 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