Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of: ) ) CS Docket No. 96-85 Implementation of Cable Act Reform) Provisions of the Telecommunications) Act of 1996 ) ERRATUM Adopted: May 19, 1999 Released: May 21, 1999 By the Chief, Cable Services Bureau: 1. This Erratum corrects the final rules in the Report and Order in the above-captioned proceeding, FCC 99-57, which was released March 29, 1999 ("Order"). This error will be corrected prior to publication of the Order in the Federal Register and in the FCC Record. 2. The following correction has been made: Appendix B the Order has been revised; changes made to 47 C.F.R.  76.964(b) are now made to 47 C.F.R.  76.1603(e) as set forth in the attached Appendix B. Attached Appendix B is substituted for Appendix B of the Order. FEDERAL COMMUNICATIONS COMMISSION Deborah Lathen Chief, Cable Services Bureau Appendix B The Federal Communications Commission amends 47 C.F.R. Part 76 as follows: PART 76 -- MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE 1. The authority citation for Part 76 continues to read as follows: AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 571, 572, 573. 2. Section 76.701 is amended by adding a new note to paragraph (b) to read as follows:  76.701 Leased access channels. * * * * * Note: "Nudity" in paragraph (b) is interpreted to mean nudity that is obscene or indecent. 3. Section 76.901 is amended by adding a new paragraph (f) to read as follows: Sec. 76.901 Definitions. * * * * * (f) Small Cable Operator. A small cable operator is an operator 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. For purposes of this definition, an operator shall be deemed affiliated with another entity if that entity holds a 20 percent or greater equity interest (not including truly passive investment) in the operator or exercises de jure or de facto control over the operator. Note 1: Using the most reliable sources publicly available, the Commission periodically will determine and give public notice of the subscriber count that will serve as the 1 percent threshold until a new number is calculated. Note 2: For a discussion of passive interests with respect to small cable operators, see Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, Report and Order in CS Docket No. 96-85, FCC 99-57 (released March 29, 1999). Note 3: If two or more entities unaffiliated with each other each hold an equity interest in the small cable operator, the equity interests of the unaffiliated entities will not be aggregated with each other for the purpose of determining whether an entity meets or passes the 20 percent affiliation threshold. 4. Section 76.905 is amended by revising paragraph (g) to read as follows:  76.905 Standards for identification of cable systems subject to effective competition. * * * * * (g) In order to offer comparable programming as that term is used in this section, a competing multichannel video programming distributor must offer at least 12 channels of video programming, including at least one channel of nonbroadcast service programming. 5. Section 76.907 is added to read as follows: 76.907. Petition for a determination of effective competition. (a) A cable operator (or other interested party) may file a petition for a determination of effective competition with the Commission pursuant to the Commission's procedural rules in  76.7 of this part. (b) The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition, as defined in  76.905 of this part, exists in the franchise area. Note: The criteria for determining effective competition pursuant to  76.905(b)(4) are described in Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, Report and Order in CS Docket No. 96-85, FCC 99-57 (released March 29, 1999). (c) If the evidence establishing effective competition is not otherwise available, cable operators may request from a competitor information regarding the competitor's reach and number of subscribers. A competitor must respond to such request within 15 days. Such responses may be limited to numerical totals. In addition, with respect to petitions filed seeking to demonstrate the presence of effective competition pursuant to  76.905(b)(4) of this part, the Commission may issue an order directing one or more persons to produce information relevant to the petition's disposition. 6. Section 76.911 is amended by removing paragraph (b); redesignating paragraphs (c) through (e) as paragraphs (b) through (d); revising paragraphs (a) and (a)(1) to read as follows:  76.911 Petition for reconsideration of certification. (a) A cable operator (or other interested party) may challenge a franchising authority's certification by filing a petition for reconsideration pursuant to  1.106. The petition may allege either of the following: (1) The cable operator is not subject to rate regulation because effective competition exists as defined in  76.905. Section 76.907(b) and (c) apply to petitions filed under this section. * * * * * 7. Section 76.915 is removed.  76.915 [Removed] 8. Add note to section 76.934 to read as follows:  76.934 Small systems and small cable companies * * * * * Note to  76.934: For rules governing small cable operators, see  76.990 of this Subpart. 9. Section 76.950 is amended by revising paragraph (b) as follows.  76.950 Complaints regarding cable programming service rates. * * * * * (b) This section shall not apply to cable programming services provided after March 31, 1999. 10. Section 76.952 is amended by revising paragraph (a) as follows:  76.952 Information to be provided by cable operator on monthly subscriber bills. * * * * * (a) The name, mailing address and phone number of the franchising authority, unless the franchising authority in writing requests the cable operator to omit such information. * * * * * 11. Section 76.956 is amended by revising paragraph (a) to read as follows:  76.956 Cable operator response. (a) Unless otherwise directed by the local franchising authority, a cable operator must file with the local franchise authority a response to the complaint. The response shall indicate when the cable operator received notice of the complaint. Service by mail is complete upon mailing. See  1.47(f) of this chapter. The response shall include the information required by the appropriate FCC form, including rate cards, channel line-ups, and an explanation of any discrepancy in the figures provided in these documents and the rate filing. The cable operator must file its response with the local franchise authority via first class mail. * * * * * 12. Section 76.961 is amended by revising paragraph (b) to read as follows:  76.961 Refunds. * * * * * (b) The cumulative refund due subscribers shall be calculated from the date of the first complaint filed with the franchising authority until the date a cable operator implements a prospective rate reduction as ordered by the Commission pursuant to  76.960. The Commission shall calculate refund liability according to the rules in effect for determining the reasonableness of the rates for the period of time covered by the complaint. * * * * * 13. Section 76.984 is amended by removing the last sentence of paragraph (b); adding notes 1, 2 to  76.984 and paragraph (c)(3); and redesignating the last two sentences of paragraph (c)(2) as paragraph (c)(3) to read as follows:  76.984 Geographically uniform rate structure. * * * * * (c)(2) Any video programming offered on a per channel or per program basis. (c)(3) Bulk discounts to multiple dwelling units shall not be subject to this section, except that a cable operator of a cable system that is not subject to effective competition may not charge predatory prices to a multiple dwelling unit. Upon a prima facie showing by a complainant that there are reasonable grounds to believe that the discounted price is predatory, the cable system shall have the burden of showing that its discounted price is not predatory. Note 1: Discovery procedures for predatory pricing complaints. Requests for discovery will be addressed pursuant to the procedures specified in  76.7(f). Note 2: Confidential information. Parties submitting material believed to be exempt from disclosure pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. 552(b), and the Commission's rules,  0.457, should follow the procedures in  0.459 and  76.9. 14. Section 76.990 is added to read as follows:  76.990 Small cable operators. (a) Effective February 8, 1996, a small cable operator is exempt from rate regulation on its cable programming services tier, or on its basic service tier if that tier was the only service tier subject to rate regulation as of December 31, 1994, in any franchise area in which that operator services 50,000 or fewer subscribers. (b) Procedures. (1) A small cable operator, may certify in writing to its franchise authority at any time that it meets all criteria necessary to qualify as a small operator. Upon request of the local franchising authority, the operator shall identify in writing all of its affiliates that provide cable service, the total subscriber base of itself and each affiliate, and the aggregate gross revenues of its cable and non-cable affiliates. Within 90 days of receiving the original certification, the local franchising authority shall determine whether the operator qualifies for deregulation and shall notify the operator in writing of its decision, although this 90-day period shall be tolled for so long as it takes the operator to respond to a proper request for information by the local franchising authority. An operator may appeal to the Commission a local franchise authority's information request if the operator seeks to challenge the information request as unduly or unreasonably burdensome. If the local franchising authority finds that the operator does not qualify for deregulation, its notice shall state the grounds for that decision. The operator may appeal the local franchising authority's decision to the Commission within 30 days. (2) Once the operator has certified its eligibility for deregulation on the basic service tier, the local franchising authority shall not prohibit the operator from taking a rate increase and shall not order the operator to make any refunds unless and until the local franchising authority has rejected the certification in a final order that is no longer subject to appeal or that the Commission has affirmed. The operator shall be liable for refunds for revenues gained (beyond revenues that could be gained under regulation) as a result of any rate increase taken during the period in which it claimed to be deregulated, plus interest, in the event the operator is later found not to be deregulated. The one-year limitation on refund liability will not be applicable during that period to ensure that the filing of an invalid small operator certification does not reduce any refund liability that the operator would otherwise incur. (3) Within 30 days of being served with a local franchising authority's notice that the local franchising authority intends to file a cable programming services tier rate complaint, an operator may certify to the local franchising authority that it meets the criteria for qualification as a small cable operator. This certification shall be filed in accordance with the cable programming services rate complaint procedure set forth in  76.1402 of this part. Absent a cable programming services rate complaint, the operator may request a declaration of CPST rate deregulation from the Commission pursuant to  76.7 of this part. (c) Transition from small cable operator status. If a small cable operator subsequently becomes ineligible for small operator status, the operator will become subject to regulation but may maintain the rates it charged prior to losing small cable operator status if such rates (with an allowance for minor variations) were in effect for the three months preceding the loss of small cable operator status. Subsequent rate increases following the loss of small cable operator status will be subject to generally applicable regulations governing rate increases. Note: For rules governing small cable systems and small cable companies, see  76.934 of this part. 15. Section 76.1401 is amended by deleting paragraphs (a), (c), and (d) and by renumbering paragraph (b) as paragraph (a). 16. Section 76.1403 is removed.  76.1403 [Removed] 17. Section 76.1603 is amended by revising paragraph (e) to read as follows:  76.1603 Written notification of changes in rates and services. * * * * * (e) To the extent the operator is required to provide notice of service and rate changes to subscribers, the operator may provide such notice using any reasonable written means at its sole discretion. * * * * *