NOTICE ************************************************************************* NOTICE ************************************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* FCC 96-303 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. In re the Matter of ) ) BENTLEYVILLE TELEPHONE ) COMPANY ) File No. W-P-C-6817 ) Petition for Waiver of Sections 63.54 and ) 63.55 of the Commission's Rules and ) ) Application for Authority to Construct ) and Operate Cable Television ) Facilities in its Telephone Service Area. ) ORDER Adopted: July 8, 1996 Released: October 30, 1996 By the Commission: I. INTRODUCTION 1. Before the Commission is an Application for Review filed by The Helicon Group, L.P. d/b/a Helicon Cablevision ("Helicon"). Helicon asks the Commission to review a Memorandum Opinion and Order issued by the Common Carrier Bureau's Domestic Facilities Division ("the Division") on May 17, 1995. That order granted Bentleyville Telephone Company ("Bentleyville") Section 214 authorization to construct and operate a cable television system in the Borough of Bentleyville, Pennsylvania. Also before the Commission is a Request for Stay filed by Helicon in which it seeks a stay of the May 17, 1995 Memorandum Opinion and Order pending the Commission's disposition of Helicon's Application for Review. For the reasons set forth below, we dismiss Helicon's Application for Review and the companion Request for Stay as moot. II. APPLICATION FOR REVIEW 2. In its Application for Review, Helicon contends that the Division failed to engage in a "meaningful analysis" of Bentleyville's Section 214 application. Had the Division conducted such an "independent analysis" of Bentleyville's financial submission, Helicon argues, the Division would have concluded that the cost estimates, revenue projections, and subscriber penetration rates upon which Bentleyville based its conclusions of economic justification for the proposed service were unreasonable. Helicon maintains that Bentleyville has engaged in cross subsidization of its cable television business at the expense of its telephone service ratepayers to compensate it for unrecovered costs associated with its cable television operations. Helicon further contends that the Division erred in failing to condition Bentleyville's Section 214 authorization on Bentleyville's compliance with the Commission's cost accounting rules, thus providing no deterrent to Bentleyville's alleged practice of cross subsidization. 3. In addition, Helicon charges that Bentleyville failed to file copyright statements of account and to file timely cumulative leakage index reports, as required by the Commission's rules, in connection with its provision of cable television services to communities surrounding the Borough of Bentleyville. According to Helicon, these alleged reporting violations manifest Bentleyville's willingness to flout the Commission's rules and support its claim that the grant of Section 214 authorization to Bentleyville will not serve the public interest. 4. Finally, Helicon argues that the Division erred in approving Bentleyville's Section 214 application in light of Helicon's allegations that Bentleyville engaged in premature construction of the proposed facilities prior to receiving Section 214 authorization to undertake such construction. III. POSITIONS OF THE PARTIES 5. In opposition, Bentleyville argues that the Division clearly drew its own conclusion that the grant of the Bentleyville Section 214 application would serve the public interest and cites relevant portions of the Division's May 17, 1995 order in support of this position. Bentleyville counters Helicon's claims that Bentleyville has cross subsidized its cable facilities at telephone ratepayer expense by asserting that, as an average schedule company, Bentleyville is precluded from increasing its interstate telephone service rates to recover the costs of its cable facilities because those rates are calculated pursuant to a formula that applies uniformly to Bentleyville and all other average schedule companies. 6. With respect to Helicon's contention that Bentleyville has increased its intrastate telephone service rates to cover the costs of its cable television operations, Bentleyville responds that its intrastate rates have been approved by the Pennsylvania Public Utility Commission and notes that both this Commission and the Pennsylvania Public Utility Commission have rules to ensure that interstate and intrastate rates, respectively, include no subsidies for cable television operations. 7. In response to Helicon's claims regarding Bentleyville's alleged failure to file copyright statements and leakage index reports, Bentleyville contends that such allegations, even if proven, would not form a basis for reversing the Division's grant of Section 214 authorization. In addition, Bentleyville denies Helicon's claims that it engaged in impermissible premature construction and contends that, "under any circumstances," this claim too provides an insufficiently compelling reason to reverse the Division's order. 8. In its opposition to Helicon's Request for Stay, the United States Telephone Association urges the Commission to deny Helicon's Request for Stay of Bentleyville's Section 214 authorization, maintaining that Helicon's arguments are intended solely to delay the introduction of competitively provided cable television service in the Borough of Bentleyville. V. DISCUSSION 9. Upon reviewing the record established in this proceeding and in recognition of the enactment of the Telecommunications Act of 1996, we hereby dismiss the present Application for Review and the accompanying Request for Stay as moot. On February 8, 1996, the President signed into law the Telecommunications Act of 1996 (the "1996 Act"). Section 302(a) of the Act (which added new Section 651(c) to the Communications Act of 1934, as amended) provides that common carriers "shall not be required to obtain a certificate under Section 214 with respect to the establishment or operation of a system for the delivery of video programming." This provision reflects Congress' intent to relieve carriers of the obligation to obtain Section 214 authorization in order to establish a system for the delivery of video programming. In addition, on March 11, 1996, the Commission modified Section 63.01, the rule under which Bentleyville received its Section 214 authorization, to remove the requirement that a carrier obtain Section 214 authorization to establish or operate a video programming delivery system. Given that the system for which Bentleyville received Section 214 authorization to construct constitutes "the establishment or operation of a system for the delivery of video programming," and in light of the modification of former Section 63.01 of the Commission's rules, we find that further review of the Section 214 issues raised by Helicon is no longer necessary. 10. Regarding Helicon's arguments that Bentleyville violated the Commission's rules by failing to file timely reports with the Commission and by constructing cable television facilities prior to obtaining Section 214 authorization, we note that forfeiture actions are not available as of right to parties involved in Commission proceedings. Instead, enforcement proceedings are initiated solely within the discretion of the Commission. Accordingly, we do not address the timely reporting and premature construction arguments raised by the parties in the present order. IV. ORDERING CLAUSES 11. Pursuant to Section 4(i) of the Communications Act of 1934, as amended, Section 302(a) of the Telecommunications Act of 1996 (which added new Section 651(c) to the Communications Act of 1934, as amended), and Section 1.115 of the Commission's rules, 47 C.F.R.  1.115, IT IS ORDERED that the Application for Review filed by Helicon IS DISMISSED AS MOOT. 12. IT IS FURTHER ORDERED that the Request for Stay filed by Helicon IS DISMISSED AS MOOT. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary