WPCQ 2HBX@ Z3|P  (TT)Times New Roman (TT)Times New Roman (Bold) (TT)"5@^*7DTT77T^*7*/TTTTTTTTTT//^^^Jxooxf\xx7Axfxx\xo\fxxxxf7/7NT7JTJTJ7TT//T/TTTT7A/TTxTTJP!PZ*7777BD7TTxJxJxJxJxJooJfJfJfJfJ7/7/7/7/xTxTxTxTxTxTxTxTxTxTxJxTxTxTxTxT\TxTxJxJoJoJoJfJfJfJxTxTxxTxTxTxTBT7T777TAxTf/fDxTxTxTxo7oD\A\AN:*KT7JTTTTT.3}}T2T}277JJT77TT7J72t7[[[[^[e*B`^.wRTTn[Cfx`xWlRx[\[ceIfIs`Wx[rriwge*7DTT77T^*7*/TTTTTTTTTT//^^^Jxooxf\xx7Axfxx\xo\fxxxxf7/7NT7JTJTJ7TT//T/TTTT7A/TTxTTJP!PZ7TJTT7\777JJ:T7A7xx*7TTTT!T7.T^7TB[227`K*723T}}}Jxxxxxxoffff7777xxxxxxx^xxxxxx\TJJJJJJoJJJJJ////TTTTTTT[TTTTTTTApple LaserWriter II NTXPT1APLAIINT.WRSC\  P6Q"oUP2* z33|\ Times New Roman (TT)Times New Roman (Bold) (TT))c7PC2X DXP\  P6QXP.d7UC2XxXU4  pQX y.K8?X3qK\  P@QP\r>\gFr>\t0\\=!=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBT\>Q\\\\\3;\7;\7>>QQ\??n\\pBnnBmgg>Q\7"yyyy\njc\gnn\ X- Figure 1  Figure 1 #C\  P6QgP#X01Í ÍX81Í Í#XP\  P6QW XP#uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""1>Document 5Document 5. Document 2Document 2/ Document 7Document 70 Right Par 1Right Par 11` hp x (#X` hp x (#X` hp x (#` hp x (#2G2&A3lDC4C5ERight Par 2Right Par 22` hp x (#X` hp x (#0X` hp x (#0` hp x (#Document 3Document 33 Right Par 3Right Par 34` hp x (#X` P hp x (#X` P hp x (#` hp x (#Right Par 4Right Par 45` hp x (#X` hp x (#0X` hp x (#0` hp x (#2P6H7lW?$BX@lfZA$ZTechnical 3Technical 3> Technical 4Technical 4?` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 1Technical 1@ Technical 7Technical 7A` hp x (#X` hp x (# X` hp x (#` hp x (#2eB$(]CL_DjaEcTechnical 8Technical 8B` hp x (#X` hp x (# X` hp x (#` hp x (#toc 1toc 1C` hp x (#!(#B!(#B` hp x (#toc 2toc 2D` hp x (#` !(#B` !(#B` hp x (#toc 3toc 3E` hp x (#` !(# ` !(# ` hp x (#2lFeGgHjIv2ltoc 4toc 4F` hp x (# !(#  !(# ` hp x (#toc 5toc 5G` hp x (#h!(# h!(# ` hp x (#toc 6toc 6H` hp x (#!(#!(#` hp x (#toc 7toc 7I 2RuJlKnLqM4stoc 8toc 8J` hp x (#!(#!(#` hp x (#toc 9toc 9K` hp x (#!(#B!(#B` hp x (#index 1index 1L` hp x (#` !(# ` !(# ` hp x (#index 2index 2M` hp x (#` !(#B` !(#B` hp x (#2xNuOvwPlxQrxtoatoaN` hp x (#!(# !(# ` hp x (#captioncaptionO _Equation Caption_Equation CaptionP endnote referenceendnote referenceQ 2[}K(yRs{S'|T|"i~'^ %,77\V%%%7>%7777777777>>>0eOIIOD>OO%*ODaOO>OI>DOOgOOD%%37%07070%777V7777%*77O77055;%;3%%%%%%%%%%%7O0O0O0O0O0aHI0D0D0D0D0%%%%O7O7O7O7O7O7O7O7O7O7O0O7O6O7O7O7>7O0O0O0I0I0I;I0OED0D0D0D0O7O7O7O;O7O;O7%%7%%%7M>;;O7DD,D%D%DO7AO7O7O7O7aOI%I%I%>*>*>*>;D.DD3O7O7O7O7O7O7gOO;D0D0D0O7D%O7>*D%O7E77%%WMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN(BB(37%07777j7#TT7!#TT7T!%%007n&&Bn77lCTn(nBB(A\\>>n%07\n!"IIIITTenn7TnB@;7>lBBn7HeadingChapter HeadingRJ d  ) I. ׃  Right ParRight-Aligned Paragraph NumbersS>a݅@  I.   X(# SubheadingSubheadingT0\ E A.  2U^}Vd}WO~XdFOOTNOTEFootnote - AppearanceUPHIGHLIGHT 1Italics and BoldldeddV+. DRAFT ONHeader A Text = DRAFT and DateW X =8` (#FDRAFTă r  ` (#=D3 1, 43 12pt (Z)(PC-8))T2Dă  ӟDRAFT OFFTurn Draft Style offX@@    2YX.Z1[1\1HEADERHeader A - AppearanceYLETTER LANDLetter Landscape - 11 x 8.5Z 3'3'Standard'3'3StandardLetter Portrait - 8.5 x 11 ;   LEGAL LANDLegal Landscape - 14 x 8.5[f 3'3'Standard'A'AStandardZ K e6VE L"nu;   LETTER PORTLetter Portrait - 8.5 x 11\L 3'3'Standard3'3'StandardZ K e6VE L"nU9   2Æ]1K^n|_X`BLEGAL PORTLegal Portrait - 8.5 x 14] 3'3'StandardA'A'StandardLetter Portrait - 8.5 x 119   TITLETitle of a Document^K\ * ăFOOTERFooter A - Appearanced_BLOCK QUOTESmall, single-spaced, indented`N X 2Kaibd^cj‡d,HEADING 33rd Heading Levela| XHIGHLIGHT 2Large and Bold LargebB*d. HIGHLIGHT 3Large, Italicized and Underscoredc V -qLETTERHEADLetterhead - date/marginsdu H XX  3'3'LetterheadZ K e VE L"n3'3'LetterheadZ K e VE L"nE9    * 3'3'LetterheadZ K e VE L"n3' II"n"Tv3'StandarddZ K e VE L"nU9 Ѓ   2_eE}f-‹g8h8'INVOICE FEETFee Amount for Math Invoicee ,, $0$0  MEMORANDUMMemo Page FormatfD.   ! M E M O R A N D U M ă r  y<N dddy   INVOICE EXPSEExpense Subtotals for Math Invoiceg:A ,p, $0$00INVOICE TOTTotals Invoice for Math Macrohz 4p, $0$002@ijX2k[l[INVOICE HEADRHeading Portion of Math Invoicei+C`*   4X 99L$0 **(  ӧ XX NORMALReturn to Normal TypestylejSMALLSmall TypestylekFINEFine Typestylel2m[rn[͒o[(pLARGELarge TypestylemEXTRA LARGEExtra Large TypestylenVERY LARGEVery Large TypestyleoENVELOPEStandard Business Envelope with Headerp+w ,,EnvelopeZ K e VE L"n,,EnvelopeLarge, Italicized and Under;    ,, 88+  `   2qd8rosl t|wA, B,|G?@6 Uppercase Letters=(*/|G?.Eq .footnote textr%_Equation Caption1_Equation Caption1s footnote tex t$ d\  PC 2u%vwRxa12:.E+O**Right-Aligned Paragraph Numbers=(O*Ou8mn@   a22:.E+O**Right-Aligned Paragraph Numbers=(O*OvAop@` `  ` ` ` a32:.E+O**Right-Aligned Paragraph Numbers=(O*OwJqr` ` @  ` `  a42:.E+O**Right-Aligned Paragraph Numbers=(O*OxSst` `  @  2yՙz{J|a52:.E+O**Right-Aligned Paragraph Numbers=(O*Oy\uv` `  @hh# hhh a62:.E+O**Right-Aligned Paragraph Numbers=(O*Ozewx` `  hh#@( hh# a72:.E+O**Right-Aligned Paragraph Numbers=(O*O{nyz` `  hh#(@- ( a82:.E+O**Right-Aligned Paragraph Numbers=(O*O|w{|` `  hh#(-@pp2 -ppp 2)}b~lw(} ӎSMALL s†NSMALL s†NORMAL¤ Technical 4¸žC~ ӆNORMAL¤ TNORMAL¤ Technical 4¸žC:\mw3022.tmp` hp x (#X` P hp x (#X` P hp x (#` hp x (#bly remains several bly remains several years \softline \softlheight276 awa` hp x (#X` hp x (#X` hp x (#` hp x (#2s$[lj Technical 4¸ Technical 4¸žC:\mw3022.tmpރC:\mw3022.tmp` hp x (#X` hp x (# X` hp x (#` hp x (#T 2 Ҷ TechnicaT 2 Ҷ Technical 7Ҳ Right Par 7z INV` hp x (#X` hp x (#X` hp x (#` hp x (#ОC:\mw3022.tmpC:\mw3022.tmpރC:\mw3022.tmpԸOC~C:\DOCS\C :\mw3022.tmpރC:\mw3022.tmpރC:\mw3022.tmpԸOC~C:\DOCS\COMP` hp x (#` hp x (## P7P# 2kl/MރC:\mw3022.tmpԸOCރC:\mw3022.tmpԸOC~C:\DOCS\COMPWHEN\: ~C:\DOCS\COMPWHEN\~C:\DOCS\COMPWHEN\: , ` hp x (# p x (# p x (#` hp x (#:\DOCS\COMPWHEN\:\DOCS\COMPWHEN\: , ` hp x (# p x (# p x (#` hp x (#: , : , ,0` hp x (#` !(#B` !(#B` hp x (#2cٳl ,  , ,0` hp x (#` !(# ` !(# ` hp x (#:\mw3024.tmpt :\mw3024.tmpt C:\WINDOWS\MSAPPS\TEXTCONV\RTF_W` hp x (# !(#  !(# ` hp x (#wwwwwbbbbbwwbwwbwwwwwbbbbbwwbwwbbbwwwwbwwwwbwwwwbwbwwwbwbb` hp x (#` !(#B` !(#B` hp x (#,,0kjH 2mvv vvheading 4heading 4 heading 5heading 5 heading 6heading 6 heading 7heading 7 2vvZheading 8heading 8 endnote textendnote text toa headingtoa heading` hp x (#(#(#` hp x (#1, 2, 3,?@65NumbersO@/"=(1*1÷$t ?.E1.25Ǽba11I.E+')*'0Right-Aligned Paragraph Numbers')8?I u*')8ij@   a21I.E+')*'0Right-Aligned Paragraph Numbers')8?I u*')Akl@` `  ` ` ` a31I.E+')*'0Right-Aligned Paragraph Numbers')8?I u*')Jmn` ` @  ` `  a41I.E+')*'0Right-Aligned Paragraph Numbers')8?I u*')Sop` `  @  2Z"a51I.E+')*'0Right-Aligned Paragraph Numbers')8?I u*')\qr` `  @hh# hhh a61I.E+')*'0Right-Aligned Paragraph Numbers')8?I u*')est` `  hh#@( hh# a71I.E+')*'0Right-Aligned Paragraph Numbers')8?I u*')nuv` `  hh#(@- ( a81I.E+')*'0Right-Aligned Paragraph Numbers')8?I u*')wwx` `  hh#(-@pp2 -ppp 2_%qKmChapter?I@6HChapter Heading=(')8?I *')'0 ?I.E9y z ` CHAPTER 3  Report Body@6HMain Text of Report8?I *')'0 ?I.E{|  TitleNotesTitle Page NotesH('0\F H rW?I ''#Z*f9 x$X# #Z*f9 x%X#NotesTrianglee NotesH('0\F H rW?I 2\pq^Works CitedWorks Cited PageH('0\F H rW?I 99         Page TitlePage Title PageH('0\F H rW?I #  `  2XwE~wKRn6bDocument Style=(G>wK@RH*G>FwE~wK\Emn` ` ` 3XwE~wKSn6bDocument Style=(G>wK@SH*G>FwE~wK\Eo p . 2eefp^4XwE~wKTn6bDocument Style=(G>wK@TH*G>FwE~wK\E qr 5XwE~wKUn6bDocument Style=(G>wK@UH*G>FwE~wK\E st 6XwE~wKVn6bDocument Style=(G>wK@VH*G>FwE~wK\E*uv   7XwE~wKWn6bDocument Style=(G>wK@WH*G>FwE~wK\Ewx` ` ` 2f-8XwE~wKXn6bRight-Aligned Paragraph NumbersH*G>FwE~wK\E8yz@   9XwE~wKYn6bRight-Aligned Paragraph NumbersH*G>FwE~wK\EA{|@` `  ` ` ` 10wE~wKZn6bDocument Style=(G>wK@ZH*G>FwE~wK\E0} ~    11wE~wK[n6bRight-Aligned Paragraph NumbersH*G>FwE~wK\EJ` ` @  ` `  2E12wE~wK\n6bRight-Aligned Paragraph NumbersH*G>FwE~wK\ES` `  @  13wE~wK]n6bRight-Aligned Paragraph NumbersH*G>FwE~wK\E\` `  @hh# hhh 14wE~wK^n6bRight-Aligned Paragraph NumbersH*G>FwE~wK\Ee` `  hh#@( hh# 15wE~wK_n6bRight-Aligned Paragraph NumbersH*G>FwE~wK\En` `  hh#(@- ( 2I?16wE~wK`n6bRight-Aligned Paragraph NumbersH*G>FwE~wK\Ew` `  hh#(-@pp2 -ppp 17wE~wKan6bDocument Style=(G>wK@aH*G>FwE~wK\EF D*  ׃  18wE~wKbn6bTechnical Document StylewK@bH*G>FwE~wK\E&  . 19wE~wKcn6bTechnical Document StylewK@cH*G>FwE~wK\E&  . 2{@20wE~wKdn6bTechnical Document StylewK@dH*G>FwE~wK\E*    21wE~wKen6bTechnical Document StylewK@eH*G>FwE~wK\E'   22wE~wKfn6bTechnical Document StylewK@fH*G>FwE~wK\E&   23wE~wKgn6bTechnical Document StylewK@gH*G>FwE~wK\E4$     2E",24wE~wKhn6bTechnical Document StylewK@hH*G>FwE~wK\E&  . 25wE~wKin6bTechnical Document StylewK@iH*G>FwE~wK\E&  . MACNormaljn6b8 >8=(G>wK@jH*G>FwE~wK\E'     X` hp x (#%'0*,.8135@8:<    #:}D4PXP# I. A. 1. a.(1)(a) i) a),X0Í Í,X0Í Í,0Í Í,0Í Í,XÍ.,XÍ.,Í.,Í. .,., US#:}D4PXP#     X` hp x (#%'0*,.8135@8:<    #:}D4PXP# .,., US#:}D4P XP#referenceon6b8 >8=(G>wK@oH*G>FwE~wK\E;#FxX  P CXP#2"wmfuitemizewKpn6b 8 >8=(G>wK@pH*G>FwE~wK\E* F r#FxX  P CXP#header2wKqn6b.8 >8=(G>wK@qH*G>FwE~wK\E `    #FxX  P CXP# CitatorwKrn6bFormat Secretary's Citator Output File>FwE~wK\E#d6X@7@# XX  FX b#d6X@7@# XX p*  bFormat Downln6bFormat Downloaded DocumentK@uH*G>FwE~wK\EU XX    X\ #d6X@7@#2T%a127\E+G>XwE~Right-Aligned Paragraph Numbers>>=(G>$H*G>F8@   a227\E+G>XwE~Right-Aligned Paragraph Numbers>>=(G>$H*G>FA@` `  ` ` ` a327\E+G>XwE~Right-Aligned Paragraph Numbers>>=(G>$H*G>FJ` ` @  ` `  a427\E+G>XwE~Right-Aligned Paragraph Numbers>>=(G>$H*G>FS` `  @  2yAa527\E+G>XwE~Right-Aligned Paragraph Numbers>>=(G>$H*G>F\` `  @hh# hhh a627\E+G>XwE~Right-Aligned Paragraph Numbers>>=(G>$H*G>Fe` `  hh#@( hh# a727\E+G>XwE~Right-Aligned Paragraph Numbers>>=(G>$H*G>Fn` `  hh#(@- ( a827\E+G>XwE~Right-Aligned Paragraph Numbers>>=(G>$H*G>Fw` `  hh#(-@pp2 -ppp 2pDqe%eDocument[8]'Eg%Document StyleE O  O g% W4I O g` ` ` Document[4]'Eg%Document Style W4A O g% W4I O g  . Document[6]'Eg%Document Style W4A O g% W4I O g  Document[5]'Eg%Document Style W4A O g% W4I O g  2Q!p$Document[2]'Eg%Document Style W4A O g% W4I O g*    Document[7]'Eg%Document Style W4A O g% W4I O g  ` ` ` Right Par[1]Eg%Right-Aligned Paragraph NumbersO g% W4I O g8 @  Right Par[2]Eg%Right-Aligned Paragraph NumbersO g% W4I O gA@` ` `  ` ` ` 2iDocument[3]'Eg%Document Style W4A O g% W4I O g0     Right Par[3]Eg%Right-Aligned Paragraph NumbersO g% W4I O gJ` ` ` @  ` ` ` Right Par[4]Eg%Right-Aligned Paragraph NumbersO g% W4I O gS` ` `  @  Right Par[5]Eg%Right-Aligned Paragraph NumbersO g% W4I O g\` ` `  @hhh hhh 2cQRight Par[6]Eg%Right-Aligned Paragraph NumbersO g% W4I O ge` ` `  hhh@ hhh Right Par[7]Eg%Right-Aligned Paragraph NumbersO g% W4I O gn` ` `  hhh@  Right Par[8]Eg%Right-Aligned Paragraph NumbersO g% W4I O gw` ` `  hhh@ppp ppp Document[1]'Eg%Document Style W4A O g% W4I O gF    ׃  2;Technical[5]Eg%Technical Document Style O g% W4I O g&!"  . Technical[6]Eg%Technical Document Style O g% W4I O g&#$  . Technical[2]Eg%Technical Document Style O g% W4I O g*%&    Technical[3]Eg%Technical Document Style O g% W4I O g''(   2PFTechnical[4]Eg%Technical Document Style O g% W4I O g&)*   Technical[1]Eg%Technical Document Style O g% W4I O g4+$,     Technical[7]Eg%Technical Document Style O g% W4I O g&-.  . Technical[8]Eg%Technical Document Style O g% W4I O g&/0  . 2rCrGFormat DownloadFormat Downloaded Documentiޛ r5- XX    \ #d6X@`7Ͽ@#a2Agendaa1AgendaAgenda Items7D yP ) I. a3Agenda2>gRl"egV6_rSmall Circle 7j_4&=(40*4.çegDE"WP Heading 2WP Heading 244#a\  P6QP##XP\  P6QXP#WP Heading 1WP Heading 144#y\  P6QP# #XP\  P6QXP#Document 8aDocument 8a 2,xpllTlDocument 4aDocument 4a  Document 6aDocument 6a Document 5aDocument 5a Document 2aDocument 2a 2rl^lDocument 7aDocument 7a Right Par 1aRight Par 1a` hp x (#X` hp x (#X` hp x (#` hp x (#Right Par 2aRight Par 2a` hp x (#X` hp x (#0X` hp x (#0` hp x (#Document 3aDocument 3a 2  Right Par 3aRight Par 3a` hp x (#X` P hp x (#X` P hp x (#` hp x (#Right Par 4aRight Par 4a` hp x (#X` hp x (#0X` hp x (#0` hp x (#Right Par 5aRight Par 5a` hp x (#X` hp x (#X` hp x (#` hp x (#Right Par 6aRight Par 6a` hp x (#X` hp x (#0X` hp x (#0` hp x (#2N l$$Right Par 7aRight Par 7a` hp x (#X` hp x (#X` hp x (#` hp x (#Right Par 8aRight Par 8a` hp x (#X` hp x (#0X` hp x (#0` hp x (#Technical 5aTechnical 5a` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 6aTechnical 6a` hp x (#X` hp x (# X` hp x (#` hp x (#2lllp$lTechnical 2aTechnical 2a Technical 3aTechnical 3a Technical 4aTechnical 4a` hp x (#X` hp x (# X` hp x (#Technical 1aTechnical 1a 2|!$$KK1Technical 7aTechnical 7a` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 8aTechnical 8a` hp x (#X` hp x (# X` hp x (#` hp x (#"i~'^5>g\\>>>\g0>03\\\\\\\\\\>>ggg\yyrF\yrgyy>3>j\>\gQgQ>\g3>g3g\ggQF>g\\\QI(I_>0_j>>>0>>>>>>\>g3\\\\\QyQyQyQyQD3D3D3D3g\\\\gggg\\g\\\\pg\\\QQ_QyQyQyQyQ\\\_\gjF3FgF>Fgg__gy3ySy>yIy3ggg\\QQQgFgFgFg_y^y>yjgggggg_yQyQyQgy>ggFy>\0\\=2=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBa\>\\\\\\7>\7>\7>>\\\??n\\pBnnBsgg>\\7"yyyy\nlc\gnn\"i~'^5>M\\>>>\}0>03\\\\\\\\\\>>}}}\rryrr>Qygyrr\grrggF3FM\>\\Q\Q3\\33Q3\\\\FF3\QyQQFI3Ic>0cM>>>0>>>>>>\>\3r\r\r\r\r\yyQrQrQrQrQ>3>3>3>3y\\\\\\\\\gQr\\\\gQ\r\r\r\r\yQyQycyQnrQrQrQrQ\\\c\c\>3>\>>>\\ccyQg3gBg>g;g3y\jy\y\\\yrFrFrF\F\F\FccgBg3gM\\\\\\ygcgFgFgF\g>y\\Fg>g\n0\\=(=WddddddddddddddddddddddddddddddddddddddddNBnnB_\F\\\\\\3;\7;\7>>gg\??n\\pBnnBb\\>g\7"yyyy\njc\}nn\2 &@!$i"5@^2BRdd$BBdq2B28dddddddddd88qqqYzoBNzoozzB8B^dBYdYdYBdd88d8ddddBN8ddddY`(`l2BB!BBPRBddYYYYYYzYzYzYzYB8B8B8B8ddddddddddYdddddoddYYYYYzYzYzYddddddPdBdBBBdNdz8zRdddBRoNoNNF2ZdBYddddd7>d<d<BBYYdBBddBYBdYzzzzBBBBqodYYYYYYYYYYY8888dddddddnddddddd\60_=5,%&_*f9 xr G;&XP:% ,J:\  P6G;JPULBC {O?'ԍSmall System Order, 10 FCC Rcd at 742/@>&! @~)@,"5@^2Boddȧ8BBdr2B28ddddddddddBBrrrdzNdzoȐB8BtdBdoYoYBdo8Bo8odooYNBodddYO,Oh2BB!BBPRBdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYYddddooPoNoNBNodo8RoodȐYYoNoNNF2ldBdddddd%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155<%%%%,-%77O1O1O1O1O1bII1C1C1C1C1%%%%O7O7O7O7O7O7O7O7O7O7O1O7O7O7O7O7=7O7O1O1I1I1I1C1C1C1O7O7OO7O7O7O7,7%7%%%7+O7CC-O7O7O7bOI%I-=+=+N&27%177777"SS7!TT7S!%%117n%%77ln%1n%!t%<<<<>l[O6Wls[77TTTH_%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155%T7,OOOOOO=7111111I111117777777<77777772XF@|< @?@C"5@^!)22SN!!28!2222222222888-\HCCH=7HH!'H=YHH7HC7=HH^HH=!!/2!-2-2-!222N2222!'22H22-006!!!!()!22H-H-H-H-H-YCC-=-=-=-=-!!!!H2H2H2H2H2H2H2H2H2H2H-H2H2H2H2H272H2H-H-C-C-C-=-=-=-H2H2HH2H2H2H2(2!2!!!2'H2==)H2H2H2YHC!C)7'7'N#-2!-22222KK2LL2K!!--2d!!22bd!-d!t!77778c7%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155<%%%%,-%77O1O1O1O1O1bII1C1C1C1C1%%%%O7O7O7O7O7O7O7O7O7O7O1O7O7O7O7O7=7O7O1O1I1I1I1C1C1C1O7O7OO7O7O7O7,7%7%%%7+O7CC-O7O7O7bOI%I-=+=+N&27%177777"SS7!TT7S!%%117n%%77ln%1n%!t%<<<<>mBBs,?>[N6Wms[77UUUH_%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155%T7,OOOOOO=7111111I111117777777<77777772Q yO b X-y  Federal Communications Commission`(# FCC 97339 ă  yxdddy   @-  -@ X *Xg yO-#X\  P6G;gP#x` `  hh@hpp  xxD2/1/5 8:9 0DؐX(# X(#*XՊ#X\  P6G;gP# #C\  P6QgP# 3vBefore the  yOSFederal Communications Commission  yO |Washington, D.C. 20554 #&a\  P6G;/&P#ѐTP   S- >#g #&J\  P6Q/&P# >#g In the Matter of hhR) x` `  hhR)  S-Implementation of Sections of theR)hppMM Docket No. 92266 Cable Television Consumer ProtectionR)  Sh-and Competition Act of 1992:R)hppMM Docket No. 93215 x` `  hhR)  S -Rate Regulation hhR)  S -  FOURTEENTH ORDER ON RECONSIDERATION ĐTP  S(- Adopted: September 24, 1997 hh@hpp Released: October 1, 1997 By the Commission:  S`- I.xINTRODUCTION   S- p'x` ` 1. On May 5, 1995, the Commission adopted the Sixth Report and Order and  S- xEleventh Order on Reconsideration in MM Docket Nos. 92266 and 93215 ("Small System Order"),K  yOR-ԍFCC 95196, 10 FCC Rcd 7393 (1995).K  xthereby modifying the rules governing rates charged for regulated cable services by certain smaller cable  S-systems. In this order, we address petitions for reconsideration of the Small System Order.  SN- II.xBACKGROUND  S- pCx` ` 2. Section 623(i) of the Communications Act of 1934, as amended ("Communications  x.Act"), requires that the Commission design rate regulations to reduce the administrative burdens and the  S- xcost of compliance for cable systems with 1,000 or fewer subscribers.>X  yO-ԍ47 U.S.C.  543(i).> In the course of establishing the  xstandard benchmark and cost of service ratemaking methodologies generally available to cable operators,  xthe Commission adopted various measures aimed specifically at easing regulatory burdens for these  S6- xsmaller systems.6  {O#- xԍSee, e.g., Report and Order and Further Notice of Proposed Rulemaking in MM Docket No. 92266, FCC 93 {O$- xK177, 8 FCC Rcd 5631 (1993) ("Rate Order"); Second Order on Reconsideration, Fourth Report and Order, and  {OR%- xFifth Notice of Proposed Rulemaking in MM Docket No. 92266, FCC 9438, 9 FCC Rcd 4119 (1994) ("Second  {O&- xReconsideration Order"); Fifth Order on Reconsideration and Further Notice of Proposed Rulemaking in MM  {O&- xhDocket Nos. 93215 & 93266, 9 FCC Rcd 5327 (1994); Eighth Order on Reconsideration in MM Docket Nos. 92266 & 93215, FCC 9542, 10 FCC Rcd 5179 (1995). In the Small System Order, the Commission further extended small system rate relief"6j ,))ZZh"  S- xto certain systems that exceed the 1,000subscriber standard.U {Oh-ԍSmall System Order, 10 FCC Rcd at 7406.U These systems were deemed eligible for  xOsmall system treatment because we determined that they faced higher costs and other burdens  S-disproportionate to their size.Z {O- x[ԍId. at 7407. More recently, Congress amended Section 623 of the Communications Act to allow greater  xideregulation for "small cable operators," defined as operators that "directly or through an affiliate, [serve] in the  xaggregate fewer than 1 percent of all subscribers in the United States and [are] not affiliated with any entity or  xKentities whose gross annual revenues in the aggregate exceed $250,000,000." Telecommunications Act of 1996  xZ("1996 Act"), Pub. L. No. 104104,  301(c), 110 Stat. 56, approved February 8, 1996; Communications Act,   x623(m), 47 U.S.C.  543(m). Pursuant to this amendment, the rate regulation requirements of Sections 623(a), (b)  xand (c) do not apply to a small cable operator with respect to "(A) cable programming services, or (B) a basic  xservice tier that was the only service tier subject to regulation as of December 31, 1994," in areas where the operator  {O - xxserves 50,000 or fewer subscribers. Id. A cable operator subject to deregulation under this statutory provision is,  {O - xhof course, exempt from our rules regulating small systems.  Order and Notice of Proposed Rulemaking in CS Docket No. 9685, 11 FCC 5937, 594750 (1996).   S`- px` ` 3. The Small System Order defines a small system as any system that serves 15,000  S:- xor fewer subscribers.U:  {O-ԍSmall System Order, 10 FCC Rcd at 7406.U The Commission recognized that systems with no more than 15,000 subscribers  xwere qualitatively different from larger systems with respect to a number of characteristics, including:  xj(1) average monthly regulated revenues per channel per subscriber; (2) average number of subscribers per  S- x0mile; and (3) average annual premium revenues per subscriber.:R  {O-ԍId. at 7408.: The magnitude of the differences  xbetween the two classes of systems as to these characteristics indicated that the 15,000 subscriber  xNthreshold was an appropriate point of demarcation for purposes of providing for substantive and  SJ -procedural regulatory relief.2J  {O-ԍId. 2  S - px` ` 4. Most forms of rate relief provided under the Small System Order and the  xCommission's rules are available only to those small systems that are owned by a small cable company,  S - xwhich is defined as a cable operator that serves a total of 400,000 or fewer subscribers over all of its  S - xzsystems. ^ v {O- xԍId. A small system is deemed owned by a larger cable company if the company "holds more than a 20 percent  {Od - xequity USESESUSinterest (active or passive) in the system or exercises de jure control (such as through a general partnership  {O.!-or majority voting shareholder interest)." Id. at 741213, n.88. The Commission adopted this threshold because it roughly corresponds to $100 million in  xannual regulated revenues, a standard the Commission has used in other contexts to identify smaller  S4- x?entities deserving of relaxed regulatory treatment.= 4 {Op$-ԍId. at 740911.= The Commission found that cable companies  xexceeding this threshold would find it easier than smaller companies to attract the financing and" . ,-(-(ZZ"  S- xinvestment necessary to maintain and improve service.:  {Oh-ԍId. at 7411.: In addition, the Commission determined that  xcable companies that exceeded the small cable company definition "are better able to absorb the costs and  S-burdens of regulation due to their expanded administrative and technical resources.": Z {O-ԍId. at 7409.:  S`- px` ` 5. In addition to adopting the new categories of small systems and small cable  S8- x=companies, the Small System Order introduced a form of rate regulation known as the small system cost  S- xyof service methodology.=  {O -ԍId. at 741828.= This approach, which is available only to small systems owned by small cable  xcompanies, follows general principles of cost of service rate regulation. An eligible cable operator may  xzestablish a maximum permitted rate for regulated cable service equal to the amount necessary to cover  xits operating expenses plus a reasonable return on its prudent investment in the assets used to provide that  xjservice. The small system cost of service methodology differs both procedurally and substantively from  xthe standard cost of service methodology available to cable operators generally. We sought to adopt an  xyadministratively less burdensome procedure for eligible small cable companies based on evidence that our  xstandard procedures "place an inordinate hardship upon [smaller cable companies] in terms of labor and  S - xother resources that must be devoted to ensuring compliance.": ~ {O-ԍId. at 7420.: In addition, we intended to relieve  xeligible small cable companies from some of the substantive burdens that otherwise apply in cost of  xservice cases, having found that our standard rules "do not adequately take into account the higher costs  SZ-of doing business, and particularly the higher costs of capital, faced by smaller cable companies."1Z {O -ԍId.1  S - px` ` 6. To implement the small system cost of service rules, we designed FCC Form  x1230, a simplified onepage form, for use exclusively by operators eligible for these rules. This form is  xmore streamlined than Form 1220 used for cost of service showings by larger operators. To use Form  x1230, the operator must calculate five items of data pertaining to the system in question: annual operating  Sj- xMexpenses, net rate base, rate of return, channel count and subscriber count.:j {O-ԍId. at 7419.: Once these variables are  x{calculated, the form generates the maximum per channel rate the operator may charge for regulated  x service. Although subject to regulatory review, this rate is presumed reasonable if it is no more than  S-$1.24 per channel.14  {O!-ԍId.1 As we stated in the Small System Order:  XxWe have adopted the rate of $1.24 per channel . . . based on the 35 FCC Form 1220 cost  of service filings that have been submitted by systems with 15,000 or fewer subscribers  Rowned by what we have defined here as small cable companies. . . . Using the rate Bsetting formula that we hereby adopt, staff found that the subscriberweighted average  $cost per channel for eligible systems that had filed FCC Form 1220 amounted to $.93. " ,-(-(ZZ"  Because this is an average figure, we know that, according to the data provided on the  ~forms, a fair number of these Form 1220 filers would be entitled to rates exceeding $.93  per channel, presumably because of higher costs or recent capital improvements that  justified a higher than average rate. Using the $.93 figure for purposes of establishing  presumptions of reasonableness would have imposed an unfair burden on many systems  for whom a higher rate is well justified. Therefore, one standard deviation was added to  S- the $.93 per channel rate, producing a per channel rate of $1.24. We therefore believe  that a strong presumption of reasonableness should attach to a rate at or below this level  S-when established by an eligible operator.j  {O( - xZԍId. at 742526. As we explained in the Small System Order, standard deviation measures variance from the  xaverage in a sample. Applying one standard deviation to the sample of cable systems used to calculate the $.93  {O - xaverage rate should capture about twothirds of the eligible small cable systems. Id. at 7426, n.127. That is, two xthirds of the systems will have rates within one standard deviation from the average, with some having rates below  x;the average and some above the average. The remaining onethird of eligible systems will have rates that are either  {O - xso low or so high as to fall outside one standard deviation from the average. In the Small System Order, we  {O - xYincorrectly asserted that all systems falling outside one standard deviation are above it. Id. In fact, of the onethird  xof eligible systems not charging rates within one standard deviation of $.93, approximately half will have rates above  xone standard deviation (i.e., above $1.24 per regulated channel) and half will have rates below one standard  {O8- xdeviation (i.e., below $.62 per regulated channel). Therefore, contrary to what we stated in the Small System Order,  xapproximately onesixth (i.e., onehalf of onethird) of eligible systems will have rates exceeding $1.24 per regulated channel and will have the burden of showing the reasonableness of the rate, if challenged.   Sp-  px` ` 7. When applicable, the presumption of reasonableness effectively exempts eligible  xjcable operators from many of the proof burdens that apply under our standard cost of service rules. For  xexample, eligible small cable companies have greater discretion than larger operators in determining how  xto allocate costs between regulated and unregulated services and between various levels of regulated  S - xservices.=  {Oj-ԍId. at 742122.= Similarly, qualifying cable operators using Form 1230 are not subject to the presumption of  S - xunreasonableness that otherwise attaches when an operator seeks a rate of return higher than 11.25%.:  {O-ԍId. at 7423.:  x.As noted, an eligible operator enjoys the presumption of reasonableness with respect to these and other  xkfactors only if the maximum permitted rate claimed on Form 1230 does not exceed $1.24 per channel.  xIf the rate exceeds $1.24 per channel, the cable operator still may use Form 1230, but is subject to the  xisame presumptions that apply in a standard cost of service showing. As with other ratesetting procedures,  xa cost of service showing involving Form 1230 is subject to review by the cable operator's local  S-franchising authority and/or by the Commission.= {Ov!-ԍId. at 742526.=  Sh-x` ` 8. With respect to the effective date of the small system rules, we stated as follows:  Xx. . . we will direct franchising authorities to permit systems to use the small system cost  ~of service approach to justify rates in any proceeding that is pending as of the date this  3item is released, using data that was accurate as of the time the rates were charged. To  apply the small cable system cost of service relief to a pending case, the system must",-(-(ZZ"  show that it met the new definitions of a small system owned by a small cable company  3as of the date this item is released and as of the period during which the disputed rates  Qwere in effect. Our adoption of this new form of relief shall not affect the validity of a  S-final rate decision made by a franchising authority before the release date of this item.: {O-ԍId. at 7428.:   S8- pSx` ` 9. The Small System Order was released on June 5, 1995. We directed franchising  xauthorities to apply the small system cost of service approach to rate cases pending as of that date because  S-the record demonstrated that the preexisting rules were imposing a significant burden on small systems.1Z {O -ԍId.1 x` `   S- III.xPETITIONS FOR RECONSIDERATION  SJ - px` `  10. Two parties have sought reconsideration of the Small System Order and a number  S$ - xof other parties have filed comments opposing the petitions.Q$  {O-ԍSee Appendix A, List of Commenters.Q In one petition, the Georgia Municipal  S - xAssociation ("GMA") requests that we repeal the small system cost of service rules in their entirety.z ~ yO-ԍGeorgia Municipal Association Petition for Reconsideration ("GMA Petition") at 1. z  xIn the alternative, GMA urges the Commission to lower the maximum amount of $1.24 per channel at  S - xywhich an operator may set rates and still be entitled to a presumption of reasonableness.1  {OZ-ԍId.1 In support of  xits petition, GMA questions the accuracy of the underlying cost data that we used to set the $1.24 per  S\- xchannel rate.7\ {O-ԍId. at 2.7 In addition, GMA claims that the new rules will increase burdens on franchising  S4- xauthorities and lead to unreasonable rates for regulated cable services.142  {O-ԍId.1 GMA also cites examples of what  S -it claims are cable operators abusing the small system rules.7   {Op-ԍId. at 3.7  S- px` `  11. The New Jersey Board of Public Utilities ("New Jersey Board") seeks  S- xreconsideration of the Small System Order to the extent it permits application of the small system rules  Sn- xto rate cases that were pending as of the release date of the order.nV  yOd"-ԍNew Jersey Board of Public Utilities Petition for Reconsideration ("New Jersey Board Petition") at 1. In support of its petition, the New  xJersey Board describes the possible impact of the small system rules upon a rate case that was pending  S- xjbefore it when the Commission released the Small System Order on June 5, 1995. According to the New  x<Jersey Board, the cable operator in that case has given notice of its intent to attempt to justify its proposed  S- xrate increase by filing FCC Form 1230.7 {OV'-ԍId. at 5.7 The New Jersey Board complains that the rules governing the"x,-(-(ZZB"  xinformation that a franchising authority may seek in conjunction with its review of a Form 1230 are  S- x overly restrictive.1  {O@-ԍId.1 The New Jersey Board also objects to having to bear the burden of showing the  xunreasonableness of the rate sought by the operator if that rate does not exceed $1.24 per regulated  S- xchannel.1!Z {O-ԍId.1 As a result of the above, the New Jersey Board contends it will be "precluded from  xestablishing whether the cable operator's subscribers are being charged a reasonable rate," assuming the  S8- xMoperator meets the small system and small cable company definitions.7"8 {O -ԍId. at 7.7 The New Jersey Board also  xzasserts the alleged unfairness of applying the small system cost of service rules to the pending case in  S- xlight of the resources that the Board already has expended in the case.9#~ {O -ԍId. at 67.9 Along with its petition for  S- xreconsideration, the New Jersey Board also filed a motion for stay of the Small System Order to the extent  S-it mandates application of the new rules to pending cases.$" yOJ- xԍWith the exception of some additional language alleging irreparable harm if a stay is not granted, the New  {O- xJersey Board's motion is identical to the New Jersey Board Petition. See generally New Jersey Board of Public  xxUtilities Motion for Stay ("New Jersey Board Motion for Stay"). Because the New Jersey Board Motion for Stay repeats the New Jersey Board Petition almost verbatim, we need not summarize it separately.   SJ - IV.xDISCUSSION  S - px` `  12. Neither petition challenges our determination that some measure of regulatory  x=relief is appropriate for small systems owned by small cable companies. The petitioners do not dispute  xour conclusion that such systems face proportionately higher operating and capital costs than larger cable  xentities. Likewise, the petitioners do not contest that our standard cost of service rules may place "an  x.inordinate hardship" on smaller systems "in terms of the labor and other resources that must be devoted  S2- x.to ensuring compliance."U%2  {O-ԍSmall System Order, 10 FCC Rcd at 7420.U As the National Cable Television Association states in its opposition: "The  S - xy[p]etitions do not dispute the core underpinnings of the new rules."^&   yO6-ԍNational Cable Television Association Opposition at 4.^ Therefore, the petitions give us no  xreason to reconsider our decision to establish for eligible small systems a form of rate regulation that  x-lessens some of the substantive and procedural burdens that otherwise would apply. Because the petitions raise separate issues, we will resolve the merits of each petition individually.  SB-x A.` ` The GMA Petition  S- pbx` `  13. GMA challenges the presumption of reasonableness that arises when an eligible  xsmall system uses Form 1230 to justify a regulated rate that does not exceed $1.24 per channel. As noted  x<above, we established $1.24 per channel as the appropriate cutoff based on cost data previously submitted  xto the Commission by small cable companies seeking to establish regulated rates for their small systems"z&,-(-(ZZ"  xby using Form 1220 in accordance with our standard cost of service rules. GMA asserts that a careful  xreview of the Form 1220s that we relied on to set the $1.24 per channel rate "would probably . . . [show]  S- xthat corrections should be made to the operators' calculations in a large percentage of cases.":' yO-ԍGMA Petition at 2.: In support  x{of this prediction, GMA states that "several" Georgia cable operators using FCC Form 1220 have  S`- xloverstated the value of the intangible assets in their ratebases.1(`X {OX-ԍId.1 In addition, GMA states that the  xCommission found calculation or allocation errors in each of the nine cost of service cases that we had  S- xaddressed as of the date GMA filed its petition.1) {O -ԍId.1 GMA cites three specific cost of service cases in which  S- xthe Cable Services Bureau ("Bureau") made adjustments to correct such errors.*| {O - xԍId. at 2, n.2, citing In the Matter of Cable TV of Georgia, L.P., Memorandum Opinion and Order, 9 FCC Rcd  {O - x7151 (Cable Services Bur. rel. Nov. 9, 1994) ("Cable TV of Georgia"); In the Matter of MidAtlantic CATV Limited  {O- x-Partnership, Memorandum Opinion and Order, 9 FCC Rcd 7204 (Cable Services Bur. rel. Nov. 9, 1994) ("Mid {Ob- xAtlantic"); In the Matter of United Video Cablevision, Inc., Memorandum Opinion and Order, 9 FCC Rcd 7163  {O,-(Cable Services Bur. rel. Nov. 9, 1994) ("United Video").  On this basis, GMA  xargues that "there is a strong possibility that there are errors" in the Form 1220s from which we gleaned the cost data to establish the presumptively reasonable rate of $1.24 per channel.  SH - px` `  14. We believe that the ratesetting mechanism we adopted in the Small System Order  S" - xLreflects a reasoned judgment as to the method for establishing the rates that an eligible small system may  xcharge for regulated services. Neither GMA nor any other party challenges this mechanism. GMA  xobjects only to the input data that produced the standard of $1.24 per regulated channel against which  xthe rates of eligible small systems are measured. We considered whether a more comprehensive review  x.of small system cost data was necessary to ensure that our small system rules were properly tailored to  x=the conditions faced by such systems. In weighing the advantages and disadvantages of conducting such a survey, we observed that x` `  Xxmany smaller cable operators and cable companies have an immediate need for further  relief from certain aspects of rate regulation currently applicable to them. Moreover, we  believe that the data we already have accumulated is sufficient to design additional relief  ofor those systems most in need. In such circumstances, we see no reason to impose on  SB-smaller systems the burdens and delay that a formal cost study would entail.U+B6  {O -ԍSmall System Order, 10 FCC Rcd at 7419.U   S- px` ` 15. GMA does not challenge our finding that small systems owned by small cable  x companies were in need of immediate relief. GMA suggests that the Form 1220 filings on which we  xrelied were so facially inaccurate that we should have conducted a further analysis of small system cost  x=data. We disagree. This approach would have delayed implementation of measures for which there was  xan immediate need and would have imposed additional administrative responsibilities (i.e., having to  xyrespond to Commission inquiries concerning small system costs) on the very entities that we found were the most burdened by regulation." +,-(-(ZZk"Ԍ S-  ppԙx` ` 16. GMA fails to persuade us that the benefits of further analysis of small system cost  xdata would have outweighed the administrative costs and delay that such analysis would have entailed.  xWhile GMA does not dispute that such costs and delay would have been both inevitable and extremely  xNburdensome, it fails to factor these considerations into its discussion. GMA bases its request for  x\reconsideration on the fact that the Bureau found allocation or calculation errors in the cost of service  S8- x.cases it cites. In Cable TV of Georgia, for example, the Bureau adjusted the claimed operating losses by  xexcluding startup losses incurred after the system's first two years of operation and by correcting the  S- xzmanner in which the operator had allocated costs between regulated tiers of cable service.=, yOR-ԍ9 FCC Rcd at 715354.= Similarly,  S- xthe Bureau made adjustments in the United Video matter to correct improper allocations between tiers and  S- x[to reduce the rate of return claimed by the cable operator.=-X {O -ԍId. at 716465.= The major adjustments made in MidAtlantic  Sv-resulted from improper tier allocations and excessive startup losses claimed by the operator.=.v yO-ԍ9 FCC Rcd at 720507.=  S& - pax` ` 17. The impact of the adjustments cited are overstated by GMA and do not undermine  xthe formulation of the $1.24 standard. The Bureau decisions cited by GMA were based on general cost  S - xLof service principles and not under the interim rules the Commission adopted in February 1994.W/ z yO- xԍOur general cable cost of service rules have been the subject of three major Commission orders. When we  {O- xwadopted the Rate Order, our first order implementing the rate regulation provisions of the 1992 Cable Act, we found  xthat the record did not contain sufficient information to enable us to develop detailed cost of service rules properly  xtailored for the cable industry. 8 FCC Rcd at 5799. Pending the adoption of specific rules pursuant to a further  xrulemaking, we said that in lieu of the benchmark approach, operators could make individual cost showings that  yO- xiwould be subject to casebycase review. After further notice and comment, we adopted a specific cost of service  {O- x<alternative to the benchmark approach.  Report and Order and Further Notice of Proposed Rulemaking in MM  {Ol- xDocket No. 93215 and CS Docket No. 9428, FCC 9439, 9 FCC Rcd 4527 (1994) ("Interim Cost Order" or  {O6- xL"Further Notice"). The Interim Cost Order refined general cost of service principles to better suit the unique  {O- xcharacteristics of the cable industry. As its name suggests, the Interim Cost Order did not resolve all of the  {O- xoutstanding issues, thus necessitating the Further Notice. Pursuant to comments received in response to that item,  {O- xwe subsequently adopted the Second Report and Order, First Order on Reconsideration, and Further Notice of  {O^- xProposed Rulemaking in MM Docket No. 93215 and CS Docket No. 9428, FCC 95402, 11 FCC Rcd 2220 (1996)  {O(- x("Final Cost Order"). Between adoption of the Interim Cost Order and the Final Cost Order, we adopted the small  {O-system cost of service rules in the Small System Order.W As of  xthe time of those filings, we had directed cost of service operators to justify their rates in accordance with  S - x\traditional cost of service principles generally applicable in the field of utility rate regulation.@0  {O4!-ԍSee supra note 46.@ After  xseeking and reviewing further public comment, we subsequently adopted more refined cost of service rules  S6- xbetter tailored for use in the cable service context.Q16 {Ov$-ԍSee, generally, Interim Cost Order.Q At the same time, we designed Form 1220 for use  S- xyin accordance with the new rules. The cost data used in the Small System Order were gleaned from Form  x1220s filed by small systems pursuant to cost of service rules adapted specifically for use by cable  xoperators. The specificity of the new rules, combined with the uniformity of presentation required by"21,-(-(ZZ"  xForm 1220, makes the latter submissions inherently more reliable than the earlier submissions cited by  S- xGMA.2 yO@-ԍJames Cable Partners and Rifkin and Associates, Inc. Opposition ("James Cable Opposition") at 6. Thus, the errors in the filings relied on by GMA do not suggest the likelihood of material  xinaccuracies in the subsequent Form 1220 filings. This is particularly true given the nature of the errors  xin the cases cited by GMA. In each case, the errors were so minor that the Bureau found that the rates actually being charged by the cable operator were nevertheless justified and denied the complaint.  S- px` ` 18. We further note that in the Small System Order, we decided that standards  x]applicable to cable systems generally were inappropriate for small systems owned by small cable  xLcompanies. In particular, we decided that eligible small systems should be given more regulatory leeway  xthan larger cable entities, because small systems face disproportionately higher operating costs, capital  xcosts, and regulatory compliance costs: "Having isolated a category of systems for whom our standard  xrules need to be relaxed due to the particular characteristics of those systems, we seek to ensure that those  x]systems will be permitted to establish rates in accordance with such characteristics, rather than in  S -accordance with characteristics of cable systems generally."U3 X {O-ԍSmall System Order, 10 FCC Rcd at 7422.U  S - px` ` 19. With respect to eligible small systems, we relaxed the very standards that had  xzcaused the Bureau to make the adjustments described in the cost of service cases cited by GMA. For  xexample, we decided that small systems owned by small cable companies were entitled to "substantial  x?flexibility to fairly allocate costs between . . . [regulated service tiers], equipment and unregulated  S - x{services."14  {O-ԍId.1 Likewise, we concluded that an eligible small cable company should "have substantial  S- xflexibility in calculating its net rate base."15| {O-ԍId.1 We stated, among other things, that for qualifying systems  x"we will not presume it unreasonable to include in the rate base startup losses that exceed the first two  S- xyears of operating expenses," even though larger operators are subject to such a presumption.16 {O@-ԍId.1 Noting  xkthe greater risks of providing service and the higher costs of capital faced by many small systems, we  xfound it reasonable for small systems owned by small cable companies to seek a higher rate of return than  S- x.larger companies.:7 {OZ-ԍId. at 7423.: Further, with respect to the valuation of intangible assets, we stated that in the case  xof eligible small systems, "we will not presumptively exclude intangibles such as acquisition costs from  xthe net rate base," even though in the case of larger cable companies, including those cited by GMA, we  S- x[have been more restrictive with respect to the inclusion of the value of intangible assets in the ratebase.:82  {Ot#-ԍId. at 7422.: x` `  SR- px` ` 20. GMA does not dispute that we should be less restrictive in applying cost of  xservice principles to small systems owned by small cable companies. Yet it invites us to question cost  xinformation submitted by such systems by applying the stricter standards that we have found inappropriate" 8,-(-(ZZ"  xfor those systems. Because GMA's argument relies on overly restrictive standards, we find that it has not raised a material issue with respect to the reliability of those filings.  S-  px` ` 21. In addition to its specific challenge to the per channel rate of $1.24, GMA recites  xLseveral "experiences" of Georgia franchising authorities that purport to show that the small system rules  xL"are unfair to those franchising authorities who have invested a substantial amount of time and money in  S- xthe rate regulation process." 9 yOx- xԍGMA Petition at 4. GMA attaches a letter from one cable operator informing the local franchising authority  x,of its intention to increase its rates in accordance with the formula for small systems. In addition, GMA states that  {O - x<the cable operator for the City of Chatsworth threatened to use a rate increase under the Small System Order to  xoffset any refund obligation. Finally, GMA describes a situation where the rate order issued by the City of Aldora  xwas rendered meaningless because it was issued on June 6, 1995, and operators with rate cases pending as of June  yOb -5, 1995 were deemed eligible for small system treatment.  GMA further complains that these examples prove that "the rules are unfair  xto subscribers, because some cable operators will increase rates well beyond the level which subscribers  S- xwould pay if competition existed."1:B {O-ԍId.1 These conclusory allegations do not refute the specific findings or  S- xanalyses set forth in the Small System Order and do not state a basis for us to reconsider that order.  xLFurthermore, franchising authorities had no reasonable reliance interest in our rules remaining unchanged.  xAs for practices of the individual operators identified in the GMA petition, we do not believe it is  xappropriate for us to make specific findings in this context regarding the propriety of those practices. To  xthe extent cable operators fail to abide by our rules, local franchising authorities may take appropriate action.  S -x` ` 22. For the reasons stated above, we hereby deny GMA's petition for reconsideration.  S2-x B.` ` The New Jersey Board Petition  S-  px` ` 23. The New Jersey Board objects to the Small System Order to the extent it requires  xlocal franchising authorities to permit eligible systems to use the small system cost of service methodology  S- xin cases pending as of the date the Small System Order was released. As we stated in the Small System  Sn- xOrder: "To apply the small cable system cost of service relief to a pending case, the system must show  xthat it met the new definitions of a small system owned by a small cable company as of the date this item  S -is released and as of the period during which the disputed rates were in effect."U;  {O-ԍSmall System Order, 10 FCC Rcd at 7428.U  S- px` ` 24. In support of its petition, the New Jersey Board describes the potential impact  S- xof the Small System Order upon a rate case pending before it. That case involves the rates charged by  xService Electric Cable TV of Hunterdon ("Service Electric"). Service Electric filed a standard cost of  SZ- xservice showing with the New Jersey Board on July 14, 1994.G<Zf  yO`$-ԍNew Jersey Board Petition at 4.G Pursuant to that showing, Service Electric  S2- xsought to increase its monthly rates from $21.00 to $26.31 for its 60channel basic service tier.1=2  {O&-ԍId.1 That"2 =,-(-(ZZ{"  S- xcase was pending when the Commission released the Small System Order on June 5, 1995, although the  xstaff of the New Jersey Board had negotiated a tentative settlement with Service Electric that was subject  S- xto the approval of the New Jersey Board.7> {O-ԍId. at 5.7 Before such approval occurred, Service Electric gave notice  S-of its intent to attempt to justify its proposed rate increase by filing FCC Form 1230.1?Z {O-ԍId.1  Sb-x` `  S:- px` ` 25. The New Jersey Board contends that under the small system cost of service rules,  xService Electric might be able to justify the rate increase it sought in its initial showing to the Board or,  S- xpotentially, an even greater increase.=@ {Ov -čId. at 6.= According to the New Jersey Board, the rules governing the  xMinformation that a franchising authority may seek in conjunction with its review of Form 1230 are so  S- x.restrictive that it will be "difficult if not impossible to challenge" the rate the operator seeks to justify.1A~ {O-ԍId.1  xThe New Jersey Board also notes that under the small system cost of service rules, the burden is on the  xfranchising authority to show the unreasonableness of the rate sought by an eligible small system if that  S" - xrate does not exceed $1.24 per regulated channel.1B"  {O-ԍId.1 The New Jersey Board asserts that this  x"unprecedented" shift in the burden of proof will "necessitate the use of Board and State resources not  S -usually required" in order to establish the unreasonableness of the rate sought by the cable operator.1C  {O-ԍId.1 x` `  S -  px` ` 26. Based on the above, the New Jersey Board argues that it will be "precluded from  xestablishing whether Service Electric's subscribers are being charged a reasonable rate," assuming the  S2- xMoperator meets the small system and small cable company definitions.7D24  {O-ԍId. at 7.7 The New Jersey Board also  xzasserts the alleged unfairness of applying the small system cost of service rules to the pending case in  S-light of the resources that it already has expended in the case.9E  {OH-ԍId. at 67.9  S- px` ` 27. As an initial matter, we note that the petition seeks reconsideration of a  xCommission rule of general applicability based solely on the potential effect of that rule on a single rate  SB- xcase affecting approximately 3,000 cable subscribers.IFBX  yO:#-ԍService Electric Opposition at 3.I The Commission is charged with structuring a  xnational framework of rate regulation. A broader and more representative showing of the rule's impact is necessary for us to review the merits of a particular rule or regulatory approach. " F,-(-(ZZB"Ԍ S- px` ` 28. Further, the New Jersey Board fails to refute the underlying analysis supporting  xour decision to apply the new rules to pending cases. We adopted this approach based upon our balancing  x]of various factors. With respect to rate regulation, Congress specifically directed us to reduce the  S- xadministrative burdens and ease the costs of compliance for smaller systems._G yO-ԍCommunications Act,  623(i), 47 U.S.C.  543(i)._ In the Small System Order,  Sb- xwe concluded that our then existing rules "have significantly burdened small systems."UHbX {OZ-ԍSmall System Order, 10 FCC Rcd at 7428.U We designed  xthe small system cost of service rules to remedy this problem. Having determined small systems' need  S- xfor immediate relief, we deemed it in the public interest to provide such relief accordingly.:I {O -ԍId. at 7419.: We believe  xthat it is appropriate to apply a new rule to pending cases where the new rule serves to alleviate an  xexisting restriction on regulated parties, as the small system cost of service rules did by creating an  xadditional method for eligible systems to justify their rates. In addition, were pending cases not made  xsubject to the new rules, subscribers in some areas might have received refunds when the pending cases  xZwere decided, followed immediately by rate hikes when the systems put new rates into effect prospectively  xLin accordance with the small system cost of service methodology. Applying the new small system rules  S -to pending cases avoids this confusing "rollercoaster" result.cJf | yO- xԍWe do not suggest that the small system cost of service rules automatically will generate higher rates for  xeligible systems. Results will vary depending upon various factors, including the extent to which the operator has  xdepreciated its assets and the actual cost of capital that the operator confronts. However, we did recognize the  {On- xYoverall higher costs of providing service that small systems tend to face. Small System Order, 10 FCC Rcd at 7420.  xBecause our intent in adopting the small system rules was to ensure that eligible systems would be permitted to  yO- xestablish regulated rates in accordance with their peculiar cost environment, we concluded that such systems should  xnot be subject to many of the presumptions that apply in a standard cost of service proceeding since those  {O- x,presumptions were based on characteristics of cable systems generally, not small systems in particular. Id. at 7420 x23. Like any other cost of service operator, an operator making a showing pursuant to the rules adopted in the  {O"- xSmall System Order still must justify its rates in accordance with its actual cost experience. That Order simply  xiremoves inappropriate presumptions that would make it difficult for a small system to demonstrate the rate that accurately reflects its costs of providing regulated service.c  S - pcx` ` 29. We decided that the small system cost of service rules would not affect final  S - xdecisions of local franchising authorities made before the release of the Small System Order.[K  {O-ԍSmall System Order, 10 FCC Rcd at 7419.[ In these  xcases, the public interest, and in particular the interests of administrative finality, dictated that the final  xdecision of a local franchising authority should not be subject to reconsideration or appeal under the small  S -system rules.1L < {O"-ԍId.1  S- pDx` ` 30. By seeking reconsideration, the New Jersey Board suggests, implicitly, that we  xerred in finding a need for immediate relief. Yet it offers no arguments or evidence to refute this finding  xand thus presents no basis to reconsider it. The New Jersey Board's statement of a policy preference  xcannot overcome the evidence concerning the plight of smaller systems that was before us when we"D L,-(-(ZZr"  S- xadopted the Small System Order. As James Cable Partners and Rifkin and Associates, Inc. ("James  xCable") argues, it makes no sense "to complete pending cases under preexisting criteria that do not  S- xyembody the policy and statutory concerns that led to the adoption of the Small System Order in the first  S- xplace."DM yO-ԍJames Cable Opposition at 4.D Likewise, the New Jersey Board does not dispute the "rollercoaster" effect on rates that would  Sd-result if the new rules were not applied to pending cases.ANdX {O\-ԍSee supra para. 29.A  S- px` ` 31. The New Jersey Board contends that application of the small system rules to the  xpending Service Electric case will result in a waste of the resources it already has expended in that case.  xIt objects to our decision to place on the franchising authority the burden of proving the unreasonableness  xof a proposed rate that does not exceed $1.24 per regulated channel. The New Jersey Board suggests that  xMthe presumption of reasonableness that will attach to such a rate, coupled with the limitations on the  x information it can demand from the operator, effectively will preclude it from determining whether a  S$ -particular rate is reasonable.O$  yO- xԍWhile we do not agree with these conclusions, we also note that there is little nexus between the concerns the  xNew Jersey Board articulates and the relief it seeks. The New Jersey Board objects to the permissible scope of  xYdiscovery and the burden of proof, but requests that we eliminate these procedural restrictions in pending cases only.  xxApparently, the New Jersey Board does not object to the imposition of these restrictions in future cases. We are  xunable to discern the basis on which the New Jersey Board distinguishes pending cases from future cases for purposes of these restrictions. We disagree.  S - px` ` 32. We understand the frustration of the New Jersey Board with respect to its prior  xexpenditure of resources in accordance with the standard cost of service rules. We note, however, that  xthose expenditures were made with notice of the possibility that we would modify the rules governing  S\- x[small systems.P\b  {O^-ԍSee Second Reconsideration Order, 9 FCC Rcd at 4119, 416769, 41994200, 4223, 4247. Unfortunately, rule changes and rule modifications sometimes lead to inefficiencies and  xdisruptions for both the regulator and the regulated. We are forced to balance these factors against the  ximpact of delaying implementation of the new rule. Since the Service Electric case is the only matter in  x/which a franchising authority has articulated this concern, we cannot conclude that the problem is so  S- x=significant to require us to reconsider our prior decision. We do not believe that the Small System Order  x\will result in squandered resources even in the Service Electric case. The efforts already expended by  x/the New Jersey Board in amassing data and making factual determinations will not have been wasted  x\since they are relevant when the New Jersey Board decides the rate case in accordance with the small system rules. x` `   S- px` `  33. More generally, we disagree with the New Jersey Board's characterization of the  xpermissible scope of information requests that a franchising authority may make when reviewing Form  S~- x1230. The Small System Order expressly recognizes the right of franchising authorities to obtain "the  SX- xinformation necessary for judging the validity" of the filing.UQX  {O%-ԍSmall System Order, 10 FCC Rcd at 7424.U No information has been submitted to  S0-indicate that anything more than what this rule permits is necessary."0 Q,-(-(ZZ"Ԍ S-  pԙx` ` !34. We further find that the New Jersey Board has failed to raise a valid argument  x/against imposing the burden of proof on the franchising authority when the rate in question does not  xexceed $1.24 per channel. What it terms an "unprecedented shift in the burden of proof" is the logical  xjextension of our determination that rates at or below $1.24 per regulated channel appear reasonable. The  xNew Jersey Board does not challenge the analysis by which we arrived at the rate of $1.24 per channel.  xWhile not disputing that rates at or below $1.24 per channel can be presumed reasonable, the New Jersey  xBoard would ignore this finding in individual rate proceedings and continue to place upon the cable  xoperator the burden of establishing the reasonableness of its requested rate, regardless of the amount. We  xbelieve that having made the determination that rates at or below $1.24 per channel may by presumed  xreasonable, we should shift the burden of proof to the franchising authority when the operator seeks to  xjustify rates that do not exceed that amount. The New Jersey Board does not contest this analysis and therefore we have no basis to reconsider our decision.  S -x` ` "35. For these reasons, we hereby deny the New Jersey Board's Petition.]RZ  yO` - xZԍAs mentioned above, the New Jersey Board presents the same arguments in its Motion for Stay as it does in  {O(- xits Petition. See note 36, supra. Therefore, for the same reasons that we deny its Petition, we also deny the New Jersey Board's Motion for Stay.]  S -x C.` ` Other Matters  SX-  px` ` #36. On our own motion, we clarify one aspect of our rule that allocates the burden  xof establishing whether the rate claimed by a cable operator under the small system cost of service  S- xmethodology is reasonable.S\ yO- xԍIn light of pending petitions for reconsideration in this proceeding, the Commission retains jurisdiction to  {OZ- xKreconsider its own rules on its own motion. See Communications Act 405, 47 U.S.C.  405; 47 C.F.R.  1.108;  {O$-Central Florida Enterprises v. FCC, 598 F.2d 37, 48 n. 51 (D.C. Cir. 1978), cert. dismissed, 441 U.S. 957 (1979). As discussed above, the current rule states: "If the maximum rate established  S- xon Form 1230 does not exceed $1.24 per channel, the rate shall be rebuttably presumed reasonable."GT yO-ԍ47 C.F.R.  76.934(h)(5)(i).G  xThus, the current wording of the rule suggests that the burden depends on the maximum rate permitted  xby Form 1230, not on the rate that the operator intends to charge. Such an interpretation would create  xan anomaly where an operator determines that its maximum permitted rate is above $1.24 per regulated  xchannel, but does not actually intend to charge more than $1.24. We did not intend for the operator to  xhave the burden of overcoming all of the presumptions we generally found to be inappropriate for eligible  xsmall systems, if the actual rate the operator seeks to charge is within the zone of what we presume to  xbe reasonable. To eliminate this potential confusion, we hereby clarify that the presumption of  xzreasonableness shall apply as long as the actual rate to be charged does not exceed $1.24 per regulated  xMchannel, regardless of whether the maximum permitted rate, as calculated on Form 1230, exceeds that  x.amount. The burden shall shift back to the operator once it seeks to actually raise rates above the $1.24 per channel threshold.  S- px` ` $37. We also take this opportunity to correct three editing errors that appeared in the  S- x=rules appendix to the Small System Order. These corrections do not amend the substance of the rules in any way. "bT,-(-(ZZ"Ԍ S-  px` ` %38. In the Small System Order, we provided for the treatment of a small system that  xNproperly sets its rates in accordance with the small system cost of service methodology, but later  xexperiences a change in its status, either because the system exceeds the 15,000subscriber cap for a small  x/system or because the operator exceeds the 400,000subscriber threshold for a small cable company.  xWhile the text of the order explained the regulatory effect of such a transition, the accompanying rules  S:-did not.U : {O- xԍConsistent with the Small System Order, the rules provide that a small system may continue to establish rates  xKin accordance with the small system methodology for so long as it serves no more than 15,000 subscribers, even  xif the operator of the system later exceeds 400,000 subscribers or if the system is acquired by an operator that  xexceeds that threshold. Thus, once a small system is eligible to establish rates in accordance with the small system  xcost of service methodology, its continued eligibility no longer depends on the size of the operator. When the  xxsystem exceeds the small system cap of 15,000 subscribers, it may continue to charge the rate in effect when the  xsystem passed the 15,000 subscriber threshold. However, after exceeding 15,000 subscribers, the system may not  xadjust its rates further until it reestablishes initial permitted rates in accordance with the standard benchmark or cost {O -ofservice rules applicable to cable systems generally. Small System Order, 10 FCC Rcd at 742728. Here we amend the rules consistent with the text of the Small System Order.qV: {Ov-ԍSee Appendix B (adding paragraph (h)(11) to 47 C.F.R.  76.934).q  S- px` ` &39. As discussed above, the Small System Order provided for the application of the  xysmall system cost of service rules to cases pending as of the release date of the order if the cable operator  xin question met the subscriber threshold criteria as of the release date and as of the date the system  Sv- xbecame subject to rate regulation.:Wv.  {OD-ԍId. at 7428.: The rules appendix inadvertently referred to the effective date, instead  SN - xMof the release date, of the Small System Order for purposes of this rule. We hereby revise the text of  S( -Section 76.934(h)(9) of our rulesDX(  yO-ԍ47 C.F.R.  76.934(h)(9).D to conform it with our intent as set forth in the Small System Order. x` `  S -  px` ` '40. Due to an editing error, the rules appendix to the Small System Order did not  xaccurately indicate that we were revising the eligibility criteria for streamlined rate reduction to  S - xincorporate the new small system and small cable company definitions established in the Small System  Sf- xOrder. We hereby amend Section 76.922(b)(5) of our rulesDYfP  yOV-ԍ47 C.F.R.  76.922(b)(5).D to conform it with our intent as set forth  S@-in the Small System Order.  S- V. x FINAL REGULATORY FLEXIBILITY CERTIFICATION  S- px` ` (41. As permitted by Section 605(b) of the Regulatory Flexibility Act, 5 U.S.C.   x605(b), ("RFA"), we certify that a regulatory flexibility analysis is not necessary because the amendments  SR- xto the rules adopted in this order will not impose a significant economic impact on a substantial number  S*- x=of small entities as defined by statute, by our rules, or by the Small Business Administration ("SBA").Z* {O%-ԍSee 47 U.S.C.  543(m)(2); 47 C.F.R.  76.901(e); 13 C.F.R.  121.201 (SIC 4841).  x>5 U.S.C.  605(b). Three of the amendments merely correct the rules and have no substantive effect.  x-In addition, we clarified that the operator's presumption of reasonableness is preserved when the operator's"rZ,-(-(ZZ"  xMactual rate charged does not exceed $1.24 per regulated channel, regardless of the maximum permitted  x[rate calculated on Form 1230. Because this clarification will benefit small systems owned by small cable  x[companies, we believe a regulatory flexibility analysis is unnecessary. This certification conforms to the  S-RFA, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 ("SBREFA").[ yO- xԍSBREFA is Title II of the Contract with America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat.  {O-847, 857 (1996), codified at 5 U.S.C.  601 et seq.  S`-  S8- p&x` ` )42. The Commission will send a copy of this certification, along with this order, in  xza report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, 5  xU.S.C.  801(a)(1)(A), and to the Chief Counsel for Advocacy of the Small Business Association, 5  S-U.S.C.  605(b). A copy of this certification will also be published in the Federal Register.  x` `  Sp- VI.xORDERING CLAUSES  S - px` ` *43. Accordingly, IT IS ORDERED that, pursuant to the authority granted in Sections  x4(i), 4(j), 303(r), and 623 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j),  x303(r), and 543, the petitions for reconsideration filed by the Georgia Municipal Association and the New  x-Jersey Board of Public Utilities, and the Motion for Stay filed by the New Jersey Board of Public Utilities, ARE DENIED.  S0- px` ` +44. IT IS FURTHER ORDERED that, pursuant to the authority granted in Sections  x4(i), 4(j), 303(r), and 623 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j),  x303(r), and 543, Sections 76.922 and 76.934 of the Commission's rules, 47 C.F.R. Sections 76.922 and 76.934, ARE AMENDED as set forth in Appendix B. x` `  Sh- px` ` ,45.  IT IS FURTHER ORDERED that the Commission SHALL SEND a copy of this  S@- xFourteenth Order on Reconsideration, including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration. x` ` x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` ` x` ` x` ` x` ` x` `  hh@William F. Caton x` ` hh@Acting Secretary ""[,-(-(ZZ"  S-, APPENDIX A  S-LIST OF COMMENTERS ă  S`-Petitions for Reconsideration Georgia Municipal Association New Jersey Board of Public Utilities  SH -Oppositions to Petitions for Reconsideration Cable Telecommunications Association Chief Counsel for Advocacy, United States Small Business Association James Cable Partners and Rifkin and Associates, Inc. National Cable Television Association Service Electric Cable TV of Hunterdon, Inc. Small Cable Business Association Summit Communications, Inc.  S-  Sh-Motion for Stay New Jersey Board of Public Utilities  S-  Sx-Oppositions to Motion for Stay Service Electric Cable TV of Hunterdon, Inc. Small Cable Business Association "[,))ZZ"  S-, APPENDIX BTP  S-  RULE CHANGES ă xPart 76 of Title 47 of the Code of Federal Regulations is amended as follows: PART 76 CABLE TELEVISION SERVICE. x1. 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, 552, 554, 556, 558, 560, 561, 571, 572, 573.  S - x2. Section 76.922 is amended by revising paragraph (b)(5)(i) to read as follows.  S -  76.922 Rates for the basic service tier and cable programming services tiers.   SX- * * * * *  S-(5) Streamlined rate reductions. (i) Upon becoming subject to rate regulation, a small system owned by a small cable company may make a streamlined rate reduction, subject to the following conditions, in lieu of establishing initial rates pursuant to the other methods of rate regulation set forth in this subpart. * * * * * x2. Section 76.934 is amended by revising paragraphs (h)(5)(i) and (h)(9) and by adding paragraph (h)(11) to read as follows:  S*-  76.934 Small systems and small cable companies.  S- * * * * * (h) * * * (5) * * * (i) If the maximum rate established on Form 1230 does not exceed $1.24 per channel, the rate shall be rebuttably presumed reasonable. To disallow such a rate, the franchising authority shall bear the burden of showing that the operator did not reasonably interpret and allocate its cost and expense data in deriving its annual operating expenses, its net rate base, and a reasonable rate of return. If the maximum rate established on Form 1230 exceeds $1.24 per channel, the franchising authority shall bear such burden only if the rate that the cable operator actually seeks to charge does not exceed $1.24 per channel. * * * * * "([,))ZZ0*"Ԍ(9) In any rate proceeding before a franchising authority in which a final decision had not been issued  S-as of June 5, 1995 , a small system owned by a small cable company may elect the form of rate regulation set forth in this section to justify the rates that are the subject of the proceeding, if the system and affiliated company were a small system and small company respectively as of the June 5, 1995 and as of the period during which the disputed rates were in effect. This rule shall not affect the  S8-validity of a final rate decision made by a franchising authority before June 5, 1995. * * * * * (11) A system that is eligible to establish its rates in accordance with the small system costofservice approach shall remain eligible for so long as the system serves no more than 15,000 subscribers. When a system that has established rates in accordance with the small system costofservice approach exceeds 15,000 subscribers, the system may maintain its then existing rates. After exceeding the 15,000 subscriber limit, any further rate adjustments shall not reflect increases in external costs, inflation or channel additions until the system has reestablished initial permitted rates in accordance with some other method of rate regulation prescribed in this subpart.