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A.   a3TechnicalTechnical Document Style9Wg  2  1.   2;99|:;a4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . 2A3;<e@VADoc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:PU yO-ԍAntioch Petition at 1.>  S(-  S-II.xTHE FACTS  S-  S- ` x2.` ` On September 11, 1984, Antioch and TeleVue entered into a franchise agreement.@U yO$- xԍAntioch Petition at 1; Antioch Comments at 4; TeleVue Reply Comments at 23. Antioch states that the 1984 franchise agreement extended the original franchise entered into by the parties in 1965. Antioch Comments at 4. The  xagreement, which was reached as a settlement of litigation between the parties, was later extended in 1991  S`- xfor an additional 10 year term.1`U {O(-ԍId.1 The controversy regarding the senior citizen rate discount arises from"`* ,**88"  xparagraphs 5 through 8 of the 1984 franchise agreement. Those paragraphs, in pertinent part, are as follows:  Xx(5). In settlement of litigation between the parties in Case No. 231497 . . . the parties  Rhave elected to establish rate regulation . . . it being recognized that [cable operator] cannot waive its right to deregulate . . . .   BXx(6). [Cable operator] shall offer a "tier" of basic service . . . . For the period of May 1,  1984, to May 1, 1985, the monthly rate for this level of service shall be $8.65. Persons  who are 62 years of age or older and who qualify for the special water rates specified in  Antioch Municipal Code 65.01(f) shall be eligible for this basic tier of service at the monthly rate of $7.35.   S -  Xx(7). CITY will maintain rate regulation only on the abovereferenced lowest level of  service, or Basic Service. [Cable operator] shall have the right . . . to increase . . . its  &discounted Basic Service rate for senior citizens by an amount of $.25 annually  cumulative since [cable operator]'s last rate increase; or by a rate equal to 50% of the  Cincrease in the Consumer Price Index for the San Francisco Bay Area for All Urban  Consumers (1967=100), as published by the Bureau of labor Statistics . . . whichever is  ~the larger amount. Provided, however, that no rate increase on basic service shall exceed $.50 annually . . . without City Council approval . . . .   $Xx(8). The qualifications for eligibility for the discounted monthly rate for Basic Service  for senior citizens may be renegotiated at [cable operator]'s request at any time following  S@-the fifth anniversary date of the execution of this Agreement.L@5 yO-ԍAntioch Petition, Exhibit A at 24. L   S- ` x3.` ` Despite these provisions, Antioch states that on or about July 7, 1994, TeleVue  S- xannounced an increase in its senior citizen rates from $7.50 to $11.83 per month.?X5 yO-ԍAntioch Petition at 2. ? According to Antioch,  S- xthis increase affects approximately 1,000 eligible senior citizens within the city.=5 {O(-ԍId.= In addition, Antioch also  xstates that TeleVue announced that effective September 1, 1994, the senior citizen eligibility standards  xwould be revised so that "only persons receiving SSDI and SSI benefits will be eligible for the senior  S(- xdiscount."7 (z5 {OB!-ԍId.7 According to Antioch, this change in the senior citizen eligibility requirements also reduces  S-the number of seniors eligible to receive the senior discount.1  5 {O#-ԍId.1  S- ` x4.` ` Under the terms of the disputed franchise agreement, Antioch notes that for only a $1.00  S- xmore than the basic service rate, seniors could receive a satellite package for the total senior rate of" ,`(`(88"  S- x$8.50.1 5 {Oh-ԍId.1 Antioch states that now for seniors to continue that former level of service with a satellite  S- xMpackage included, the payment increases to a senior rate of $19.84 per month.7 Z5 {O-ԍId.7 In addition, Antioch  xzstates that TeleVue's new senior eligibility standards eliminate most Antioch senior subscribers from  S- xreceiving a senior rate and will force them into paying the standard cable rate of $24.80 per month.7 5 {O-ԍId.7  xAntioch states that the majority of its senior citizens would then have to pay an increase of $16.30 per  x>month for the same cable television service that they previously received when they qualified for the  S- xjformerly reduced senior rate.1~5 {O. -ԍId.1 Antioch states that, in light of the franchise provisions at issue, it objects  S- x[to TeleVue's practices regarding senior citizen cable rates.75 {O-ԍId. at 3.7 TeleVue responds by stating that the 1992  S-Cable Act preempts these issues.D5 yO-ԍTeleVue Reply Comment at 6.D  S-  Sp-III.xARGUMENTS OF THE PARTIES  S - ` ~ x5.` ` Antioch argues that enforcement of the franchise agreement between the City and Tele xVue to provide a senior citizen discount for cable rates is a matter of state contract law, not rate  S - xregulation, and therefore is not preempted by the Communications Act or the Commission's rules.> 2 5 yO-ԍAntioch Comments at 2.>  xAntioch notes that on February 19, 1997, the Commission endorsed this same analysis and issued a Letter  S - xjRuling in response to identical concerns raised by senior citizens of Antioch.7 5 {O-ԍId. at 3.7 Antioch requests that the  SX-Commission reaffirm this ruling.1XT 5 {OL-ԍId.1 In pertinent part, the Letter Ruling states:  XxYour letter of February 4, 1997 asks a number of questions dealing with enforcement of  the terms of local franchise agreements, specifically regarding senior citizen discounts in  such agreements. Your principal inquiry appears to be whether federal law or the  Commission's rules endorse or prohibit such terms. Our view is that federal law and the  Commission's rules do neither. Federal law, specifically the Cable Television Consumer  Protection and Competition Act of 1992 . . . , authorizes cable operators to offer senior  citizen discounts but does not require such discounts . . . . Federal law and the  `Commission's rules are silent on enforcement of an agreement between a cable operator  and a local authority under which the operator has agreed to provide discounts to senior  S- Qcitizens. We regard such an agreement its terms and enforcement to be subject to",`(`(88#"  S-contract law and not federal communications law. (Emphasis added).5 {Oh- xԍId.; Letter to Thomas J. Gundlach, Esq. from Meredith J. Jones, Chief, Cable Services Bureau, DA 97382, CSBILR 971, released February 19, 1997.     S- ` x6.` ` In further support of its position, Antioch states that Section 623(e)(1) of the  S- xCommunications Act["5 yOL- xԍDISCRIMINATION; SERVICES FOR THE HEARING IMPAIRED. Nothing in this title shall be construed  x<as prohibiting any federal agency, State, or a franchising authority from (1) prohibiting discrimination among  xsubscribers and potential subscribers to cable service, except that no Federal agency, State, or franchising may  xprohibit a cable operator from offering reasonable discounts to senior citizens or other economically disadvantaged group discounts; or . . . . 47 U.S.C.  543(e)(1).[ confers discretion upon cable operators to offer senior citizen rates lower than rates  Sb- x\charged to other subscribers.@b5 yO -ԍAntioch Comments at 6. @ Antioch notes that Section 623(e)(1) of the Act is an exception to the  S:- xregulatory requirement for a uniform rate structure throughout the franchise area.:b 5 {O<-ԍId. at 2.  See 47 U.S.C.  543(d); 47 C.F.R.  76.983 and 76.984.   According to Antioch,  xzrather than mandate a discount rate less than the maximum permitted rate, Congress devised a scheme  xthrough Section 623(e)(1) that permits cable operators to agree contractually to offer such a rate to  S-economically disadvantaged groups, including senior citizens.7 5 {OV-ԍId. at 6.7  Sr- ` #x7.` ` Antioch argues that such contractual agreements cannot be considered as rate regulation.7r 5 {O-ԍId. at 7.7  xZAntioch states that Section 623(a)(1) of the Communications Act provides that "[a]ny franchising authority  S" - xmay regulate the rates for the provision of cable service . . . but only to the extent provided under this  S - xsection."Q 5 {O-ԍId. at 7; 47 U.S.C.  543(a)(1).Q According to Antioch, Section 623(e)(1) carves out an area removed from the regulatory power  S - xof Federal, State or local franchising authorities because cable operators are granted discretion in the  S -matter of allowing for senior rate discounts.# 5 {O- xԍId. Antioch states that similar franchise provisions have been found to be contractual agreements falling outside  {O- xgovernmental regulatory powers and, therefore, not preempted by federal legislation. Antioch notes that in Nashoba  {O- xCommunications v. Town of Danvers, 893 F.3d 435 (1st Cir. 1990), in addressing a claim of federal preemption of  xa negotiated franchise agreement, cable license applicants were asked if they would honor a "rate freeze" for the first  xtwo years of operation and the court determined that this was not an issue of rate regulation, but rather a matter of enforcement of a contractual commitment. #  SZ- ` x8.` ` Alternatively, Antioch contends that even if the senior citizen rate requirement is found  S2- xto be rate regulation, that senior rate can still be enforced by Antioch.72(5 {O%-ԍId. at 9.7 Antioch argues that the senior"2,`(`(88J"  S- xrate could only be preempted if found to be in conflict with federal law.75 {Oh-ԍId.7 Antioch notes that Section 636(c)  S- xof the Communications Act>Z5 yO-ԍ47 U.S.C.  556(c).> states that "any provision of law of any . . . franchising authority, or any  xprovision of any franchise granted by such authority, which is inconsistent with this Act shall be deemed  S- x=to be preempted and superseded.">5 yO-ԍAntioch Comments at 9.> Antioch argues that the disputed senior rate is in harmony with the  Sb- x.purpose and operation of the 1992 Cable Act.8 bz5 {O| -ԍId. at 10.8 Antioch contends that Section 623(e)(1)@!b 5 yO -ԍ47 U.S.C. 543(e)(1).@ embodies an  xzintent to render cable services more accessible to those identified consumer groups least able to afford  S- xmaximum permissible rates as calculated under the Commission's rules.?"5 yON-ԍAntioch Comments at 10.? Thus, Antioch argues that the  S-senior rate and the 1992 Cable Act can coexist together.1#, 5 {O-ԍId.1  S- ` _x9.` ` TeleVue responds by noting that Antioch does not dispute that the 1992 Cable Act vests  Sr- xdiscretion with cable operators, rather than franchise authorities, to offer senior discount rates.E$r 5 yO-ԍTeleVue Reply Comments at 4.E  x\According to TeleVue, however, Antioch errs by insisting that cable operators can be forced to offer  xsenior discounts found in a franchise agreement made at a time when basic rates were entirely unregulated  S - xpursuant to the Cable Communications Policy Act of 1984 ("1984 Cable Act").n% N 5 {O-ԍId. at 3. See Pub. L. No. 98549, 98 Stat. 2779 (1984). n TeleVue contends that  xwhen the parties reaffirmed their franchise agreement when they amended it in 1991, to the extent that  x=TeleVue agreed to continue the senior discount rate found in that agreement, it did so in an environment  S - xLwhere it had discretion to set, change, and increase its other rates, including its basic service rate.=& 5 {O-ԍId.= Tele xVue argues that it did not agree to provide the senior discount now in dispute in the current regulatory  S2- xenvironment where its basic cable rates are capped pursuant to the 1992 Cable Act.H'2r5 yOD!-ԍTeleVue Reply Comments at 3, 8.H According to Tele xLVue, Antioch's attempt to enforce those disputed discount provisions has the effect of establishing rates  S-for its cable system that are below the maximum permitted under the current regulatory scheme.9(5 {O$-ԍId. at 34.9 TeleVue notes that when Antioch applied for certification to regulate basic rates under the 1992"(,`(`(88"Ԍ S- x[Cable Act, it agreed to regulate rates consistent with the Act.A)5 {Oh-ԍId. at 3, 10.A Thus, TeleVue contends that Antioch is  xMviolating its certification agreement by insisting on regulating TeleVue's basic rates while at the same  S-time requiring TeleVue to provide a steeplydiscounted rate for seniors.1*Z5 {O-ԍId.1  S`- ` px 10.` ` TeleVue argues that the senior discount that Antioch now attempts to enforce was  xpreempted and superseded by the 1984 Cable Act, and therefore could not have been enforced at any time  S- xjafter the designated sunset period in 1986.7+5 {O -ԍId. at 5.7 Specifically, TeleVue notes that rates set forth in franchise  xagreements were explicitly nullified and preempted by Section 636(c) of the 1984 Cable Act, which stated  xjthat the preemptive effect of the 1984 Act applied both to "any provision of law" and to "any provision  S- x.of any franchise."c,~5 yO-ԍTeleVue Reply Comments at 5, citing 47 U.S.C.  556(c).c TeleVue disputes Antioch's contention that the senior discount rate which it seeks  xkto enforce is not rate regulation subject to preemption by federal telecommunications law because the  SH - xsenior discount is set forth in a franchise agreement.1-H 5 {O-ԍId.1 TeleVue argues that the relevant text of Section  S - x636(c) did not change when the Communications Act was amended in 1992.7. 5 {O`-ԍId. at 6.7 Thus, TeleVue argues that  xfor purposes of Section 636(c), whether under the 1992 Cable Act or under the 1984 Cable Act, local rate  xregulation which is inconsistent with what is permitted under the federal scheme is preempted and  S - xsuperseded whether found in a provision of law or in a provision of a franchise agreement.1/ 2 5 {Oz-ԍId.1 Accordingly,  xTeleVue argues that the senior rate discount found in the parties' franchise agreement is clearly subject  SX- xyto preemption by the 1992 Act.m0X 5 {O- xYԍId. TeleVue contends that Antioch's citation to Nashoba Communications v. Town of Danvers, 893 F.2d 435  x(1st Cir. 1990) does not support Antioch's claim that franchises are immune from preemption analysis and are  {ON- x,governed exclusively by state law. TeleVue argues that Nashoba does not address the preemption issue, but instead  xapplies the "wellpleaded complaint" rule and found that the court had no subject matter jurisdiction over that question. 893 F.2d at 437438. m TeleVue further argues that the provisions of the franchise agreement  S0- xare not among those grandfathered by Section 623(j) of the 1992 Cable Act>10x5 yOH!-ԍ47 U.S.C.  543(j).> and notes that Antioch does  S-not argue otherwise.E25 yO#-ԍTeleVue Reply Comments at 8.E  S- ` Px 11.` ` In response, Antioch argues that the senior discount provisions of the franchise agreement  xwere never void, but merely unenforceable between 1984 and 1992, and the relevant contractual provisions  Sh- x were revived as a matter of state law upon the passage of the 1992 Cable Act, which Antioch claims"h2,`(`(88"  S- xremoved the preemptive impact of federal law.35 {Oh- xԍAntioch Surrebuttal at 34. See also Antioch Comments at 1112 and In Re Marriage of Barnes, 43 Cal.3d  xhqt 1377 (1987) (When a federal statute overrides a state statute under the supremacy clause the repeal of the federal  xstatute reinstates or revives the state law without an express reenactment by the state legislature. The result is the  x,same regardless of whether the federal statute is repealed or its repealing effects on state law are expressly rescinded  yO-by other Congressional action).Ć Antioch also argues that no inequity results from  xlallowing the enforcement of the senior discount provisions. Antioch claims that absent the City's  xenforcement, TeleVue admits that it would only continue the disputed senior discounts if it could pass  S- xjalong those costs to the remainder of its customers.J4z5 yO -ԍAntioch Surrebuttal Comments at 6.J Antioch argues that such an admission accentuates  xkthe need for permitting enforcement of voluntary agreements as a necessary means of effectuating the  S8- xintent of the 1992 Cable Act to provide increased access to cable services to disadvantaged segments of  S-the population.15 5 {O -ԍId.1  S- IV.xDISCUSSION  Sp- ` Px 12.` ` For the reasons discussed below, we uphold the Bureau's February 19, 1997 Letter Ruling  x/which addresses the same senior citizen discount issues raised in the instant Petition for Declaratory  xRuling. As a general rule, the Commission considers franchise agreements to be within the jurisdiction  xof the local franchising authority, and not the Commission. The Bureau's February 19, 1997 Letter Ruling  xconfirms that general proposition and goes further by stating that the specific senior citizen rate provisions  S -in the agreement are solely within the purview of local law.  SX- ` 5x 13.` ` In Implementation of Sections of the Cable Television Consumer Protection and  S2- xCompetition Act of 1992 Rate Regulation,J625 yOn-ԍ8 FCC Rcd 5631 (1993).J the Commission has, to a limited extent, addressed the issue  S - xof federal preemption of local rate restrictions contained in local franchising agreements. In interpreting  xythe 1992 Cable Act, the Commission has stated that "all provisions in franchising agreements barring rate  S- xregulations by franchise authorities are preempted by federal law."M7, 5 {O-ԍId. at 5680. M It does not appear that the  x\Commission specifically addressed the issue of preemption regarding existing rate regulations as they  xexisted in local franchising agreements at the time. However, Section 623(j) of the Act specifically  SD- x"grandfathered" rate regulation in local franchise agreements in existence before the enactment of the 1992  x=Cable Act unless there was effective competition in existence in the community under the Commission's  S-rules in effect on July 1, 1990.L8 5 yOR#- xZԍRATE REGULATION AGREEMENTS. During the term of an agreement made before July 1, 1990, by a  xfranchising authority and a cable operator providing for the regulation of basic cable service rates, where there was  xnot effective competition under Commission rules in effect on that date, nothing in this section (or the regulations  x[thereunder) shall abridge the ability of such franchising authority to regulate rates in accordance with such an agreement. 47 U.S.C.  543(j).L  "n8,`(`(88"Ԍ S- ` ox 14.` ` Antioch does not make any showing regarding the grandfathering of the senior discount  xyin its franchise agreement, but rather appears to concede that effective competition was present given the  xprovisions of the Commission's then existing definitions of where competition did not exist by noting that  S- xthose provisions were "exceedingly narrow and inapplicable to the geographic region in which the City  S`- xjis located."n9`5 {O-ԍAntioch Comments at 1011. See also Antioch Surrebuttal at 45.n More basically, however, Antioch appears to be arguing that it believes that the senior rate  xMdiscount at issue falls outside of the Commission's rate regulation scheme and was not intended to be  S- xabrogated regardless of the specific requirement of the grandfathering provision.A:Z5 yO -ԍAntioch Surrebuttal at 5.A Given the absence of  xany specific information demonstrating that effective competition did not exist during the relevant time  xLperiod combined with the absence of specific rate controls during the time period in question, we are not  x=prepared to conclude that the discount provision involved here is a "grandfathered" rate regulation under Section 623(j).  S - ` x15.` ` In making our decision here, we note that at the time the parties entered into their  xfranchise agreement, TeleVue had complete control over its rate structure with Antioch, including setting  xvariable rates for categories of subscribers. In settlement of litigation between the parties in 1984, Tele xMVue agreed to provide cable rate discounts to the senior citizens of Antioch. On December 17, 1991,  x.shortly before the enactment of the 1992 Cable Act, TeleVue agreed with Antioch to amend and extend  xthe same franchise agreement, without alteration to the senior citizen discounts. Despite TeleVue's claims  x0that the 1992 Cable Act barred it from providing these same senior discounts in a new regulatory  xenvironment, it was not until July 1994 that TeleVue unilaterally cancelled the senior rate. We note that  xfor two years after the enactment of the 1992 Cable Act, TeleVue continued to honor the terms of its franchise agreement with Antioch.  Sh- ` x16.` ` We believe that public policy requires that we avoid unnecessary regulatory interference  x=regarding contracts, such as franchise agreements, entered into by consenting parties. In this instance, in  xsettlement of a private lawsuit, the parties agreed to establish franchise provisions regarding the eligibility  xstandards for a senior citizen rate and the formula for adjusting that rate. We recognize TeleVue's  xmargument that it did not agree to provide the disputed senior discount in the current regulatory  xenvironment. However, TeleVue did agree to those terms of its own volition in 1984, and again amended  xand extended the franchise agreement in 1991, for a ten year term. TeleVue then continued to abide by  xthe terms of that franchise agreement well after the enactment of the 1992 Cable Act. We cannot agree  x.with TeleVue that the senior citizen discount provisions in that franchise agreement should be rendered  x=null and void and preempted by federal law because those provisions are now financially undesirable for  xkTeleVue. We recognize that the regulatory environment has changed, but we are unwilling to tamper with the terms of a local franchise agreement mutually consented to by the parties.  S`- ` #x17.` ` We cannot disagree, however, with TeleVue's argument that the disputed senior discount  xrate does impact the general rate regulatory scheme. While we recognize that the senior rate impacts, in  x=part, how TeleVue is affected by the system of rate regulation implemented by the 1992 Cable Act, we  S - xydo not believe that the senior discount at issue is preempted by Section 636(c).>; 5 yOr&-ԍ47 U.S.C.  556(c).> We agree with Antioch  S!- xthat the senior rate could only be preempted if found to be in conflict with federal law. By enacting"!z;,`(`(88U#"  x>Section 623(e)(1) into its system of rate regulation pursuant to the 1992 Cable Act, Congress clearly  xMintended to encourage cable operators to offer, and to continue to offer through franchise agreements,  xreasonable discounts to senior citizens or other economically disadvantaged groups. Thus, we conclude  S- xthat the disputed senior rate does not conflict with federal law, but is consistent with the purpose and  xoperation of the 1992 Cable Act. Accordingly, we will not interfere with Antioch's efforts to enforce the terms of its franchise agreement with TeleVue regarding senior citizen discounts.  S-  S-V.xORDERING CLAUSES  S- ` x18.` ` Accordingly, IT IS ORDERED that the Petition for Declaratory ruling filed by the City  Sp-of Antioch IS GRANTED to the extent indicated herein.  S - ` x19.` ` This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated  S -by Section 0.321 of the Commission's rules.=< 5 yO` -ԍ47 C.F.R.  0.321.= x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhDeborah A. Lathen x` `  hhChief, Cable Services Bureau