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Style 10oInitial Codes for Advanced U )a [ PfQK  dddn  ##  [[ b, oT9 !b, oT9 !n )^ `> XifQ ` Advanced Legal WordPerfect Learning Guide   f )^ `> XifQ Advanced Legal WordPerfect Learning Guide   Q" )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  QN~ )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 8PfInitial Codes for Beginninggi )a [ PfQK  dddn  # X` hp x (#%'b, oT9  [ &e )^ `> XifQ ` Beginning Legal WordPerfect Learning Guide   d )^ `> XifQ Beginning Legal WordPerfect Learning Guide   jH )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  j )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 9Initial Codes for Intermediate )a [ PfQK  dddn  # X` hp x (#%'b, oT9 Њ [ e )^ `> XifQ ` Intermediate Legal WordPerfect Learning Guide   3 )^ `> XifQ Intermediate Legal WordPerfect Learning Guide   jf )^ `> XifQ    Copyright  Portola Systems, Inc.`+ >Page  jX )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 UpdateInitial Codes for Update Module )a [ PfQK  dddn  #  [ X` hp x (#%'b, oT9 !n )^ `> XifQ ` Legal WordPerfect 5.0 Update Class Learning Guide   f )^ `> XifQ Legal WordPerfect 5.0 Update Class Learning Guide   Q" )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`7 CPage  jN~ )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 2(pZ!K!K$K`&33`O5hT(G2PDocument Style&^aO5h.K+&,$@`O5Bȗ+&>` ` ` "i~'^09FSS999Sq+9+/SSSSSSSSSS99qqqSggnxggxx9In]nxgxgS]xgg]]?/?FS9SSISI/SS//I/xSSSS??/SInII?C/CZ9+ZF999+999999S9S/gSgSgSgSgSnnIgIgIgIgI9/9/9/9/nSxSxSxSxSxSxSxSxS]IgSxSxSxS]IxSgSgSgSgSnInInZnIxdgIgIgIgIxSxSxSxZxSxZxS9/9S999SSZZnI]/]<]9]5]/nSanSnSxSxSng?g?g?S?S?S?ZZ]<]/]FxSxSxSxSxSxSn]Z]?]?]?xS]9nSS?]9]Sd+SS8%8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuddddddddddddddddddddddddddddddddddddddddN>>\g0>03\\\\\\\\\\>>ggg\yyyyyF\yrrygryyrr>3>g\>\\Q\Q>\g33\3g\\\FF3gQy\QF>(>g>0gg>>>0>>>>>>\>\3y\y\y\y\y\yQyQyQyQyQF3F3F3F3g\\\\ggggrQy\\\\rQ\r\y\y\y\yQyQygyQyQyQyQyQ\\\g\ggF3F\F>F\gggy\r3r_r>rFr3ggg\\yFyFyFgFgFgFggrcr3rgggggggyrgrFrFrF\r>ggFr>r\0\\=3=WddddddddddddddddddddddddddddddddddddddddNBnnB\\F\\\\\\07\7>\7>>\\\??n\\pBnnBigg>\\7"yyyy\nyc\gnn\"i~'^09]SS999S]+9+/SSSSSSSSSS99]]]Sxnxxng?Snxgx]nxxxxn9/9aS9S]I]I9S]/9]/]S]]I?9]SxSSIC%CW9+Wa999+999999S9]/xSxSxSxSxSxxInInInInI>/>/>/>/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+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNI\\>>>\g0>03\\\\\\\\\\33gggQyyrg>Frgygrr>3>T\>jaaj[Rjj28j[jjRjaR[jjjj[X%Xc>0cT>>>0>>>>>>>>\3QQQQQwyQrQrQrQrQ>3>3>3>3\\\\\\\\\\Q\Z\\\g\QQQyQyQycyQtrQrQrQrQ\\\c\c\>3>\>>>\gcc\r3rIr>r>r3\l\\\\y>y>y>gFgFgFgcrMr3rT\\\\\\crQrQrQ\r>\gFr>\t0\\=!=WddddddddddddddddddddddddddddddddddddddddNBnnBT\>Q\\\\\3;\7;\7>>QQ\??n\\pBnnBmgg>Q\7"yyyy\njc\gnn\"i~'^#)0<multichannel video programming distributor ("MVPD") should be deemed an "affiliate" of a LEC for  S( xpurposes of this test. Finally, the Notice solicited comment on the standards for showing whether a competing MPVD is offering service in the franchise area.  S<( B.` ` Discussion  R2` `  1. Offers services in the franchise area  S( ` 7.` ` To satisfy the new test for effective competition, a cable operator must show that a LEC  St( xor LECaffiliated MVPD or an MVPD using the facilities of a LEC or its affiliate:tZN" yOn ( x"X` hp x (#%'0*,.8135@8:when incorporating the word "offer" into the LEC test, Congress intended that "offer" should lose its  xcontext of the widespread availability of the competing service. To the contrary, the expectation was that  xBthe LEC presence would be ubiquitous, and the intent repeatedly expressed in the floor debates was that  S( x"the people will get a choice in how they get their services.")Z4N" {Od%( x"X` hp x (#%'0*,.8135@8:of impending competition when considering whether effective competition exists under the LEC test.  xVCongress sought to restrain cable rates and stimulate quality cable services. Once the LEC's competitive  xpresence is sufficient to achieve these goals, even if the LEC's buildout or roll out is not complete, the intent of the effective competition test has been met.  St( ` 2 12.` ` On the other hand, service offered only on a test basis, MMDS coverage limited by signal  xstrength or terrain factors, or service only to a specialized or niche market or to a geographically limited  S$ ( xmarket within the franchise area does not satisfy the test.]2$ N" yOD( x8"X` hp x (#%'0*,.8135@8:( xBeach Acquisition Corp. (La Canada, CA, et al.), 13 FCC Rcd 8506 (Cab. Serv. Bur. 1998), application for review  {M(pending.ı Any public representations the LEC has made, for example through any marketing  xand publicity alerting consumers to the LEC's plans for the competitive service, would be relevant. Documentation of actual commercial service must also be provided.  R2` `  2. ,"Comparable" Video Programming   SH ( ` x16.` ` Section 623(l) provides that the competitor must offer "comparable" programming services  xbefore effective competition can be found to exist in the franchise area under either the LEC or the  xBcompeting provider test. In the process of implementing provisions of the 1992 Cable Act, including the  xNcompeting provider test, the Commission adopted a definition of comparable programming. That  xjdefinition involves the offering of at least twelve channels of programming, including at least one channel  S ( xof nonbroadcast programming service.9F N" {O( xB"X` hp x (#%'0*,.8135@8:television broadcasting signals."Z:$N" {Oh( x"X` hp x (#%'0*,.8135@8:P N yO(X` hp x (#%'0*,.8135@8:operator's offering of "superstations" would satisfy the requirement that a competitor offer broadcast  xstations, or whether integration of satellite and offtheair broadcast signals at the receiving location would  xbe considered to be an offering of broadcast signals for the purpose of determining whether a DBS operator offers comparable programming. "R F,`(`(88"Ԍ S( ` 21.` ` In light of our conclusion above, that the existing definition of comparable programming  xbe applied under the LEC test as well as the competing provider test, we do not need to decide whether  S( xsatellitedelivered superstations should be counted as broadcast stations outside their local service areas.GN {O(X` hp x (#%'0*,.8135@8:statutory language which requires us to find that the MVPD in question is affiliated with a LEC. If a  xLEC's relationship with the MVPD, by itself, does not rise to the level of affiliation as defined above, that  xlack of affiliation is not affected by the fact that one or more other LECs also have invested in the MVPD.  xVIf none of the LECs has a sufficient interest in the MVPD to constitute affiliation, then the MVPD is not  xzaffiliated with a LEC, regardless of the aggregated interest of all the LECs. Our approach here is also  S(consistent with our approach to aggregation in other contexts, such as that of small cable operators.[N {O@(X` hp x (#%'0*,.8135@8:meeting all of the relevant criteria under the new effective competition test became exempt from rate  S( xregulation.\* N {O (X` hp x (#%'0*,.8135@8:subscribers.~pZN {Oj (X` hp x (#%'0*,.8135@8:ratemaking process is to have any closure or finality. Shortly before enactment of the 1996 Act, this  x8factor persuaded us to discontinue the practice of reviewing a cable operator's entire rate structure when  S ( x.a CPST rate complaint is filed.^ , N" {O( x6"X` hp x (#%'0*,.8135@8:63.` ` The Notice solicited comment on several issues. The issues raised are the methodology  xthat should be employed to determine the subscriber threshold under the statute; our proposal to implement  x$as a permanent rule a definition of affiliate that would establish affiliation when an entity owns an active  xor passive equity interest of 20% or more in the cable operator or holds de facto control over the operator;  xHthe calculation of "gross annual revenues" counted toward the $250 million threshold; procedures for  xdetermining eligibility for small operator treatment; and the treatment of operators that lose eligibility for  S (small operator relief and become subject to regulation. l N {O(X` hp x (#%'0*,.8135@8:be counted by using the equivalent billing unit methodology."  N" {On( xd"X` hp x (#%'0*,.8135@8:,`(`(88:"Ԍ R2 ` ` 2. ,Definition of "affiliate"  S( ` B67.` ` In the Interim Order, we determined that applying the definition of "affiliate" used in our  S( xsmall system costofservice rulesN yO(X` hp x (#%'0*,.8135@8:either a more liberal threshold when passive investment is involved or the adoption of a procedure to  xenable small operators to request waiver of the affiliate standard when other attributes warrant small  S( xsystem regulatory relief. N yO (X` hp x (#%'0*,.8135@8:revenues when determining whether an operator is affiliated with an entity generating $250 million in annual revenues.  S( ` L77.` ` Finally, we must also consider whether multiple equity stakes in a small operator can be  x~accumulated toward the $250 million threshold. SCBA urges the Commission to resist aggregation based  xon language in the Joint Committee Report that seems to limit the small operator's ability to affiliate "with  S(( x`any entity" whose annual revenues exceed the cap.( N yO&(X` hp x (#%'0*,.8135@8:about to lose its deregulatory status. In order to carry its rates over into regulation, an operator must  xVdemonstrate that it has had such rates in effect three months prior to the loss of small operator eligibility.  xAlthough some reasonable variation in rates over the preceding threemonth period would not disqualify  xan operator from transition treatment, a substantial spike in rates during the threemonth period would  xindicate that rates were increased primarily to ensure that higher rates carry over into the regulated environment.  S ( V. DEFINITION OF "AFFILIATE" IN THE CONTEXT OF CABLETELCO  S (BUYOUTS  S ( ` Y90.` ` Section 302 of the 1996 Act added Section 652 to the Communications Act. Section 652 provides in relevant part:  ` 8XX` ` (a) Acquisitions By Carriers. No local exchange carrier or any affiliate of such carrier  ` jowned by, operated by, controlled by, or under common control with such carrier may  ` zpurchase or otherwise acquire directly or indirectly more than a 10 percent financial  ` interest, or any management interest, in any cable operator providing cable service within the local exchange carrier's telephone service area.(#`  ` XX` ` (b) Acquisitions By Cable Operators. No cable operator or affiliate of a cable operator  ` xthat is owned by, operated by, controlled by, or under common ownership with such cable  ` Foperator may purchase or otherwise acquire, directly or indirectly, more than a 10 percent  ` financial interest, or any management interest, in any local exchange carrier providing  S(telephone exchange service within such cable operator's franchise area."N yO(X` hp x (#%'0*,.8135@8:3$ ZN" {O( x"X` hp x (#%'0*,.8135@8: as proposed in our Notice, but should not replicate or replace antitrust litigation.  S ( ` j107.` ` We disagree with those commenters who argue that Congress intended to provide video  S ( xservices competitors with a higher degree of protection than is provided by the federal antitrust laws.4Z FN" yOh( x("X` hp x (#%'0*,.8135@8:N" {Oh( xF"X` hp x (#%'0*,.8135@8:plausible theory showing that the cable operator has a reasonable prospect of ultimately recouping its  S ( x8investment in belowcost prices, including the time value of the money invested in belowcost pricing.? 0 N {O(X` hp x (#%'0*,.8135@8:v119.` ` In the Interim Order, we eliminated language in Note Six to Section 76.605 of the  xCommission's rules that permitted an LFA to apply to the Commission for a waiver to impose more  S" ( xstringent cable technical standards than the standards prescribed by the Commission.GT$" N" {O( x,"X` hp x (#%'0*,.8135@8:the Commission's technical standards is "the only practical method of handling complaints" regarding  S( xLsignal quality problems.qN" {O ( x2"X` hp x (#%'0*,.8135@8:though the franchising authority can still require system upgrades.{N yO(X` hp x (#%'0*,.8135@8:pN yO (ԍ47 U.S.C.  544(b).> In addition, Section 611 of the Communications Act affirms the ability of an LFA to establish  x\and enforce franchise provisions concerning facilities and equipment related to PEG channels and for  xeducational and governmental use of channel capacity on institutional networks. Section 621(a)(3)  xXauthorizes franchising authorities to ensure access to cable services throughout the franchise area,  x`regardless of the income levels of potential residential subscribers. Section 621(a)(4) authorizes the LFA  xto require adequate assurance of the cable operator's financial, technical, and legal qualifications to  xpprovide cable service. Section 621(b)(3)(D) allows an LFA to require institutional networks. Section  x`626(b)(2) states that, subject to Section 624, a franchise renewal proposal "shall contain such material as  xthe franchising authority may require, including proposals for the upgrade of the system." Section  x~632(a)(2) enables an LFA to establish and enforce "construction schedules and other constructionrelated  S( x`performance requirements."p|N yO(ԍ47 U.S.C.  531, 541(a)(3), (4), (b)(3)(D), 546(b)(2), 552(a)(2).p The Commission likewise has long acknowledged areas of local concern,  xsuch as studio capacities, electrical safety codes, construction requirements, and management of public  S( xrightsofway.~ N {O<( xԍSee Review of the Technical and Operational Requirements of Part 76, Cable Television, Report and Order,  {O( x102 FCC2d 1372, 1380 n.12 (1985); TCI Cablevision of Oakland County, Inc., 12 FCC Rcd 21396, 21441 (1997),  {O( xreconsideration denied, 13 FCC Rcd 16400. In TCI Cablevision, the Commission also found that a city condition  xdthat cable construction permits would not be used for telecommunications purposes did not violate Section 624(e)  xjbecause the condition concerned the nature of services the cable operator would be providing over its facilities  x2pursuant to its cable franchise rather than either the transmission technology or subscriber equipment used for the services. 12 FCC Rcd at 2143032. Local governments perform a range of vital tasks necessary to preserve the physical  xintegrity of streets and highways, to control the orderly flow of vehicles and pedestrians, and to manage  xfacilities that crisscross the streets and public rightsofway, which are unaffected by Section 624(e). The  x1996 Act also does not preclude LFA review of the adequacy of the cable operator's plans for meeting the cablerelated needs identified by the LFA.  S( `  143. ` ` Although this Order clarifies to some extent the meaning of "transmission technology" for  xpurposes of Section 624(e), we recognize that over three years have passed since the 1996 Act was signed  xRinto law. We also recognize that, in the absence of a final federal rule, local franchise authorities and  xcable operators have entered into agreements based on their own understandings of the language of Section"(>R ,`(`(88"  x624(e). In the absence of today's guidance, parties may have drafted certain franchise provisions in a way  xHthat they believed was permissible under Section 642(b), but that now would be found impermissible  S( xunder our reading of Section 624(e). Had the parties had the benefit of today's Order, these provisions  xcould have been drafted in a way that would have permitted local authorities to exercise their legitimate  xrights under Section 624(b) without running afoul of Section 624(e). We have received no formal  xpcomplaints from any party claiming Section 624(e) has been violated. Given these settled contractual  S( xarrangements, nothing in this Order is intended automatically to preempt or affect the enforceability of  S(existing franchise agreements.Af N {OT( xԍSee, e.g., Pan American Life insurance Co. v. Blue Cross and Blue Shield, 127 F.3d 1099 (4th Cir. 1997)  x,(unpublished disposition, per curium) (finding that voluntary agreement was enforceable, even if agreement was based  {O ( xRon parties' mistaken belief that ERISA did not preempt state statute); E. Norman Peterson Marital Trust v.  {O (Commissioner of Internal Revenue, 78 F.3d 795 (2d Cir. 1996):   XXIf the particular language used in a statute is highly susceptible to misunderstanding by a lay person, and   fif the clarification which the regulations are intended to provide is available only after ordinary people have   made choices in reliance on the more common meaning of the statutory term, it might be a situation of such   vsubstantial unfairness would arise that it would be permissible to apply the latecoming regulations only prospectively.(# 78 F.3d at 800. A  S( VIII.PRIOR YEAR LOSSES   SL (  A.` ` Background  S ( ` ~144.` ` Section 301(k)(1) of the 1996 Act amended Section 623 of the Communications Act to  xpreclude the disallowance of certain losses incurred by original franchisees prior to September 4, 1992. Specifically, the statute provides:  ` XX` ` (n) Treatment of Prior Year Losses. Notwithstanding any other  ` Fprovision of this section or of section 612, losses associated with a cable  ` system (including losses associated with the grant or award of a  ` nfranchise) that were incurred prior to September 4, 1992, with respect to  ` a cable system that is owned and operated by the original franchisee of  ` vsuch system shall not be disallowed, in whole or in part, in the  ` determination of whether the rates for any tier of service or any type of  SD(equipment that is subject to regulation under this section are lawful.D N yO (X` hp x (#%'0*,.8135@8:provide that a cable operator may refuse to transmit any leased access or public access programming  S( xcontaining "obscenity, indecency, or nudity."N {Ox(ԍ1996 Act  506(a), (b), 110 Stat. 13637, codified 47 U.S.C.  531(e), 532(c)(2). In the Order, the Commission amended Sections 76.701  x0and 76.702 of the Commission's rules concerning leased access and PEG access, respectively, to  S( x.incorporate these amendments.ZN {O (X` hp x (#%'0*,.8135@8:changes using any reasonable written means at its sole discretion. Notwithstanding  FSection 623(b)(6) or any other provision of this Act, a cable operator shall not be required  to provide prior notice of any rate change that is the result of a regulatory fee, franchise  fee, or any other fee, tax assessment, or charge of any kind imposed by any Federal  Bagency, State, or franchising authority on the transaction between the operator and the  S(subscriber.N {O$(X` hp x (#%'0*,.8135@8:Municipal parties filed a comment in response to the initial regulatory flexibility analysis. The parties  S( xstate that the Commission failed to consider, in the IFRA to the Notice, the effect of the proposed rules  xfon small governmental entities. Specifically, the municipal parties state the Commission's proposal to  xDrequire a local franchising authorities ("LFA") to send complaints to the cable operator, wait for a  xresponse, and then forward the response to the Commission, would impose additional burdens on small  xgovernment entities. Additionally, municipal commenters state that burdens for small governmental  x*entities will increase if operators are not required to give direct notice to subscribers of rate increases  x(because LFAs will receive additional complaints from subscribers that were not aware that rate increases  xLwere taking place), and that LFAs, if unable to negotiate facilities and equipment requirements, will need  xto devise indirect means of assuring community needs and interests are met under renewal portions of the  xCommunications Act. The municipal commenters state that, in the alternative, the Commission should  xreinstate its original process for rate complaint filings, should simply redesign the rate complaint form to  x&allow an LFA to certify that it has received subscriber complaints, and should allow a franchising  x authority to file the complaint with the Commission and the operator, with the operator filing its rate  S( xjustification directly with the Commission. We discuss these alternatives in the body of the Order, and  S( xin the below analysis. In addition, other commenters raised issues in response to the Notice that could  S(involve small entities. These comments are addressed in the Order and below.  SJ( ` 172. ` ` Description and Estimate of the Number of Small Entities to Which Rules Will Apply. The  xzRFA defines the term "small entity" as having the same meaning as the terms "small business," "small  xorganization," and "small governmental jurisdiction," and the same meaning as the term "small business  S( x"concern" under Section 3 of the Small Business Act."N yO<(X` hp x (#%'0*,.8135@8:Operations Division, SHALL SEND a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. ` `  ,hhhFEDERAL COMMUNICATIONS COMMISSION ` `  ,h ` `  ,hhhMagalie Roman Salas ` ` ,hhhSecretary "P0*&&88h"  S( APPENDIX A Đx  S(   S`( COMMENTERS Alliance for Community Media, Consumer Project on Technology, and Alliance for XCommunications Democracy (# Allied Associated Partners, LP and GELD Information Systems Bell Atlantic BellSouth Corporation ("BellSouth") Cable Telecommunications Association ("CATA") Cablevision Systems Corporation ("Cablevision") California Cable Television Association ("CCTA")  S ( City and County of Denver, CO ("Denver") City of Fairfield, CA ("Fairfield") City of Indianapolis, IN ("Indianapolis") Cole, Raywid, & Braverman (on behalf of Bresnan Communications Company, L.P., Charter Communications, Inc., Daniels Communications, Inc., Halcyon Communications Partners, James Cable Partners, L.P., Jones Intercable, Inc., Rifkin & Associates, Inc., TCA Cable TV, Inc. ("Cole, Raywid")) Comcast Cable Communications, Inc. ("Comcast") Cook Jr., William A. ("William Cook") Cox Communications, Inc. ("Cox")  S@(CTec Cable Systems, Inc. and Mercom, Inc. ("CTEC and Mercom")  S( Falcon Holding Group, L.P. ("Falcon") Fleischman and Walsh, L.L.P (on behalf of Adelphia Communications Corporation, Arizona Cable Telecommunications Association, Century Communications Corporation, Charter Communications, Inc., Insight Communications Co., State Cable TV Corp., and Suburban Cable TV Co. Inc. ("Fleischman"))  SP(FrontierVision Operating Partners, L.P. ("FrontierVision")  S(( Greater Metro Cable Consortium, Metro Denver, CO ("GMCC") GTE Service Corporation ("GTE") Independent Cable & Telecommunications Association ("ICTA") Kramer, Monroe & Wyatt ("Kramer")  S( Massachusetts Cable Television Commission ("Massachusetts Cable Commission") National Cable Television Association, Inc. ("NCTA") National League of Cities and National Association of Telecommunications Officers and Advisors ("League of Cities and NATOA") National Telephone Cooperative Association ("NTCA") New England Cable Television Association, Inc. ("NECTA") New Jersey State Board of Public Utilites ("New Jersey Board") New Jersey State Division of the Ratepayer Advocate ("New Jersey Ratepayer Advocate") New York City Department of Information Technology and Telecommunications ("New York City") New York State Department of Public Service ("State of New York")" %Q0*&&88`""ԌOptel, Inc. ("OpTel") People for the American Way and Media Access Project Residential Communications Network, Inc. SBC Communications, Inc. and Southwestern Bell Video Systems, Inc. ("SBC") Small Cable Business Association ("SCBA") State of California Agency ("SMATV") TeleCommunications, Inc. ("TCI") Time Warner Cable (Time Warner) United States Small Business Administration ("SBA") United States Telephone Association ("USTA") United States Wireless Cable, Inc. and Wedgewood Communications, Inc. ("U.S. Wireless and Wedgewood") US WEST, Inc. ("U.S. WEST") Wireless Cable Association International, Inc. ("WCA")  S (  SX(REPLY COMMENTERS Alliance for Community Media Ameritech New Media, Inc. ("Ameritech") Bell Atlantic City of Atlanta, GA City of Los Angeles, CA; National League of Cities; and National Association of Telecommunications Officers & Advisors ("Los Angeles, League of Cities, and NATOA") City of Austin, TX ("Austin") City of Lake Forest, IL ("Lake Forest") City of Naperville, IL ("Naperville") City of Rolling Meadows, IL ("Rolling Meadows") Cole, Raywid, & Braverman (on behalf of Bresnan Communications Company, L.P., Charter Communications, Inc., Daniels Communications, Inc., Halcyon Communications Partners, James Cable Partners, L.P., Jones Intercable, Inc., Rifkin & Associates, Inc., TCA Cable TV, Inc. ("Cole, Raywid")) Comcast Cable Communications, Inc. ("Comcast") Fleischman and Walsh, L.L.P (on behalf of Adelphia Communications Corporation, Arizona Cable Telecommunications Association, Century Communications Corporation, Charter Communications, Inc., Insight Communications Co., State Cable TV Corp., and Suburban Cable TV Co. Inc. ("Fleischman")) General Electric Capital Corporation ("GE Capital") Independent Cable & Telecommunications Association ("ICTA") J.P. Morgan & Company, Brown Brothers Harriman & Co., Olympus Partners, and First Union Capital Partners, Inc. Massachusetts Cable Television Commission ("Massachsetts Cable Commisssion") Metropolitan Area Communications Commission representing Oregon communities ("MACC") Michigan, Illinois and Texas Communities" %R0*&&88`""ԌNational Cable Television Association, Inc. ("NCTA") New York City Department of Information Technology and Telecommunications ("New York City") Optel, Inc. ("OpTel") Small Cable Business Association ("SCBA") TeleCommunications, Inc. ("TCI") Time Warner Cable ("Time Warner") United States Telephone Association ("USTA") United States Wireless Cable, Inc. and Wedgewood Communications, Inc. ("U.S. Wireless and Wedgewood") US WEST, Inc. ("U.S. WEST") Viacom, Inc. ("Viacom") Village of Lincolnwood, IL ("Lincolnwood") Wireless Cable Association International, Inc. ("WCA") " S0*&&88( "  S(@ APPENDIX B ă Part 76 of Title 47 of the Code of Federal Regulations is amended as follows: PART 76 MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE  S( 1. 1. 1. a.(1)(a) i) a) I. 1. 1. a.(1)(a) i) a)1.` ` The authority citation for Part 76 continues to read as follows: AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 571, 572, 573.  S (2. ` ` Section 76.701 is amended by adding a new note to paragraph 701(b) as follows:  S (  76.701 Leased access channels.  S (*` ` * ,*h*hh*  S (Note: "Nudity" in paragraph (b) is interpreted to mean nudity that is obscene or indecent.  S0(3.` ` Section 76.901 is amended by adding a new paragraph (f) to read as follows:  S( Sec. 76.901 Definitions.  S(*` ` * ,*h*hh*  S((f) Small Cable Operator. A small cable operator is an operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000. For purposes of this definition, an operator shall be deemed affiliated with another entity if that entity holds a 20 percent or greater equity interest (not including truly passive investment) in the operator or exercises de jure or de facto control over the operator.  S(Note 1: Using the most reliable sources publicly available, the Commission periodically will determine and give public notice of the subscriber count that will serve as the 1 percent threshold until a new number is calculated.  S((Note 2: For a discussion of passive interests with respect to small cable operators, see Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, Report and Order in CS Docket No. 9685, FCC 9957 (released March , 1999).  S(Note 3: If two or more entities unaffiliated with each other each hold an equity interest in the small cable operator, the equity interests of the unaffiliated entities will not be aggregated with each other for the purpose of determining whether an entity meets or passes the 20 percent affiliation threshold.  S (3. ` ` Section 76.905 is amended by revising paragraph 76.905(g) to read as follows:  S"(  76.905 Standards for identification of cable systems subject to effective competition.  Sp#(*` ` * ,*h*hh*"p#T0*&&88 "Ԍ(g) In order to offer comparable programming as that term is used in this section, a competing multichannel video programming distributor must offer at least 12 channels of video programming, including at least one channel of nonbroadcast service programming.  S`(4. ` ` A new Section 76.907 is added to read as follows:  S( 76.907. Petition for a determination of effective competition. (a) A cable operator (or other interested party) may file a petition for a determination of effective competition with the Commission pursuant to the Commission's procedural rules in  76.7. (b) The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition, as defined in  76.905, exists in the franchise area.  S (Note: The criteria for determining effective competition pursuant to  76.905(b)(4) are described in Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, Report and Order in CS Docket No. 9685, FCC 9957 (released March , 1999). (c) If the evidence establishing effective competition is not otherwise available, cable operators may request from a competitor information regarding the competitor's reach and number of subscribers. A competitor must respond to such request within 15 days. Such responses may be limited to numerical totals. In addition, with respect to petitions filed seeking to demonstrate the presence of effective competition pursuant to  76.905(b)(4), the Commission may issue an order directing one or more persons to produce information relevant to the petition's disposition.  S(5. ` ` Section 76.911 is amended by revising paragraphs (a) and (a)(1) to read as follows; by deleting paragraph (b); and by renumbering paragraphs (c), (d), and (e) to read (b), (c), and (d), respectively.  S(  76.911 Petition for reconsideration of certification. (a) A cable operator (or other interested party) may challenge a franchising authority's certification by filing a petition for reconsideration pursuant to  1.106. The petition may allege either of the following: (1) The cable operator is not subject to rate regulation because effective competition exists as defined in  76.905. Section 76.907(b) and (c) apply to petitions filed under this section.  S(*` ` * ,*h*hh*  S(6. ` ` Section 76.915 is deleted.  S8(7.` ` Section 76.934 is amended by adding a note at the end of the rule to read as follows:  S (  76.934 Small systems and small cable companies  S!(*` ` * ,*h*hh*  S"(Note: For rules governing small cable operators, see  76.990 of this Subpart.  SH$(8. ` ` Section 76.950 is amended by revising paragraph (b) as follows. " %U0*&&88`""Ԍ S(  76.950 Complaints regarding cable programming service rates.  S(*` ` * ,*h*hh* (b) This section shall not apply to cable programming services provided after March 31, 1999.  S`(9. ` ` Section 76.952 is amended by revising paragraph (a) as follows:  S(  76.952 Information to be provided by cable operator on monthly subscriber bills.  S(*` ` * ,*h*hh* (a) The name, mailing address and phone number of the franchising authority, unless the franchising authority in writing requests the cable operator to omit such information.  SH ( 10.` ` Section 76.956 is amended by revising paragraph (a) to read as follows:  S (  76.956 Cable operator response. (a) Unless otherwise directed by the local franchising authority, a cable operator must file with the local franchise authority a response to the complaint. The response shall indicate when the cable operator received notice of the complaint. Service by mail is complete upon mailing. See  1.47(f) of this chapter. The response shall include the information required by the appropriate FCC form, including rate cards, channel lineups, and an explanation of any discrepancy in the figures provided in these documents and the rate filing. The cable operator must file its response with the local franchise authority via first class mail.  Sh( 11.` ` Section 76.961 is amended by revising paragraph (b) to read as follows:  S(  76.961 Refunds.  S(**` ` * ,*h* (b) The cumulative refund due subscribers shall be calculated from the date of the first complaint filed with the franchising authority until the date a cable operator implements a prospective rate reduction as ordered by the Commission pursuant to  76.960. The Commission shall calculate refund liability according to the rules in effect for determining the reasonableness of the rates for the period of time covered by the complaint.  S( 12.` ` Section 76.964 is amended by revising paragraph (b) to add the word "written" between the words "reasonable" and "means" as follows:  S`(  76.964 Written notification of changes in rates and services.  S8(**` ` * ,*h* (b) To the extent the operator is required to provide notice of service and rate changes to subscribers, the operator may provide such notice using any reasonable written means at its sole discretion.  Sp#( 13. ` ` Section 76.984 is amended by deleting the last sentence of paragraph (b); by moving the last 2 sentences of paragraph (c)(2) to new paragraph (c)(3); and by adding notes 1 and 2 as follows:" %V0*&&88`""Ԍ S(ԙ  76.984 Geographically uniform rate structure.  S(*` ` * ,*h*hh* (c)(2) Any video programming offered on a per channel or per program basis. (c)(3) Bulk discounts to multiple dwelling units shall not be subject to this section, except that a cable operator of a cable system that is not subject to effective competition may not charge predatory prices to a multiple dwelling unit. Upon a prima facie showing by a complainant that there are reasonable grounds to believe that the discounted price is predatory, the cable system shall have the burden of showing that its discounted price is not predatory.  S(Note 1: Discovery procedures for predatory pricing complaints. Requests for discovery will be addressed pursuant to the procedures specified in  76.7(f).  Sr(Note 2: Confidential information. Parties submitting material believed to be exempt from disclosure pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. 552(b), and the Commission's rules,  0.457, should follow the procedures in  0.459 and  76.9.  S ( 14. ` ` A new Section 76.990 is added to read as follows:  S (  76.990 Small cable operators. (a) Effective February 8, 1996, a small cable operator is exempt from rate regulation on its cable programming services tier, or on its basic service tier if that tier was the only service tier subject to rate regulation as of December 31, 1994, in any franchise area in which that operator services 50,000 or fewer subscribers.  S((b) Procedures. (1) A small cable operator, may certify in writing to its franchise authority at any time that it meets all criteria necessary to qualify as a small operator. Upon request of the local franchising authority, the operator shall identify in writing all of its affiliates that provide cable service, the total subscriber base of itself and each affiliate, and the aggregate gross revenues of its cable and noncable affiliates. Within 90 days of receiving the original certification, the local franchising authority shall determine whether the operator qualifies for deregulation and shall notify the operator in writing of its decision, although this 90day period shall be tolled for so long as it takes the operator to respond to a proper request for information by the local franchising authority. An operator may appeal to the Commission a local franchise authority's information request if the operator seeks to challenge the information request as unduly or unreasonably burdensome. If the local franchising authority finds that the operator does not qualify for deregulation, its notice shall state the grounds for that decision. The operator may appeal the local franchising authority's decision to the Commission within 30 days. (2) Once the operator has certified its eligibility for deregulation on the basic service tier, the local franchising authority shall not prohibit the operator from taking a rate increase and shall not order the operator to make any refunds unless and until the local franchising authority has rejected the certification in a final order that is no longer subject to appeal or that the Commission has affirmed. The operator shall be liable for refunds for revenues gained (beyond revenues that could be gained under regulation) as a result of any rate increase taken during the period in which it claimed to be deregulated, plus interest, in the event the operator is later found not to be deregulated. The oneyear limitation on refund liability will not be applicable during that period to ensure that the filing of an invalid small operator certification does not reduce any refund liability that the operator would otherwise incur."N$W0*&&88!"Ԍ(3) Within 30 days of being served with a local franchising authority's notice that the local franchising authority intends to file a cable programming services tier rate complaint, an operator may certify to the local franchising authority that it meets the criteria for qualification as a small cable operator. This certification shall be filed in accordance with the cable programming services rate complaint procedure set forth in  76.1402. Absent a cable programming services rate complaint, the operator may request a declaration of CPST rate deregulation from the Commission pursuant to  76.7.  S((c) Transition from small cable operator status. If a small cable operator subsequently becomes ineligible for small operator status, the operator will become subject to regulation but may maintain the rates it charged prior to losing small cable operator status if such rates (with an allowance for minor variations) were in effect for the three months preceding the loss of small cable operator status. Subsequent rate increases following the loss of small cable operator status will be subject to  S" (generally applicable regulations governing rate increases.  S (Note: For rules governing small cable systems and small cable companies, see  76.934 of this Subpart.  S (15. ` ` Section 76.1401 is amended by deleting paragraphs (a), (c), and (d) and by renumbering paragraph (b) as paragraph (a).  S (16.` ` Section 76.1403 is deleted.  S(   "X0*&&88h" rDISSENTING STATEMENT OF  S(| COMMISSIONER HAROLD FURCHTGOTTROTH ă  Q`(XRe:X` ` Implementation of Cable Act Reform Provisions of the Telecommunications Act, CS Docket No. 9685 `   S(  0In implementing the "effective competition" provision of the 1996 Telecommunications Act, Part  S( xII of this Report and Order requires that a local exchange carrier's service area "substantially overlap" that  Sp( xof the incumbent cable operator in a franchise area. Because the plain language of the statute reveals no  xVsubstantiality test, and because other statutory definitions of effective competition expressly include such  S" (tests, I respectfully dissent from Part II.  S (  I start with the text of the statute. Section 623(l)(1)(D) states that "effective competition" exists when:  Xa local exchange carrier or its affiliate (or any multichannel video programming distributor  S2( 8["MVPD"] using the facilities of such carrier or its affiliate) offers video programming  services directly to subscribers by any means (other than directtohome satellite services)  S( in the franchise area of an unaffiliated cable operator which is providing cable service in  S( that franchise area, but only if the video programming services so offered in that area are  S( 2comparable to the video programming services provided by the unaffiliated cable operator in that area.   S (47 U.S.C. section 543(l)(1)(D)(emphases added).  S(  PI now turn to the context of the provision. Section 623(l)(1)(D) was not the first time that  x\Congress defined the meaning of "effective competition" for deregulatory purposes. The subsections  xjimmediately preceding the LEC effective competition provision, which were enacted in 1992, also define  xthat term. Significantly, each of these definitions includes some kind of a pass or penetration rate that  xa new entrant must meet before a finding of effective competition is made and deregulation follows. In particular, these definitions provide that effective competition exists when:  S( 2Xfewer than 30 percent of the households in the franchise area subscribe to the service of a cable system;   SB( Xthe franchise area is served by at least two unaffiliated MVPDs each of which offers  S ( comparable video programming to at least 50 percent of the households in the franchise  S (  area . . . [and] the number of households subscribing to programming services offered by  S!(  MVPDs other than the largest MVPD exceeds 15 percent of the households in the franchise area; [or]  "#Y0*&&88 "Ԍ S( Xa MVPD operated by the franchising authority for that franchise area offers video  S(programming to at least 50 percent of the households in that franchise area;   Q(  S(Id. sections 623(l)(1)(A)(C) (emphases added).   Two things about the abovequoted statutory language are salient. First, nothing in subsection (D)  x`states that the LEC must provide video programming to substantially the same number of households, or  x in substantially the same geographic area, as does the incumbent cable operator. There is simply no  xtextual basis for a "substantial overlap" test. In terms of geography, all the statute requires is that the LEC  xzoffer service "in the franchise area," not "in a substantial part of the franchise area" or "in most of the  Sv( xfranchise area." Notably, the definition is conditional for instance, the delivery cannot be via direct  xsatellite, and the services must be comparable but a geographic coverage requirement within the  xfranchise area is not one of the conditions set out by the statute. It is an extra condition that is entirely  S (of the Commission's making and wholly extrastatutory. d) yOh (ԍIf there were any doubt about the clarity of the statute, the legislative history supports the view that subsection (D) contains no coverage, pass, or penetration test. "Offer" in subsection (D) was intended to mean  {O(the same thing as in 47 CFR section 76.905(e). See H.R. Conf. Rep. No. 458, 104th Cong., 2d Sess. 170 (1996). That regulation includes no coverage, pass, or penetration rate. To be sure, the regulation establishes some  {O(requirements for an "offering" e.g., a reasonable awareness on the part of potential subscribers of the availability of the services but it sets no threshold limit for the breadth or scope of the offering.   <Second, the absence of language in subsection (D) regarding a coverage test is particularly  xconspicuous when considered in the context of the surrounding provisions. The other subsections defining  xeffective competition include often immediately after the word "offer" some kind of threshold test  x.for the substantiality of the offering in question. But after the word "offer" in subsection (D), there is no  xsuch test. "[W]here Congress includes particular language in one section of a statute but omits it in  xanother section of the same Act, it is generally presumed that Congress acts intentionally and purposely  S( xin the disparate inclusion or exclusion." Russello v. United States, 464 U.S. 16, 23 (1983) (internal  xfquotation marks omitted). Congress clearly knew how to tack a numerical threshold onto the offering  Sr(requirement, and it did not do so here. We cannot conveniently ignore the fact of this exclusion.rDd) yOV(ԍIf there is any basis for a numerical test under section 623(l)(1)(D), it must be derived from the statute specifically, the object of the phrase "offer to," "subscribers." The plural indicates that Congress meant two or more; the statute states nothing more, and nothing less, than this. And that result is not an absurd one, given the broad deregulatory nature of the Telecommunications Act of 1996. Unfortunately, the majority's reading of  yOv(section 623(l)(1)(D) does not so much comport with Congressional intent as with their own policy judgments, as Commissioner Powell ably notes.   @The Notice in this matter suggested that LEC competition cannot be "effective" when it is not  x offered to a significant number of households within the franchise area. Congress has not asked the  x$Commission to define the term "effective competition" based on our understanding of what is and is not  S( xeffective in terms of a market disciplining presence. Rather, Congress has already defined the term. And,  xbunder that definition, if a LEC offers programming comparable to that of the local cable company"Z 0*&&88"  x~"directly to subscribers . . . in the franchise area," by any means except directtohome satellite, each and every element of the definition is met. Cable rate deregulation then must follow as a matter of law. * * * * * * *x "8[0*&&88"  S(y_d) X2#XP\  P6Q XP#  yO(# C\  P6QQwP#US?? I  U 1 1!IaIOdd USUSu؃ I ??US  rDISSENTING STATEMENT OF  S(v PCOMMISSIONER MICHAEL POWELL ă  Q(XxRe:Implementation of Cable Act Reform Provisions of the Telecommunications Act, CS Docket  Q`(No. 968 &> 9 5(#   During my confirmation, I was asked by a Senator whether I would implement communications  xtlaw as written by Congress even if I personally disagreed with the outcome. I promised that I would, for  xLthat was the duty of a regulator. Consistent with that promise, I respectfully dissent from Part II of this  xReport and Order which requires that a local exchange carrier's (LEC) service area must "substantially  Sp( xoverlap" that of the incumbent cable operator in a franchise area before the LEC can be said to provide  SJ ( xeffective competition under Section 623(l)(1)(D) of the Communications Act.  As Commissioner  xFurchtgottRoth persuasively argues in his dissenting statement, this result cannot be squared with the plain language of the statute.   Having said this, I will note that I can appreciate the desire of the majority to read this provision  S ( xBmore broadly. One can reasonably argue that it is not desirable to deregulate a monopoly cable provider  S\( xwhen it faces only minimal competition in its franchise area. I would also concede that if the other three  S4( xB effective competition provisions of Section 623(l) did not specifically include pass or penetration tests,  xthe Commission might have the latitude to assume that Congress intended some type of substantial overlap  xtest. Given the context of the section 623(l)(1)(D), however, I see no such latitude. It is clear from the  xtext of section 623(l) that where Congress intended the Commission to apply a pass or penetration test,  xit included the test in the statute. Congress, apparently, chose not to include a pass or penetration standard  xin the LEC effective competition test for whatever reason, and it is improper for the Commission to  xassume that Congress could not have intended what it wrote. Although we might think that some possible  xramifications of interpreting the statute as written are extreme, this agency cannot substitute its judgement for that of Congress. "\0*&&88"     S( SEPARATE STATEMENT OF COMMISSIONER GLORIA TRISTANI ă  S(K In the Matter of Implementation of Cable Act Reform Provisions  Qb( of the Telecommunications Act of 1996 CS Docket No. 9685Đx I write separately to clarify my views on the technical standards section.   First, I believe that the Order fails to adequately acknowledge the ambiguity of the term  x"transmission technology." As the comments reflect, that term can be interpreted in several different ways,  x each plausible on its face. Neither the Communications Act, the legislative history, nor Commission  xjprecedent (until today) provide any clear guidance for choosing one definition over another. Thus, while  xI do not disagree with the interpretation of "transmission technology" ultimately adopted in today's Order, it is not the only plausible interpretation of the term.   Second, I would have made it clearer that parties should be protected from piecemeal abrogation  xof existing franchise agreements. As the Order notes, Section 624(e) was signed into law over three years  xago. Since that time, the Commission failed to provide any guidance as to the meaning of Section 624(e),  xthereby forcing parties to enter into agreements based upon their own interpretation of the statute. Given  xSection 624(e)'s ambiguity, parties may have mistakenly drafted provisions that they believed were  xpermissible regulation of facilities and equipment under Section 624(b), but which under today's Order  xwould constitute an impermissible regulation of transmission technology. These mistakes were mutual:  Sj( xas the item notes, we have not received a single formal complaint from any party claiming that its Section  x624(e) rights have been violated. Moreover, these mistakes were avoidable. Had the Commission spoken  xearlier, parties could have phrased their agreements in a way that would have complied with today's  x8Order. Thus, given the Commission's delay and the parties' mutually mistaken reading of an ambiguous  xDstatute, I believe it would be patently unfair for these provisions to simply be struck from existing  xtfranchise agreements while the remainder of the agreement is enforced. I express no opinion on whether  xsuch agreements should be found enforceable or rescinded in their entirety, or reformed pursuant to renegotiation between the parties.   Indeed, I believe that simply striking contractual provisions that may now violate Section 624(e),  xwithout the opportunity for renegotiation, would violate the framework that Congress established in  xSection 624. Congress granted local authorities the right to regulate facilities and equipment in Section  x.624(b), so long as they did not step over the vague line into "transmission technology." For three years,  xthe Commission provided no guidance regarding where that line was located. Now it appears that some  x\local authorities and cable operators may have made incorrect albeit reasonable judgments about  xtwhere Section 624(b) ended and Section 624(e) began. Had they had the benefit of today's Order, these  xmistakes could have been corrected in the drafting stage. Simply striking specific franchise provisions  xwould deprive local communities of their legitimate rights to regulate facilities and equipment under  xSection 624(b). It would find that because they inadvertantly stepped over the line that divides Section  St#( x624(b) and Section 624(e), that they have lost all of their rights under Section 624(b) for the length of"t#]0*g$g$88 "  xhthe franchise term. Local communities should not pay such a high price for the Commission's indefensible delay.   Finally, I would be opposed to extending the definition of "transmission technology" beyond the  S`( xfspecific examples cited in the Order.^X` yO(ԍSpecifically, the Order states that the term "transmission technology" has been used to include both the transmission medium (i.e., microwave, satellite, coaxial cable, twisted pair copper telephone line, and fiber optic systems) and the specific modulation or communications format (i.e., analog or digital). ^ For instance, I would be opposed to extending the definition to  xprohibit agreements that provide for a certain MHz level or a certain number of homes per fiber node.  xI believe we have done our statutory duty to fairly interpret the meaning of "transmission technology." Any expansion of that definition, I believe, would tread on the legitimate rights of local authorities.