Cable Television Act of 1992

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MM Docket No. 92-266, FCC 94-38]

Cable Television Act of 1992

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule is one segment of the Second Order On

Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed

Rulemaking in this proceeding. The final rules adopted in this decision

may be found elsewhere in this issue. In the Fifth Notice of Proposed

Rulemaking in this proceeding, the Commission: (1) Provided notice

concerning further rate requirements for systems currently eligible for

transition treatment; (2) sought comment on the treatment of systems

with more than 100 channels; (3) sought comment on the proper

compensation to operators adding or deleting channels; and, (4) sought

comment on regulations governing rates charged to commercial

establishments.

DATES: Comments are due on or before June 29, 1994 and Reply comments

are due on or before July 29, 1994.

ADDRESSES: Federal Communications Commission, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Joel Kaufman (202) 416-1164, Aliza

Katz (202) 416-0939 or Kathleen Franco (202) 416-0956, Cable Services

Bureau.

SUPPLEMENTARY INFORMATION: This is a synopsis of the proposed rules

segment of the Commission's Second Order on Reconsideration, Fourth

Report and Order, and Fifth Notice of Proposed Rulemaking in MM Docket

No. 92-266, FCC 94-38, adopted February 22, 1994, and released March

30, 1994. The Complete text of this document is available for

inspection and copying during normal business hours in the FCC

Reference Center (room 239), 1919 M Street, NW., Washington, DC 20554,

and may be purchased from the Commission's copy contractor,

International Transcription Service at (202) 857-3800, 2100 M Street,

NW., suite 140, Washington, DC 20037.

Synopsis of Fifth Notice of Proposed Rulemaking

1. Termination of transition relief. As determined in the Second

Order on Reconsideration in this proceeding, systems owned by small

operators and systems with low prices will not have to apply the full

17 percent competitive differential pending our analysis of the

relationship between costs and prices for those systems. We are

initiating these cost studies in our Cost Proceeding. Accordingly, we

are here providing notice that we will establish further requirements

concerning permitted rates for systems currently eligible for

transition treatment. As stated, depending on the results of our cost

studies, these further provisions could require such systems to

terminate transition relief and establish full reduction rates.

2. Going-forward methodology. Cable operators are actively

exploring new technical developments that may enable them to provide up

to 500 channels. Some of these technical capabilities may involve

significant modifications or additions to distribution plant. Others

may involve compression and multiplexing techniques that permit

derivation of many channels without significant new distribution plant.

The benchmark table adopted in the Rate Order (58 FR 29716, May 21,

1993) and our table reflecting the efficiency curve observed in our

Competitive Survey, establish per channel adjustments for systems with

total channels on regulated tiers of 100 channels or less. It does not

currently establish per channel rates for systems that provide more

than 100 channels.

3. We solicit comment on whether we should establish a methodology

for adjusting capped rates in situations where there are more than 100

regulated channels. We solicit comment generally on what that

methodology should be. We also seek comment on whether we could use

mathematical formulations derived from existing data or tables. We also

solicit comment on whether, instead of adopting a methodology for

setting rates for offerings of more than 100 channels, we should cap

rates at the 100 channel level unless the operator could justify a

higher rate based on a cost-of-service showing. We solicit comments on

how any of these proposals would effect incentives for operators to

provide additional channels on an ``a la carte'' basis. We additionally

solicit comment on whether our going-forward methodology should be

modified to provide greater or lesser compensation to operators for

adjustments to capped rates when channels are added or deleted from

regulated tiers, and whether this would better meet our goals of

encouraging infrastructure development and growth of programming.

Operators should provide a complete factual justification for any

claims that the current methodology is inadequate.

4. Commercial rates. We have determined that we would not establish

rules permitting special rates for regulated commercial cable service

on reconsideration of the Rate Order. We stated, however, that

allowances for commercial rates might help assure that rates for

subscribers are reasonable if higher commercial earnings were offset by

savings to consumers. Therefore, we solicit comment on whether we

should establish regulations governing rates for regulated cable

service provided to commercial establishments. In particular, we ask

whether higher earnings for commercial establishments should be offset

by lower rates to other subscribers. We solicit comment on whether the

offset in rates to other subscribers should be exactly equal to the

additional earnings from higher commercial rates. Alternatively, we

could establish regulations that would mandate a specified level of

sharing of earnings from higher commercial rates between operators and

subscribers. We solicit comment on which approach would best serve

subscribers and operators. We also solicit comment on what standards of

reasonableness we could establish to govern commercial rates.

Administrative Matters

5. Initial regulatory flexibility analysis for the fifth notice of

proposed rulemaking. Pursuant to section 603 of the Regulatory

Flexibility Act, the Commission has prepared the following initial

regulatory flexibility analysis (IRFA) of the expected impact of these

proposed policies and rules on small entities. Written public comments

are requested on the IRFA. These comments must be filed in accordance

with the same filing deadlines as comments on the rest of the Notice,

but they must have a separate and distinct heading designating them as

responses to the regulatory flexibility analysis. The Secretary shall

cause a copy of the Notice, including the initial regulatory

flexibility analysis, to be sent to the Chief Counsel for Advocacy of

the Small Business Administration in accordance with section 603(a) of

the Regulatory Flexibility Act, Public Law No. 96-354, 94 Stat. 1164, 5

U.S.C. Section 601 et seq. (1981).

I. Reason for action. The Cable Television Consumer Protection and

Competition Act of 1992 requires the Commission to prescribe rules and

regulations for determining reasonable rates for basic tier cable

service and to establish criteria for identifying unreasonable rates

for cable programming services. The Commission has adopted rate

regulations that require a comparison to the rates of cable systems

subject to effective competition, as defined in the Cable Act of 1992

and represented in the revised benchmark formula. This Notice proposes

to establish regulations governing the setting of rates for regulated

cable systems with more than 100 channels, and to consider separate

rate regulations for commercial entities and rules for termination of

transition relief.

II. Objectives. To propose rules to implement section 3 of the

Cable Television Consumer Protection and Competition Act of 1992. We

also desire to adopt rules that will be easily interpreted and readily

applicable and, whenever possible, minimize the regulatory burden on

affected parties.

III. Legal basis. Action as proposed for this rulemaking is

contained in sections 4(i), 4(j), 303(r) and 623 of the Communications

Act of 1934, as amended.

IV. Description, potential impact and number of small entities

affected. We anticipate a possible impact on small entities because the

Notice addresses the termination of transition relief for small systems

owned by small operators. The Cable Act of 1992 defines a small system

as serving 1,000 or fewer subscribers.

V. Reporting, record keeping and other compliance requirements.

None.

VI. Federal rules which overlap, duplicate or conflict with this

rule. None.

VII. Any significant alternatives minimizing impact on small

entities and consistent with stated objectives. None.

6. Paperwork reduction act. The requirements adopted herein have

been analyzed with respect to the Paperwork Reduction Act of 1980 and

found to impose a new or modified information collection requirement on

the public. Implementation of any new or modified requirement will be

subject to approval by the Office of Management and Budget as

prescribed by the Act.

Procedural Provisions

7. Ex parte rules--non-restricted proceeding. This is a non-

restricted notice and comment rulemaking proceeding. Ex parte

presentations are permitted, except during the Sunshine Agenda period,

provided that they are disclosed as provided in Commission rules. See

generally 47 CFR 1.1202, 1.1203, and 1.1206(a).

8. Pursuant to applicable procedures set forth in Secs. 1.415 and

1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested

parties may file comments on or before June 29, 1994 and reply comments

on or before July 29, 1994. To file formally in this proceeding, you

must file an original plus four copies of all comments, reply comments,

and supporting comments. If you want each Commissioner to receive a

personal copy of your comments and reply comments, you must file an

original plus nine copies. You should send comments and reply comments

to Office of the Secretary, Federal Communications Commission, 1919 M

Street, NW Washington, DC 20554. Comments and reply comments will be

available for public inspection during regular business hours in the

FCC Reference Center, room 239, Federal Communications Commission, 1919

M Street NW., Washington DC 20554.

Ordering Clauses

9. Authority for this proposed rule is contained in sections 4(i),

4(j), 303(r), 612, 622(c) and 623 of the Communications Act of 1934, as

amended, 47 U.S.C. 154(i), 154(j), 303(r), 532, 542(c) and 543.

10. It is ordered That, pursuant to sections 4(i), 4(j), 303(r),

612(c), 622(c) and 623 of the Communications act of 1934, 47 U.S.C.

154(i), 154(j), 303(r), 532(c), 542(c), and 543, Notice is hereby given

of proposed amendments to part 76, in accordance with the proposals,

discussions, and statement of issues in this Notice of Proposed

Rulemaking, and that Comment is Sought regarding such proposals,

discussion, and statement of issues.

List of Subjects in 47 CFR Part 76

Cable television.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 94-8999 Filed 4-14-94; 8:45 am]

BILLING CODE 6712-01-M