Cable Television Act of 1992

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 95-174; FCC 95-472]

Cable Television Act of 1992

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: This Notice of Proposed Rulemaking seeks comment on proposed

methods for cable operators' setting of uniform rates for uniform

services offered in multiple franchising areas. The Commission is

exploring this issue to solicit comment on possibly permitting

operators to establish uniform rates. The item will help the Commission

create a record on this issue, which will assist the Commission in

designing new or amending current regulations to allow operators to

establish uniform rates.

DATES: Comments are due on or before January 12, 1996 and reply

comments are due on or before February 12, 1996.

ADDRESSES: Federal Communications Commission, 1919 M Street NW.,

Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

Larry Walke, (202) 416-0847.

SUPPLEMENTARY INFORMATION: The 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, (202) 857-3800, 2100 M Street NW.,

Washington, DC 20037.

[CS Docket No. 95-174]

In the matter of Implementation of Sections of the Cable

Television Consumer Protection and Competition Act of 1992--Rate

Regulation Uniform Rate-Setting Methodology.

Notice of Proposed Rulemaking

Adopted: November 28, 1995.

Released: November 29, 1995.

By the Commission:

Comment Date: January 12, 1996.

Reply Comment Date: February 12, 1996.

I. Introduction

1. Under the Commission's cable service rate regulations, a cable

operator serving multiple franchise areas must establish maximum

permitted service rates in each franchise area. These rates often vary

from franchise area to franchise area, even if each area receives the

identical package of program services. This outcome may cause needless

confusion for subscribers, as well as unnecessary administrative

burdens for cable companies. In addition, a cable operator's ability to

market its product on a regional basis may be hindered. Therefore, in

this Notice of Proposed Rulemaking (``NPRM''), we explore the design

and implementation of an optional rate-setting methodology under which

a cable operator could establish uniform rates for uniform cable

service tiers offered in multiple franchise area.

II. Background

2. Under the Cable Television Consumer Protection and Competition

Act of 1992 (the ``1992 Cable Act''), the rates charged by a cable

system are

[[Page 63493]]

subject to regulation unless the system faces effective competition. In

particular, the 1992 Cable Act directed the Commission to establish

regulations designed to protect subscribers from unreasonable rates for

certain types of cable services offered by such systems. Rate-regulated

services consist of the basic service tier (``BST'') and the cable

programming services tier (``CPST'').

3. Every cable operator subject to rate regulation must offer a BST

that includes all local broadcast stations that the operator carries on

its system, plus all public, educational, and governmental (``PEG'')

access channels required by the operator's franchise agreement with its

local franchising authority. If it so chooses, a cable operator may

offer additional programming on its BST beyond these minimum

requirements. Subscribers to a rate-regulated cable system must

purchase the BST in order to have access to any other tier of service.

CPSTs include all non-BST programming offered over the cable system,

other than programming offered to subscribers on a per channel or per

program basis. There is no general requirement that an operator offer a

CPST, and some operators offer no CPST. Per channel and per program

offerings are generally exempt from rate regulation.

4. Congress identified several specific factors that the Commission

must consider in establishing regulations governing BST and CPST rates.

The Commission may take other factors into account as well. In

addition, the 1992 Cable Act required that the Commission ``seek to

reduce administrative burdens on subscribers, cable operators,

franchising authorities and the Commission'' in establishing its

regulations.

5. Under the primary method of rate regulation adopted by the

Commission, a regulated cable system determines the maximum permitted

initial rates for cable services pursuant to a benchmark formula. In

selecting a primary regulatory model, the Commission employed a

benchmark formula instead of the cost-of-service methodology that is

traditionally applied to public utilities because of the often

significant administrative costs and burdens on regulators and

regulated companies associated with cost-of-service regulation.

However, operators subject to regulation do have the option of setting

rates in accordance with a cost-of-service methodology that the

Commission has developed.

6. To set or justify its initial rates in accordance with the

benchmark formula, a cable operator first must use FCC Form 1200. This

form generates a maximum permitted rate as of May 15, 1994 for a

particular franchise area, based upon various characteristics specific

to the cable system within that franchise area. These variables include

channels per tier, number of regulated non-broadcast channels per tier,

number of subscribers in the local franchise area, number of tier

changes, the census income level for the franchise area, number of

additional outlets and remote control units in the franchise area,

system-wide subscribership, whether the system is part of a multiple

system operation (``MSO''), and the number of systems in the MSO. A

benchmark operator may, and sometimes must, adjust the rates permitted

by Form 1200 to take account of changes in inflation and other costs

since May 15, 1994. Currently, the operator must use FCC Form 1210 to

calculate these adjustments. As of the effective date of the Form 1240

promulgated pursuant to the recently adopted Thirteenth Order on

Reconsideration, 60 FR 52106 (October 6, 1995), operators may make rate

adjustments as provided by FCC Form 1240 in lieu of Form 1210. Whereas

an operator can file Form 1210 as often as once per calendar quarter to

adjust rates to take account of costs already incurred by the operator,

Form 1240 will be filed no more than annually but will permit the

operator to adjust rates based on costs to be incurred within the

coming year. In addition, operators may increase rates to reflect the

addition of new programming services to regulated tiers. Our rules

provide two methods for adjusting rates for the addition of programming

services. First, an operator can add channels to CPSTs using our

original ``going-forward'' rules, which allow the operator to charge

subscribers the cost of the additional programming plus up to an

additional 7.5% markup on that cost. Second, an operator may add

programming services under the Commission's more recently adopted

going-forward option, which allows an operator to charge subscribers up

to $0.20 per channel for additional channels and up to a further $0.30

in associated licensing fees. The latter going-forward rules similarly

require specific decreases in subscriber rates when an operator deletes

channels from its lineup, depending on when the channel in question was

added.

7. Enforcement of the Commission rate regulations is divided

between qualified local franchising authorities and the Commission. A

local franchising authority may enforce regulation of the cable

operator's BST once the Commission has received and approved the local

franchising authority's certification that it has the legal and

practical ability to do so. Upon receiving notification that the

franchising authority has been certified by the Commission to regulate

rates, a cable operator opting for benchmark regulation must justify

its existing BST rates pursuant to the benchmark formula. Once

regulated, the operator also must seek local approval for future BST

rate increases. The operator seeks such approvals by filing the forms

described above. The operator also must justify its rates for equipment

and installations associated with the BST. The franchising authority

must then review the forms, may request additional information if

reasonably necessary to complete its review, and ultimately issue an

order approving or disapproving the rates proposed by the operator.

8. The participation by local franchising authorities in the

regulation of cable service is critical. Generally, the Commission

establishes federal standards and procedures concerning various aspects

of cable service which local franchising authorities implement. These

rules include but are not limited to subscriber rates, cable service

technical standards, and customer service. Local franchising

authorities are the first line of enforcement of these numerous

regulations. While the Commission may be on hand, either by statute or

informally, to help resolve any disputes that may arise between a cable

provider and a local franchising authority, the responsibility to

oversee cable service regulations falls primarily on the franchise

authorities. Generally, the Commission gives significant deference to

decisions by local franchising authorities. For example, where a cable

operator appeals a franchising authority's rate decision, the

Commission will not conduct de novo review of the decision; rather, the

Commission will defer to the local authority's decision provided there

is a rational basis for the decision. This process is just one example

of the Commission's significant reliance upon local franchising

authorities in the regulation of basic cable service. Moreover, in all

but the most rare situations, local authorities administer cable

service regulation without federal assistance.

9. An operator's CPST is subject to regulation directly by the

Commission. Commission enforcement of CPST rate regulation is triggered

by the filing of a complaint by a subscriber or franchising authority

or other relevant state or local regulatory authority. Upon the filing

of

[[Page 63494]]

such a complaint, the operator must file the necessary forms with the

Commission, which then follows a review process analogous to that used

by local franchising authorities regulating BST rates.

10. The benchmark approach described above requires operators to

establish a separate rate structure in each franchise area served,

since many of the variable used to generate the maximum rate are

franchise specific. For example, while the data on whether the system

is part of an MSO will be identical throughout all of the franchise

areas served, the census income and subscribership variables are

measured on a franchise area basis and necessarily will vary among

franchise areas. Similarly, costs associated with PEG channels and

other franchise-related costs may vary among franchise areas. A

disparity in rates among franchise areas will occur even if the

operator provides service to multiple franchise areas through a single,

integrated cable system, since even in that case rates are set

separately for each franchise area on the basis of variables specific

to the franchise area.

11. Relatedly, we note that the acquisition and clustering of

neighboring cable systems by MSOs has become fairly common. An operator

seeking to establish uniform rates and services for clustered systems

likely will need to add channels to the programming lineups of certain

system and delete channels from the lineups of other systems. While the

Commission's ``going-forward'' rate regulations typically provide

operators with the flexibility to establish a uniform package of

programming services, the operator's efforts to equalize prices will be

severely constrained because the rules quite specifically dictate

permitted changes in rates that must accompany changes in level of

service and do not permit regional averaging of the data used to

complete rates.

III. Discussion

12. We tentatively conclude that permitting operators serving

multiple franchise areas to establish uniform services at uniform rates

in all such areas would be beneficial for subscribers, franchising

authorities, and operators. For example, facilitating an operator's

ability to advertise a single rate for cable service over a broad

geographic region may lower marketing costs and enhance the operator's

efficiency in responding to competition from alternative service

providers that typically may establish and market uniform services and

rates without regard to franchise area boundaries. The increased

ability of operators to compete resulting from this approach may

increase penetration in a particular franchise area. Such an approach

could reduce consumer confusion because a subscriber moving from one

part of the operator's service area to another would not experience any

difference in price or service offerings. We explore below two

alternatives for permitting an operator to establish uniform rates for

uniform services across multiple franchise areas, while fully

protecting subscribers from unreasonable rates, and solicit comment on

these and any other possible approaches. Before discussing these two

methodologies, we will identify several issues that will arise

regardless of which methodology we ultimately adopt.

13. Cable operators currently serve multiple franchise areas using

a variety of system structure; some operators serve multiple areas with

a single, integrated cable system while others use multiple, distinct

systems. An operator's rates are not dependent on whether single or

multiple systems are used to deliver service. We propose that under a

uniform rate0-setting option, a cable operator be allowed to establish

uniform rates for uniform service offerings in multiple franchise areas

regardless of whether the operator serves the multiple franchise areas

with on integrated cable system (i.e., one ``headend'') or with

multiple separate cable systems, and seek comment on this proposal.

14. We believe that cable operators primarily will seek to

establish uniform rates for systems serving multiple franchise areas

that are located within some measure of proximity to each other,

perhaps for purposes of regional adverting. Moreover, it is likely that

the service costs and characteristics, such as the number of channels,

density of subscribers, and median income level, associated with

various franchise areas typically will vary as the geographic distances

increase between the multiple franchise areas. This circumstance can

increase the complexity of uniform rate-setting across multiple

franchise areas. We note that a cable operator's obligation under the

``must-carry'' rules to carry local over-the-air broadcast stations, as

well as the operator's copyright fee responsibilities, are determined

based on the Area of Dominant Influence (``ADI'') in which the system

is located. Section 4 of the 1992 Cable Act specifies that a commercial

broadcasting station's market shall be determined in the manner

provided in Sec. 73.3555(d)(3)(i) of the Commission's Rules, as in

effect on May 1, 1991. This section of the rules, now redesignated

Sec. 73.3555(e)(3)(i), refers to Arbitron's ADI for purposes of the

broadcast multiple ownership rules. Section 76.55(e) of the

Commission's Rules provides that the ADIs to be used for purposes of

the initial implementation of the mandatory carriage rules are those

published in Arbitron's 1991-1992 Television Market Guide. This

Arbitron Guide is available at the Federal Communications Commission,

2033 M Street, N.W., Room 200, Washington, D.C. We note that Arbitron,

the company that establishes the boundaries for ADIs, has ceased

updating its ADI market list. Commission staff is currently exploring

the designation of a replacement measure. Accordingly, we seek comment

on whether the ADI, or some other region, would be appropriate for the

setting of uniform rates. We seek comment on additional benefits of

limiting uniform rate-setting to franchise areas located within the

same ADI or similar region, as well as any difficulties resulting from

this limitation. We further seek comment on the benefits or detriments

of limiting rates to franchise areas located within the same county or

state. Finally, we seek comment on the costs and benefits of permitting

cable operators to select the region in which to set uniform rates

under a uniform rate-setting method.

15. Below we describe two possible approaches for permitting cable

operators to establish uniform rates for uniform packages of services

offered to multiple franchise areas. We invite comment from interested

parties as to these approaches and we seek suggestions as to any other

alternatives that would further the goals discussed above.

16. The first approach would work generally as follows. A cable

operator first would determine or identify BST and CPST rates

established in each local franchise area pursuant to our existing rate

regulations, as adjusted to reflect permitted or required rate changes

resulting from the addition or deletion of channels necessary to

structure uniform tiers throughout the franchise areas served. We seek

comment on whether an operator would similarly follow our existing

regulations concerning rates for equipment. BST rates then would be

equalized by reducing all BST rates charged in the relevant region to

the lowest regulated BST rate charged in any one franchise area located

in the region. The new uniform BST rate would now constitute the

operator's maximum permitted rate for basic cable service in all the

relevant franchise areas. The operator then would add the total amount

of ``lost'' revenue resulting from the various BST rate reductions to

the total CPST

[[Page 63495]]

revenues to which the operator is otherwise entitled, under our

existing rules, for all franchise areas in the relevant region. The

operator then would determine a uniform CPST rate by dividing the total

of the displaced BST revenues and existing CPST revenues by all CPST

subscribers in the region. Thereafter, the operator would apply our

going-forward policies and annual rate adjustment regulations on a

regional basis. A numerical example of this option can be found below.

17. In some instances, cable systems may be regulated in certain

franchise areas within the region and unregulated in others. We

proposed that operators be free to establish uniform rates under the

uniform rate-setting approach in unregulated as well as regulated

franchise areas for purposes of uniformity. We believe that in such

situations, an operator may elect to base uniform rates in part on data

from unregulated areas only if such uniform rates also are charged in

the unregulated areas. We believe that this optional approach further

enhances operators' flexibility in establishing uniform rates.

Moreover, uniform rates calculated pursuant to the method ultimately

adopted in this proceeding, and charged in unregulated areas, should

increase an operator's regulatory certainty with respect to whether the

subscriber rates charged in the unregulated areas are reasonable under

our rules should the operator later become subject to rate regulation

in one of those areas. An operator later becoming subject to regulation

would follow our existing procedures for establishing regulated rates,

including determining an initial rate pursuant to our benchmark formula

or cost-of-service rules, and seeking the approval of rates from the

local franchising authority. We seek comment on this approach. We also

seek comment on how an operator's regulated rates for equipment may

affect the setting of uniform rates.

18. An operator's rates would remain subject to the dual

jurisdictions of the affected local franchising authorities and the

Commission. Upon the initial application of this approach, BST rates

would be unchanged in at least one franchise area and would be reduced

in each franchise area with higher rates. Thus, this proposal may

benefit many subscribers who receive only basic cable service, and

should be cost-neutral to the remaining basic-only subscribers in the

franchise area(s) with the lowest current BST rates. Certified local

franchising authorities would retain jurisdiction to ensure that the

operator's BST rates are in compliance with our rules. The operator

would recoup the costs of reduced BST rates through the averaged CPST

rates over which the Commission would retain jurisdiction. We seek

comment on this proposed approach, including comment on: (1) the costs

and benefits of requiring operators to reduce BST rates to the lowest

common rate under this option, (2) the impact of an operator's

redistribution of BST rate reductions among CPST rates charged in

neighboring franchise areas, and (3) the application of our going-

forward policies and annual rate adjustment on a regional basis. We

note that our rules allow franchising authorities to review and approve

operators' proposed BST rates and increases to those rates. Under this

option, however, pre-approval of uniform BST rates by franchising

authorities generally will be unnecessary given that subscriber rates

typically will decrease or remain unchanged. We seek comment on the

benefits and costs of this approach for local franchising authorities,

and whether this approach will protect subscribers from unreasonable

rates.

19. Under the second possible approach for establishing uniform

rates for uniform services, a cable operator would determine or

identify BST and CPST rates charged in each of the relevant franchise

areas pursuant to our existing rate regulations, as adjusted for rate

changes resulting from the addition or deletion of channels necessary

to structure uniform service tiers. We seek comment on whether an

operator similarly would follow our existing regulations concerning

rates for equipment. After aggregating the BST rates and revenues for

all the franchise areas in the region, and then the CPST rates and

revenues for all franchise areas, the operator would determine a single

``blended'' rate for BSTs, and a single blended rate for CPSTs, to be

charged in all franchise areas in the region pursuant to a formula

designed by the Commission. The blended rates for BSTs and CPSTs would

be determined by averaging the operator's total BST and CPST rates,

respectively, on a per subscriber basis for all subscribers in the

region, in order to ensure that the establishment of uniform rates is

revenue-neutral to the cable operator. A numerical example of this

option can be found below. The operator would be required to justify

its blended rates to each local franchising authority certified to

regulate rates. The operator would be free, of course, to establish

this rate in uncertified areas, for purposes of uniformity across a

wide region. As noted for the other proposed approach, we propose that

an operator may elect a base uniform rates in part on data from

unregulated areas only if such uniform rates also are charged in the

unregulated areas, and believe that similar benefits for operators and

subscribers will result from this requirement under both possible

approaches. We seek comment on this tentative conclusion, as well as

comment on other benefits and detriments of the cable operator basing

the blended rate in part on data from such unregulated areas. We also

seek comment on how an operator's establishment of uniform rates in

uncertified areas may impact on the operator's ability to later

implement required refunds or prospective rate reductions in certified

areas.

20. After setting initial uniform rates, the operator would apply

our going-forward policies and the recently adopted annual adjustment

method on a regional basis to adjust future rates. Again, the dual

jurisdictional boundaries of franchising authorities and the Commission

would remain intact. We seek comment on this approach generally,

including comment on: (1) any associated burdens for regulated cable

companies and regulators, (2) whether this approach would protect cable

subscribers from unreasonable rates in accordance with the 1992 Cable

Act, (3) the proposed calculation of the blended rate, and (4) the

application of our going-forward policies and annual adjustment method

on a regional basis. We note that under this approach subscribers' BST

rates may increase in certain jurisdictions (and decrease in others) as

BST rates are adjusted to establish uniformity. We seek comment on the

benefits and costs of adopting this formula given that certain BST

subscribers may experience rate increases.

21. Both proposed uniform rate setting methodologies will result in

increases in CPST rates for some subscribers. In light of the cost

savings to cable operators likely to be created by implementation of

uniform rates, we seek comment on whether it is appropriate to either

limit the amount of increase a CPST subscriber must pay in a given year

as a result of this institution of uniform rates or to phase-in

significant increases over a two-year period. Comments should also

address what administrative burdens such a limitation or phased-in

increase would create for operators.

22. Several potential timing circumstances may affect the

implementation of a uniform rate-setting approach. For example, where

an operator has submitted justifications, the operator may be subject

to multiple

[[Page 63496]]

local tolling orders of varying durations which can complicate

implementation of uniform BST rates. After the initial 30 day notice

period that must precede any rate adjustment, franchising authorities

can toll the effective date of a proposed rate for an additional 90

days in benchmark cases or 150 days in cost of service cases. We seek

suggestions of procedures that would permit a cable operator in this

situation to establish uniform rates as expeditiously as possible. We

solicit comment on allowing proposed uniform rates to take effect

automatically after some period of time, subject to ultimate resolution

in a later ``truing-up'' process, in which rate discrepancies could be

reflected in rates for the following year.

23. In proposing to give cable operators flexibility to charge

uniform rates for uniform services, we in no way seek to circumscribe

the authority of local franchising authorities to negotiate franchise-

specific terms in their agreements with cable operators. For example,

we note that local franchising authorities typically establish

requirements in a franchise agreement with respect to the designation

or use of the franchised cable operator's channel capacity of PEG

services. This could result in a cable system having a non-uniform

channel line-up within franchise areas where it seeks to establish

uniform rates. We seek comment on whether our uniform rate proposals

require any modification or adjustment to accommodate such non-uniform

offerings.

24. A further problem may arise because PEG requirements and other

franchise obligations will vary between franchise areas, such that the

operator's ``franchise related costs,'' one of the variables used to

establish and adjust rates, also will vary among franchise areas. We

seek to provide cable operators with uniform rate alternatives while

allowing franchising authorities flexibility to negotiate franchise

terms and conditions that respond to particular community needs. We

also seek to ensure that the uniform rate proposal does not allow

franchise-specific costs to be shifted from one community to another.

One alternative for resolving this issue would be to permit the cable

operator simply to itemize and charge for franchise-related costs

outside the uniform rate-setting formula. We seek comment on this

approach. We also seek suggestions of other methods that could

compensate operators for legitimately incurred expenses while

protecting subscribers from unreasonable rates. Finally, we seek

comment on additional potential obstacles to the establishment of

uniform rates and service offerings, and possible resolutions to such

obstacles.

IV. Initial Regulatory Flexibility Act Analysis

25. 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 NPRM, 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 NPRM, 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, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. 601 et

seq. (1981).

26. Reason for Action. The Commission has perceived that our cable

service rate regulations may impede a cable operator's ability to

establish uniform rates for uniform services offered in multiple

clustered franchise areas. We believe that allowing operators to set

such uniform rates may facilitate operators' regional marketing of

services, reduce administrative burdens on both regulators and cable

companies, and reduce consumer confusion resulting from disparate

rates. The NPRM proposes two possible alternatives for setting uniform

rates, and solicits comments on further approaches.

27. Objectives. To explore a method under which a cable operator

could establish uniform rates for uniform services offered in multiple

franchise areas.

28. Legal Basis. Action as proposed for this rulemaking is

contained in Section 623 of the Communications Act of 1934, as amended,

47 U.S.C. Sec. 543.

29. Description, Potential Impact and Number of Small Entities

Affected. The proposals, if adopted, will not have a significant effect

on a substantial number of small entities.

30. Reporting, Recordkeeping and Other Compliance Requirements.

None.

31. Federal Rules which Overlap, duplicate or Conflict with these

Rules. None.

32. Any Significant Alternatives Minimizing Impact on Small

Entities and Consistent with Stated Objectives. None.

V. Paperwork Reduction Act

33. This NPRM contains either a proposed or modified information

collection. The Commission, as part of its continuing effort to reduce

paperwork burdens, invites the general public and the Office of

Management and Budget (OMB) to comment on the information collections

contained in this NPRM, as required by the Paperwork Reduction Act of

1995, Pub. L. No. 104-13. Public and agency comments are due to the

same time as other comments on this NPRM; OMB comments are due 60 days

from date of publication of this NPRM in the Federal Register. Comments

should address: (a) whether the proposed collection of information is

necessary for the proper performance of the functions of the

Commission, including whether the information shall have practical

utility; (b) the accuracy of the Commission's burden estimates; (c)

ways to enhance the quality, utility, and clarity of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

VI. Procedural Provisions

34. 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's rules. See

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

35. 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. Comments are due by January 12, 1996, and reply comments are

due by February 12, 1996. 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.

36. In addition to filing comments with the Secretary, a copy of

any comments on the information collections contained herein should be

submitted to Dorothy Conway, Federal

[[Page 63497]]

Communications Commission, Room 234, 1919 M Street, N.W., Washington,

DC 20554, or via the Internet to [email protected], and to Timothy Fain,

OMB Desk Officer, 10236, NEBO, 725--17th Street, N.W., Washington, DC

20503 or via the Internet to [email protected].

37. For additional information concerning the information

collections contained in this NPRM contact Dorothy Conway at 202-418-

0217, or via the Internet at [email protected].

VII. Ordering Clauses

38. It is ordered that, pursuant to Sections 623 of the

Communications Act of 1934, as amended, 47 U.S.C. 543 notice is hereby

given of proposed amendments to Part 76, in accordance with the

proposals, discussions, and statement of issues in this NPRM, and that

COMMENT IS SOUGHT regarding such proposals, discussion, and statement

of issues.

39. It is further ordered that the Secretary shall send a copy of

this NPRM, including the Initial Regulatory Flexibility Analysis, to

the Chief Counsel for Advocacy of the Small Business Administration in

accordance with paragraph 603(a) of the Regulatory Flexibility Act,

Public Law 96-354, 94 Stat. 1164, 5 U.S.C. Secs. 601 et seq. (1981).

List of Subjects in 47 CFR Part 76

[Cable television.]

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Examples of Proposed Methods

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Current rates Franchise A Franchise B Franchise C

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

BST............................................................. $10 $11 $11

CPST............................................................ 21 21 20

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

Total..................................................... 31 32 31

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

* Each franchise area has 11,000 BST subscribers and 10,000 CPST subscribers.

First Proposed Method:

Step 1: BST rates reduced to lowest in region: BST rates in

franchise areas ``B'' and ``C'' reduced to $10.

Step 2: ``Lost'' BST revenues is totaled; $1/subscriber in

franchise areas ``B'' and ``C''=($1 x 11,000)+($1 x 11,000)=$22,000.

Step 3: Current CPST revenue is totaled:

($21 x 10,000)+($21 x 10,000)+($20 x 10,000)=$620,000.

Step 4: Current CPST revenue is added to Lost BST revenue to create

new CPST revenue requirement: $620,000+$22,000=$642,000.

Step 5: New CPST revenue requirement is divided evenly by all CPST

subcribers in the region to calculate new uniform CPST rate: $642,000/

30,000=$21.40.

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

Current rates Franchise A Franchise B Franchise C

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

BST............................................................. $10.00 $10.00 $10.00

CPST............................................................ 21.40 21.40 21.40

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

Total..................................................... 31.40 31.40 31.40

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

Franchise A: no change in BST rates; increase in CPST and overall

rates.

Franchise B: decrease in BST rates; increase in CPST rates;

decrease in overall rates.

Franchise C: decrease in BST rates; increase in overall rates.

Second Proposed Method:

Step 1: Average current BST rates on a per BST subscriber basis to

calculate average, uniform BST rate:

$10(11,000)+$11(11,000)+$11(11,000)=$10.67/BST subscriber.

Step 2: Average current CPST rates on a per CPST subscriber basis

to calculate average, uniform CPST rate:

$21(10,000)+$21(10,000)+$20(10,000)=$20.67/CPST subscriber.

Total: $31.34/subscriber.

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New rates Franchise A Franchise B Franchise C

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BST............................................................. $10.67 $10.67 $10.67

CPST............................................................ 20.67 20.67 20.67

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Total..................................................... 31.34 31.34 31.34

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Franchise A: increase in BST rates; decrease in CPST; increase in

overall rates.

Franchise B: decrease in BST rates; decrease in CPST rates;

decrease in overall rates.

Franchise C: decrease in BST rates; increase in CPST rates;

increase in overall rates.

The results under each proposed method will vary widely depending

on the current rates and the numbers of subscribers in each franchise

area. In addition, these examples do not account for the impact of

channel changes that may be necessary to achieve uniform packages of

services.

[FR Doc. 95-29807 Filed 12-8-95; 8:45 am]

BILLING CODE 6712-01-M