NEWSReport No. 95-22       ACTION IN DOCKET CASE           February 6, 1995


           COMMISSION ADOPTS ORDER PERMITTING LOCAL FRANCHISING 
                 AUTHORITIES AND SMALL SYSTEMS TO CREATE 
                        THEIR OWN RATE AGREEMENTS 
                      (MM DOCKET NOS. 92-266, 93-215)

     The Commission has adopted an order amending its rules to allow certified local
franchising authorities ("LFAs"), independent small systems, and small systems owned by
small multiple system operators to enter into alternative rate regulation agreements for the
basic service and cable programming service tiers.  These agreements will reduce the
regulatory burdens on both LFAs and small operators.

     The amended rules allow LFAs and eligible small operators to enter into rate
agreements covering initial rates, going-forward issues, network upgrades, and external
costs.  The Commission believes that, in many cases, LFAs and small system operators are
better qualified to adopt rate rules that reflect their unique local business environment, yet
meet the regulatory requirements of the 1992 Cable Act.  The Commission believes the rules
adopted today properly take into account these statutory requirements.  Thus, rates charged
pursuant to an alternative rate regulation agreement will be deemed reasonable.  Consumers
have the opportunity to comment on the terms of an alternative agreement before it becomes
effective.

     Certified LFAs and eligible small systems may enter into an alternative rate regulation
agreement at any time, even if they currently follow the Commission's benchmark/cost-of-
service regulations.  The rules adopted today impose no requirements to control the
negotiation process, and the parties may negotiate directly with each other.  LFAs must,
however, consider all statutory factors when negotiating reasonable rates to be charged by the
small system.

     Interested parties, including subscribers, may appeal to the Commission an LFA's
basic service rate decision made according to an alternative agreement, and they may file an
FCC Form 329 complaint to challenge CPS rates.  The issue before the Commission will be
whether the small system is charging the agreed upon rate and whether the agreement was
entered into consistent with our requirements.

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     The Order responds to concerns expressed to the Commission by the Cable
Telecommunications Association ("CATA"), the Small Cable Business Association, and other
groups.  These groups believe that the consumer can be better served if small system
operators can reduce administrative costs by negotiating directly with the LFA to establish
reasonable rates for cable television service.  It is further asserted by CATA and others that
some small communities have not sought certification because of the perceived administrative
burden on local government.  The Commission believes that this additional method of
creating local rate agreements will bring the benefits of the 1992 Cable Act to additional
small communities desiring to regulate basic and cable programming service rates.

     Action by the Commission February 3, 1995, by Eighth Order On Reconsideration 
(FCC 95-42).

     News Media contact: Morgan Broman (202) 416-0852; Cable Services Bureau
contacts: Susan Cosentino and Tom Power at (202) 416-0800.

                                   -FCC-