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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of:               )
                                )
TIME WARNER CABLE               )       File No. CSB-A-0483
                                )
Appeal of Local Rate Order Issued By)
Guilford County, NC             )


                  MEMORANDUM OPINION AND ORDER

   Adopted:  March 27, 1998             Released:  March 31, 1998

By the Acting Chief, Cable Services Bureau:

     I.   INTRODUCTION

     1.   Pursuant to Section 76.944(b) of the Commission's rules, Time Warner Cable ("Time
Warner"), a franchised cable operator serving Guilford County, North Carolina ("County"), has filed an Appeal
from a local rate order ("Order") issued by the County as the local franchising authority.  The issue is whether
the County could reject Time Warner's rate increase request because of alleged low service quality and delay
in modernizing equipment and extending service to rural areas.  The County has not filed an opposition to Time
Warner's Appeal.

     2.   Under the Communications Act, the Commission reviews appeals of rate orders issued by local
cable franchising authorities ("LFAs").  When considering appeals, the Commission will not conduct a de novo
review, but instead will sustain the LFA's decision as long as it did not act unreasonably in applying
Commission regulations.  If the Commission reverses an LFA's decision, it will not substitute its own
judgment, but will remand the case to the franchising authority with instructions to resolve it consistent with
the decision.
     II.  DISCUSSION

     3.   In its December 4, 1997 Order, the County denied Time Warner's request for a 13 cents rate
increase for the basic cable service tier.  The County declined to accept its staff's recommendation to approve
the rate increase, arguing that:

                    the citizens of this County ... cannot afford a price increase at this time and
          same is not justified at this time and that the pace of equipment and
          modernization and extension of service to the rural areas has been woefully
          unsatisfactory and that the provision of community access as to content and
          content review and the technical quality has not been satisfactory.

Time Warner contends that the County may not reject a rate increase for service quality or similar concerns,
and states, "if there is no dispute with the figures presented in the cable operator's rate justification form, the
rate derived from the form must be approved."  Time Warner requests that we remand the case to the County.

     4.   The County may not use the Commission's rate regulation framework to address technical and
content quality concerns or to expedite equipment modernization and extension of service to unserved areas. 
When reviewing an operator's rate filing, an LFA must follow the Commission's rules for rate regulation.  If
an LFA does not dispute the bases for the figures presented in a cable operator's rate filing or has not
discovered any mathematical errors in the appropriate form, the LFA should approve the rates.  If an LFA
rejects an operator's proposed rates, it must issue a written decision affirmatively demonstrating why the rates
are unreasonable.  An LFA may address other, non-rate concerns through our rules on technical standards,
our rules on customer service obligations, and the LFA's own cable regulations and franchise agreement. 
Because the County has rejected Time Warner's rate increase for improper reasons, we grant the Appeal and
remand this case to the County.

     III. ORDERING CLAUSES

     5.   Accordingly, IT IS ORDERED that Time Warner's Appeal IS GRANTED and this case
IS REMANDED to the County for resolution in accordance with the terms of this Memorandum Opinion and
Order.

     6.   This action is taken by the Acting Chief, Cable Services Bureau, pursuant to authority
delegated by  0.321 of the Commission's rules.  47 C.F.R.  0.321.

                                                            FEDERAL COMMUNICATIONS COMMISSION



                                                            John E. Logan
                                                            Acting Chief, Cable Services Bureau