******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect or Word to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: ) ) Falcon Cable Systems Company ) CSB-A-0589 Appeal of Local Rate Order of the ) County of San Luis Obispo, California ) (CUID NO. CA0680) ) ) Petition for Reconsideration ) MEMORANDUM OPINION AND ORDER Adopted: December 13, 1999 Released: December 15, 1999 By the Deputy Chief, Cable Services Bureau: I. introduction 1. The County of San Luis Obispo, California ("County"), filed a petition for reconsideration of Falcon Cable Systems Company, 14 FCC Rcd 2105 (CSB 1999) ("Bureau Order"). Falcon Cable Systems Company ("Falcon") filed an opposition to the petition. With this order we deny the petition. II. discussion 3. The Bureau Order, which reviewed a local rate order of the County issued August 4, 1998, disapproved a portion of a basic service tier ("BST") rate increase sought by Falcon after upgrading its cable system serving certain communities within the County. The facts, applicable law, arguments of the parties, and a detailed analysis of the County's local rate order are set forth in the Bureau Order and need not be repeated here. First, the County asks that we modify paragraph 5 of the Bureau Order and uphold its disallowance of portions of Falcon's plant construction costs associated with the system upgrade, which it deemed to be imprudent and excessive. The County determined that a portion of Falcon's upgrade construction costs were imprudent and excessive because those upgrade costs were higher than Falcon's original cost estimates and higher than industry norms for an upgrade construction project. The Bureau Order found that those factors provided an insufficient basis for excluding costs on the basis of cost overruns. 4. The County submitted an affidavit in support of its argument that reconsideration would serve the public interest in the protection of County cable subscribers from excessive and imprudent costs and as factual support for upholding its disallowance of costs. The County contends that a petition for reconsideration that relies on facts not previously presented to the Commission or designated authority may be granted where consideration of those facts is required in the public interest. However, the Commission's rules also provide that the petition must be supported by facts related to events that occurred since the last opportunity for presenting them or facts that were unknown, or through ordinary diligence could not have become known, since the last opportunity for presenting them. The County's affidavit does not satisfy either of these tests for reconsidering the findings and conclusions of the Bureau Order. A reading of the affidavit shows that the factual material recited therein was known, or should with ordinary diligence have been known to the County not only when it responded to Falcon's appeal, but also during its own review of Falcon's rate proposal. Moreover, the affidavit provides no engineering or other construction costs breakdown in support of its claim that replacement cost for most or all of the strand, as well as the coaxial cable and electronics "would be in the range of $15,000 to 17,000 per strand mile." For this reason, we find that the County failed to establish that reconsideration of paragraph 5 of the Bureau Order would serve the public interest. 5. The County also asks us to modify Paragraph 8 of the Bureau Order and uphold its allocation of fifty percent of allowed upgrade construction costs to the additional channels created by the system upgrade. The Bureau Order found reasonable Falcon's allocation of upgrade costs among all channels on a straight channel ratio basis, because that allocation method is consistent with the Commission's cost of service rules, and rejected the County's allocation of fifty percent of those cost to new channels created by the upgrade. The County asserts that its allocation method is consistent with the Commission's cost of service rules because it considers, to the extent possible, the origin or cause of common costs. We decline to reconsider this argument, which was implicitly rejected by the Bureau Order's finding that Falcon's allocation method is consistent with Comission rules. We observe further that both the County's consultant, who recommended the fifty percent allocation split, and the reconsideration petition failed to provide any factual support demonstrating that such allocation split is not arbitrary and therefore not unreasonable. VI. ordering clause 7. For the foregoing reasons, IT IS HEREBY ORDERED, pursuant to authority delegated under Section 0.321 of the Commission's rules, that the Petition for Reconsideration of Falcon Cable Systems Company, 14 FCC Rcd 2105 (CSB 1999), filed by the County of San Luis Obispo, California IS DENIED. FEDERAL COMMUNICATIONS COMMISSSION William H. Johnson Deputy Chief, Cable Services Bureau