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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 ) Tele-Media Company of ) Franklin ) CUID No. KY0600 (City of Franklin) ) ) Small System Filing to Support ) Cable Programming Services ) Tier Rates ) ORDER Adopted: February 27, 1997 Released: March 6, 1997 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint filed with the Federal Communications Commission ("Commission") on February 22, 1994 regarding the rate that Tele-Media Company of Franklin ("Tele-Media") was charging for its cable programming services tier ("CPST") in the franchise area referenced above. On December 15, 1995, Tele-Media filed FCC Form 1230, seeking to justify its CPST rate through the simplified small system cost of service procedures under the Sixth Report and Order and Eleventh on Reconsideration, MM Docket Nos. 92-266 and 93-215 ("Small System Order"). We will grant Tele-Media's request for small system relief under the Small System Order and, based on our review of Tele-Media's FCC Form 1230 filing, deny the pending CPST complaint and find the CPST rate to be not unreasonable. 2. Under the Communications Act and the Commission's rules, the Commission must review a cable operator's rate for its CPST upon the filing of a valid complaint. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rate. Under the Commission's rules, an operator may attempt to justify its CPST rate through a benchmark showing, a cost of service showing, or a small system cost of service showing. In any case, the operator has the burden of demonstrating that its rate is not unreasonable. 3. The Commission's original rate regulations took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. In a further effort to offer small cable companies administrative relief from rate regulation, the Commission amended the definition of small cable companies and small systems and introduced a simplified form of small system rate relief in the Small System Order. Cable systems serving 15,000 or fewer subscribers, and owned by a company having 400,000 or fewer subscribers, may elect to use the small cable system rate mechanism in lieu of other Commission rate processes, provided the Commission has not reached a final resolution on the rate complaints filed against the system. Operators attempting to justify their rates through small system relief must file FCC Form 1230. FCC Form 1230 requires that the Operator Selected Per Subscriber Monthly Programming Rate Per Channel (FCC Form 1230, Line A11) not exceed the Per Subscriber, Per Channel Monthly Programming Costs (FCC Form 1230, Line A6). If the maximum rate established on FCC Form 1230 does not exceed $1.24 per channel, the rate shall be presumed reasonable. 4. On December 15, 1995, Tele-Media filed FCC Form 1230 seeking to justify its CPST rate through the simplified small system cost of service procedures under the Commission's Small System Order. In support of its rate justification, (1) the operator stated the company had "approximately 330,000 subscribers" and (2) the operator's FCC Form 1230 indicates on Line A2 that the system serving Franklin 2,798 had subscribers. We find that Tele-Media is a company with fewer than 400,000 total subscribers and that the system in question serves fewer than 15,000 subscribers, making it eligible for small system relief. Further, Tele-Media's filing shows that its actual rate per channel for regulated cable service (FCC Form 1230, Line A11) of $.72 does not exceed its per subscriber, per channel monthly programming costs (FCC Form 1230, Line A6) of $1.12 and the Maximum Permitted Rate (FCC Form 1230, Line A10) of $1.17 does not exceed $1.24. We, therefore, find the rate to be not unreasonable. 5. Accordingly, IT IS ORDERED, pursuant to Section 76.934 of the Commission's rules, 47 C.F.R. 76.934, that Tele-Media's request for small system relief IS GRANTED. 6. IT IS FURTHER ORDERED that the CPST rate charged by Tele-Media during the period under review for the above-referenced CUID number IS JUSTIFIED. 7. IT IS FURTHER ORDERED that the complaint against the CPST rate charged by Tele-Media during the period under review with respect to the above-referenced CUID number IS DENIED. 8. Tele-Media's Motion to file a late filed document IS GRANTED. 9. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's rules, 47 C.F.R. 0.321. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau