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As a result, cable  xsystems in New Jersey charge uniform rates for uniform services offered in as many as 53  X- xxcontiguous municipalities.>! yO( -ԍNJBPU Comments at 34.> The Massachusetts Commission, which is the cable regulatory body  xfor the State of Massachusetts, also endorses the goals of uniform rates, and notes that three cable  xsystems will soon control approximately 75% of the market in Massachusetts. The Massachusetts  xCommission offers itself as a pilot program in which uniform rates established under a  X3-Commission proposal could be tested before being implemented nationwide.S"3x yO\-ԍMassachusetts Commission Comments at 1415.S  X - ` x 13. ` ` As a general matter, we agree with these parties and continue to believe that, under  x.certain conditions, allowing a cable operator to establish uniform regulated cable service rates  xkacross multiple franchise areas could benefit consumers, LFAs and the cable operator. The  xrecord, however, indicates that the Commission's adoption of a specific methodology that would  xbe applicable to all cable operators nationwide may not be the most feasible course of action,  X- xgiven variations in factors from system to system.# {OK- xwԍSee, e.g., NATOA Comments at 45; Rock Hill Comments at 12; Dade County Comments at 4; Massachusetts Commission Comments at 5; LFA Coalition Reply Comments at 17; Florida Cities Comments at 34. We will, therefore, establish procedures to  xpermit uniform rates across multiple franchise areas through the Commission's casebycase  x=review of a cable operator's proposed uniform rate structure. These procedures will permit the  xCommission to take account of the variations between cable systems and of the comments of  xaffected LFAs. Accordingly, a cable operator seeking to establish uniform rates will be required  xZto submit a proposal with supporting justification that states fully and precisely all pertinent facts and considerations relied on to demonstrate that the proposed rates will not be unreasonable.  X- ` x 14. ` ` Under the ratesetting approach adopted herein, a cable operator may submit to the  xCommission a proposal for establishing uniform rates for uniform services offered in multiple  xfranchise areas. The Commission, however, will not specify a particular methodology for setting  xuniform rates. The only condition we place on any proposed uniform rates mechanism is that  xthe BST rates may not exceed the BST rates that would be established under our existing  xregulations. In addition, below we offer general guidelines that the Commission will consider  XP-in deciding whether to approve a particular proposed mechanism.  X"- ` x15. ` ` A cable operator will be required to submit with its proposal a certificate of service""b #,-(-(ZZ"  X- xshowing that the proposal and its supporting justification have been served on all affected LFAs.:$Z {Oy- xԍSee also discussion below of LFAs' involvement in the review and approval of an operator's proposed uniform  xrate structure, and how their level of involvement will not significantly differ from that under the existing benchmark process.:  x[The Commission will place the operator's filing on public notice. Interested persons, including  xthe affected LFAs, may submit comments on the proposal within sixty days after the date of the  X- xpublic notice.^% yOV-ԍThese comments must be served on the cable operator. ^ The cable operator may file a reply to the comments within thirty days  X- xthereafter.9&Xz yO - xԍThis reply must be served on any parties submitting comments on the initial justification. In addition, the  xCommission may, for good cause, specify an altered time period for either the comments or replies concerning any such justification.9 The Commission will consider the justification, as well as all other submitted  xmaterials, and determine whether the proposed uniform rates will not be unreasonable. Pursuant  Xv- xto this Order and any conditions established in a Commission decision on a particular proposal,  xZthe Commission may approve uniform rates notwithstanding any differences between the uniform rates and the rates that would be determined under our existing benchmark rate formula.  X - ` x16. ` ` Some LFAs express concern that a uniform rates mechanism will not protect  X - xjsubscribers from unreasonable cable service rates, as required under the 1992 Cable Act.'|  {OP- xJԍSee generally, NATOA Comments at 45 ("First, if either of the two approaches proposed by the Commission  x/were adopted, many subscribers would experience rate increases without receiving any concurrent service  xZimprovements."); Florida Cities Comments at 4 (contending that allowing unregulated areas to be included in the  xYuniform region may result in rates higher than those permitted under the benchmark formula); LFA Coalition Reply  {Or- xComments at 26 (stating that under one of the Notice's proposed methodologies, "roughly half of all basic subscribers  xwill pay more, as will the same fraction of CPS subscribers; under the other... proposal, most subscribers will pay less for basic, but all will pay more for CPS."). On  xthe contrary, we believe that, in any event, rates will remain reasonable under any uniform rates  x[approach approved by the Commission. First, it is important to note that, while the benchmark  xformula is the most widely used method for determining rates in compliance with our rules, we  X - xjhave found rates other than, or that vary from, benchmark rates to be reasonable. For example,  X- x=an operator may elect to justify BST and CPST rates based on a costofservice showing.V( yO!-ԍ47 C.F.R.  76.922 (costofservice rules).V In  xaddition, an operator may offer subscribers a "new product tier" (NPT) and price that tier as it  Xd- xchooses so long as it complies with the conditions described in the Sixth Order on  XO- xReconsideration, Fifth Report and Order, and Seventh Notice of Proposed Rulemaking in MM  xDocket Nos. 92266 and 93215, Implementation of Sections of the Cable Television Consumer  X#- xjProtection and Competition Act of 1992: Rate Regulation (the "Going Forward Order").)#n {OB%- x,ԍ10 FCC Rcd 1226, 123438 (1994). In the GoingForward Order, the Commission determined that prices for NPTs would remain reasonable because of competitive pressures from the operator's existing CPST. The  X- xCommission has also eliminated the "all rates in play" approach so that, if no complaint"),-(-(ZZ "  xyconcerning a CPST rate or rate increase was filed before November 6, 1995, the cable operator's  X- x[CPST rate as of that date would be deemed not unreasonable under our rules.*$ yOb- x<ԍUnder the old approach, an operator's entire CPST rate structure was subject to regulatory review when the  {O*- xNCommission receives a CPST rate complaint triggering regulation of the CPST. Thirteenth Order On  {O- xReconsideration, MM Docket No. 92266 (Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation), 11 FCC Rcd 388, 450452 (1995). This may lead  xzto a rate being deemed not unreasonable although the rate might not be accepted under our  X- xbenchmark formula. +& yO - xԍWe also note that the Commission has an ongoing proceeding in which we are considering increased pricing  {O - xYflexibility for operators that may result in somewhat higher CPST and lower BST rates. See Memorandum Opinion  {O - xand Order, and Notice of Proposed Rulemaking, MM Docket No. 92266 and CS Docket No. 96157, 11 FCC Rcd  {O| -9517, 9523 (1996) ("Cable Pricing Flexibility Notice").  Finally, the Commission has allowed, subject to certain conditions,  xagreements among LFAs and small cable operators to serve as yet another alternative method or  X- xprocess for establishing reasonable rates for regulated tiers of cable service.,$ {O- xԍSee, e.g., Eighth Order on Reconsideration, MM Docket Nos. 92266 and 93215 (Implementation of Sections  {O- x of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation)("Small System Order"),  x10 FCC Rcd 5179 (1995) (permitting certified LFAs, independent small systems, and small systems owned by small multiple system operators to enter into alternative rate regulation agreements). Thus, there is no  xLsingle formula for establishing regulated rates. Rather, there are a variety of measures that will  xLproduce reasonable rates. We believe that, under the uniform rates mechanism we adopt here,  xit will be possible to accommodate operators' needs for pricing flexibility to compete while still maintaining reasonable rates.  X - ` x17. ` ` We further address the concerns of LFAs regarding the reasonableness of uniform  xrates by placing a condition on an operator's setting of uniform rates. That is, under any uniform  x=rates structure established pursuant to this Order, BST rates for any subscriber in the affected  xareas may not exceed the BST rates that would be established under our existing regulations.  xThus, LFAs can be assured that, at a minimum, BST rates will either decrease or remain  X- xyunchanged.-  {O- xԍThis approach also will foster the development of a lower cost BST, which we endorsed in the Cable Pricing  {O-Flexibility Notice. Cable Pricing Flexibility Notice, 11 FCC Rcd at 952425. For example, if an operator sought to implement uniform rates for three franchise  xareas where the maximum permitted BST rates are $10.00, $11.00 and $12.00, respectively, any  xuniform rates proposal that resulted in a uniform BST rate greater than $10.00 would be disapproved.  X- ` _x18. ` ` The fair implementation of a uniform rate approach is facilitated if the Commission  xZcan examine the methodology to be employed and the impact of that methodology on subscribers  xin advance of its implementation. Our approach will provide the Commission with the ability  xto render an informed and accurate decision on whether an operator's proposed uniform rates are  xnot unreasonable. An operator's supporting justification must include a specific, detailed  xydescription of all relevant financial and economic data, and other factors (including particularly"-,-(-(ZZR"  x<local factors) that demonstrate the impact of the proposal on subscriber rates, and that justify the  xuniform rates as not unreasonable. This approach also will allow the Commission to consider  xthe views of LFAs and consider whether the interests of subscribers will be protected under the  X-new rate structure.H.X yO4- xԍWe agree with NATOA that a record is necessary to evaluate cable operators' requests to establish uniform  xrates. NATOA Comments at 7 (urging the Commission to require detailed economic studies from a cable operator seeking to set regulated uniform rates).H  X- ` x19. ` ` On a goingforward basis, we will require operators that establish initial uniform  xrates under the regulations we set forth here to adjust future rates on an annual basis, pursuant  xto FCC Form 1240. We believe that allowing rate changes no more frequently than annually will  xZenhance the efficiency of rate review by LFAs. As under our current rules, review of adjustments  xkto BST rates will be the responsibility of LFAs while the Commission will be responsible for  X -review of CPST rates.p/  yO-ԍ47 C.F.R.  76.910, 76.92223; Communications Act  623(c)(1).p  X - ` x20. ` ` We seek to provide guidance in this Order to cable operators that propose uniform  xrates. First, as we already have indicated, implementing any uniform rate approach across  xmultiple franchise areas inevitably raises issues that do not lend themselves to a global resolution.  xThe most difficult and common issue arises when a cable operator is regulated by multiple LFAs,  xkas compared to a single statelevel or regional regulatory body. A methodology that would  xproduce uniform rates throughout multiple franchise areas and would be applicable in one  xparticular franchise area, for example, would be based in part on information that is particular  XK- xjto other franchise areas. Under both methodologies offered for comment in the Notice, a cable  xoperator first would calculate its respective underlying rates under the Commission's existing  xrules for every franchise area and then calculate the uniform rate based on those underlying  X- xrates.L0x {O1-ԍNotice, 11 FCC Rcd at 379798.L The uniform rate would be based in part on franchisespecific factors such as the  x<numbers of subscribers, remote control units and additional outlets in the various franchise areas  X-where the uniform rate is to be charged.  X- ` x21. ` ` The Notice sought comment on how review by one LFA of a proposed uniform  X- xrate may affect implementation of that rate in other franchise areas.I1  {OR!-ԍNotice, 11 FCC Rcd at 3800.I  First, some LFAs contend  xthat a uniform rate approach could increase their administrative burden by requiring them to  xMreview the underlying data and rates for all local franchising areas where the uniform rate is  XR- x[charged in order to review the uniform rate charged in its local franchising area.2R yO%- xkԍDade County Comments at 4 (discussing issue in the context of uniform rates that may cross county boundaries); Massachusetts Commission Comments at 5 (discussing issue when uniform rates cross state boundaries). For example,  xxthe LFA Coalition asserts that "the proposal would increase the administrative burden on the City"; 2,-(-(ZZ"  x=[of St. Louis] by over 30 times...," because approximately 30 local franchising areas could be  X- xcovered by one cable operator's uniform region. 3 yOb- x,ԍCity of Ann Arbor, Michigan; City of Dubuque, Iowa; Consolidated City of Indianapolis, Indiana; Montgomery  yO*-County, Maryland; City of St. Louis, Missouri ("LFA Coalition") Reply Comments at 7.  We disagree. The condition specified above,  xthat requires that BST rates determined under a uniform rate approach may not exceed those  xestablished under our existing regulations, will ease LFAs' regulatory burdens by ensuring LFAs  xthat any BST rates they must review will either decrease or remain unchanged. LFAs'  xadministrative burdens therefore will not significantly increase because, given the above  xLcondition, an LFA can be assured that the proposed uniform BST rate to apply in its particular  xfranchise area is reasonable for that area so long as the proposed rate is equal to or less than the existing rate that was previously determined and established under the current regulations.  X - ` nx22. ` ` Other LFAs responded to this inquiry by arguing that their jurisdiction over basic  X - x cable rates could be compromised under a uniform rates approach.`4  {O-ԍSee, e.g., Town of Ocean City Reply Comments at 1.` For example, the LFA  X - xCoalition states that the proposal "improperly departs from the Cable Act, which requires that a  xcable system be responsive to local community needs and interests, as individually determined  X - x<through the local franchising process by each local franchising authority."5  {O!-ԍLFA Coalition Reply Comments at 17 (emphasis deleted)(citing 47 U.S.C.  521(2) and 546). Florida Cities states  xthat the "uniform rate setting system will have the practical effect of emasculating local  X- xfranchising authorities' power to regulate rates...."6D {O- xԍFlorida Cities Comments at 1. See also LFA Coalition Reply Comments at 67 (arguing that Ohio Cable's proposal will remove LFAs' ability to set initial BST rates). We also reject these arguments. First,  xwe note the discussion above concerning an LFA's option to participate vigorously in the  Xb- xCommission's review of an operator's proposed uniform rates approach.A7b {O-ԍSee supra para. 13.A Second, an LFA's  xauthority will not be undermined because the overall process for establishing and regulating  xuniform rates will be parallel to that of our current regulatory framework. In the development  xof the benchmark formula, for example, the Commission, after notice and comment and the  xparticipation of LFAs, established and approved the regulatory methodology that sets forth  xreasonable rates for the BST. Using the benchmark formula, the operator then submits proposed  X- xinitial BST rates for review by each affected LFA.M80  yO!-ԍ47 C.F.R.  76.922 and 76.933.M If the BST rate is rejected by an LFA, the  xyoperator may appeal to the Commission, where the relevant LFA receives ample opportunity to  X- xLdefend its calculations and review of the operator's proposed BST rates.>9  {O%-ԍId.  76.944.> With respect to the  xoptional ratesetting approach adopted herein, and as with our existing regulations, the  xCommission merely approves the general methodology to be employed by an operator, while"| R 9,-(-(ZZn"  xjurisdiction over an operator's implementation of a BST rate remains the exclusive responsibility  xof LFAs. Thus, contrary to some commenting LFAs' arguments, LFAs' statutory responsibility and obligation with respect to BSTs will not be hindered under a uniform approach.  X-  X- ` x23. ` ` Commenters suggest a variety of approaches for resolving conflicts that could arise  xif one LFA tolled the effectiveness of the proposed uniform rate in its franchise area while  Xv- xanother LFA permitted the rate to take effect in its area.>:v yO-ԍ47 C.F.R.  76.933.> Generally, commenting LFAs seek  x.to maintain their existing authority over BST rates. Although they do not specifically address  xthe tolling of proposed uniform rates, presumably these parties might argue that uniform rates  xcould be disapproved by any one of the affected LFAs, and that rates would be tolled in all the  X - xfranchise areas until an appeal of the relevant rate decision was resolved.};Z X {O# - xԍSee generally, LFA Coalition Reply Comments at 56; Cities of Cape Coral, Greenacres, Lantana, Miami, North  xPalm Beach, and Pensacola, Florida ("Florida Cities") Comments at 3 (questioning our authority to allow uniform rates and stating that our proposal will reduce LFAs' incentives to rate regulate).} Cable operators, on  x.the other hand, support allowing the proposed uniform rate to take effect immediately, subject  X - xto a later "trueup" of any discrepancies which the Commission subsequently finds to exist.{< z yO-ԍMediaOne Comments at 89; Adelphia Comments at 5; Time Warner Reply Comments at 12.{ We  x<believe that the current authority of LFAs should be preserved, and that subscribers must remain  xlfully protected from unreasonable rate increases. Moreover, an operator seeking to take  xZadvantage of the benefits of establishing (or adjusting) uniform rates must also shoulder the risks  xof implementing uniform rates. We therefore will prohibit a proposed uniform rate to take effect  xsubject only to a subsequent trueup. Rather, an LFA that rejects a proposed uniform rate may  xtoll the effectiveness of that rate in that particular franchise area. Alternatively, if the LFA so  xKchooses, the rate may take effect, however, but only subject to refunds as later determined by the  x=LFA. An LFA's decision with respect to proposed rates will only have effect within the LFA's  xparticular local franchise area, and not the implementation of rates in other franchise areas. We  xtake this approach because it again parallels our current rules in that it neither increases or  xdecreases LFAs' existing authority to review rates. We will, however, entertain proposals for  x/innovative and efficient ways to implement uniform rates structures so long as they do not  xcompromise LFAs' authority under our current rules. LFAs' concerns that their jurisdiction or  xiauthority over BST rates may be compromised under a uniform rates approach are thus addressed in this manner as well.  Xe- ` x24. ` ` As indicated above, an operator may elect to implement a uniform rates structure  xin a region that covers both regulated and unregulated local franchise areas. Under this approach,  xan operator would include data from both the unregulated and regulated areas, and determine a  xuniform rate applicable in all such areas. Some commenting LFAs oppose allowing operators  X - xzto include unregulated areas for purposes of uniform rates. The LFA Coalition, for example,  X- xasserts that "the Commission has no evidence that average [or uniform] rates and therefore" <,-(-(ZZ<"  X- xoverall rates will not go up" if unregulated systems are included.K= yOy-ԍLFA Coalition Reply Comments at 37.K According to these LFAs,  xLassuming an operator's rates are not regulated because the rates are reasonable is shallow and  X- xxoften incorrect.1>X {O-ԍId.1 Dade County presumes that rates in unregulated areas will be higher than those  xKin regulated areas, and thus asserts that permitting uniform rates to include unregulated areas will  xcause subscribers living in regulated areas to subsidize rates charged to subscribers in unregulated  X-areas.B? yO( -ԍDade County Comments at 4.B  X_- ` x25. ` ` We believe that permitting uniform rates to include unregulated franchise areas  x[could benefit subscribers living in the uniform rate region. For example, including data from all  xof the affected local franchise areas both regulated and unregulated could have a beneficial  xeffect on subscriber rates when rates in unregulated areas are lower than those in the regulated  xareas. With respect to systems subject to effective competition, Congress determined that rate  xregulation was not necessary to ensure reasonable rates. With respect to cable systems potentially  xsubject to regulation, but which are currently unregulated because no complaint has been filed,  xthere is no evidence to suggest that these systems have unreasonable rates. Indeed, we would  xexpect that if rates were unreasonable in these franchise areas, complaints would have been filed  x(especially prior to passage of the Telecommunications Act of 1996 when a single complaint was  Xy- xenough to trigger CPST rate review).@yz yO-ԍ1996 Act,  301(b)(1), codified at Communications Act,  623(c), 47 U.S.C.  543(c). Accordingly, we do not believe that including unregulated  xsystems for purposes of determining uniform rates is more likely to lead to unreasonable rates  xZthan using exclusively regulated systems to determine uniform rates. In addition, should the LFA  xLin an unregulated area later elect to regulate the operator's BST, or should the operator's CPST  xrates become subject to regulation by the Commission, the operator still would be required to  xyjustify the rate in question under our current regulations. Thus, including unregulated areas in  xja uniform rate determination can produce benefits for subscribers, and subscriber's interests in reasonable rates will remain protected given the conditions described above.  X- ` 3x26. ` ` With respect to the BST in regulated local franchise areas, the operator would  xsubmit to the LFA its proposed initial rates, using either the benchmark or costofservice  xmechanism, and the regulating LFA would have authority to review and approve or disapprove  Xe- x-the proposed rates.VAe  yO #-ԍ47 C.F.R.  76.922, 76.933, and 76.944.V If the LFA determined that a reduction in BST rates is necessary to comply  xwith the rules, the operator would be required to reflect this reduction in the rate charged in the  xregion, if necessary. Again, nothing in this Order is intended to compromise LFAs' authority to  xregulate BST rates. With respect to CPST rates, we emphasize that, in reviewing a uniform rates  xproposal, we will closely examine the impact of the proposal on subscribers' rates, and would be"  A,-(-(ZZ"  xdisinclined to approve any scheme that results in a more than minimal increase in CPST rates for  X-a large proportion of the affected subscribers.  X- ` 3x27. ` ` Commenting cable operators argue that they will require broad discretion with  X- xyrespect to several aspects of setting uniform rates, including: (1) the size of the region in which  X- xto establish uniform rates;B yO- xԍAdelphia Comments at 4; Ohio Cable Telecommunications Association ("Ohio Cable") Comments at 34; Cablevision Comments at 910. (2) whether all franchise areas located within the uniform rate region  Xv- xmust be included for purposes of calculating and offering the uniform rate;[Cv  yOG -ԍCole, Raywid Comments at 6; MediaOne Comments at 4.[ (3) which tiers of  X_- xjregulated cable service should be offered at a uniform rate;CD_ yO -ԍCole, Raywid Comments at 7.C (4) the methodology employed to  XH- xdetermine the uniform rate;uEH@ yO9-ԍBlade Comments at 23; NCTA Comments at 10; Time Warner Reply Comments at 15.u (5) how to address variances in the numbers of channels offered in  X1- xvarious franchise areas;F1 yO-ԍOhio Cable Comments at 68; Cole, Raywid Comments at 9; TCI and Continental Comments at 67. and (6) how and whether to establish uniform rates for the installation  X - xor maintenance of equipment.BG `  yO+-ԍOhio Cable Comments at 16.B We will review each cable operator's proposal on a casebycase  x\basis, and will take into consideration the specific elements of each proposal. However, we  xybelieve that the establishment of uniform rates will accomplish certain goals, such as providing  xcable operators with competitive pricing options, providing subscribers with less confusing rate  xstructures across wider regions, and providing LFAs with enhanced incentives to pool their  xresources to administer rate regulation across a wider region. Thus, we offer some general  X-guidance regarding what a cable operator should follow to accomplish these goals.  Xb- ` x28. ` ` First, we anticipate that an operator's uniform rates proposal will be based on some  x\meaningful neutral geographic measure, such as the Area of Dominant Influence (ADI), the  xDesignated Market Area, the Basic Trading Area, or the Standard Metropolitan Statistical Area.  x.Where the operator proposes to include additional franchise areas outside of such a region or measure, our casebycase review will examine the operator's proposal and justification.  X- ` x29. ` ` Second, with respect to which franchise areas should be included in a uniform rate  xstructure, we would be disinclined to approve a scheme in which an operator selects some of its  xfranchise areas in a contiguous geographic region, but excludes others, unless compelling  xcircumstances were shown to justify such an approach. An example of a situation presenting  xsuch circumstances could be one in which an upgrade was in progress and the uniform rates  x/became applicable as the upgrade progressed. Typically, channel lineups will vary widely  xxbetween preupgrade and postupgrade portions of the system based on differences in capacities.  xjIn addition, the costs of an upgrade often cause significant changes in rates, particularly when"7 G,-(-(ZZ"  xrates are set based on a costofservice showing. Thus, imposing uniform rates simultaneously on an entire region or system that is in the midst of an upgrade would not be reasonable.  X- ` Cx30. ` ` In this vein, we note that some commenting LFAs argue that a uniform rate  xystructure may result in crosssubsidization among subscribers living in franchise areas where a  xkcable operator's costs of providing service are relatively low costs and those subscribers in  Xv- xfranchise areas where costs are higher.Hv {O- xԍSee, e.g., Florida Cities Comments at 34; Dade County Comments at 3; NJ Ratepayer Advocate Comments at 5. Any crosssubsidization that may occur under a uniform  xrates structure, however, will be neither significant nor unique. It is important that some measure  xof crosssubsidization occurs within a cable operator's service rates regardless of where such rates  xare charged. Even under the existing scheme, where a single BST rate is typically charged  xthroughout only one local franchise area, for example, the costs of serving some portions of the  xfranchise area will be less than the costs of serving others. The limited crosssubsidization that  xmay occur under a uniform rates proposal could actually provide economic benefits if subsidies  xlead to higher cable penetration. For instance, higher penetration may provide economic  xefficiencies to a cable operator that could be passed on to consumers. In addition, as stated  xabove, we will be disinclined to approve any proposal that results in a more than minimal increase in CPST rates for a significant proportion of the affected subscribers.  Xb- ` x31. ` ` Third, with respect to which tiers of regulated service should be offered at uniform  xrates, we would be inclined generally to ratify a uniform rate proposal that covers all of an  xNoperator's BSTs within the proposed uniform rate region. Furthermore, any uniform rate  x-proposal in which BST rates decrease likely will include offsetting CPST rate increases, assuming  xjan operator's overall rates and revenues remain close to neutral under the uniform rate scheme.  x-We believe that in light of the high penetration of at least one CPST in most multitiered systems,  xit will be possible to effect these offsets with minimal CPST rate increases. We also would  xentertain proposals to offer uniform rates on CPSTs generally, regardless of their penetration.  xIn all cases, however, we will closely examine, and be disinclined to approve, any uniform rate  X- xapproach that increases the combined tier rate for subscribers by a more than minimal amount.GI" {Of-ԍSee supra para. 26. G  xyThis approach will give operators increased flexibility to respond to competition with a uniform rate structure, while at the same time protecting subscribers from excessive rates.  X7- ` Qx32. ` ` Fifth, we note that in the Notice we sought comment on whether the particular  xLpackages of programming services offered at a uniform rate in multiple franchise areas must be  X - xidentical.IJ  {Op$-ԍNotice, 11 FCC Rcd at 3800.I In response, cable operators urge the Commission to allow an operator broad  X- xdiscretion in dealing with variances among numbers of channels offered in various areas.KF yO&-ԍOhio Cable Comments at 68; Cole, Raywid Comments at 9; TCI and Continental Comments at 67. With"K,-(-(ZZ<"  xrespect to the cable operators' comments, we believe generally that the establishment of uniform  xrates across multiple franchise areas should be permitted where the cable operator is offering the  xsame number of channels on its regulated tiers of programming services. Generally, subscribers  xkin one franchise area should not pay the same rates as those in another franchise area if the  xamount of programming services received are not the same. Therefore, we would be inclined to  xyaccept uniform rate proposals that apply only to franchise areas that have identical numbers of channels on the respective BSTs and CPSTs.  XH- ` x 33. ` ` However, with respect to whether the packages of services need be identical, we  xirecognize that there may be circumstances beyond the operator's control that cause dissimilarities  xamong tiers of programming services. For instance, differences in PEG access and mustcarry  x-requirements or leased access use are factors that might create deviations in the channel lineups  xreceived by subscribers in a contiguous geographic area. Indeed, because of these circumstances,  X - x.certain LFAs argue that any uniform rates mechanism implemented pursuant to this Order will  xnot result in truly uniform rates, and thus will not succeed in reducing confusion for a subscriber  X - xmoving between different parts of the same uniform rates region.uL  {O"-ԍSee, e.g., LFA Coalition Reply Comments at 24; NJBPU Comments at 1112.u In order to address these  xconcerns, as well as provide operators with a measure of flexibility in implementing a uniform  xLrates structure, we will take care when evaluating a proposal for uniform rates across franchise  xareas that do not receive identical programming services to consider the extent and nature of the  xdeviation in programming services, and whether the deviation's impact on subscriber rates is  x\significant. In the event that a deviation based on PEG access costs or other external costs  xj(including franchiserelated external costs) is significant, we would consider a requirement that  xan operator's uniform rates be determined exclusive of such costs; in which case the operator  x.likely would be permitted to add these costs onto the uniform rate on a franchisebyfranchise  xbasis. In this vein, we note that our existing regulations have always permitted cable systems that  xZcover multiple franchise areas having differing franchise fees or other franchise costs to advertise  xa "fee plus" rate that indicates the core rate plus the range of possible additions, depending on  X- xLthe particular location of the subscriber.>MZ yO-ԍ47 C.F.R.  76.946.> We therefore believe that any subscriber confusion  xremaining under an operator's uniform rates approach will be less or the same as under our existing rules.  X9- ` 2x!34. ` ` Finally, we note that, under the Telecommunications Act of 1996, cable operators  X"- xymay aggregate their equipment costs on a franchise, system, regional, or company level.eN" yO"-ԍCommunications Act  623(a)(7)(A), 47 U.S.C. 543(a)(7)(A).e The  X - xCommission has adopted regulations implementing this provision that, among other things, ease  X- xythe burden of cable rate regulation on operators and increase administrative efficiency for both"zN,-(-(ZZ<"  X- x/LFAs and cable operators.KOZ {Oy- xԍSee 47 C.F.R.  76.923(a), (c), (f), (g) and (m); Report and Order in CS Docket No. 9657 (Implementation  xof Section 301(j) of the Telecommunications Act of 1996; Aggregation of Equipment Costs by Cable Operators), 11 FCC Rcd 6778, 6779 (1996).K Cable operators seeking to implement uniform rates may avail themselves of those rules to bring uniformity to their equipment rates.  X-  X- ` _x"35. ` ` Accordingly, we find that implementation of any uniform rate approach as offered  X- xin the Notice requires resolving several issues, including those of a local nature, that do not lend  x-themselves to global resolution. We find that it is preferable to base our approval of any uniform  xrate approach on data that accurately reflects the situation of a particular cable operator seeking  xZto establish uniform rates, and the predicted impact on consumers of the operator's proposal. We  xtherefore decline to specify a particular methodology for implementing uniform rates. Rather,  xas described above, cable operators may submit information in accordance with the procedures  X -outlined above demonstrating that the proposed uniform rates will not be unreasonable. P  yO- x<ԍIn light of this finding, we decline to reach the arguments presented by the commenters with respect to the  {O-appropriate methodology, region, and other aspects of uniform rates offered for comment in the Notice.   X -  X - V.xREGULATORY FLEXIBILITY ACT CERTIFICATION  X - ` x#36. ` ` As required by the Regulatory Flexibility Act, 5 U.S.C.  603 (RFA), an Initial  X- xRegulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking  X}- xin CS Docket 95174 (the "Notice"). The Commission sought written public comments on the  Xh-proposals in the Notice including comments on the IRFA. No Comments were received.  X<- ` 2x$37. ` ` Although we performed an IRFA in the Notice, there were no comments received  xin response to the IRFA and we believe that we can certify that no Regulatory Flexibility Act Analysis is now necessary.  X- ` x%38. ` ` We do not believe that the final rule adopted in the Report and Order will have  xa significant economic impact on a substantial number of small entities, 5 U.S.C. 605(b). The  X- xiuniform rate option described in this Report and Order gives cable operators an additional option  x=when setting rates, and is not mandatory. This rate adjustment option will not force operators  xto forgo revenues as it is designed to be revenue neutral to cable operators. The Communications  xAct at 47 U.S.C. 543(m)(2) defines a small cable operator as "a cable operator that, directly or  xthrough an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United  xStates and is not affiliated with any entity or entities whose gross annual revenues in the  x>aggregate exceed $250,000,000." Under the Communications Act, at 47 U.S.C. 543(m)(1), a  xsmall cable operator is not subject to the rate regulation requirements of Sections 543(a), (b) and  x(c) on cable programming services tiers ("CPSTs") in any franchise area in which it serves 50,000 or fewer subscribers. " DP,-(-(ZZ"Ԍ X- ` ox&39. ` ` The Regulatory Flexibility Act defines at 5 U.S.C.  601(5) "small governmental  xjurisdictions" as "governments of cities, counties, towns, townships, villages, school districts or  xjspecial districts with populations of less than 50,000." Under the Commissions current rules, if  xya local franchising authority ("LFA") has elected to rate regulate the basic service tier ("BST"),  xa cable operator must submit rate justifications to the LFA on FCC Forms. We do not believe  X- xthat small LFAs will face a significant economic impact due to this Report and Order. The  xchange in our rules adopted herein would not have a significant economic effect on small LFAs  xbecause the burden associated with reviewing a uniform rate approach should be no more than  x.the burden under the current regulations. If other rate adjustments are made to the BST at the  x0time of the uniform rate adjustment, or at some time thereafter, the cable operator will be  xirequired to submit a rate justification to the LFA that is based on the operator's "underlying rate,"  X - xi.e., the rate the operator would be charging in the absence of the uniform rate adjustment. The  xLFA will engage in the same rate review process as would have otherwise occurred for these  xjother rate adjustments. LFA review of the underlying rate entails the same rate review process  xthat would occur normally, without the uniform pricing option adopted herein. Responsibility  xfor the determination of the correctness of the uniform rate adjustment to CPST rates will rest  xwith the Commission because the Commission, and not LFAs, is responsible for insuring that CPST rates are not unreasonable.  XO- ` 2x'40. ` ` The Commission will send a copy of this certification, along with this Report and  X:- xOrder, in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness  xNAct of 1996, 5 U.S.C.  801(a)(1)(A), and to the Chief Counsel for Advocacy of the Small  xBusiness Administration. A copy of this certification will also be published in the Federal  X-Register.` `  X-x ` `  X-V.xFINAL PAPERWORK REDUCTION ACT OF 1995 ANALYSIS  X-  X- ` x(41. ` ` This Report and Order contains a new information collection. The Commission,  xas part of its continuing effort to reduce paperwork burdens, invites the general public to  Xo- xcomment on the information collection contained in this Report and Order, as required by the  xPaperwork Reduction Act of 1995, Pub. L. No. 10413. Public comments are due 60 days after  XC- xpublication of this Report and Order in the Federal Register. Comments should address: (a)  x.whether the proposed collection of information is necessary for the proper performance of the  xLfunctions of the Commission, including whether the information shall have practical utility; (b)  xthe accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and  x\clarity of the information collected; and (d) ways to minimize the burden of the collection of  x[information on the respondents, including the use of automated collection techniques or other forms of information technology.  X#- ` x)42. ` ` A copy of any comments on the information collection contained herein should be  xsubmitted to Dorothy Conway, Federal Communications Commission, Room 234, 1919 M Street,  xlN.W., Washington, D.C. 20554, or via the Internet to dconway@fcc.gov. For additional information, contact Dorothy Conway at 2024180217 or via the Internet at the above address. "1'P,-(-(ZZ%"Ԍ X- VII.xORDERING CLAUSES  X- ` "x*43. ` ` Accordingly, IT IS ORDERED that, pursuant to the authority granted in Sections  x>4(i), 4(j), 303(r) and 623 of the Communications Act of 1934, as amended, 47 U.S.C. Sections  xl154(i), 154(j), 303(r) and 543, Part 76 of the Commission's rules IS AMENDED as set forth  xbelow. The amendments impose information collection requirements and shall become effective  xLupon approval of the Office of Management and Budget ("OMB") but no sooner than 30 days after publication in the Federal Register. x  X1- ` x+44. ` ` IT IS FURTHER ORDERED that, the Secretary shall send a copy of this Report  X - xand Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for  xkAdvocacy of the Small Business Administration in accordance with paragraph 603(a) of the  X -Regulatory Flexibility Act. Pub. L. No. 96354, 94 Stat. 1164, 5 U.S.C.  601 et seq. (1981). X` hp x (#%'0*,.8135@8: