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Century Cable of Southern California Appeal of Local Rate Orderof City of Redondo Beach, California

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Released: January 19, 1996

Before the


Washington, D.C. 20554


In the Matter of:




Appeal of Local Rate Order


Redondo Beach, California




: December 11, 1995


: January 19, 1996

By the Chief, Cable Services Bureau:


On August 15, 1995, Century Cable of Southern California ("Century"), filed an
appeal of the local rate order adopted on August 9, 1995, by its local franchising authority, the
City of Redondo Beach, California (the "City"). The local order denies a proposed rate increase
sought by Century.1 In its appeal, Century argues that the City failed to adhere to Commission
requirements for written decisions. Century also sought a stay of the local rate order pending our
review. On August 30, 1995, the City filed an opposition to Century's appeal and an opposition
to Century's petition requesting a stay pending appeal.2

Under our rules, rate orders adopted by local franchising authorities may be

1 Under the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No.
102-385, 106 Stat. 1460 (1992), Communications Act of 1934, as amended,
§ 623(b), 47 U.S.C. §543(b) (1993), and the Commission's implementing regulations, local
franchising authorities may regulate rates for basic cable service and associated equipment.
2 Because we are resolving this dispute on the merits by addressing the issues presented in the
petition for review, the petition for stay is rendered moot.

appealed to the Commission.3 In ruling on appeals of local rate orders, the Commission will not
conduct a de novo review, but instead will sustain the franchising authority's decision as long as
there is a reasonable basis for that decision.4 The Commission will reverse a franchising
authority's decision only if it is determined that the franchising authority acted unreasonably in
applying the Commission's rules in rendering its local rate order.5 If the Commission reverses a
franchising authority's decision, it will not substitute its own decision, but instead will remand
the issue to the franchising authority with instructions to resolve the case consistent with the
Commission's decision on appeal.6


In a letter dated August 9, 1995, the City denied a proposed rate increase sought
by Century in its FCC Form 1210 filing.7 The City's written decision consists of a one-page
letter that simply states that the City disapproved of Century's proposed rate increase.8 In its
appeal, Century argues that this letter is insufficient under the Commission's rules.9 The City
contends, in its opposition to the appeal, that it disapproved of Century's proposal based on the
"poor quality of service" offered by Century to its subscribers.10

3 See 47 C.F.R. § 76.944.
4 See Implementation of Sections of the Cable Television Consumer Protection and Competition
Act of 1992: Rate Regulation, Report and Order, MM Docket No. 92-266, 8 FCC Rcd 5631, 5731
(1993) ("Rate Order"); and Implementation of Sections of the Cable Television Consumer
Protection and Competition Act of 1992; Rate Regulation & Buy-Through Prohibition, Third Order
on Reconsideration, MM Docket Nos. 92-266 and 92-262, 9 FCC Rcd 4316, 4346 (1994) ("Third
Reconsideration Order
5 Id.
6 Id.
7 See Century's Appeal of Local Rate Order, at Exhibit D. FCC Form 1210 is used by cable
operators to adjust their maximum permitted rates based upon changes in the number of regulated
channels, and to permit operators to pass through certain external costs and inflation to their
subscribers. See Instructions For FCC Form 1210 Updating Maximum Permitted Rates For
Regulated Cable Services.
8 See Century's Appeal of Local Rate Order, at Exhibit D.
9 Id. at 3.
10 See City of Redondo Beach's Opposition to Appeal of Local Rate Order at 1.


The local order does not state why the City found Century's proposed rates to be
unreasonable. In rate regulation proceedings, the cable operator bears the burden of proving the
reasonableness of all of its proposed regulated rates.11 The local franchising authority, however,
must provide the cable operator with an opportunity to participate in the rate review proceedings
and to offer support for its proposed rates.12 If the local franchising authority determines that the
operator's proposed rate exceeds the maximum permitted level as defined by the Commission's
rate standards, it may prescribe a rate different from the proposed rate provided that the local
franchising authority explains in a written decision why the operator's rate is unreasonable and
why its prescribed rate is reasonable.13

11 See 47 C.F.R. § 76.937; See also Sammons Communications, Inc., (Cities of Burbank and
Glendale, CA), 10 FCC Rcd 5089 (1995).
12 See Rate Order, 8 FCC Rcd at 5723-5724; see also, 47 C.F.R. § 76.936.
13 Id.


In order to comply with our rules, the City's rate order should have contained such
an explanation.14 Instead, the City provided only a general explanation for its order in its
opposition to the appeal, asserting that Century had offered poor quality programming and
service to its subscribers.15 The City's explanation is unacceptably vague. Nothing in our rules
allows for rate decisions based on an unspecified concern about poor service. Moreover,
Commission rules require that the City provide an explanation for its action in a written decision.
Asserting reasons for denying a rate proposal in an opposition to the appeal of the rate order is
not sufficient. Because it appears from the record below that the City's written decision did not
adhere to Commission rules, we remand this case for further proceedings consistent with this





that Century's Appeal of the local order of the
City of Redondo Beach, California


, and the cause



to the City
for further proceedings consistent with this Order.

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




14 Id. See also TCI TKR of Houston (League City, TX), DA 95-1607 (Cab. Serv. Bur., released
July 24, 1995); Falcon Telecable (Hallsville, TX), DA 95-131 (Cab. Serv. Bur., released June 14,
1995); Falcon Cablevision (Warrensburg, MO), DA 95-1178 (Cab. Serv. Bur., released June 1,
1995); Chillicothe Cablevision, Inc. (Washington Court House, OH), DA 95-479 (Cab. Serv. Bur.,
released March 14, 1995); A-R Cable Services (Lisbon, ME), 10 FCC Rcd 1783 (1995).
15See City of Redondo Beach's Opposition to Appeal of Local Rate Order at 1.


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