[Federal Register Volume 59, Number 73 (Friday, April 15, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-8999] [[Page Unknown]] [Federal Register: April 15, 1994] ======================================================================= ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 76 [MM Docket No. 92-266, FCC 94-38] Cable Television Act of 1992 AGENCY: Federal Communications Commission. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: This proposed rule is one segment of the Second Order On Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed Rulemaking in this proceeding. The final rules adopted in this decision may be found elsewhere in this issue. In the Fifth Notice of Proposed Rulemaking in this proceeding, the Commission: (1) Provided notice concerning further rate requirements for systems currently eligible for transition treatment; (2) sought comment on the treatment of systems with more than 100 channels; (3) sought comment on the proper compensation to operators adding or deleting channels; and, (4) sought comment on regulations governing rates charged to commercial establishments. DATES: Comments are due on or before June 29, 1994 and Reply comments are due on or before July 29, 1994. ADDRESSES: Federal Communications Commission, Washington, DC 20554. FOR FURTHER INFORMATION CONTACT: Joel Kaufman (202) 416-1164, Aliza Katz (202) 416-0939 or Kathleen Franco (202) 416-0956, Cable Services Bureau. SUPPLEMENTARY INFORMATION: This is a synopsis of the proposed rules segment of the Commission's Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed Rulemaking in MM Docket No. 92-266, FCC 94-38, adopted February 22, 1994, and released March 30, 1994. The Complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (room 239), 1919 M Street, NW., Washington, DC 20554, and may be purchased from the Commission's copy contractor, International Transcription Service at (202) 857-3800, 2100 M Street, NW., suite 140, Washington, DC 20037. Synopsis of Fifth Notice of Proposed Rulemaking 1. Termination of transition relief. As determined in the Second Order on Reconsideration in this proceeding, systems owned by small operators and systems with low prices will not have to apply the full 17 percent competitive differential pending our analysis of the relationship between costs and prices for those systems. We are initiating these cost studies in our Cost Proceeding. Accordingly, we are here providing notice that we will establish further requirements concerning permitted rates for systems currently eligible for transition treatment. As stated, depending on the results of our cost studies, these further provisions could require such systems to terminate transition relief and establish full reduction rates. 2. Going-forward methodology. Cable operators are actively exploring new technical developments that may enable them to provide up to 500 channels. Some of these technical capabilities may involve significant modifications or additions to distribution plant. Others may involve compression and multiplexing techniques that permit derivation of many channels without significant new distribution plant. The benchmark table adopted in the Rate Order (58 FR 29716, May 21, 1993) and our table reflecting the efficiency curve observed in our Competitive Survey, establish per channel adjustments for systems with total channels on regulated tiers of 100 channels or less. It does not currently establish per channel rates for systems that provide more than 100 channels. 3. We solicit comment on whether we should establish a methodology for adjusting capped rates in situations where there are more than 100 regulated channels. We solicit comment generally on what that methodology should be. We also seek comment on whether we could use mathematical formulations derived from existing data or tables. We also solicit comment on whether, instead of adopting a methodology for setting rates for offerings of more than 100 channels, we should cap rates at the 100 channel level unless the operator could justify a higher rate based on a cost-of-service showing. We solicit comments on how any of these proposals would effect incentives for operators to provide additional channels on an ``a la carte'' basis. We additionally solicit comment on whether our going-forward methodology should be modified to provide greater or lesser compensation to operators for adjustments to capped rates when channels are added or deleted from regulated tiers, and whether this would better meet our goals of encouraging infrastructure development and growth of programming. Operators should provide a complete factual justification for any claims that the current methodology is inadequate. 4. Commercial rates. We have determined that we would not establish rules permitting special rates for regulated commercial cable service on reconsideration of the Rate Order. We stated, however, that allowances for commercial rates might help assure that rates for subscribers are reasonable if higher commercial earnings were offset by savings to consumers. Therefore, we solicit comment on whether we should establish regulations governing rates for regulated cable service provided to commercial establishments. In particular, we ask whether higher earnings for commercial establishments should be offset by lower rates to other subscribers. We solicit comment on whether the offset in rates to other subscribers should be exactly equal to the additional earnings from higher commercial rates. Alternatively, we could establish regulations that would mandate a specified level of sharing of earnings from higher commercial rates between operators and subscribers. We solicit comment on which approach would best serve subscribers and operators. We also solicit comment on what standards of reasonableness we could establish to govern commercial rates. Administrative Matters 5. Initial regulatory flexibility analysis for the fifth notice of proposed rulemaking. Pursuant to section 603 of the Regulatory Flexibility Act, the Commission has prepared the following initial regulatory flexibility analysis (IRFA) of the expected impact of these proposed policies and rules on small entities. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines as comments on the rest of the Notice, but they must have a separate and distinct heading designating them as responses to the regulatory flexibility analysis. The Secretary shall cause a copy of the Notice, including the initial regulatory flexibility analysis, to be sent to the Chief Counsel for Advocacy of the Small Business Administration in accordance with section 603(a) of the Regulatory Flexibility Act, Public Law No. 96-354, 94 Stat. 1164, 5 U.S.C. Section 601 et seq. (1981). I. Reason for action. The Cable Television Consumer Protection and Competition Act of 1992 requires the Commission to prescribe rules and regulations for determining reasonable rates for basic tier cable service and to establish criteria for identifying unreasonable rates for cable programming services. The Commission has adopted rate regulations that require a comparison to the rates of cable systems subject to effective competition, as defined in the Cable Act of 1992 and represented in the revised benchmark formula. This Notice proposes to establish regulations governing the setting of rates for regulated cable systems with more than 100 channels, and to consider separate rate regulations for commercial entities and rules for termination of transition relief. II. Objectives. To propose rules to implement section 3 of the Cable Television Consumer Protection and Competition Act of 1992. We also desire to adopt rules that will be easily interpreted and readily applicable and, whenever possible, minimize the regulatory burden on affected parties. III. Legal basis. Action as proposed for this rulemaking is contained in sections 4(i), 4(j), 303(r) and 623 of the Communications Act of 1934, as amended. IV. Description, potential impact and number of small entities affected. We anticipate a possible impact on small entities because the Notice addresses the termination of transition relief for small systems owned by small operators. The Cable Act of 1992 defines a small system as serving 1,000 or fewer subscribers. V. Reporting, record keeping and other compliance requirements. None. VI. Federal rules which overlap, duplicate or conflict with this rule. None. VII. Any significant alternatives minimizing impact on small entities and consistent with stated objectives. None. 6. Paperwork reduction act. The requirements adopted herein have been analyzed with respect to the Paperwork Reduction Act of 1980 and found to impose a new or modified information collection requirement on the public. Implementation of any new or modified requirement will be subject to approval by the Office of Management and Budget as prescribed by the Act. Procedural Provisions 7. Ex parte rules--non-restricted proceeding. This is a non- restricted notice and comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided that they are disclosed as provided in Commission rules. See generally 47 CFR 1.1202, 1.1203, and 1.1206(a). 8. Pursuant to applicable procedures set forth in Secs. 1.415 and 1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested parties may file comments on or before June 29, 1994 and reply comments on or before July 29, 1994. To file formally in this proceeding, you must file an original plus four copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments and reply comments, you must file an original plus nine copies. You should send comments and reply comments to Office of the Secretary, Federal Communications Commission, 1919 M Street, NW Washington, DC 20554. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, room 239, Federal Communications Commission, 1919 M Street NW., Washington DC 20554. Ordering Clauses 9. Authority for this proposed rule is contained in sections 4(i), 4(j), 303(r), 612, 622(c) and 623 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 303(r), 532, 542(c) and 543. 10. It is ordered That, pursuant to sections 4(i), 4(j), 303(r), 612(c), 622(c) and 623 of the Communications act of 1934, 47 U.S.C. 154(i), 154(j), 303(r), 532(c), 542(c), and 543, Notice is hereby given of proposed amendments to part 76, in accordance with the proposals, discussions, and statement of issues in this Notice of Proposed Rulemaking, and that Comment is Sought regarding such proposals, discussion, and statement of issues. List of Subjects in 47 CFR Part 76 Cable television. Federal Communications Commission. William F. Caton, Acting Secretary. [FR Doc. 94-8999 Filed 4-14-94; 8:45 am] BILLING CODE 6712-01-M