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Home My WebLink About6.1 CableTV&ConsumrProtectAct I!' -'# e . , . CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: SUBJECT: Public Hearing: Adopting Regulations in Compliance with the Cable Television and Consumer Protection Act of 1992. ~ (Prepared by: Bo Barker, Management Assistant) EXHIBITS ATTACHED: 1./ Draft Ordinance 2./ FCC Regulations 3. / General Information Handout on the Cable Act RECOMMENDATION: 1. 0JV2. .. 3. r , 4. 5. Open Public Hearing Accept Public Testimony Close Public Hearing Deliberate and Introduce the Ordinance Notify Viacom Cablevision of these Regulations FINANCIAL STATEMENT: There will be a cost for review of the cable operator's rate application which depends on the scope of the rate application and is therefore unknown at this time. The cost will be split between the Cities of Livermore, Pleasanton, San Ramon and Dublin. DESCRIPTION: On October 5, 1992, Congress enacted the Cable Television Consumer Protection and Competition Act of 1992. The Act allows cable systems not subject to effective competition to be regulated. In accordance with regulations prescribed by the Federal Communications Commission (FCC), franchising authorities, such as cities, may regulate basic cable service rates, charges for related equipment and establish customer service standards that are consistent with the FCC regulations. Rates for premium channels and pay-per-view channels are not regulated. Rates for all other cable programming (i.e. Satellite Value package) are subject to regulation by the FCC. In order to regulate, the City must be certified by the FCC. The City became certified on November 10, 1993. The City must now hold public hearings and adopt local regulations consistent with the FCC regulation within 120 days of certification, or by March 10, 1994. Adopting an Ordinance The FCC has issued detailed regulations, and has required that franchising authorities that are certified must adopt local regulations consistent with the FCC regulations. It is not necessary that the City adopt different regulations from those already issued by the FCC. Although any franchising authority could adopt stricter regulations, such actions may result in legal challenges from the Cable company or increased costs that could be passed through to the cable customers. The proposed ordinance amends Title 3, Chapter 20 of the Dublin Municipal Code - Cable Television and Communication System. The attached resolution (Exhibit 1) adopts the detailed FCC regulations, including customer service standards by reference. This methodology was developed and recommended by NATOA (National Association of Telecommunications Officers and Advisors), a national governmental telecommunications group. Exhibit 2 is a copy of the FCC regulations which covers rate regulation and customer service standards. Additionally, staff has included a brief description of the Cable Act (Exhibit 3) drafted in order to assist the public with understanding how the City is impacted by this new law. The City of Livermore has adopted the regulations while the Cities of Pleasanton and San Ramon are hearing the issue concurrently. I It is recommended the City Council introduce this ordinance that provides for the regulation of basic cable service and customer service standards of the Cable Television System. The City is also required to notify the cable operator of this action. COPIES TO: Michal Houston, Viacom Cablevision ITEMNO.~ e . ORDINANCE NO. - 94 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DUBLIN *************************** AMENDING MUNICIPAL CODE CHAPTER 3.20 (CABLE TELEVISION FRANCHISE) TO PROVIDE FOR THE REGULATION OF BASIC SERVICE TIER RATES AND RELATED EQUIPMENT, INSTALLATIONS AND SERVICE CHARGES AND CUSTOMER SERVICE STANDARDS OF ANY CABLE TELEVISION SYSTEM OPERATING IN THE CITY OF DUBLIN WHEREAS, On November 12, 1985, the City adopted Ordinance No. 30-85, the City of Dublin Cable Television Franchise Ordinance; and WHEREAS, Effective January I, 1986, the City (as "Grantor") and Tele-Vue Systems, Inc., doing business as Viacom Cablevision, of Viacom International, Inc. ("Viacom") entered into an agreement whereby the City granted to Viacom a non-exclusive franchise to operate a cable television system in the City; and WHEREAS, On October 5, 1992, the United States Congress enacted the Cable Television Consumer Protection and Competition Act of 1992 which, among other things, provided that a franchising authority may regulate basic service rates and charges and customer service standards in accordance with Federal Communications Commission (FCC) regulations; and WHEREAS, On April 1, 1993, the FCC prescribed such regulations, which are set forth at 47 CFR (Code of Federal Regulations) 76.900 - 76.985 and 76.309 (the "FCC Cable Regulations"). NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby amended Title 3, Chapter 20, of the Dublin Municipal Code by adding a new Section to read as follows: Section 1 - FCC Cable Regulations 3.20.335 shall be added to the DMC to read as follows: a. Incorporation of FCC Cable Regulations Grantor hereby adopts and incorporates by reference the FCC Cable Regulations implementing the Cable Television Consumer Protection and Competition Act of 1992 (47 U.S.c. 521 et seq.), including but not limited to those rules and regulations regarding rate regulation as set forth in 47 CFR 76.900 t076.985 and regarding customer service standards as set forth in 47 CFR 76.309. Amendments to FCC rules and regulations implementing the Cable Act of 1992 made after the effective date of this section shall also be incorporated by reference without further legislative action by the Grantor. The FCC Cable Regulations supersede any different or inconsistent provisions in the Chapter 3.20 or in the franchise granted under it. b. Implementation Grantor shall implement the FCC Cable Regulations in the City with the existing Grantee and any future franchisees. In implementing the Regulations, Grantor will ensure a reasonable opportunity for consideration of the views of interested parties." Exhibit 1 e e Section 2 - Effective Date and Posting of Ordinance This Ordinance shall take effect and be in force 30 days after its adoption. The City Clerk of the City of Dublin shall cause this Ordinance to be posted in at least three (3) public places in the City of Dublin in accordance with Section 36933 of the Government Code of the State of California. PASSED, APPROVED AND ADOPTED this. . .. day of' AYES: NOES: ABSENT: , 1994. Mayor ATTEST: City Clerk . , ":-, n<, ".I ,"i..' . ~, ~ ~ ~ "".r . '~ '. . ~ .' \'. , ' . ..','."\ ", . '." ..~_~_~_,~.__........~............IIt... _' _. __- ..~J.::~.~~~;l~.~l~~~r,H,.~,.._....J,..":'O"'::~I....'.:...:: ..... ",;,;);11 .' >e,' 'w; "">'~r.t'" ":;, .:, ;" ,." '.: ;).;t<~';~,.~~.~~ . ." · '/t',::~'J:1J:~;fl~~r ~ ". '/" . ~ ..'," .":.... .' ., ~ ," i.' i,", ,~' .. (,: ., ;. ...~ -., FCC CABLE REGULATIONS on Rate Regulation and Olstomer SeIVice Standards Issued Pursuant to CABLE TELEVISION CONSUMER PROTECTION , ..,'1" :',.1. ',ij~ 'III I.,' '-':' ~ .:. '-'!.: ::;:}\j'H ....(;.,1 >,\{::;~{ 'i:i;i~ \ e', e AND COMPETITION ACT OF 1992 /:..,..."/ (.; ; . ~ ":\ -', , " ,_I," I'..', . ,. . "..,: _.,": . n. .' . '~.:' ~ ; " " .-....._~.-..........."....,-" , .j.... . ,; \\ \1 \ I \ I ,..t, FCC Cable Television Regulations Pursuant to 1992 Act Table of Contents Subpart N -- Cable Rate Regulation . . . . . . . . . . . . . . . . . . . . . . .. Page 1 fi76.900 Temporary rreeze of cable rates. . . . . . . . . . . . . . . . .. Page 1 fi76.901 Definitions. ................................ Page 1 (a) Basic service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 1 (b) Cable programming service. . . . . . . . . . . . . . . . . . . .. Page 1 (c) Small system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 2 fi76.905 Standards for identification of cable systems subject to effective competition. . . . . . . . . . . . . . . . . . . . . . . . . .. Page 2 fi76.906 Presumption of no effective competition. . . . . . . . . . .. Page 4 ~76.910 Franchising authority certification. . . . . . . . . . . . . . .. Page 4 fi76.911 Petition for reconsideration of certification. ........ Page S fi76.912 Joint certification. ........................... Page 6 a fi76.913 Assumption of jurisdiction by the Commlsslon. . . . . .. Page 7 .. fi16.914 Revocation or certification. .. . . . . . . . . . . . . . . . . . .. Page 1 fi76.915 Change In status of cable operator. . . . . . . . . . . . . . . . Page 8 fi76.916 Petition for recertification. ..................... Page 9 fi76.920 Composition or the basic tier. . . . . . . . . . . . . . . . . . . . Page 9 fi76.921 Buy.tbrough of other tiers prohibited. . . . . . . . . . . .. Page 10 ~76.922 Rates for the basic service tier and cable programming services tiers. .............................. Page 10 (a) Basic and cable programming service tier rates. . . .. Page 10 (b) Initial pennitted per channel charge. ............ Page 11 (c) Subsequent permitted per channel charge. ........ Page 12 (d) Price cap requirements. . . . . . . . . . . . . . . . . . . . . .. Page 12 (1) IoDation adjustments. . . . . . . . . . . . . . . . . . . .. Page 12 (2) External costs. ......................... Page 12 fi76.923 Rates for equipment and installation wed to receIve the basic service tier. .............. ~ . . . . . . . . . . .. Page 14 (a) Scope. ................................... Page 14 a (b) Unbundllng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 14 .. (c) Equipment basket. .......................... Page 14 (d) Hourly service charge. ....................... Page 14 (e) Installation charges. . . . . . . . . . . . . . . . . . . . . . . . .. Page 15 (f) Remote charges. .. . . . . . . . . . . . . . . . . . . . . . . . . .. Page 15 (g) Other equipment charges. .................... Page 15 (b) Additional connection charges. . . . . . . . . . . . . . . . .. Page 15 (I) Charges for equipment sold. ................ . .. Page 16 0) Promotions. ............................... Page 16 (k) Francbise fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 16 As of August, 1993 Page i FCC Cable Television Regulations Pursuant to 1992 Act ~76.924 Cost accounting and cost allocation requirements. . .. Page 16 (8) Applicability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 16 (b) GeneraUy accepted accounting principles. . . . . . . . .. Page 16 (c) Accounts required. ............ . . . . . . . . . . . . .. Page 17 (d) Accounting level. ........................... Page 17 (e) Cost aUocation requirements. . . . . . . . . . . . . . . . . .. Page 17 <0 Cob1D1on costs. .. . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 18 (g) Unrelated expenses and revenues. . . . . . . . . . . . . . .. Page 18 (h) Part-time channels. ......................... Page 18 fi76.925 Costs or francblse requirements. . . . . . . . . . . . . . . .. Page 18 fi76.930 Initiation or review of basic cable service and equipment rates. .................................... Page 19 fi76.931 Notification of basic tier availability. . . . . . . . . . . . .. Page 19 fi76.932 Notification or proposed rate increase. ........... Page 19 fi76.933 Franchising authority review of basic cable rates and equipment costs. . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 19 ~76.934 Small systems. ... . . . . . . . . . . . . . . . . . . . . . . . . .. Page 20 fi76.935 Participation of interested parties. .............. Page 21 'fi76.936 Written decision. ........................... Page 21 ~76.937 Burden or proof. . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 21 ~76.938 Proprietary information. . . . . . . . . . . . . . . . . . . . . .. Page 22 i76.940 Prospective rate reduction. .. . . . . . . . . . . . . . . . . .. Page 22 f76.941 Rate prescription. . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 22 fi76.942 Refunds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 22 176.943 Fines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 23 f76.944 Commission review of rrancbising authority decisions on rates for the basic service tier and associated equipmenP.age 23 fi76.945 Procedures for Commlssion on review of basic service . rate. ..................................... Page 24 fi76.950 Complaints regarding cable programming service ratesPage 25 fi76.951 Standard complaint ronn; other riling requirements.. Page 25 fi76.952 Information to be provided by cable operator on monthly subscriber bills. ... '. . . . . . . . . . . . . . . . . . . . . . . .. Page 27 ~76.953 Umitation on fiUng a complaint. ............... Page 27 (8) Complaint regarding 8 rate in effect on June 21, 1993. Page 27 (b) Complaint recording a rate increase. ............ Page 27 i76.954 Initial review or complaint; minimum showing requirement; dismissal of defective complaints. ............... Page 27 fi76.955 Additional opportunity to file corrected complaint. .. Page 28 i76.956 Cable operator response. ....:................ Page 28 fi76.957 Commission adjudication of the complaint. . . . . . . .. Page 30 i76.960 Prospective rate reductions. ................... Page 30 I ! ! !': f' r:': ~: ~ ~. ' t l' 1 ~ ' " ,\ .' i , , , I ~.., " r .,...",?",.~-"j,:l\,..""'1J'.;;r~- Page ii FCC Cable Television Regulations Pursuant to 1992 Act 176.961 Refunds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 30 fi76.962 Implementation and certification of compllance. .... Page 31 (a) Implementation. . . . . . . . . . . . . . . . . . . . . . . . . . . .. Page 31 (b) Certification of compliance. ................... Page 31 f76.963 Fonelture. ................................ Page 31 f76.964 Advance written notification of rate Increases. . . . . .. Page 32 f76.970 Commercial leased access rates. ....... . . . . . . . .. Page 32 176.971 Commercial leased access terms and conditions. . . .. Page 33 176.975 Commercial leased access dispute resolution. ...... Page 34 fi76!J77 Minority and educational programming used In Ueu or deregulated commercial leased access capacity. ..... Page 35 176.980 Charges for customer changes. ................. Page 36 176.981 Negative option billing. . . . . . . . . . . . . . . . . . . . . . .. Page 37 176.982 Continuation or rate agreements. ............... Page 37_ fi76.983 Discrimination. ............................ Page 3bW f76.984 GeographicaUy uniform rate structure. . . . . . . . . . .. Page 38 f76.985 Subscriber bill itemization. . . . . . . . . . . . . . . . . . . .. Page 38 Subpart -" Consumer Protection and CUstomer Service ......... Page 40 fi76.309 Customer Service ObUgations . . . . . . . . . . . . . . . . .. Page 40 Subpart L - Cable Television Access ...................... Page 45 fi76.701 Leased Access Channels. ..................... Page 45 f76.702 Publlc, Educational and Governmental Access. ..... Page 46 e As of August, 1993 Page ill .~.-~ .'. f-:'~f :.: - ., . _ ; ';..",'1:.; '-., ;"~ ~ "','\r"'\~:r"f"'i .V'!'"'~ . ,:~'(:"'--L ,-' " FCC Cable Television Regulations Pursuant to 1992 Act Part 76 CABLE TELEVISION SERVICE Subpart N - Cable Rate Regulation ~76.900 Temporary freeze of cable rates. (a) The average monthly subscriber bill for services provided by cable operators subject to regulation under Section 623 of the Communications Act shall not increase above the average monthly subscn"ber bill determined under rates in effect on April 5, 1993, until November 15, 1993. (b) The average monthly subscriber bill shall be calculated by determining for a monthly billing cycle the sum of aU billed monthly charges for all cable a seIVices subject to regulation under Section 623 of the Communications Act _ and dividing that sum by the number of subscribers receiving any of those services. The average monthly subscriber bill determined under rates in effect on April 5, 1993, shall be calculated based on customer charges for the most recent monthly billing cycle ending prior to April 5, 1993. ~76.901 Definitions. (a) Basic service. The basic seIVice tier shall, at a minimum, include all signals of domestic television broadcast stations provided to any subscriber (except a signal secondarily transmitted by satellite carrier beyond the local service area of such station, regardless of how such signal is ultimately received by the cable system) any public, educational, and governmental programming required by the franchise to be carried on the basic tier, and any additional video programming signals a service added to the basic tier by the cable operator. (b) Cable programming service. Cable programming service includes any video e programming provided over a cable system regardless of service tier, including installation or rental of equipment used for the receipt of such video programming, other than: (1) Video programming carried on the basic service tier as defmed in this section; (2) Video programming offered on a pay-per-channelor pay-per-program basis; or As of August, 1993 Page 1 FCC Cable Television Regulations Pursuant to 1992 Ad (3) A combination of multiple channels of pay-per-channelor pay-per- program video programming offered on a multiplexed or time-shifted basis so long as the combined service: (i) Consists of commonly-identified video programming; and (il) is not bundled with any regulated tier of seIVice. (c) Small system. A small system is a cable television system '. that selVes fewer than 1,000 subscribers. The service area of a small system shall be detennined by the number of subscribers that are selVed by a system's principal headend. including any other headends or microwave receive sites that are, technically integrated to the system's principal headend. ~76.90S Standards for identfficatlon of cable systems subject to effective competition. (a) Only the rates of cable systems that are not subject to effective competition may be regulated. (b) A cable system is subject to effective competition when anyone of the following conditions is met: , , (1) Fewer than 30 percent of the households in its franchise, area subscribe to the cable seIVice of a cable system. (2) The franchise area is: , .' (i) SelVed by ~t 'le~~t 1 tw~ unaffiliated multichannel video programming distributors each of which offers comparable programming to at least 50 percent of the households in the franchise area; and (il) The number of households subscribing to multich~nnel video programming other than the largest multichannel video programming distributor exceeds 15 percent of the households in the franchise area. (3) A multichannel video programming distributor, operated by the franchising authority for that franchise area, offers video programming to at least 50 percent of the households in the franchise area. Page 2 " FCC Cable Television Regulations Pursuant to 1992 Act (c) Each separately billed or billable customer will count as a household subscribing to or being offered video programming seIVices, with the exception of multiple dwelling buildings billed as a single customer. Individual units of multiple dwelling buildings will count as separate households. (d) A multichannel video program distributor, for putposes of this section, is an entity such as, but not limited to, a cable operator, a multichannel multipoint distn"bution service, a direct broadcast satellite service, a television receive-only satellite program distributor, a video dialtone seIVice provider, or a satellite master antenna television seIVice provider that makes available for purchase, by subscn"bers or customers, multiple channels of video programming. (e) Service of a multichannel video programming distributor will be deemed _ offered:, _ .- ' ! ... (1) When the multichannel video programming distributor is physically able to deliver seIVice to potential subscribers, with the addition of no or only minimal additional investment by the distn"butor, in order for an individual subscriber to receive seIVice; and (2) When no regulatoty, technical or other impediments to households taking seIVice exist, and potential subscribers in the franchise area are reasonably aware, that they may purchase the services of the multichannel , video prograriuning distributor. . . .! ". (I) For purposes of determining the number of households subscribing to the seIVices of a multichannel video programming distributor other than the largest multichannelvideo programming distributor, under paragraph (b )(2)(11) of this section, the number of subscribers of all multichannel video programming distributors 'that offer service to at least SO percent of the households in the ~a~c~ area will be aggregated. e (g) In 'order to offer comparable programming within the meaning of paragraph (b)(2)(i) of this section, a competing multichannel video programming distributor must offer at least 12 channels of video programming, including at least one channel of nonbroadcast selVice programming. 1i U'I ( :(1 j..J~\~ \71~;1;."";" .\...0'" . As of August, 1993 Page 3 FCC Cable Television Regulations Pursuant to 1992 Act ~76.906 Presumption of no effective competition. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. ~76.910 Franchising authority certification. (a) A franchising authority must be certified by the Commission in order to regulate the basic setvice tier and associated equipment of a cable system within its jurisdiction. (b) To be certified, tbe franchising authority must file with the Commission a written certification that: (1) The franchising authority will adopt and administer regulations with respect to the rates for the basic setvice tier that are consistent with the 'regulations prescribed by the Commission for regulation of the basic service tier; (2) The franchising authority has the legal authority to adopt, and the personnel to administer, such regulations; (3) Procedural laws and regulations applicable to rate regulation proceedings by such authority provide a reasonable opportunity for consideration of the views of interested parties; and (4) The cable system in question is not subject to effective competition. Unless a franchising authority has actual knowledge to the contrary, the franchising authority may rely on the presumption in g 76.906 that the cable operator is not subject to effective competition. (c) The written certification described in paragraph (b) of this section shall be made by filing the FCC form designated for that purpose. The form must be flled by (1) Registered mail, return receipt requested. or (2) Hand delivery to the Commission and a date-stamped copy obtained. The date on the return receipt or on the date-stamped copy is the date filed. Page 4 ____,.,~_:......I ~ ._ . FCC Cable Television Regulations Pursuant to 1992 Act (d) A copy of the certification form described in paragraph (c) of this section must be served on the cable operator before or on the same day it is ftled with the Commission. (e) Unless the Commission notifies the franchising authority otherwise~ the certification will become effective 30 days after the date filed. provided, however, that the franchising authority may not regulate the rates of a cable system unless it: (1) Adopts regulations: (i) Consistent with the Commission's regulations governing the basic tier; and e (ll) Providing a reasonable opportunity for considerat~on of the views of interested parties, within 120 days of the effective date of certification; and (2) Notifies the cable operator that the authority has been ce~ified ~nd has adopted the regulations required by paragraph (e)(I) of this section. (f) If the Commission denies a fra~chising aut~ority's certific~ti.on, the Commission will notify the franchising authonty of any revulOns or modifications necessary to obtain approval. ~76.911 Petition ror reconsideration or certification. (a) A cable operato~ (or other interes~ed party) may ~haUe~e a franchis~g authority's certificatIOn by filing a petition for reconslderahon. The petition may allege either of the following: e (1) The cable operator is not subject to rate regulation because effective competition exists as derwed in ~ 76.905. ;e~ (2) The franchising authority does not meet the certillcationstandards! I forth in 47 U.S.C. ~ 543(a)(3). (b) (1) The cable operator bears the burden of rebutting the presumpti~n that effective competition does not exist with evidence that effectiVe competition, as defined in ~ 76.905, exists in the franchise area. As of August, 1993 Page 5 FCC Cable Television Regulations Pursuant to 1992 Act FCC Cable Television Regulations Pursuant to 1992 Act (2) For purposes of paragraph (a)(I) of this section, if the evidence establishing effective competition is not otherwise available cable operators may request from a competitor information regarding the competitor's reach and number of subscribers. A competitor must respond to such request within 15 days. Such responses may be limited to numerical totals. cable systems and regardless of whether the rates in each franchising area are uniform. (2) A petitioner filing pursuant to paragraph (a)(2) of this section may request a stay of rate regulation. fi76.913 Assumption of Jurisdiction by the Commission. (a) Upon denial or revocation of the franchising authori~s certific~tion, the Commission will regulate rates for cable servic~~ and assoctate~ equtpment?f a cable system not subject to effective compettti?D; as d:fined ~ ~ 76.9?5, tn a franchise area. Such regulation by the COPlD11Sston will contwue until the franchising authority has obtained certification or recertification. (b) A franchising authority unable to meet ce~cation stan~rds may pet~tion .. the Commission to regulate the rates for baste cable semce and assoctated _ equipment of its franchisee when: (1) The franchising authority lacks the resources to administe~ rate regulation; provided, however, that tbe request must be accompa~:d by a demonstration that franchise fees are insufficient to fund any additional activities required to administer basic service rate regulation; or (c) Stay of rate regulation. (1) The filing of a petition for reconsideration pursuant to paragraph (a)(I) of this section will automatically stay the imposition of rate regulation pending the outcome of the reconsideration proceeding. (3) In any case in which a stay of rate regulation has been granted, if the petition for reconsideration is denied, the cable operator may be required to refund any rates or portion of rates above the permined tier charge which were collected from the date the petition was filed. (d) The ftling of a petition for reconsideration alleging the presence of effective competition based on frivolous grounds is prohibited, and may be subject to forfeitures. (e) If the Commission upholds a challenge to a certification rued pursuant to paragraph (a)(2) of this section, the Commission will notify the franchising authority of the revisions necessary to secure approval and provide the authority an opportunity to amend its certification however necessary to secure approval. provided, however, that pending approval of certification, the Commission will assume jurisdiction over basic cable seIVice rates in that franchise area. (2) The franchising authority lacks the legal au~hority to regu~ate. ba~ic service rates; provided, however, that the authonty ~ust su.bmlt WIth Its request a statement detailing the nature of the legal infinmty. (c) The Commission will regulate basic service rates pursuant to this Section until the franchising authority qualifies to exercise jurisdiction pursuant to ~ 76.916. (a) Franchising authorities may apply for joint certification and may engage in joint regulation, including but not limited to, joint hearings, data collection, and ratemaking. Franchising authorities jointly certified to regulate their cable system(s) may make independent rate decisions. !i76.914 Revocation or certification. e (a) A franchising authority's certification shall be revoked if: (1) After the franchising authority has been given a reasonable opportunity to comment, it is detennined that .sl?te ,and local laws ~nd regulations do not conform to the CODlDllSslon s rate regulatiOns governing cable rates, n 76.922 through 76.925. (2) After being given an opportunity to cure the defect, a franchising authority fails to fulfill one of the three conditions for certification, set forth in 47 U.s.C. ~ 543(a)(3), or any of the provisions of ~~ 76.910(b). fi76.9U Joint certification. (b) Franchising authorities may apply for joint certification regardless of whether the authorities are served by the same cable system or by different Page 6 As of Augusl, 1993 Page 7 FCC Cable Television Regulations Pursuant to 1992 Act (b) In all cases of revocation, the Commission will assume jurisdiction over basic service rates until an authority becomes recertified. The Commission will also notify the franchising authority regarding the corrective action that may be taken. (c) A petition for revocation must be served on the franchising authority and contain a statement that service was made. The franchising authority may file an opposition within 30 days of filing of the petition. A reply may be rued within 15 days of filing of the opposition. (d) While a petition for revocation is pending, and absent grant of a stay, the franchising authority may continue to regulate the basic service rates of its franchisees. ~76.91S Change in status or cable operator. (a) A cable operator that becomes subject to effective competition, may petition the franchising authority for change in its regulatory status. The operator bears the burden of proving the existence of effective competition. Oppositions may be filed within 15 days of public notice of the filing of the petition, and must be served on the operator. Cable operators may reply within 7 days of filing of oppositions. (b) Franchising authority decisions on petitions for change in status must be made within 30 days after the pleading cycle set forth in paragraph (a) of this section closes. Franchising authorities must notify the Commission within ten days of any decision changing status. Unless the Commission receives an opposition to such change in status, the decision will become final 30 days after adoption by the franchising authority. (c) After an initial determination of the franchising authority that effective competition exists becomes final, the franchising authority will then cease regulating basic cable seIVice rates, and the Commission's regulatory authority over cable programming services for the system in the franchise area will also cease. (d) A cable operator and a franchising authority may submit a joint statement that effective competition exists. The joint statement must stipulate which of the three statutory tests for effective competition has been met and explain how tbe test has been satisfied. These joint statements will become final decisions within 30 days of filing with the Commission, unless challenged by an interested party. Page 8 FCC Cable Television Regulations Pursuant to 1992 Act (e) Cable operators denied a change in status by a franchising authority may seek review of that finding at the Commission by filing a petition for revocation. (f) In cases where a local franchising authority has not been certified to regulate rates, a cable operator may petition the Commission for change in its regulatory status. The time periods in paragraph (a) of this section will apply to oppositions and replies concerning these petitions. ~76.916 Petition for recertification. (a) After its request for certification has been denied or its existing certification has been revoked. a franchising authority wishing to assume" jurisdiction to regulate basic service and associated equipment rates must me - a "Petition for Recertification" accompanied by a copy of the earlier decision denying or revoking certification. (b) The petition must: (1) Meetthe requirements set forth in 47 U.S.C. ~ 543(a)(3); (2) State that the cable system is not subject to effective competition; and (3) Contain a cleaT showing, supported by either objectively verifiable data such as a state statUte, or by affidavit, that the reasons for the earlier denial or revocation no longer pertain. (c) The petition must be served on the cable operator and on any interested party that participated in the proceeding denying or revoking the original certification. (d) Oppositions may be filed within 15 days after the petition is filed, anft must be served on the petitiooer. Replies may be filed within seven days of filing of oppositions, aod must be served on the opposing party(ies). fi76.920 ComposUion or the basic tier. Every subscriber of a cable system must subscribe to the basic tier in order to subscribe to any other tier of video programming or to purchase any other video programming. As of August, 1993 Page 9 l , , 1 ['~n' FCC Cable Television Regulations Pursuant to 1992 Act ~76.921 Buy-through or other tiers prohibited. (a) No cable system operator may require the subscription to any tier other than the basic service tier as a condition of subscription to video programming offered on a per channel or per program charge basis. A cable operator may, however, require the subscription to one or more tiers of cable programming sexvices as a condition of access lO one or more tiers of cable programming services. (b) A cable operator may not discriminate between subscribers to the basic service tier and other subscribers with regard to the rates charged for video programming offered on a per-channel or per-program charge basis. (c) Prior to October 5,2002, the provisions of paragraph (a) of this section shall not apply to any cable system that lacks the capacity lO offer basic service and aU programming distributed on a per channel or per program basis without also providing other intermediate tiers of seIVice: (1) By controlling subscriber access to nonbasic channels of seIVice through addressable equipment electronically controlled from a central control point or (2) Through the installation. noninstallation. or removal of frequcncy filters (traps) at the premises of subscribers without other alteration in system configuration or design and without causing degradation in the technical quality of service provided. (d) Any retiering of channels or services that is not undertaken in order to accomplish legitimate regulatOIY, technical, or cuslOmer seIVice objectives and that is intended to frustrate or has the effect of frustrating compliance with paragraphs (a) through (c) of this section is prohibited. ~76.922 Rates for the basic service tier and cable programming services tiers. (a) Basic and cable programming service tier rates. Basic sexvice tier and cable programming seIVice rates shall be subject to regulation by the Commission and by state and local authorities, as is appropriate, in order to assure that they are in compliance with the requirements of 47 V.S.C. 543. Rates that are demonstrated, in accordance with these rules, not to exceed the "Initial Permitted Per Channel Charge" or the "Subsequent Pcrmitted Per Channel Charge" as described below, or the equipment charges as specified in ~ 76.923, will be acceptcd as in compliancc. The maximum monthly charge per Page 10 "I \ , i \ ! ~ : I ). FCC Cable Television Regulations Pursuant to 1992 Act subscriber for a tier of regulated programming services offered by a cable system shall consist of a permitted per channel charge multiplied by tbe number of channels on the tier, plus a charge for franchise fees. The maximum monthly charges for regulated programming services shall not include any charges for equipment or installations. Charges for equipment and installations are to be calculated separately pursuant to ~ 76.923 of these rules. (b) Initial permitted per channel charge. (I) The permitted per channel charge on the initial date of regulation shall be, at the election of the cable operator, either: (1) a charge determined pursuant to a cost-of-seIVice proceeding; or (2) the charge specified in subsection (i), (ii), or (ill) below, as applicable; (i) If the operator's per channel charge for regulated programminAt seIVices and equipment in effect on the date of initial regulation is equal to or below the benchmark per channel charge, as adjusted forward for inflation from September 30, 1992 to the date of initial regulation, then the permitted per channel charge shall be the per cbannel charge in effect on the date of initial regulation adjusted for equipment. (ii) If (1) the operator's per channel charge for regulated programming seIVices and equipment in effect on the date of initial regulation is above the benchmark per channel charge, as adjusted forward for inflation from September 30, 1992 to the date of initial regulation. and (2) the operator's per channel charge for regulated programming services and equipment in effect on September 3D, 1992 was above the benchmark per channel charge, then the permitted per channel charge is nine-tenths of the per channel charge in effect on September 30, 1992. but no lower than the benchmark per channel charge, additionally adjusted for inflatioA from September 30, 1992 to the initial date of regulation. f~ equipment, and for any changes in the number of channels offered on all regulated tiers. (ill) If (1) the operator's per channel charge for regulated programming services and equipment in effect on the date of initial regulation is above the benchmark per channel charge, as adjusted forward for inflation from September 30, 1992 until the initial date of regulation. and (2) the operator's per chawlel charge for regulated programming seIVices and equipment in effect on September 3D, 1992 was below the benchmark per channel charge, As of August, 1993 Page 11 FCC Cable Television Regulations Pursuant to 1992 Act then the permitted per channel charge is the benchmark rate per channel adjusted for inflation from September30. 1992 to the initial date of regulation. for equipment, and for any changes in the number of channels offered on all regulated tiers. (2) For purposes of this section. the initial date of regulation for the basic service tier shall be the date on which local notice is given pursuant to ~ 76.910 of our rules that the provision of the basic service tier is subject to regulation. For a cable programming services tier. the initial date of regulation shall be the first date on which a complaint on the appropriate form is filed with the Commission concerning rates charged for the cable programming services tier. (3) For purposes of this section, rates in effect on the initial date of regulation or on September 30. 1992 shall be the rates charged to subscribers for service received on that date. (c) Subsequent pernlitted per channel cbarge. After the initial date of regulation, the permitted per channel charge for regulated programming services shall be. at the election of the cable operator, either. (1) a per channel rate determined pursuant to a cost-of service showing, or (2) the prior permitted per channel charge previously approved by a regulatory authority. adjusted for inflation and external costs in accordance with the price cap requirements set forth in subsection (d) below. (d) Price cap requirements. (1) InDation adjustments. Permitted per channel charges for regulated programming services may be adjusted periodically on account of inflation. Adjustments to permitted per channel charges on account of inflation shall be based on changes in the Gross National Product Price Index published by the Bureau of Economic Analysis of the United States Department of Commerce. (2) External costs. Permitted per channel charges for regulated programming services may also be adjusted for changes in external costs measured on a per channel per subscriber basis. To the extent external cost increases are greater or less than the GNPPI for the relevant period the per-channel charge will be adjusted accordingly. Per channel charges may not be increased if external costs increase at a rate less than inflation. Permitted per channel charges also shall be decreased on account of external costs to the extent such costs decrease from previous levels. Page 12 .. ._..................~~__............._ohw,1 ~~.__ FCC Cable Television Regulations Pursuant to 1992 Act (I) Categories. External Costs shall consist of costs in the following categories: (1) state and local taxes applicable to provision of cable television service; (2) franchise fees; (3) costs of complying with franchise requirements, including costs of providing public, educational. and governmental access channels as required by the franchising authority; (4) retransmission consent fees; and (5) programming costs. (ii) The permitted per channel charge for a tier of regulated programming seIVices shall be adjusted on account of programming costs and retransmission consent fees only for programming or broadcast signals offered on that tier. (ill) The permitted per channel charge shall not be adjusted for cosfj of retransmission consent fees or changes in those fees incurred prior to October 6. 1994. (iv) The starting date for adjustments on account of external costs for a tier of regulated programming service shall be the initial date of regulation of the tier or 180 days from the effective date of these rules, if the initial date of regulation occurs on or after 180 days from the effective date of these rules. (v) Changes in franchise fees shall not result in an adjustment to permitted per channel charges. but rather shall be calculated separately as part of the maximum monthly charge per subscriber for a tier of regulated programming service. (vi) Adjustments to permitted per channel charges on account of increases in costs of programming obtained from affilia. programmers, as defined in ~ 76.901 of the rules shall be the les of actual increases or the previous permitted rate level increased by the amount of inflation. (vii) Adjustments to permitted per channel charges on account of increases in costs of programming shall be further adjusted to reflect any revenues received by the operator from the programmer. '-"1' I 1 \ l I \ 1 As or August,1993 Page 13 FCC Cable Television Regulations Pursuant to 1992 Act ~76.923 Rates for equipment and installation used to receive the basic service tier. (a) Scope. Thc equipment regulated under this section consists of all equipment in a subscriber's home that is used to receive the basic setvice tier, regardless of whether such equipment is additionally used to receive othertiers of regulated programming setvice and/or unregulated setvice. Such equipment shall include, but is not limited to: (1) converter boxes: (2) remote control units: (3) connections for additional television receivers; and (4) other cable home wiring. Subscriber charges for such equipment shall not exceed charges based on actual costs in accordance with the requirements set forth below. ~ (b) Unbundling. A cable operator shall establish rates for remote control units, converter boxes, other customer equipment, installation, and additional connections separate from rates for basic tier setvice. In addition, the rates for such equipment and installations shall be unbundled one from the other. (c) Equipment basket. A cable operator shall establish an Equipment Basket, which will include all costs associated with providing customer equipment and installation under this section. (1) Equipment Basket costs shall be limited to the direct and indirect material and labor costs of providing, leasing, installing, repairing, and seIVicing customer equipment, as determined, in accordance with the cost accounting and cost allocation requirements of ~ 76.924. The Equipment Basket shall not include general administrative overhead including general marketing expenses. Tbe Equipment Basket shall include a reasonable profit. (d) Hourly service charge. A cable operator shall establish charges for equipment and installation using the Hourly Setvice Charge (HSC) methodology. The HSC shall equal the operator's annual Equipment Basket costs, excluding the purchase cost of customer equipment, divided by the total person hours involved in installing, repairing, and servicing customer equipment during the same period. The HSC is calculated according to the following formula: Page 14 ". .......toit-owf'tT.~II^""J.:.... ...~_~' ...~ FCC Cable Television Regulations Pursuant to 1992 Ad EB - CE HSC= H Where, EB = annual Equipment Basket Costs: CE = annual purchase cost of all customer equipment; and H = person hours involved in installing and repairing equipment per year. The purchase cost of customer equipment shall include the cable operator's invoice price plus all other costs incuITed with respect to the equipment until the time it is provided to the customer. (e) Installation charges. Installation charges shall be either: (i) The HSC multiplied by the actual time spent on each individual installation: or e (ii) TIle HSC multiplied by the average time spent on a specific type of installation. (0 Remote charges. Monthly charges for rental of a remote control unit shall consist of the average annual unit purchase cost of the type of remote leased, including acquisition price and incidental costs such as sales tax, financing and storage up to the time it is provided to the customer, added to the product of the HSC times the average number of hours annually repairing or setvicing a remote, divided by 12 to determine the monthly lease rate for a remote according to the following formula: UCE + (HSC X HR) Monthly Charge = ----------- 12 Where, HR = average hours repair per year; and UCE = average'3nnual unit cost of remote. Separate charges shall be established for each significantly different type of remote control unit. e (g) Other equipment charges. The monthly charges for rental of converter boxes and other-customer equipment shall be calculated in the same manner as for remote control units. Sepaqtte charges shall be established for each significantly different type of converter box and each significantly different type of other customer equipment. (h) Additlonal connection charges. The costs of installation and monthly use of additional connections shall be recovered as charges associated with the installation and equipment cost categories, and at rate levels determined by .' .i;':' As of August, 1993 Page 15 f .*~ i':" ,JJ!:, :,jfft. :,i' FCC Cable Television Regulations Pursuant to 1992 Act the actual cost methodology presented in the foregoing subsections (e), (f), and (g) . An operator may recover additional programming costs and the costs of signal boosters on the customers premises, if any, associated with the additional connection as a separate monthly unbundled charge for additional connections. (i) Charges for equipment sold. A cable operator may sell customer premises equipment to a subscriber. The equipment price shall recover the operator's cost of the equipment, including costs associated with storing and preparing the equipment for sale up to the time it is sold to the customer plus a reasonable profit. An operator may sell service contracts for the maintenance and repair of equipment sold to subscribers. The charge for a setvice contract shall be the HSC times the estimated average number of hours for maintenance and repair over the life of the equipment. (j) Promotions. A cable operator may offer equipment or installation at charges below those determined under subsections (e) - (g), above, as long as -those offerings are reasonable in scope in relation to the operator's overall offerings in the Equipment Basket and not unreasonably discriminatory. Operators may not recover the cost of a promotional offering by increasing charges for other Equipment Basket elements, or by increasing programming seIVice rates above the maximum monthly charge per subscriber prescribed by these rules, As part of a general cost-of-setvice showing, an operator may include the cost of promotions in its general system overhead costs. (k) Franchise fees. Equipment charges may include a properly allocated portion of franchise fees. ~76.924 Cost accounting and cost allocation requirements. (a) Applicability. The requirements of this section are applicable to c,a~le operators for which the basic service tier is regulated by local franchis~g authorities or the Commission, or, with respect to a cable programIIllIlg services tier, for which a complaint has been filed with the Commis~ion. The requirements of this section are applicable for purposes of rate adjustments on account of external costs and for cost-of-service showings, (b) Generally accepted accounting principles. Cable operators ~hall ~ai~tain their accounts in accordance with generaUy accepted accountmg pnnclples, except as otherwise directed by the Commission. Page 16 FCC Cable Television Regulations Pursuant to 1992 Act (c) Accounts required. Cable operators shall maintain accounts in a manner that will enable identification of appropriate costs and application of the Commission's cost assignment and allocation procedures, to cost categories necessary for rate adjustments due to changes in external costs and for cost-of- service showings. Such categories shall be sufficiently detaUed and supported to permit verification and audit against the company's accounting records. (d) Accounting level. Except to the extent indicated below, cable operators shall aggregate expenses and revenues at, either the franchise, system, regional, or company level in a manner consistent with practices of the .oper~tor as of April 31'1992. However, in aU events cable operators shaUldentify at the franchise level their costs of franchise requirements, franchise fees, local taxes, and local programming, e (e) Cost allocation requirements. (1) For purposes of establishing expenses at the franchise level, cable operators shall allocate expenses and revenues aggregated at higher levels to the franchise level based on the ratio of the total number of subscribers served at the franchise level to the total number of subscribers served at the higher level. (2) Except to the extent indicated below, aU categories of costs allocate,d to, or identified at, the franchise level shall be allocated to the baSIC setvice tier based on the ratio of channels in the basic tier to the total number of channels offered in the franchise area, including nonregulated and leased commercial access channels. These costs shall be aUocated to each tier of cable programming services based on the ratio of channels in that tier to the total number of channels offered in the franchise area. (3) Costs of programming and retransmission consent fees, however, shall be allocated only to the tier on which the programming or broadcast signal at issue is offered. (4) Costs of franchise fees shall be allocated among equipment an,d installations, program service tiers and subscribers in a ma~er that 18 most consistent with the methodology of assessment of franchise fees by local authorities. :.: ,I :1 (5) Costs of public, educational, and go~ernmental acc,:ss .channels carried on the basic tier shaU be directly aSSigned to the baSIC her where possible. As of August. 1993 Page 17 FCC Cable Television Regulations Pursuant to 1992 Act (f) Common costs. Expenses which cannot be assigned to any single expense or setvice category shall be described as common costs. Common costs shall be allocated to expense categories as follows: (I) Wherever possible, common costs are to be allocated to service cost categories based on direct analysis of the origin of the costs themselves. (2) When direct analysis is not possible, common costs shall, if possible, be allocated to setvice cost categories based on an indirect. cost-causative linkage to other costs directly assigned or allocated to the setvice cost category. (3) When neither direct nor indirect measures of cost allocation can be found, common costs shall be allocated to each setvice cost categoJ)' based on the ratio of aU costs directly assigned and anributed to a service cost category over total costs directly assignable and attributable. (g) Unrelated expenses and revenues. Cable operators shall exclude from cost categories used to, develop rates for the provision of regulated cable service, equipment, and leased commercial access, any direct or indirect expenses and revenues not related to the provision of such services. Common costs of providing regulated cable service, equipment. and leased commercial access and unrelated activities shall be allocated between them in accordance with subsection (t). (h) Part-time channels. In situations where a single channel is divided on a part-time basis and is used to deliver service associated with different tiers or with pay per channel or pay per view service, a reasonable and documented allocation of that channel between services shall be required along with the associated revenues and costs. fi76.925 Costs of francWse requirements. (a) The costs of satisfying franchise requirements to support public, educational, and governmental channels shall consist of the sum of: (1) all per channel costs for the number of channels used to meet franchise requirements for public, educational, and governmental channels; (2) any direct costs of meeting such franchise requirements; and (3) a reasonable allocation of general and administrative overhead. Page 18 ''-' i.J. .,._" FCC Cable Television Regulations Pursuant to 1992 Act (b) The costs of satisfying any other requirement under the franchise shall consist of the direct and indirect costs including a reasonable allocation of general and administrative overhead. ~76.930 Initiation or review of basic cable service and equipment rates. (a) A cable operator shall file its schedule of rates for the basic service tier and associated equipment with a franchising authority within 30 days of receiving written notification from the franchising authority that the franchising authority has been certified by the Commission to regulate rates for the basic setvice tier. ~76.931 Notification of basic tier availability. e A cable operator shall provide written notification to subscribers of the availability of basic tier service by September 19, 1993, or three billing cycles from June 21, 1993, and to new subscribers at the time of installation. This notification shall include the following infonnation: (1) That basic tier service is available; (2) The cost per month for basic tier service; , ',' (3) A list of all seIVices included in the basic setvice tier. 1 ! I fi76.932 NotLfication of proposed rate Increase. A cable operator shall provide written notice to a subscriber of any increase in the price to be charged for the basic seIVice tier or associated equipment at least 30 days before any proposed increase is effective. The notice should include the name and address of the local franchising authority. i e ~76.933 Franchising authority review of basic cable rates and equipment costs. (a) After a cable operator has submitted for review its existing rates for the basic service tier and associated equipment costs or a proposed increase in these rates (including increases in the baseline channel change that results from reductions in the number of channels in a tier), the existing rates will remain in effect or the proposed rates will become effective after 30 days from As of Augusl,1993 Page 19 FCC Cable Television Regulations Pursuant to U92 Ad the date of submission; provided, however, that the franchising authority may toU this 30-day deadline for an additional time by issuing a brief written order as described in paragraph (b) within 30 days of the rate submission explaining that it needs additional time to review the rates. (b) If the franchising authority is unable to determine, based upon the material submitted by the cable operator, that the existing or proposed rates are within the Commission's permitted basic service tier charge or actual cost of equipment as defined in U 76.922 and 76.923, or if a cable operator has submitted a cost-of-service showing pursuant to ~~ 76.937(c) and 76.924, seeking to justify a rate above the Commission's basic selVice tier charge as defined in ~~ 76.922 and 76.923, the franchising authority may toll the 30-day deadline in paragraph (a) of this section to request and/or consider additional information or to consider the comments from interested parties as foUows: (1) For an additional 90 days in cases not involving cost-of service showings; or (2) For an additional 150 days in cases involving cost-()f-service showings. (c) If a franchising authority has availed itself of the additiona190 or 150 days permitted in paragraph (b) of this section. and has taken no action within these additional time periods, then the proposed rates will go into effect at the end of the 90 or 150 day periods, or existing rates will remain in effect at such times subject to refunds if the franchising authority subsequently issues a written decision disapproving any portion of such rates,provided, however, that in order to order refunds, a franchising authority must have issued a brief written order to the cable operator by the end of the 90 or 150-day period permitted in paragraph (b) of this section directing the operator to keep an accurate account of aU amounts received by reason of the rate in issue and on whose behalf such amounts were paid. ~76.934 Small systems. A franchising authority that has been certified. pursuant to ~ 76.910 to regulate rates for basic service and associated equipment may permit a smaU system as derwed in section 76.901 to certify that the smaU system's rates for basic service and associated equipment comply with ~ 76.922, the Commission's substantive rate regulations. Page 20 "'.. '. - ~ FCC Cable Television Regulations Pursuant to 1992 Act ~76.935 Participation of Interested parties. In order to regulate basic tier rates or associated equipment costs, a franchising authority must have procedural laws or regulations applicable to rate regulation proceedings that provide a reasonable opportunity for consideration of the views of interested parties. Such roles must take into account the 30. 120. or lSD-day time periods that franchising authorities have to review rates under ~ 76.933. ~76.936 Written decision. (a) A franchising authority must issue a written decision in a ratemaking procceding whenever it disapproves an initial rate for the basic service tier or associated equipment in whole or in part, disapproves a request for a rate increase in whole or in part, or approves a request for an increase in whole or in part over the objections of interested parties. A franchising authority is not required to issue a written decision that approves an unopposed existing or proposed rate for the basic service tier or associated equipment. e (b) Public notice must be given of any written decision required in paragraph (a). including releasing the text of any written decision to the public. ~76.937 Burden of proor. (a) A cable operator has the burden of proving that its existing or proposed rates for basic selVice and associated equipment comply with 47 U.S.c. ~ 543, and U 76.922 and 76.923. (b) For an existing or a proposed rate for basic tier service or associated equipment that is within the permitted tier charge and actual cost of equipment as set forth in ~~ 76.922 and 76.923, the cable operator must submit the appropriate FCC form. e (c) For an existing or a proposed rate for basic tier seIVice that exceeds the permitted tier charge as set forth in U 76.922 and 76.923. the cable operator must submit a cost-of.service showing to justify the proposed rate. As of August, 1993 Page 21 FCC Cable Television Regulations Pursuant to 1992 Act i76.938 Proprietary information. A franchising authority may require the production of proprietary information to make a rate determination and in such cases must apply procedures analogous to those set forth in ~ 0.459 regarding requests for confidentiality. ~76.940 Prospective rate reduction. A franchising authority may order a cable operator to implement a reduction in basic service tier or associated equipment rates where necessary to bring rates into compliance with the standards set forth in ~~ 76.922 and 76.923. ~76.941 Rate prescription. A franchising authority may prescribe a reasonable rate for the basic service tier or associated equipment after it determines that a proposed rate is unreasonable. ~76.942 Refunds. (a) A franchising authority may order a cableoperatorto refund to subscribers that portion of previously paid rates determined to be in excess of the permitted tier charge or above the actual cost of equipment, unless the operator has submitted a cost-of.service showing which justifies the rate charged as reasonable. Before ordering a cable operator to refund previously paid rates to subscribers, a franchising authority must give the operator notice and opportunity to comment. (b) An operator's liability for refunds is limited to a one-year period. except that an operator that fails to comply with a valid rate order issued by a franchising authority or the Commission shall be liable for refunds commencing from the effective date of such order until such time as it complies with such order. (c) The refund period shall ron as follows: (1) from the date the operator implements a prospective rate reduction back in time to June 21, 1993, or one year, whichever is shorter. Page 22 _;,,':';.,_ . ...J.Ol. ..............':\<.~_ ....y~~. ~ FCC Cable Television Regulations Pursuant to 1992 Act (2) From the date a franchising authority issues an accounting order pursuant to ~ 76.933(c), and ending on the date the operator implements a prospective rate reduction ordered by a franchising authority or one year, whichever is shorter. (d) The cable operator. in its discretion, may implement a refund in the following wanner: (1) By rettuning overcharges to those subscribers who actually paid the overcharges. either through direct payment or as a specifically identified credit to those subscribers' bills; or (2) By means of a prospective percentage reduction in the rates for the basic seIVice tier or associated equipment to cover the cumulative overcharge. This shall be reflected as a specifically identified, one-time credit on prospective bills to the class of subscribers that currently subscribe to the cable system. e (e) Refunds shall include interest computed at applicable rates published by the Internal Revenue Service for tax refunds and additional tax payments. ~76.943 Fines. (a) A franchising authority may impose fines or monetary forfeitures on a cable operator that does not comply with a rate decision or refund order directed specifically at the cable operator, provided the franchising authority has such power under state or local laws. (b) A cable operator shall not be subject to forfeiture because its rate for basic service or equipment is determined to be unreasonable. e ~76.944 Commission review or franchising authority decisions on rates ror the ~asic service tier and associated equipment. (a) The Commission shall be the sole forum for appeals of decisions by franchising authorities on rates for the basic service tier or associated equipment involving whether or not a franchising authority has acted consistently with the Cable Act or ~~ 76.922 and 76.923. Appeals of ratemaking decisions by franchising authorities that do not dcpend upon determining whcther a franchising authority has acted consistently with the Cable Act or ~~ 76.922 and 76.923, may be heard in state or local courts. As of August, 1993 Page 23 FCC Cable Television Regulations Pursuant to 1991 Act (b) Ally participant at the franchising authority level in a ratemaking proceeding may file an appeal of the franchising authority's decision with the Commission within 30 days of release of the text of the franchising authority's decision as computed under ~ 1.4(b) of this chapter. Oppositions may be filed within 15 days after the appeal is filed. and must be served on the party(ies) appealing the rate decision. Replies may be filed 7 days after the last day for oppositions and shall be served on the parties to the proceeding. ~76.94S Procedures Cor Commission on review oC basic service rate. (a) Upon assumption of rate regulation authority, the Commission will notify the cable operator and require the cable operator to file its basic rate schedule with the Commission within 30 days, with a copy to the local franchising authority. '(b) Basic seIVice and equipment rate schedule filings for existing rates or proposed rate increases (including increases in the baseline channel change that results from reductions in the number of channels in a tier) must use the appropriate FCC forms. Cable operators with existing or proposed rates above the permitted tier rate must submit a cost-of-service showing sufficient to support a fInding that the rates are reasonable. (c) Filings proposing annual adjustments or rates within the rate regulation standards in fifi 76.922 and 76.923, must be made 30 days prior to the proposed effective date and can become effective on the proposed effective date uuless the Commission issues an order defening the effective date or denying the rate proposal. Petitions opposing such filings must be rued within 15 days of public notice of the filing by the cable operator and be accompanied by a certificate that service was, made on the cable operato~ ~nd the local franchising authority. The cable operator may flIe an opposttion within five days of filing of the petition, certifying to service on both the petitioner and the local franchising authority. (d) Filings proposing a rate not within the rate regulation standards of fi~ 76.922 and 76.923, must be made 90 days before the requested effective date. Petitions opposing such filings must be filed within 30 days of public notice of the filing, and be accompanied by a certificate that service was made on the cable operator and the local franchising authority. The cable operator may file an opposition within 10 days of the filing of the petition, and cert~g that service was made on the petitioner and the local franchising authonty. Page 24 .,' ..._..... t.. ,. FCC Cable Television Regulations Pursuant to 1992 Act ~76.9S0 Complaints regarding cable programming service rates. Ally subscriber, franchising authority, or other relevant state or local government entity may ftle with the Commission a complaint challenging the reasonableness,ofa cable operator's rate for cable programming seIVice, or the reasonableness of a cable operator's charges for installation or rental of equipment used for the receipt of cable programming service. ~76.9S1 Standard complaint Corm; other filing requirements. (a) Any complaint regarding a cable operator's rate for cable programming service or associated equipment must be filed using standard complaint form, FCC 329. The cable operator must provide a copy of the standard complaint form to any subscriber upon request. (b) The following information must be provided ou the standard complaint form: e (1) The complainant's name, mailing address, and daytime telephone number; (2) The name, mailing address, and FCC community unit identifier of the relevant cable operator (Note: Pursuant to ~ 76.952, the cable operator must provide its FCC community unit identifier on monthly bills to subscribers); (3) The name and address of the relevant franchising authority (Note: pursuant to ~ 76.952, the cable operator must provide this information on monthly bills to subscribers); (4) An indication whether the complainaut is challenging the reasonableness of: e (i) A rate concerning cable programming service or associated equipment in effect on June 21, 1993; or (il) A rate increase for cable programming service or associated equipment; (5) For subscriber complaints regarding a rate increase, the date the complainant first received a bill from the cable operator reflecting the increased rate; As of August, 1993 Page 25 FCC Cable Television Regulations Pursuant to 1992 Ad (6) A description of the cable programming service or associated equipment involved and, if applicable, how the service or associated equipment has changed; (7) The current rate for the cable programming service or associated equipment at issue and, if the complainant is challenging the reasonableness of a rate increase, the most recent rate for the service or associated equipment immediately prior to the rate increase; (8) An indication whether the complainant is filing: (i) a complaint regarding this specific rate for the first time: or (il) a corrected complaint regarding this specifie rate to cure a defect in a prior complaint that was dismissed without prejudice: (9) If the complainant is filing a corrected complaint, an indication of the date the complainant flled the' prior complaint and the date the complainant received notification from the Commission tbat tbe prior complaint was defective; (10) A certification that a copy of the complaint, including all attachments, is being served contemporaneously via first class mail on the cable operator and, if the complainant is a subscriber, on the relevant franchising authority; (11) An allegation that the rate in question is unreasonable because it violates the Commission's rate regulations; and (12) A certification that, to the best of the complainant's knowledge, the information provided on the form is true and correct. (c) The complainant must attach to the standard complaint form a copy of the most recent bill reflecting the disputed rate or rate increase. (d) A complaining subscriber may, but is not required to, attach to the standard complaint form a statement front the relevant franchising authority presenting its views on the reasonableness of the rate in question. Page 26 FCC Cable Television Regulations Pursuant to 1992 Act fi76.952 Information to be provided by cable operator on monthly subscriber bills. All cable operators must provide the following information to subscribers on monthly bills: (a) The name and mailing address of the relevant franchising authority: and (b) The FCC community unit identifier for the cable system. fi76.953 Limitation on filing a complaint. (a) Complaint regarding a rate in effed on June 21, 1993. Notwithstanding paragraph (b) of this section. a complaint regarding a rate for cable programming service or associated equipment in effect on June 21, 1993 must be filed by December20, 1993. (b) Complaint recording a rate increase. Except as provided in paragraph (a) of this section, a complaint alleging an unreasonable rate for cable programming seIVice or associated equipment may be filed against a cable operator only in the event of a rate increase. A complaint regarding a rate increase for cable programming seIVice or associated equipment must be filed with the Commission within 45 days from the date the complainant receives a bill from the cable operator that reflects the increased rate. (c) Late-rued complaints will be dismissed with prejudice. fi76.954 Initial review of complaint; minimum showing requirement; dismissal of defective complaints. ( a) The Commission will conduct an initial review of a complaint to determine if it meets the minimum showing required to allow the complaint to go fOlWard. The minimum showing shall be satisfied if the complaint is flled using the standard complaint form described in f 76.951 and includes all information and attachments required by tbat form. A complainant will not be required, as part of tbe minimum Showing. to provide tbe underlying infonnation and calculations necessary to judge the cable programming service rate in question against the Commission's rate standards. (b) A complaint that does not meet tbe minimum showing requirement described in paragrapb (a) of this section will be considered defective. A As of August, 1993 Page 27 e ': I :: I 1'1' : I ': i I: i I :11'li , I "I' Iii ;11\ . ~ I FCC Cable Television Regulations Pursuant to 1992 Act defective complaint will be dismissed without prejudice to filing a corrected . complaint as provided by A 76.955. The Commission will notify the complainant by mail of the dismissal. The filing of a complaint on the applicable fonn, but which is otheIWise defective, will toll the limitation period established by ~ 76.953. A76.955 Additional opportunity to me corrected complaint. (a) If the Commission dismisses an initial complaint without prejudice pursuant to ~ 76.954, the complainant shall have one additional opportunity to cure the defect and me a corrected complaint. (b) For a complaint filed on the applicable form but is otheIWise defective, the complainant must cure the defect and file a corrected complaint with the Commission within 30 days from the date of the Commission's dismissal notice. Failure to cure the defect and file a corrected complaint within this time period will result in dismissal of the complaint with prejudice. i76.956 Cable operator response. (a) Unless the Commission notifies a cable operator to the contrary, the cable operator must file with the Commission a response to a complaint filed on the applicable fonn within 30 days of the date of seIVice of the complaint. The response shall indicate when service occurred. Service by mail is complete upon mailing. See ~ 1.47 (t). The response shall include the information required by the appropriate FCC form. The cable operator must serve its response on the complainant (and, if the complainant is a subscriber, the relevant franchising authority) via first class mail. (b) The burden shall be on the cable operator to prove that the service rate or equipment charge in question is not unreasonable. The cable operator may carry its burden in the following manner: (1) For a service rate at or below the permitted level, by providing information and calculations that demonstrate that the rate in question falls at or below the permitted level; (2) For a service rate that exceeds the permitted level; Page 28 FCC Cable Television Regulations Pursuant to 1992 Act (i) By providing proof that the cable system has reduced the rate for the cable programming service at issue to a level at or below the permitted level; or (ii) By providing detailed cost.based information that demonstrates that the rate in question is reasonable despite the fact that it exceeds the permitted level. (3) For a charge for equipment installation or rental. by providing information that demonstrates that the charge is bascd on the cable operator's actual cost. (c) In addition to responding to the merits of a complaint, the cable operator may also move for dismissal of the complaint for failure to meet the minimum showing requirement. AJ1y such motion for dismissal must state with particularity the reasons the cable operator believes the complaint is defective and shall not relieve the cable operator of its obligation to respond to the merits of the complaint. (d) A cable operator may file a consolidated response to multiple complaints regarding the identical rate or rate increase. A consolidated response must be med within 30 days from the date of service of the first complaint received, unless the Commission notifies the cable operator to the contrary. A cable operator may amend a consolidated response to address new issues raised by complaints received after the cable operator's initial response. (e) A cable operator that fails to me and selVe a response to a valid complaint may be deemed in default. If the Commission deems a cable operator in default, the Commission may enter an order against the cable operator finding the rate to be umeasonable and mandating appropriate relief. (f) A cable operator need not respond to any complaint that is: (I) Not f1!ed on the applicable form; or (2) That the Commission has determined is defective and has so notified the cable operator. As of August, 1993 Page 29 e i I i I i :1 ,I I"~ e: , , "1 i :1 : " i,1 I, FCC Cable Television Regulations Pursuant to 1991 Ad ~76.9S7 Commission adjudication or the complaint. The Commission will consider the complaint and the cable operator's response and then determine by written decision whether the rate for the cable programming setvice or associated equipment is unreasonable or not. If it determines that the rate in question is unreasonable, the Commission will grant the complaint and may order appropriate relief, including, but not limited to, prospective rate reductions and refunds. If it determines that the rate in question is reasonable, the Commission will deny the complaint. ~76.960 Prospective rate reductions. Upon a rmding that a rate for cable programming seIVice or associated equipment is unreasonable, the Commission may order the cable operator to implement a prospective rate reduction to the class of customers subscribing , to the cable programming seIVice at issue. The Commission's decision regarding a prospective rate reduction shall remain binding on the cable operator for one year unless the Commission specifies otherwise. ~76.961 Refunds. (a) Upon a finding that a rate for cable programming setvice or associated equipment is unreasonable, the Commission may order the cable operator to refund to subscribers that portion of previously paid rates which is deemed unreasonable. (b) The cumulative refund due subscribers shall be calculated from the date a valid complaint is filed until the date a cable operator implements a prospective rate reduction as ordered by the Commission pursuant to A 76.960. (c) The cable operator, in its discretion, may implement a refund in the following manner: (i) By returning overcharges to those subscribers who ~ctuallf pai~ the overcharges, either through direct payment or as a specifically ldentified, one-time credit to those subscribers' bills; or (ii) By means of a prospective percentage reduction in the unreasonable cable programming service rate or equipment charge to cover the cumulative overcharge. This shall be reflected as a specifically identified, . Page 30 ..".._......_.........~.~... , ...-, FCC Cable Television Regulations Pursuant to 1992 Act one-time credit on prospective bills to the class of subscribers that currently subscnbe to the cable programming seIVice or associated equipment at issue. (d) Refunds shall include interest computed at applicable rates published by the Internal Revenue SeIVice for tax refunds and additional tax payments. Interest shall accrue from the date a valid complaint is filed until the refund issues. ~76.962 Implementation and certification of compliance. (a) Implementation. A cable operator must implement remedial requirements, including prospective rate reductions and refunds, within 60 days from the date the Commission releases an order mandating a remedy. e (b) Certification of compliance. A cable operator must certify to the Commission its compliance with any Commission order mandating remedial requirements. Such certification shall: (1) Be filed with the Commission within 90 days from the date the Commission releases an order mandating a remedy: (2) Reference the applicable Commission order; (3) State that the cable operator has complied fully with all provisions of the Commission's order, (4) Include a description of the precise measures the cable operator has taken to implement the remedies ordered by the Commission; and e (5) Be signed by an authorized representative of the cable operator. ~76.963 Forfeiture. (a) If any cable operator willfully fails to comply with the terms of any Commission order, including an order mandating remedial requirements after a rmding of unreasonable cable programming service or equipment rates, or any Commission rule, the Commission may, in addition to other remedies, impose a forfeiture pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. ~ 503(b). As of August, 1993 Page 31 i,.... FCC Cable Television Regulations Pursuant to 1992 Act (b) A cable operator shall not be subject to forfeiture because its rate for cable programming service or equipment is determined to be unreasonable. ~76.964 Advance written notification of rate Increases. In addition to the requirementof Section 76.309(c)(3)(i)(B) regarding advance notification to customers of any changes in rates, programming services or channel positions, a cable operator shall give the relevant franchising authority a minimum of 30 days advance written notification of any changes in rates for cable programming selVice or associated equipment. ~76.970 Commercial leased access rates. (a) Cable operators shaU designate ch.annel capacity ~or commer~ial use by .. persons unaffiliated with the operator m accordance Wlth the requtrement of 47 U.S.C. ~ 532. (b) The maximum cODlIDercialleased access rates that a c~ble operator may charge is the highest implicit net fee charged any nonaffiliated programmer (excluding leased access programmers) within the same program category. (c) The implicit fee charged an unaffiliated programmer shaU be calculated by determining the monthly price per subscriber that the ~perator pays to ca?y the programming of nonaffiliated providers and deductm~ the mon.thlY pn~ subscribers pay to view tbe programming of tbe nonaffiliated provtder. This difference is multiplied by the percentage of subscribers able to receive t~e nonaffiliated provider's programming. The implicit fee for a contracted se~ce may not include fees, stated or implied, for seIVices other than t~e pro~lon of channel capacity (e.g., billing and collection, marketing, or studio semces). (d) For each of the three program categories as defmed in ?aragrap~ (f) ~f this section, the highest implicit net fee charged any nonaffiliated proVlde.r III each category shall be the maximum monthly leased access rate per sub~nber tbat tbe operator could cbarge a commercial leased access program~er ID th?t category. The highest implicit net fee shall be based on contract~ ID effect ID the previous calendar year. Maximum rates for shorter penods can be calculated by prorating the monthly maximum rate. (e) Upon request, a schedule of commerciallcased access rates sh~" ~ provided to prospective leased access programmers. Operato~ shall.ma~tam, for Commission inspection, sufficient supporting documentatIOn to Justify the Page 32 FCC Cable Television Regulations Pursuant to 1992 Act scheduled rates, including supporting contracts, calculations of the net implicit fees, and justifications for all adjustments. (f) For purposes of paragraph (b) of this section there are three program categories: (1) Programming for which a per-event or per channel charge is made; (2) Programming more than fifty percent of the capacity of which is used to sell products directly to customers; and (3) All other programming. e ~76.971 Commercial leased access terms and conditions. (a) (1) The cable operator and unaffiliated commercial leased access user may negotiate channel placement and tier access for Jeased programming, taking into account: (i) The nature of the service (payor general distribution channel, complete channel or individual program); (ii) The relationship between the charge imposed and the desirability of the channel; and (ill) The need to provide competition in program delivery and to afford users a genuine outlet for their programming. (2) Where demand for commercial leased access capacity exceeds available supply, each lessee will be allowed to lease up to one channel's capacity. e (b) Cable operators may not apply programming production standards to leased access that are any higher than those applied to public, educational and governmental access channels. (c) Cable operators are required to provide unafftliated leased access users the minimal level of technical support necessary for users to present their material on the air, and may not umeasonably refuse to cooperate with a leased access user in order to prevent that provider from obtaining channel capacity, provided however, that leased access providers must reimburse operators for the reasonable cost of any technical support that operators actually provide. As of August, 1993 Page 33 FCC Cable Television Regulations Pursuant to 1992 Act (d) Cable operators may require reasonable security deposits or other assurances from users who are unable to prepay in full for access to leased commercial channels. (e) Cable operators may not set terms and conditions for commercialleascd access use based on content, except: (1) To the limited extent necessary to establish a reasonable price for the commercial use of designated channel capacity by an unaffiliated person; or (2) To comply with 47 U.S.C. fi 532(h), (i) and fi 76.701. (f) (1) A cable operator shall provide billing and collection seIVices for commercial leased access cable users, unless the operator demonstrates the existence of third party billing and collection services which in terms of cost and accessibility, offer leased access users an alternative substantially equivalent to that offered comparable non-leased programmers. (2) If an operator can make the showing required in paragraph (1)(1) of this section, it must, to the extent technically feasible, make available data necessary to enable a third party to bill and collect for the leased access user. fi76.975 Commercial leased access dispute resolution. (a) Any person aggrieved by the failure or refusal of a cable operator to make commercial channel capacity available in accordance with the provisions of Title VI of the Communications Act may bring an action in the district court of the United States for the judicial district in which the cable system is located to compel that such capacity be made available. (b) Any person aggrieved by the failure or refusal of a cable operator to make commercial channel capacity available or to charge rates for such capacity in accordance with the provisions of Title VI of the Communications Act, or our implementing regulations, ~~ 76.970 and 76.971, may file a petition for relief with the Commission. (c) A petition must contain a concise statement of the facts constituting a violation of the statute or the Commission's Rules, the specific statute(s) or rule(s) violated, and certify that the petition was served on the cable operator. Page 34 FCC Cable Television Regulations Pursuant to 1992 Act (d) A petition must be filed within 60 days of the alleged violation. (e) The cable operator or other respondent will have 30 days from the filing of the petition in which to file a response. If a leased access rate is disputed, the response must show that the rate charged is not higher than the highest implicit fee the operator charges for a comparable category of service, and submit the affidavit of a responsible company official in support. If, after a response is submitted, the staff finds a prima facie violation of our rules, the staff may require a respondent to produce additional information, or specify other procedures necessary for resolution of the proceeding. (f) The Commission, after consideration of the pleadings, may grant the relief requested, in whole or in part, including, but not limited to ordering refunds, injunctive measures, or fodeitures pursuant 47 V.S.C. ~ 503, denying the petition, or issuing a ruling on the petition or dispute. e (g) To be afforded relief, the petitioner must show by clear and convincing evidence that the cable operator has violated the Commission's leased access provisions in 47 U.S.C. ~ 532 or fi~ 76.970 and 76.971, or otherwise acted unreasonably or in bad faith in failing or refusing to make capacity available or to charge lawful rates for such capacity to an unaffiliated leased access programmer. (h) During the pendency of a dispute, a party seeking to lease channel capacity for commercial purposes, shall comply with the rates, tenns and conditions prescribed by the cable operator, subject to refund or other appropriate remedy. 676.977 Minority and educational programming used in lieu or deregulated commercial leased access capacity. e (a) A cable operator required by this section to designate channel capacity for commercial use pursuant to 47 D.S.C. 6 532, may use any such channel capacity for the provision of programming from a qualified minority programming source or from any qualified educational programming source, whether or not such source is affiliated with cable operator. The channel capacity used to provide programming from a qualified minority programming source or from any qualified educational programming source pursuant to this Section may not exceed 33 percent of the channel capacity designated pursuant to 47 D.S.C. ~ 532. As of August, 1993 Page 35 I I,' FCC Cable Television Regulations Pursuant to 1992 Ad (b) For purposes of this section, a qualified minority programming source is a programming source that devotes substantially all of its programming to coverage of minority viewpoints, or to programming directed at members of minority groups, and which is over 50 percent minority..owned. (c) For purposes of this section, a qualified educational programming source is a programming source that devotes substantially all of its programming to educational or instructional programming that promotes public understanding of mathematics, the sciences, the humanities, or the arts and has a documented annual expenditure on programming exceeding $15 million. The annual expenditure on programming means all annual costs incurred by the programming source to produce or acquire programs which are scheduled to be televised, and specifically excludes marketing, promotion, satellite transmission and operational costs, and general administrative costs. (d) For purposes of paragraphs (b) and (c) of this section, "substantially all" means that 90% or more of the programming offered, must be devoted to - minority or educational purposes, as defined in paragraphs (b) and (c) of this section respectively. (e) For purposes of subsection (b), "minority" is defined as in 47 D.S.C. 309(i) (3) (c) (ll) to include Blacks, Hispanics, American Indians, Alaska Natives, Asians and Pacific Islanders. ~76.980 Charges ror customer changes. (a) This Section shall govern charges for any changes in service tiers or equipment provided to the subscriber that are initiated at the request of a subscriber after initial service installation. (b) The charge for customefchanges in seIVice tiers effected solely by coded entry on a computer terminal or by other similarly simple methods shall be a nominal anlOunt, not exceeding actual costs, as defined in subsection (c) below. (c) The charge for customer changes in service tiers or equipment that involve more than coded entry on a computer or other similarly simple method shall be based on actual cost. The actual cost charge shall be either the HSC, as defined in Section 76.923 of the rules multiplied by the number of person hours needed to implement the change, or the HSC multiplied by the average number of person hours involved in implementing customer changes. Page 36 FCC Cable Television Regulations Pursuant to 1992 Act (d) A cable operator may establish a higher charge for changes effected solely by coded entry on a computer terminal or by other similarly simple methods, subject to approval by the franchising authority, for a subscriber changing service tiers more than two times in a twelve month period, except for such changes ordered in response to a change in price or channel line-up. If a cable system adopts such an increased charge, the cable system must notify all subscribers in writing that they may be subject to such a charge for changing service tiers more than the specified number of times in any twelve month period. (e) Downgrade charges that are the same as, or lower than, upgrade charges are evidence of the reasonableness of such downgrade charges. (1) For 30 days after notice of retiering or rate increases, a customer may obtain changes in service tiers at no additional charge. e ~76.981 Negative option billing. A cable operator shall not charge a subscriber for any seIVice or equipment that the subscriber has not affirmatively requested by name. This provision, however, shall not preclude the addition or deletion of a specific program from a service offering, the addition or deletion of specific channels from an existing tier of service, or the restructuring or division of existing tiers of service that do not result in a fundamental change in the nature of an existing service or tier of service provided that such change is otherwise consistent with applicable regulations. A subscriber's failure to refuse a cable operator's proposal to provide such service or equipment is not an affirmative request for service or equipment. A subscriber's affirmative request for seIVice or equipment may be made orally or in writing. . ~76.982 Continuation of rate agreements. During the tenn of an agreement executed before July 1, 1990. by a franchising authority and a cable operator providing for the regulation of basic cable service rates where there was not effective competition under Commission rules in effect on that date, the franchising authority may regulate basic cable rates without following Section 623 of the 1992 Cable Act or ~~ 76.910 through 76.942. A franchising authority regulating basic cable rates pursuant to such a rate agreement is not required to file for certification during the remaining term of the agreement but shall notify the Commission of its intent to continue rcgulating basic cable rates. As of August, 1993 Page 37 j ~~~. FCC Cable Television Regulations Pursuant to 1992 Ad ~76.983 Discrimination. (a) No Federal agency, state, or local franchising authority may prohibit a cable operator from offering reasonable discounts to senior citizens or to economically disadvantaged groups. (1) Such discounts must be offered equally to all subscribers in the franchise area who qualify as members of these categories, or any reasonable subcategory thereof. (2) For purposes of this section, members of economically disadvantaged groups are those individuals who receive federal, state or local welfare assistance. (b) Nothing herein shall preclude any Federal agency, state, or local franchising authority from requiring and regulating the reception of cable , service by hearing impaired individuals. ~76.984 Geographically uniform rate structure. (a) The rates charged by cable operators subject to ~~ 76.922 and 76.923 shall be provided pursuant to a rate strucrure that is uniform throughout each franchise area in which cable service is provided. (b) This section does not prohibit the establishment by cable operators of reasonable categories of setvice and customers with separate rates and terms and conditions of seIVice, within a franchise area. fi76.985 Subscriber bill itemization. (a) Cable operators may identify as a separate line item of each regular subscriber bill the following: (1) The amount of the total bill assessed as a fra~c~ fee and the identity of the franchising authority to which the fee lS paid. (2) The amount of the total bill assessed to satisfy any requirements imposed on the cable operator by the franchise agreement to support public, educational, or governmental channels or the use of such channels. Page 38 FCC Cable Television Regulations Pursuant to 1992 Aet (3) The amount of any other fee, tax, assessment, or charge of any kind imposed by any governmental authority on the transaction between the operator and the subscriber. In order for a governmental fee or assessment to be separately identified under this subsection, it must be directly imposed by a governmental body on a transaction between a subscriber and an operator. (b) The charge identified on the subscriber b~ as. the total charge f~r cable service should include all fees and costs ltenuzed pursuant to this Section. (c) Local franchising authorities may adopt regulations consistent with this section. e . I il As of Augusl,1993 Page 39 , :":;;\ FCC Cable Television Regulations Pursuant to 1992 Act Subpart - Consumer Protection and CUstomer Service ~76.309 Customer Service Obllgations (a) A cable franchise authority may enforce the customer service standards set forth in section (c) of this rule against cable operators. The franchise authority must provide affected cable operators ninety (90) days written notice of its intent to enforce the standards. (b) Nothing in this rule should be construed to prevent or prohibit: (1) A franchising authority and a cable operator from agreeing to customer service requirements that exceed the standards set forth in section (c) of this rule; (2) A franchising authority from enforcing, through the end of the franchise term, pre-existing customer service requirements that exceed the standards set forth in section (c) of this rule and are contained in current franchise agreements; (3) Any State or any franchising authority from enacting or enforcing any consumer protection law, to tbe extent not specifically preempted herein; or (4) The establishment or enforcement of any State or municipal law or regulation concerning customer service that imposes customer service requirements that exceed, or address matters not addressed by, the standards set forth in section (c) of this rule. (c) Effective July 1, 1993, a cable operator shall be subject to the following customer seIVice standards: (1) Cable system office hours and telephone availability~ (A) The cable operator will maintain a local, toll-~ee or co~ect call telephone access line which will be available to Its subscnbers 24 hours a day, seven days a week. (i) Trained company representatives will be available to respond to customer telephone inquiries during nonnal business hours. Page 40 FCC Cable Television Regulations Pursuant to 1992 Act (ii) After normal business bours, the access line may be answered by a setvice or an automated response system, including an answering machine. Inquiries received after normal business hours must be responded to by a trained company representative on the next business day. (B) Under normal operating conditions, telephone answer time by a customer representative, including wait time, shall not exceed thirty (30) seconds when the connection is made. If the call needs to be transferred, transfer time shall not exceed thirty (30) seconds. These standards shall be met no less than ninety (90) percent of the time under normal operating conditions, measured on a quarterly basis. e (C) The operator will not be required to acquire equipment or perform sulVeys to measure compliance with the telephone answering standards above unless an historical record of complaints indicates a clear failure to comply. (D) Under normal operating conditions, the customer will receive a busy signal less than three (3) percent of the time. (E) CUstomer service center and bill payment locations will be open at least during normal business hours and will be conveniently located. (2) Installations, outages and service calls- Under normal operating conditions, each of the following four standards will be met not less than ninety five (95) percent of the time measured on a quarterly basis: (A) Standard installations will be performed within seven (7) .. business days after an order has been placed. "Standard"" installations are those that are located up to 125 feet from the existing distribution system. (B) Excluding conditions beyond the control of the operator, the cable operator will begin working on "setvice interruptions" promptly and in no event later than 24 hours after the interruption becomes known. The cable operator must begin actions to correct other service problems that next business day after notification of the service problem. As of August, 1993 Page 41 .. ,._".. ....__~___.......i-......._..~_W'____~ FCC Cable Television Regulations Pursuant to 1992 Act (C) The "appointment window" alternatives for installations, setvice calls, and other installation activities will be either a specific time or, at maximum, a four-hour time block during normal business hours. (The operator may schedule service calls and other installation activities outside of normal business hours for the express convenience of the customer.) (D) An operator may not cancel an appointment with a customer after the close of business on the business day prior to the scheduled appointment. (E) If a cable operator representative is running late for an appointment with a customer and will be able to keep the appointment as scheduled. the customer will be contacted. The appointment will be rescheduled. as necessary, at a time which is convenient for the customer. (3) Communications between cable operators and cable subscribers- (A) Notifications to subscribers- (1) The cable operator shall provide written information on each of the following areas at the time of installation of service, at least annually to all subscribers, and at any time upon request: (i) Products and service offered; (il) Prices and options for programming services and conditions of subscription to programming and other services; (ill) Installation and service maintenance policies; (iv) Instructions on how to use the cable service; (v) Channel positions of programming carried on the system; and, (vi) Billing and complaint procedures, including the address and telephone number of the local franchise authorities cable office. Page 42 . . ~ '.1IU ~, FCC Cable Television Regulations Pursuant to 1992 Act (2) Customers will be notified of any changes in rates, programming services or channel positions as soon as possible through announcements on the cable system and in writing. Notice must be given to subscribers a minimum of thirty (30) days in advance of such changes if the change is within the control of the cable operator. In addition, the cable operator shall notify subscribers thirty (30) days in advance of any significant changes in the other information required by the preceding paragraph. (B) Billing- (i) Bills will be clear, concise and understandable. Bills must be fully itemized. with itemizations including, but not limited to, .. basic and premium service charges and equipment charges. .., Bills will also clearly delineate all activity during the billing period, including optional charges, rebates and credits. (il) In case of a billing dispute, the cable operator must respond to a written complaint from a subscriber within thirty (30) days. (C) Refunds. Refund checks will be issued promptly, but no later than either. (i) The customer's next billing cycle following resolution of the request or thirty (30) days, whichever is earlier, or (ii) The return of the equipment supplied by the cable operator if service is terminated. (D) Credits. Credits for service will be issued no later than the customer's next billing cycle following the determination tbat a credite is warranted. (4) DefInitions. (A) Normal Business Hours. Tbe term "normal business hours" means those hours during which most similar businesses in the community are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and/or some weekend hours. (D) Normal Operating Conditions. The term "normal operating conditions" means those selVice conditions which are within the As of August, 1993 Page 43 "____0 ...___..........~ ~......,..... ,..,. FCC Cable Television Regulations Pursuant to 1992 Act control of the cable operator. Those conditions which are not within the control of the cable operator include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are ordinarily within the control of the cable operatorinclude, but are not limited to, special promotions, pay-per- view events, rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of the cable system. (C) Setvice Interruption. The term "setvice interruption" means the loss of picture or sound on one or more cable channels. Page 44 ..... .... FCC Cable Television Regulations pursUAnt to 1992 Act Subpart L w_ Cable Television Access ~76.701 Leased Access Channels. (a) Notwithstanding 47 V.S.C. i 532 (b) (2) (Communications Act of 1934, as amended, Section 612), a cable operator, in accordance with 47 D.S.C. i 532 (h) (Cable Consumer Protection and Competition Act of 1992, il0 (a)), may adopt and enforce prospectively a written and published policy of prohibiting programming which, it reasonably believes, describes or depicts sexual or excretory activities or organs in a patently offensive manner as measured by contemporary community standards. (b) A cable operator that does not prohibit the distribution of progra~ in accordance with paragraph ( a) shall place any leased access programming identified by program providers as indecent on one or more channels that are available to subscribers only with their prior written consent as provided in paragraph (c). (c) A cable operator shall make such programming available to a subscriber within 30 days of receipt of a wriUen request for access to the programming that includes a statement that the requesting subscriber is at least eighteen years old; a cable operator shall terminate a subscriber's access to such programming within 30 days from receipt of a subscriber's request. (d) A program provided requesting access on a leased access channel shall identify for a cable operator any programming that is indecent as defined in paragraph (g). Such identification shall be in writing and include the full name, address, and telephone number of the program provider and a statement that the program provider is responsible for the content of the programming. A cable operator may require that such identification .. provided up to 30 days prior to the requested date for carriage. A prograll' provider requesting carriage of "live programming" on a leased access channel that is not identified as indecent must exercise reasonable efforts to insure that indecent programming will not be presented. A cable operator will not be in violation of paragraph (b) if it fails to block indecent programming that is not identified by it program provide as required in paragraph (d). (e) A cable operator shall not be required to provide leased access to a program provided if: (1) The program provider refuses to identify whether programming is indecent as required under paragraph (d); or As of August, 1993 Page 45 .. ~ ~ .,_~''''..:''''''_''''''',:o" ,"'" '~li:u.tw. '...t. FCC Cable Television Regulations Pursuant to 1992 Act (2) The program provider refuses or fails to certify, if requested by the cable operator under paragraph (e), that the programming is not obscene programming or indecent programming subject to the requirement of paragraph (b); or (3) The program provider refuses or fails to certify, if requested by the cable operator under paragraph (e), that reasonable efforts will be made to ensure that any "live programming" is not obscene programming or indecent programming subject to the requirement of paragraph (b); or (4) The program provider has failed to provide up to thirty days prior notice, if requested by the cable operator, that the programming is indecent. (g) For purposes of paragraphs (b) - (f), "indecent programming" is any programming that describes or depicts sexual or excretory activities or organs jn a patently offensive manner as measured by contemporary community standards for the cable medium. (h) Cable operators shall retain records sufficient to verify their compliance with paragraph (b) of this section and make such records available to the public. Such records must be retained for a period sufficient to cover the limitations period specified in 47 V.S.C. ~ 503 (b) (6) (B). i76.702 Public, Educational and Governmental Access. Any cable operator may prohibit the use on its system of any channel capacity of any public, educational, or governmental access facility for any programming which contains obscene material. indecent material as defined in section 76.701(g}, or material soliciting or promoting unlawful conduct. For purposes of this section. "material soliciting or promoting unlawful conduct" shall meaD material that is otherwise prescribed by law. A cable operator may require any access user, or access manager or administrator agreeing to assume the responsibility of certifying, to certify that its programming does not contain any of the materials described above and that reasonable efforts will be used to ensure that live programming does not contain such material. Page 46 : ~:. \'1 "\"";" ''''1"0,;1'\ ": ""';~" , " ...~ ~ :";.'.f}~~ ....D:lt.i~f~f};. e e \ , I e e LOCAL CABLE REGULATION INFORMATION What is the 1992 Cable Act? On October 5, 1992, Congress enacted the Cable Television Consumer Protection and Competition Act of 1992, The Federal Communications Commission is responsible for establishing the rules to implement this law, This legislation affects local government by allowing local franchising authorities, like cities, to regulate rates for the basic cable service tier and to regulate customer service standards, The FCC regulates the satellite value package tier while rates for premium and pay per view channels are unregulated, How will the City regulate basic rates Initially, Viacom, the city's cable operator, will submit documentation to the City demonstrating that their rates comply with FCC regulations, In future years, Viacom must file an application with the City for a rate adjustment. The FCC allows rate increase based on specific criteria such as number of cable channels and satellite distributed programming, Since the cities of San Ramon, Dublin, Pleasanton and Livermore operate under similar franchises with Viacom, they will jointly review Viacom's rate application, What is Basic Service Tier. Satellite Tier and Premium Service The basic service tier(Viacom calls it Limited Service) includes public and local broadcast stations, and public access channels, Broadcast stations for Viacom include channels 2, 4, 5,6,7,9, etc., Channel30 (CTV) is currently the only public access channel on Viacom's system, The Satellite Tier includes all other channels not included in the basic service tier or which is not a premium or pay per view channel. These stations include ESPN, CNN, A & E, TNT, etc, Premium Channels include Showtime, HBO, Disney, etc, This service requires the rental of an addressable cable box in order to receive the satellite transmission, Why Did Viacom Change its Channel Schedule One of the provisions of the Cable Act of 1992 requires that Viacom "Must Carry" on its cable system, any TV station in the local market that meets the criteria outlined by the FCC, even if it means dropping other channels from their schedule. Who to Call for Customer Service In general, Viacom's customer service policies exceed the minimum standards established by the FCC. Ideally, all customer service issues should be handled by Viacom, For 24-hour general customer service call 800-945-2288. For 24-hour Customer Service Repair call 828-2000. If a customer perceives a possible violation of FCC regulations for Basic Service Rates or customer service standards, they should call 833-6650. Exhibit 3