Before the

**Federal Communications Commission**

# Washington, D. C. 20554

In the Matter of: )

)

Falcon Cable Systems Company ) CSB-A-0589

Appeal of Local Rate Order of the )

County of San Luis Obispo, California )

(CUID NO. CA0680) )

)

Petition for Reconsideration )

# MEMORANDUM OPINION AND ORDER

##  Adopted: December 13, 1999 Released: December 15, 1999

By the Deputy Chief, Cable Services Bureau:

I.  introduction

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1.  The County of San Luis Obispo, California ("County"), filed a
    petition for reconsideration of *Falcon Cable Systems Company*, 14
    FCC Rcd 2105 (CSB 1999) ("*Bureau Order*"). Falcon Cable Systems
    Company ("Falcon") filed an opposition to the petition. With this
    order we deny the petition.

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II. discussion

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2.  The *Bureau Order*, which reviewed a local rate order of the County
    issued August 4, 1998, disapproved a portion of a basic service tier
    ("BST") rate increase sought by Falcon after upgrading its cable
    system serving certain communities within the County. The facts,
    applicable law, arguments of the parties, and a detailed analysis of
    the County's local rate order are set forth in the *Bureau Order*
    and need not be repeated here. First, the County asks that we modify
    paragraph 5 of the *Bureau Order* and uphold its disallowance of
    portions of Falcon's plant construction costs associated with the
    system upgrade, which it deemed to be imprudent and excessive. The
    County determined that a portion of Falcon's upgrade construction
    costs were imprudent and excessive because those upgrade costs were
    higher than Falcon's original cost estimates and higher than
    industry norms for an upgrade construction project. The *Bureau
    Order* found that those factors provided an insufficient basis for
    excluding costs on the basis of cost overruns.

3.  The County submitted an affidavit in support of its argument that
    reconsideration would serve the public interest in the protection of
    County cable subscribers from excessive and imprudent costs and as
    factual support for upholding its disallowance of costs.[^1] The
    County contends that a petition for reconsideration that relies on
    facts not previously presented to the Commission or designated
    authority may be granted where consideration of those facts is
    required in the public interest.[^2] However, the Commission's rules
    also provide that the petition must be supported by facts related to
    events that occurred since the last opportunity for presenting them
    or facts that were unknown, or through ordinary diligence could not
    have become known, since the last opportunity for presenting
    them.[^3] The County's affidavit does not satisfy either of these
    tests for reconsidering the findings and conclusions of the *Bureau
    Order*. A reading of the affidavit shows that the factual material
    recited therein was known, or should with ordinary diligence have
    been known to the County not only when it responded to Falcon's
    appeal, but also during its own review of Falcon's rate proposal.
    Moreover, the affidavit provides no engineering or other
    construction costs breakdown in support of its claim that
    replacement cost for most or all of the strand, as well as the
    coaxial cable and electronics "would be in the range of \$15,000 to
    17,000 per strand mile."[^4] For this reason, we find that the
    County failed to establish that reconsideration of paragraph 5 of
    the *Bureau Order* would serve the public interest.

4.  The County also asks us to modify Paragraph 8 of the *Bureau Order*
    and uphold its allocation of fifty percent of allowed upgrade
    construction costs to the additional channels created by the system
    upgrade. The *Bureau Order* found reasonable Falcon's allocation of
    upgrade costs among all channels on a straight channel ratio basis,
    because that allocation method is consistent with the Commission's
    cost of service rules, and rejected the County's allocation of fifty
    percent of those cost to new channels created by the upgrade. The
    County asserts that its allocation method is consistent with the
    Commission's cost of service rules because it considers, to the
    extent possible, the origin or cause of common costs.[^5] We decline
    to reconsider this argument, which was implicitly rejected by the
    *Bureau Order*'s finding that Falcon's allocation method is
    consistent with Comission rules. We observe further that both the
    County's consultant, who recommended the fifty percent allocation
    split,[^6] and the reconsideration petition failed to provide any
    factual support demonstrating that such allocation split is not
    arbitrary and therefore not unreasonable.

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III. ordering clause

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5.  For the foregoing reasons, **IT IS HEREBY ORDERED**, pursuant to
    authority delegated under Section 0.321 of the Commission's rules,
    that the Petition for Reconsideration of *Falcon Cable Systems
    Company*, 14 FCC Rcd 2105 (CSB 1999), filed by the County of San
    Luis Obispo, California **IS DENIED.**

    FEDERAL COMMUNICATIONS COMMISSSION

    William H. Johnson\
    Deputy Chief, Cable Services Bureau

[^1]: *See* Affidavit of Jonathan L. Kramer attached as Exhibit 2 to the
    petition.

[^2]: 47 C.F.R. § 1.106(c)(2).

[^3]: 47 C.F.R. § 1.106(b)(2).

[^4]: Affidavit of Jonathan L. Kramer at 4.

[^5]: County Petition at 7.

[^6]: *See* Falcon Petition for Review filed September 3, 1998, Exhibit
    C at p 4-5.