**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of: )

) CS Docket No. 96-85

Implementation of Cable Act Reform )

Provisions of the Telecommunications )

Act of 1996 )

**ERRATUM**

**Adopted: May 19, 1999 Released: May 21, 1999**

By the Chief, Cable Services Bureau:

1\. This Erratum corrects the final rules in the Report and Order in the
above-captioned proceeding, FCC 99-57, which was released March 29, 1999
(\"*Order*\"). This error will be corrected prior to publication of the
*Order* in the Federal Register and in the FCC Record.

2\. The following correction has been made:

Appendix B the *Order* has been revised; changes made to 47 C.F.R. §
76.964(b) are now made to 47 C.F.R. § 76.1603(e) as set forth in the
attached Appendix B. Attached Appendix B is substituted for Appendix B
of the *Order*.

FEDERAL COMMUNICATIONS COMMISSION

Deborah Lathen

Chief, Cable Services Bureau

**Appendix B**

The Federal Communications Commission amends 47 C.F.R. Part 76 as
follows:

PART 76 \-- MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

The authority citation for Part 76 continues to read as follows:

AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 307, 308,
309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533, 534, 535, 536,
537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 571,
572, 573.

Section 76.701 is amended by adding a new note to paragraph (b) to read
as follows:

**§ 76.701 Leased access channels.**

\* \* \* \* \*

[Note:]{.smallcaps} \"Nudity\" in paragraph (b) is interpreted to mean
nudity that is obscene or indecent.

Section 76.901 is amended by adding a new paragraph (f) to read as
follows:

**Sec. 76.901 Definitions.**

\* \* \* \* \*

\(f\) [Small Cable Operator]{.underline}. A small cable operator is an
operator that, directly or through an affiliate, serves in the aggregate
fewer than 1 percent of all subscribers in the United States and is not
affiliated with any entity or entities whose gross annual revenues in
the aggregate exceed \$250,000,000. For purposes of this definition, an
operator shall be deemed affiliated with another entity if that entity
holds a 20 percent or greater equity interest (not including truly
passive investment) in the operator or exercises de jure or de facto
control over the operator.

[Note]{.smallcaps} 1: Using the most reliable sources publicly
available, the Commission periodically will determine and give public
notice of the subscriber count that will serve as the 1 percent
threshold until a new number is calculated.

N[ote]{.smallcaps} 2: For a discussion of passive interests with respect
to small cable operators, see Implementation of Cable Act Reform
Provisions of the Telecommunications Act of 1996, Report and Order in CS
Docket No. 96-85, FCC 99-57 (released March 29, 1999).

[Note 3:]{.smallcaps} If two or more entities unaffiliated with each
other each hold an equity interest in the small cable operator, the
equity interests of the unaffiliated entities will not be aggregated
with each other for the purpose of determining whether an entity meets
or passes the 20 percent affiliation threshold.

Section 76.905 is amended by revising paragraph (g) to read as follows:

**§ 76.905 Standards for identification of cable systems subject to
effective competition.**

\* \* \* \* \*

\(g\) In order to offer comparable programming as that term is used in
this section, a competing multichannel video programming distributor
must offer at least 12 channels of video programming, including at least
one channel of nonbroadcast service programming.

Section 76.907 is added to read as follows:

**76.907. Petition for a determination of effective competition.**

\(a\) A cable operator (or other interested party) may file a petition
for a determination of effective competition with the Commission
pursuant to the Commission\'s procedural rules in § 76.7 of this part.

\(b\) The cable operator bears the burden of rebutting the presumption
that effective competition does not exist with evidence that effective
competition, as defined in § 76.905 of this part, exists in the
franchise area.

[Note:]{.smallcaps} The criteria for determining effective competition
pursuant to § 76.905(b)(4) are described in Implementation of Cable Act
Reform Provisions of the Telecommunications Act of 1996, Report and
Order in CS Docket No. 96-85, FCC 99-57 (released March 29, 1999).

\(c\) 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. In addition, with respect to
petitions filed seeking to demonstrate the presence of effective
competition pursuant to § 76.905(b)(4) of this part, the Commission may
issue an order directing one or more persons to produce information
relevant to the petition\'s disposition.

Section 76.911 is amended by removing paragraph (b); redesignating
paragraphs (c) through (e) as paragraphs (b) through (d); revising
paragraphs (a) and (a)(1) to read as follows:

**§ 76.911 Petition for reconsideration of certification.**

\(a\) A cable operator (or other interested party) may challenge a
franchising authority\'s certification by filing a petition for
reconsideration pursuant to § 1.106. The petition may allege either of
the following:

\(1\) The cable operator is not subject to rate regulation because
effective competition exists as defined in § 76.905. Section 76.907(b)
and (c) apply to petitions filed under this section.

\* \* \* \* \*

Section 76.915 is removed.

**§ 76.915 \[Removed\]**

Add note to section 76.934 to read as follows:

**§ 76.934 Small systems and small cable companies**

\* \* \* \* \*

Note to § 76.934: For rules governing small cable operators, see §
76.990 of this Subpart.

Section 76.950 is amended by revising paragraph (b) as follows.

**§ 76.950 Complaints regarding cable programming service rates.**

\* \* \* \* \*

\(b\) This section shall not apply to cable programming services
provided after March 31, 1999.

Section 76.952 is amended by revising paragraph (a) as follows:

**§ 76.952 Information to be provided by cable operator on monthly
subscriber bills.**

\* \* \* \* \*

\(a\) The name, mailing address and phone number of the franchising
authority, unless the franchising authority in writing requests the
cable operator to omit such information.

\* \* \* \* \*

Section 76.956 is amended by revising paragraph (a) to read as follows:

**§ 76.956 Cable operator response.**

\(a\) Unless otherwise directed by the local franchising authority, a
cable operator must file with the local franchise authority a response
to the complaint. The response shall indicate when the cable operator
received notice of the complaint. Service by mail is complete upon
mailing. See § 1.47(f) of this chapter. The response shall include the
information required by the appropriate FCC form, including rate cards,
channel line-ups, and an explanation of any discrepancy in the figures
provided in these documents and the rate filing. The cable operator must
file its response with the local franchise authority via first class
mail.

\* \* \* \* \*

Section 76.961 is amended by revising paragraph (b) to read as follows:

**§ 76.961 Refunds.**

\* \* \* \* \*

\(b\) The cumulative refund due subscribers shall be calculated from the
date of the first complaint filed with the franchising authority until
the date a cable operator implements a prospective rate reduction as
ordered by the Commission pursuant to § 76.960. The Commission shall
calculate refund liability according to the rules in effect for
determining the reasonableness of the rates for the period of time
covered by the complaint.

\* \* \* \* \*

Section 76.984 is amended by removing the last sentence of paragraph
(b); adding notes 1, 2 to § 76.984 and paragraph (c)(3); and
redesignating the last two sentences of paragraph (c)(2) as paragraph
(c)(3) to read as follows:

**§ 76.984 Geographically uniform rate structure.**

\* \* \* \* \*

(c)(2) Any video programming offered on a per channel or per program
basis.

(c)(3) Bulk discounts to multiple dwelling units shall not be subject to
this section, except that a cable operator of a cable system that is not
subject to effective competition may not charge predatory prices to a
multiple dwelling unit. Upon a prima facie showing by a complainant that
there are reasonable grounds to believe that the discounted price is
predatory, the cable system shall have the burden of showing that its
discounted price is not predatory.

N[ote]{.smallcaps} 1: *Discovery procedures for predatory pricing
complaints.* Requests for discovery will be addressed pursuant to the
procedures specified in § 76.7(f).

[Note 2:]{.smallcaps} *Confidential information.* Parties submitting
material believed to be exempt from disclosure pursuant to the Freedom
of Information Act (FOIA), 5 U.S.C. 552(b), and the Commission\'s rules,
§ 0.457, should follow the procedures in § 0.459 and § 76.9.

Section 76.990 is added to read as follows:

**§ 76.990 Small cable operators.**

\(a\) Effective February 8, 1996, a small cable operator is exempt from
rate regulation on its cable programming services tier, or on its basic
service tier if that tier was the only service tier subject to rate
regulation as of December 31, 1994, in any franchise area in which that
operator services 50,000 or fewer subscribers.

\(b\) *Procedures*. (1) A small cable operator, may certify in writing
to its franchise authority at any time that it meets all criteria
necessary to qualify as a small operator. Upon request of the local
franchising authority, the operator shall identify in writing all of its
affiliates that provide cable service, the total subscriber base of
itself and each affiliate, and the aggregate gross revenues of its cable
and non-cable affiliates. Within 90 days of receiving the original
certification, the local franchising authority shall determine whether
the operator qualifies for deregulation and shall notify the operator in
writing of its decision, although this 90-day period shall be tolled for
so long as it takes the operator to respond to a proper request for
information by the local franchising authority. An operator may appeal
to the Commission a local franchise authority\'s information request if
the operator seeks to challenge the information request as unduly or
unreasonably burdensome. If the local franchising authority finds that
the operator does not qualify for deregulation, its notice shall state
the grounds for that decision. The operator may appeal the local
franchising authority\'s decision to the Commission within 30 days.

\(2\) Once the operator has certified its eligibility for deregulation
on the basic service tier, the local franchising authority shall not
prohibit the operator from taking a rate increase and shall not order
the operator to make any refunds unless and until the local franchising
authority has rejected the certification in a final order that is no
longer subject to appeal or that the Commission has affirmed. The
operator shall be liable for refunds for revenues gained (beyond
revenues that could be gained under regulation) as a result of any rate
increase taken during the period in which it claimed to be deregulated,
plus interest, in the event the operator is later found not to be
deregulated. The one-year limitation on refund liability will not be
applicable during that period to ensure that the filing of an invalid
small operator certification does not reduce any refund liability that
the operator would otherwise incur.

\(3\) Within 30 days of being served with a local franchising
authority\'s notice that the local franchising authority intends to file
a cable programming services tier rate complaint, an operator may
certify to the local franchising authority that it meets the criteria
for qualification as a small cable operator. This certification shall be
filed in accordance with the cable programming services rate complaint
procedure set forth in § 76.1402 of this part. Absent a cable
programming services rate complaint, the operator may request a
declaration of CPST rate deregulation from the Commission pursuant to §
76.7 of this part.

\(c\) *Transition from small cable operator status*. If a small cable
operator subsequently becomes ineligible for small operator status, the
operator will become subject to regulation but may maintain the rates it
charged prior to losing small cable operator status if such rates (with
an allowance for minor variations) were in effect for the three months
preceding the loss of small cable operator status. Subsequent rate
increases following the loss of small cable operator status will be
subject to generally applicable regulations governing rate increases.

[Note:]{.smallcaps} For rules governing small cable systems and small
cable companies, see § 76.934 of this part.

Section 76.1401 is amended by deleting paragraphs (a), (c), and (d) and
by renumbering paragraph (b) as paragraph (a).

Section 76.1403 is removed.

**§ 76.1403 \[Removed\]**

Section 76.1603 is amended by revising paragraph (e) to read as follows:

**§ 76.1603 Written notification of changes in rates and services.**

\* \* \* \* \*

\(e\) To the extent the operator is required to provide notice of
service and rate changes to subscribers, the operator may provide such
notice using any reasonable written means at its sole discretion.

\* \* \* \* \*