53572 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations

treat its tax as a broad-based and

uniform health care-related tax. A State

application may be approved if the State

established that, among other things, the

tax is generally redistributive. We

established in the regulation the waiver

criteria under which we will determine

whether a tax, that does not meet the

statutory defined broad-based or

uniform requirements, is generally

redistributive.

As published, the regulation at 42

CFR 433.68(e)(2)(iv) contains an error in

the percentage amount necessary to

demonstrate that a State tax that varies,

based exclusively on regional variations,

and enacted and in effect prior to

November 24, 1992, is generally

redistributive and can be considered to

meet the criteria for waiver of the

uniform tax requirement.

List of Subjects in 42 CFR Part 433

Administrative practice and

procedure, Child support, Claims, Grant

programs—health, Medicaid, Reporting

and recordkeeping requirements.

Accordingly, 42 CFR part 433 is

corrected by making the following

correcting amendment:

PART 433—STATE FISCAL

ADMINISTRATION

1. The authority citation for part 433

continues to read as follows:

Authority: Secs. 1102, 1137, 1902(a)(4),

1902(a)(18), 1902(a)(25), 1902(a)(45), 1902(t),

1903(A)(3), 1903(d)(2), 1903(d)(5), 1903(o),

1903(p), (1903(r), 1903(w), 1912, and 1919(e)

of the Social Security Act (42 U.S.C. 1302,

1320b–7, 1396a(a)(4), 1396a(a)(18),

1396a(a)(25), 1396a(a)(45), 1396a(t),

1396b(a)(3), 1396b(d)(2), 1396a(d)(5),

1396b(i), 1396b(o), 1396b(p), 1396b(r),

1396b(w), and 1396k.)

§ 433.68 [Corrected]

2. In § 433.68, paragraph (e)(2)(iv),

remove the percentage ‘‘0.85’’ and add

in its place ‘‘0.70’’.

(Catalog of Federal Assistance Program No.

93.778, Medical Assistance Program)

Dated: September 12, 1997.

Neil J. Stillman,

Deputy Assistant Secretary for Information

Resources Management.

[FR Doc. 97–27194 Filed 10–9–97; 4:00 pm]

BILLING CODE 4120–01–M

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 76

[MM Docket Nos. 92–266 and 93–215; FCC

97–339]

Small Cable Television Systems; Rate

Regulation

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The Commission has adopted

a Fourteenth Order on Reconsideration

denying two petitions seeking

reconsideration of the rules adopted for

small cable television systems governing

rates charged for regulated cable

services in the Sixth Report and Order

and Eleventh Order on Reconsideration

in MM Docket Nos. 92–266 and 93–215,

FCC 95–195. The Commission also

adopted minor clarifications to the rate

rules.

EFFECTIVE DATE: October 15, 1997.

FOR FURTHER INFORMATION CONTACT: Julie

Buchanan, Cable Services Bureau, (202)

418–7200.

SUPPLEMENTARY INFORMATION: The

following is a synopsis of the

Commission’s Fourteenth Order on

Reconsideration in MM Docket Nos. 92–

266 and 93–215, adopted September 24,

1997 and released October 1, 1997. The

full text of this decision is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room 239), 1919 M Street, NW.,

Washington, DC 20554, and may be

purchased from the Commission’s copy

contractor, International Transcription

Services, Inc., (202) 857–3800, 1231

20th Street, NW., Washington, DC

20036.

Synopsis

I. Introduction

1. On May 5, 1995, the Commission

adopted the Sixth Report and Order and

Eleventh Order on Reconsideration in

MM Docket Nos. 92–266 and 93–215,

FCC 95–196, 60 FR 35854 (July 12,

1995) (‘‘Small System Order’’), thereby

modifying the rules governing rates

charged for regulated cable services by

certain smaller cable systems. In this

order, we address petitions for

reconsideration of the Small System

Order.

II. Background

2. Section 623(i) of the

Communications Act of 1934, as

amended (‘‘Communications Act’’),

requires that the Commission design

rate regulations to reduce the

administrative burdens and the cost of

compliance for cable systems with 1,000

or fewer subscribers. In the Small

System Order, the Commission

extended small system rate relief to

small cable systems owned by small

cable companies. The Small System

Order defines a small system as any

system that serves 15,000 or fewer

subscribers, and it defines a small cable

company as a cable operator that serves

a total of 400,000 or fewer subscribers

over all of its systems.

3. In addition to adopting the new

categories of small systems and small

cable companies, the Small System

Order introduced a form of rate

regulation known as the small system

cost of service methodology. This

approach, which is available only to

small systems owned by small cable

companies, follows general principles of

cost of service rate regulation. An

eligible cable operator may establish a

maximum permitted rate for regulated

cable service equal to the amount

necessary to cover its operating

expenses plus a reasonable return on its

prudent investment in the assets used to

provide that service. The small system

cost of service methodology differs both

procedurally and substantively from the

standard cost of service methodology

available to cable operators generally.

4. To implement the small system cost

of service rules, we designed FCC Form

1230, a simplified one-page form, for

use exclusively by operators eligible for

these rules. This form is more

streamlined than Form 1220 used for

cost of service showings by larger

operators. To use Form 1230, the

operator must calculate five items of

data pertaining to the system in

question: annual operating expenses,

net rate base, rate of return, channel

count and subscriber count. Once these

variables are calculated, the form

generates the maximum per channel rate

the operator may charge for regulated

service. Although subject to regulatory

review, this rate is presumed reasonable

if it is no more than $1.24 per channel.

5. When applicable, the presumption

of reasonableness effectively exempts

eligible cable operators from many of

the proof burdens that apply under our

standard cost of service rules. For

example, eligible small cable companies

have greater discretion than larger

operators in determining how to allocate

costs between regulated and

unregulated services and between

various levels of regulated services.

Similarly, qualifying cable operators

using Form 1230 are not subject to the

presumption of unreasonableness that

otherwise attaches when an operator

seeks a rate of return higher than
Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations 53573

11.25%. As noted, an eligible operator

enjoys the presumption of

reasonableness with respect to these and

other factors only if the maximum

permitted rate claimed on Form 1230

does not exceed $1.24 per channel. If

the rate exceeds $1.24 per channel, the

cable operator still may use Form 1230,

but is subject to the same presumptions

that apply in a standard cost of service

showing. As with other rate-setting

procedures, a cost of service showing

involving Form 1230 is subject to

review by the cable operator’s local

franchising authority and/or by the

Commission.

6. With respect to the effective date of

the small system rules, we directed

franchising authorities to apply the

small system cost of service approach to

rate cases pending as of the release date

of the Small System Order because the

record demonstrated that the preexisting rules were imposing a

significant burden on small systems.

The Small System Order was released

on June 5, 1995.

III. Petitions for Reconsideration

7. Two parties seek reconsideration of

the Small System Order and a number

of other parties oppose the petitions. In

one petition, the Georgia Municipal

Association (‘‘GMA’’) requests that we

repeal the small system cost of service

rules in their entirety. In the alternative,

GMA urges the Commission to lower the

maximum amount of $1.24 per channel

at which an operator may set rates and

still be entitled to a presumption of

reasonableness. In support of its

petition, GMA questions the accuracy of

the underlying cost data that we used to

set the $1.24 per channel rate. In

addition, GMA claims that the new

rules will increase burdens on

franchising authorities and lead to

unreasonable rates for regulated cable

services. GMA also cites examples of

what it claims are cable operators

abusing the small system rules.

8. The New Jersey Board of Public

Utilities (‘‘New Jersey Board’’) seeks

reconsideration of the Small System

Order to the extent it permits

application of the small system rules to

rate cases that were pending as of the

release date of the order. In support of

its petition, the New Jersey Board

describes the possible impact of the

small system rules upon a rate case that

was pending before it when the

Commission released the Small System

Order on June 5, 1995. According to the

New Jersey Board, the cable operator in

that case has given notice of its intent

to attempt to justify its proposed rate

increase by filing FCC Form 1230. The

New Jersey Board complains that the

rules governing the information that a

franchising authority may seek in

conjunction with its review of a Form

1230 are overly restrictive. The New

Jersey Board also objects to having to

bear the burden of showing the

unreasonableness of the rate sought by

the operator if that rate does not exceed

$1.24 per regulated channel. As a result

of the above, the New Jersey Board

contends it will be ‘‘precluded from

establishing whether the cable

operator’s subscribers are being charged

a reasonable rate,’’ assuming the

operator meets the small system and

small cable company definitions. The

New Jersey Board also asserts the

alleged unfairness of applying the small

system cost of service rules to the

pending case in light of the resources

that the Board already has expended in

the case. Along with its petition for

reconsideration, the New Jersey Board

also filed a motion for stay of the Small

System Order to the extent it mandates

application of the new rules to pending

cases.

IV. Discussion

9. Neither petition challenges our

determination that some measure of

regulatory relief is appropriate for small

systems owned by small cable

companies. The petitioners do not

dispute our conclusion that such

systems face proportionately higher

operating and capital costs than larger

cable entities. Likewise, the petitioners

do not contest that our standard cost of

service rules may place ‘‘an inordinate

hardship’’ on smaller systems ‘‘in terms

of the labor and other resources that

must be devoted to ensuring

compliance.’’ Therefore, the petitions

give us no reason to reconsider our

decision to establish for eligible small

systems a form of rate regulation that

lessens some of the substantive and

procedural burdens that otherwise

would apply. Because the petitions raise

separate issues, we will resolve the

merits of each petition individually.

A. The GMA Petition

10. GMA challenges the presumption

of reasonableness that arises when an

eligible small system uses Form 1230 to

justify a regulated rate that does not

exceed $1.24 per channel. As noted

above, we established $1.24 per channel

as the appropriate cut-off based on cost

data previously submitted to the

Commission by small cable companies

seeking to establish regulated rates for

their small systems by using Form 1220

in accordance with our standard cost of

service rules. GMA asserts that a careful

review of the Form 1220s that we relied

on to set the $1.24 per channel rate

‘‘would probably * * * [show] that

corrections should be made to the

operators’ calculations in a large

percentage of cases.’’ In support of this

prediction, GMA states that ‘‘several’’

Georgia cable operators using FCC Form

1220 have overstated the value of the

intangible assets in their ratebases. In

addition, GMA states that the

Commission found calculation or

allocation errors in each of the nine cost

of service cases that we had addressed

as of the date GMA filed its petition.

GMA cites three specific cost of service

cases in which the Cable Services

Bureau (‘‘Bureau’’) made adjustments to

correct such errors. On this basis, GMA

argues that ‘‘there is a strong possibility

that there are errors’’ in the Form 1220s

from which we gleaned the cost data to

establish the presumptively reasonable

rate of $1.24 per channel.

11. We believe that the rate-setting

mechanism we adopted in the Small

System Order reflects a reasoned

judgment as to the method for

establishing the rates that an eligible

small system may charge for regulated

services. Neither GMA nor any other

party challenges this mechanism. GMA

objects only to the input data that

produced the standard of $1.24 per

regulated channel against which the

rates of eligible small systems are

measured. We determined in the Small

System Order, however, that a more

comprehensive review of small system

cost data was not necessary to ensure

that our small system rules were

properly tailored to the conditions faced

by such systems.

12. GMA does not challenge our

finding that small systems owned by

small cable companies were in need of

immediate relief. GMA suggests that the

Form 1220 filings on which we relied

were so facially inaccurate that we

should have conducted a further

analysis of small system cost data. We

disagree. This approach would have

delayed implementation of measures for

which there was an immediate need and

would have imposed additional

administrative responsibilities (i.e.,

having to respond to Commission

inquiries concerning small system costs)

on the very entities that we found were

the most burdened by regulation.

13. GMA fails to persuade us that the

benefits of further analysis of small

system cost data would have

outweighed the administrative costs and

delay that such analysis would have

entailed. While GMA does not dispute

that such costs and delay would have

been both inevitable and extremely

burdensome, it fails to factor these

considerations into its discussion. GMA

bases its request for reconsideration on
53574 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations

the fact that the Bureau found allocation

or calculation errors in the cost of

service cases it cites. However, the

impact of the Bureau’s adjustments in

the cited cases are overstated by GMA

and do not undermine the formulation

of the $1.24 standard.

14. The Bureau decisions cited by

GMA were based on general cost of

service principles and not under the

interim rules the Commission adopted

in February 1994. As of the time of

those filings, we had directed cost of

service operators to justify their rates in

accordance with traditional cost of

service principles generally applicable

in the field of utility rate regulation.

After seeking and reviewing further

public comment, we subsequently

adopted more refined cost of service

rules better tailored for use in the cable

service context. At the same time, we

designed Form 1220 for use in

accordance with the new rules. The cost

data used in the Small System Order

were gleaned from Form 1220s filed by

small systems pursuant to cost of

service rules adapted specifically for use

by cable operators. The specificity of the

new rules, combined with the

uniformity of presentation required by

Form 1220, makes the latter

submissions inherently more reliable

than the earlier submissions cited by

GMA. Thus, the errors in the filings

relied on by GMA do not suggest the

likelihood of material inaccuracies in

the subsequent Form 1220 filings. This

is particularly true given the nature of

the errors in the cases cited by GMA. In

each case, the errors were so minor that

the Bureau found that the rates actually

being charged by the cable operator

were nevertheless justified and denied

the complaint.

15. We further note that in the Small

System Order, we decided that

standards applicable to cable systems

generally were inappropriate for small

systems owned by small cable

companies. In particular, we decided

that eligible small systems should be

given more regulatory leeway than

larger cable entities because small

systems face disproportionately higher

operating costs, capital costs, and

regulatory compliance costs. In fact,

with respect to eligible small systems,

we relaxed the very standards that had

caused the Bureau to make the

adjustments described in the cost of

service cases cited by GMA.

16. GMA does not dispute that we

should be less restrictive in applying

cost of service principles to small

systems owned by small cable

companies. Yet it invites us to question

cost information submitted by such

systems by applying the stricter

standards that we have found

inappropriate for those systems.

Because GMA’s argument relies on

overly restrictive standards, we find that

it has not raised a material issue with

respect to the reliability of those filings.

17. In addition to its specific

challenge to the per channel rate of

$1.24, GMA recites several

‘‘experiences’’ of Georgia franchising

authorities that purport to show that the

small system rules ‘‘are unfair to those

franchising authorities who have

invested a substantial amount of time

and money in the rate regulation

process.’’ GMA further complains that

these examples prove that ‘‘the rules are

unfair to subscribers, because some

cable operators will increase rates well

beyond the level which subscribers

would pay if competition existed.’’

These conclusory allegations do not

refute the specific findings or analyses

set forth in the Small System Order and

do not state a basis for us to reconsider

that order. Furthermore, franchising

authorities had no reasonable reliance

interest in our rules remaining

unchanged. As for practices of the

individual operators identified in the

GMA petition, we do not believe it is

appropriate for us to make specific

findings in this context regarding the

propriety of those practices. To the

extent cable operators fail to abide by

our rules, local franchising authorities

may take appropriate action.

18. For the reasons stated above, we

hereby deny GMA’s petition for

reconsideration.

B. The New Jersey Board Petition

19. The New Jersey Board objects to

the Small System Order to the extent it

requires local franchising authorities to

permit eligible systems to use the small

system cost of service methodology in

cases pending as of the date the Small

System Order was released. In support

of its petition, the New Jersey Board

describes the potential impact of the

Small System Order upon a rate case

pending before it. That case involves the

rates charged by Service Electric Cable

TV of Hunterdon (‘‘Service Electric’’).

Service Electric filed a standard cost of

service showing with the New Jersey

Board on July 14, 1994. Pursuant to that

showing, Service Electric sought to

increase its monthly rates from $21.00

to $26.31 for its 60-channel basic service

tier. That case was pending when the

Commission released the Small System

Order on June 5, 1995, although the staff

of the New Jersey Board had negotiated

a tentative settlement with Service

Electric that was subject to the approval

of the New Jersey Board. Before such

approval occurred, Service Electric gave

notice of its intent to attempt to justify

its proposed rate increase by filing FCC

Form 1230.

20. The New Jersey Board contends

that under the small system cost of

service rules, Service Electric might be

able to justify the rate increase it sought

in its initial showing to the Board or,

potentially, an even greater increase.

According to the New Jersey Board, the

rules governing the information that a

franchising authority may seek in

conjunction with its review of Form

1230 are so restrictive that it will be

‘‘difficult if not impossible to challenge’’

the rate the operator seeks to justify. The

New Jersey Board also notes that under

the small system cost of service rules,

the burden is on the franchising

authority to show the unreasonableness

of the rate sought by an eligible small

system if that rate does not exceed $1.24

per regulated channel. The New Jersey

Board asserts that this ‘‘unprecedented’’

shift in the burden of proof will

‘‘necessitate the use of Board and State

resources not usually required’’ in order

to establish the unreasonableness of the

rate sought by the cable operator.

21. Based on the above, the New

Jersey Board argues that it will be

‘‘precluded from establishing whether

Service Electric’s subscribers are being

charged a reasonable rate,’’ assuming

the operator meets the small system and

small cable company definitions. The

New Jersey Board also asserts the

alleged unfairness of applying the small

system cost of service rules to the

pending case in light of the resources

that it already has expended in the case.

22. As an initial matter, we note that

the petition seeks reconsideration of a

Commission rule of general

applicability based solely on the

potential effect of that rule on a single

rate case affecting approximately 3,000

cable subscribers. The Commission is

charged with structuring a national

framework of rate regulation. A broader

and more representative showing of the

rule’s impact is necessary for us to

review the merits of a particular rule or

regulatory approach.

23. Further, the New Jersey Board

fails to refute the underlying analysis

supporting our decision to apply the

new rules to pending cases. We adopted

this approach based upon our balancing

of various factors. With respect to rate

regulation, Congress specifically

directed us to reduce the administrative

burdens and ease the costs of

compliance for smaller systems. In the

Small System Order, we concluded that

our then existing rules ‘‘have

significantly burdened small systems.’’

We designed the small system cost of

service rules to remedy this problem.
Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations 53575

Having determined small systems’ need

for immediate relief, we deemed it in

the public interest to provide such relief

accordingly. We believe that it is

appropriate to apply a new rule to

pending cases where the new rule

serves to alleviate an existing restriction

on regulated parties, as the small system

cost of service rules did by creating an

additional method for eligible systems

to justify their rates. In addition, were

pending cases not made subject to the

new rules, subscribers in some areas

might have received refunds when the

pending cases were decided, followed

immediately by rate hikes when the

systems put new rates into effect

prospectively in accordance with the

small system cost of service

methodology. Applying the new small

system rules to pending cases avoids

this confusing ‘‘roller-coaster’’ result.

24. We decided that the small system

cost of service rules would not affect

final decisions of local franchising

authorities made before the release of

the Small System Order. In these cases,

the public interest, and in particular the

interests of administrative finality,

dictated that the final decision of a local

franchising authority should not be

subject to reconsideration or appeal

under the small system rules.

25. By seeking reconsideration, the

New Jersey Board suggests, implicitly,

that we erred in finding a need for

immediate relief. Yet it offers no

arguments or evidence to refute this

finding and thus presents no basis to

reconsider it. The New Jersey Board’s

statement of a policy preference cannot

overcome the evidence concerning the

plight of smaller systems that was before

us when we adopted the Small System

Order. As James Cable Partners and

Rifkin and Associates, Inc. argues, it

makes no sense ‘‘to complete pending

cases under pre-existing criteria that do

not embody the policy and statutory

concerns that led to the adoption of the

Small System Order in the first place.’’

Likewise, the New Jersey Board does not

dispute the ‘‘roller-coaster’’ effect on

rates that would result if the new rules

were not applied to pending cases.

26. The New Jersey Board contends

that application of the small system

rules to the pending Service Electric

case will result in a waste of the

resources it already has expended in

that case. It objects to our decision to

place on the franchising authority the

burden of proving the unreasonableness

of a proposed rate that does not exceed

$1.24 per regulated channel. The New

Jersey Board suggests that the

presumption of reasonableness that will

attach to such a rate, coupled with the

limitations on the information it can

demand from the operator, effectively

will preclude it from determining

whether a particular rate is reasonable.

We disagree.

27. We understand the frustration of

the New Jersey Board with respect to its

prior expenditure of resources in

accordance with the standard cost of

service rules. We note, however, that

those expenditures were made with

notice of the possibility that we would

modify the rules governing small

systems. Unfortunately, rule changes

and rule modifications sometimes lead

to inefficiencies and disruptions for

both the regulator and the regulated. We

are forced to balance these factors

against the impact of delaying

implementation of the new rule. Since

the Service Electric case is the only

matter in which a franchising authority

has articulated this concern, we cannot

conclude that the problem is so

significant to require us to reconsider

our prior decision. We do not believe

that the Small System Order will result

in squandered resources even in the

Service Electric case. The efforts already

expended by the New Jersey Board in

amassing data and making factual

determinations will not have been

wasted since they are relevant when the

New Jersey Board decides the rate case

in accordance with the small system

rules.

28. More generally, we disagree with

the New Jersey Board’s characterization

of the permissible scope of information

requests that a franchising authority

may make when reviewing Form 1230.

The Small System Order expressly

recognizes the right of franchising

authorities to obtain ‘‘the information

necessary for judging the validity’’ of

the filing. No information has been

submitted to indicate that anything

more than what this rule permits is

necessary.

29. We further find that the New

Jersey Board has failed to raise a valid

argument against imposing the burden

of proof on the franchising authority

when the rate in question does not

exceed $1.24 per channel. What it terms

an ‘‘unprecedented shift in the burden

of proof’’ is the logical extension of our

determination that rates at or below

$1.24 per regulated channel appear

reasonable. The New Jersey Board does

not challenge the analysis by which we

arrived at the rate of $1.24 per channel.

While not disputing that rates at or

below $1.24 per channel can be

presumed reasonable, the New Jersey

Board would ignore this finding in

individual rate proceedings and

continue to place upon the cable

operator the burden of establishing the

reasonableness of its requested rate,

regardless of the amount. We believe

that having made the determination that

rates at or below $1.24 per channel may

by presumed reasonable, we should

shift the burden of proof to the

franchising authority when the operator

seeks to justify rates that do not exceed

that amount. The New Jersey Board does

not contest this analysis and therefore

we have no basis to reconsider our

decision.

30. For these reasons, we hereby deny

the New Jersey Board’s Petition. The

New Jersey Board presents the same

arguments in its Motion for Stay as it

does in its Petition. Therefore, for the

same reasons that we deny its Petition,

we also deny the New Jersey Board’s

Motion for Stay.

C. Other Matters

31. On our own motion, we clarify

one aspect of our rule that allocates the

burden of establishing whether the rate

claimed by a cable operator under the

small system cost of service

methodology is reasonable. As

discussed above, the current rule states:

‘‘If the maximum rate established on

Form 1230 does not exceed $1.24 per

channel, the rate shall be rebuttably

presumed reasonable.’’ Thus, the

current wording of the rule suggests that

the burden depends on the maximum

rate permitted by Form 1230, not on the

rate that the operator intends to charge.

Such an interpretation would create an

anomaly where an operator determines

that its maximum permitted rate is

above $1.24 per regulated channel, but

does not actually intend to charge more

than $1.24. We did not intend for the

operator to have the burden of

overcoming all of the presumptions we

generally found to be inappropriate for

eligible small systems, if the actual rate

the operator seeks to charge is within

the zone of what we presume to be

reasonable. To eliminate this potential

confusion, we hereby clarify that the

presumption of reasonableness shall

apply as long as the actual rate to be

charged does not exceed $1.24 per

regulated channel, regardless of whether

the maximum permitted rate, as

calculated on Form 1230, exceeds that

amount. The burden shall shift back to

the operator once it seeks to actually

raise rates above the $1.24 per channel

threshold.

32. We also take this opportunity to

correct three editing errors that

appeared in the rules appendix to the

Small System Order. These corrections

do not amend the substance of the rules

in any way.

33. In the Small System Order, we

provided for the treatment of a small

system that properly sets its rates in
53576 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations

accordance with the small system cost

of service methodology, but later

experiences a change in its status, either

because the system exceeds the 15,000-

subscriber cap for a small system or

because the operator exceeds the

400,000-subscriber threshold for a small

cable company. While the text of the

order explained the regulatory effect of

such a transition, the accompanying

rules did not. Here we amend the rules

consistent with the text of the Small

System Order.

34. As discussed above, the Small

System Order provided for the

application of the small system cost of

service rules to cases pending as of the

release date of the order if the cable

operator in question met the subscriber

threshold criteria as of the release date

and as of the date the system became

subject to rate regulation. The rules

appendix inadvertently referred to the

effective date, instead of the release

date, of the Small System Order for

purposes of this rule. We hereby revise

the text of § 76.934(h)(9) of our rules to

conform it with our intent as set forth

in the Small System Order.

35. Due to an editing error, the rules

appendix to the Small System Order did

not accurately indicate that we were

revising the eligibility criteria for

streamlined rate reduction to

incorporate the new small system and

small cable company definitions

established in the Small System Order.

We hereby amend § 76.922(b)(5) of our

rules to conform it with our intent as set

forth in the Small System Order.

V. Final Regulatory Flexibility

Certification

36. As permitted by Section 605(b) of

the Regulatory Flexibility Act, 5 U.S.C.

605(b), (‘‘RFA’’), we certify that a

regulatory flexibility analysis is not

necessary because the amendments to

the rules adopted in this order will not

impose a significant economic impact

on a substantial number of small entities

as defined by statute, by our rules, or by

the Small Business Administration. 5

U.S.C. 605(b). Three of the amendments

merely correct the rules and have no

substantive effect. In addition, we

clarified that the operator’s presumption

of reasonableness is preserved when the

operator’s actual rate charged does not

exceed $1.24 per regulated channel,

regardless of the maximum permitted

rate calculated on Form 1230. Because

this clarification will benefit small

systems owned by small cable

companies, we believe a regulatory

flexibility analysis is unnecessary. This

certification conforms to the RFA, as

amended by the Small Business

Regulatory Enforcement Fairness Act of

1996.

37. The Commission will send a copy

of this certification, along with this

order, in a report to Congress pursuant

to the Small Business Regulatory

Enforcement Fairness Act of 1996, 5

U.S.C. 801(a)(1)(A), and to the Chief

Counsel for Advocacy of the Small

Business Association, 5 U.S.C. 605(b).

VI. Ordering Clauses

38. Accordingly, It Is Ordered that,

pursuant to the authority granted in

sections 4(i), 4(j), 303(r), and 623 of the

Communications Act of 1934, as

amended, 47 U.S.C. 154(i), 154(j),

303(r), and 543, the petitions for

reconsideration filed by the Georgia

Municipal Association and the New

Jersey Board of Public Utilities, and the

Motion for Stay filed by the New Jersey

Board of Public Utilities, are denied.

39. It Is Further Ordered that,

pursuant to the authority granted in

sections 4(i), 4(j), 303(r), and 623 of the

Communications Act of 1934, as

amended, 47 U.S.C. 154(i), 154(j),

303(r), and 543, 76.922 and 76.934 of

the Commission’s rules, 47 CFR 76.922

and 76.934, are amended as set forth

below.

40. It Is Further Ordered that the

Commission shall send a copy of this

Fourteenth Order on Reconsideration,

including the Final Regulatory

Flexibility Certification, to the Chief

Counsel for Advocacy of the Small

Business Administration.

List of Subjects in 47 CFR Part 76

Administrative practice and

procedure, Cable television, Reporting

and recordkeeping requirements.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Part 76 of Title 47 of the Code of

Federal Regulations is amended as

follows:

PART 76—CABLE TELEVISION

SERVICE

1. 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, 552,

554, 556, 558, 560, 561, 571, 572, 573.

2. Section 76.922 is amended by

revising paragraph (b)(5)(i) introductory

text to read as follows.

§ 76.922 Rates for the basic service tier

and cable programming services tiers.

* * * * *

(b) * * *

(5) Streamlined rate reductions. (i)

Upon becoming subject to rate

regulation, a small system owned by a

small cable company may make a

streamlined rate reduction, subject to

the following conditions, in lieu of

establishing initial rates pursuant to the

other methods of rate regulation set

forth in this subpart:

* * * * *

3. Section 76.934 is amended by

revising paragraphs (h)(5)(i) and (h)(9)

and by adding paragraph (h)(11) to read

as follows:

§ 76.934 Small systems and small cable

companies.

* * * * *

(h) * * *

(5) * * *

(i) If the maximum rate established on

Form 1230 does not exceed $1.24 per

channel, the rate shall be rebuttably

presumed reasonable. To disallow such

a rate, the franchising authority shall

bear the burden of showing that the

operator did not reasonably interpret

and allocate its cost and expense data in

deriving its annual operating expenses,

its net rate base, and a reasonable rate

of return. If the maximum rate

established on Form 1230 exceeds $1.24

per channel, the franchising authority

shall bear such burden only if the rate

that the cable operator actually seeks to

charge does not exceed $1.24 per

channel.

* * * * *

(9) In any rate proceeding before a

franchising authority in which a final

decision had not been issued as of June

5, 1995, a small system owned by a

small cable company may elect the form

of rate regulation set forth in this section

to justify the rates that are the subject of

the proceeding, if the system and

affiliated company were a small system

and small company respectively as of

the June 5, 1995 and as of the period

during which the disputed rates were in

effect. However, the validity of a final

rate decision made by a franchising

authority before June 5, 1995 is not

affected.

* * * * *

(11) A system that is eligible to

establish its rates in accordance with the

small system cost-of-service approach

shall remain eligible for so long as the

system serves no more than 15,000

subscribers. When a system that has

established rates in accordance with the

small system cost-of-service approach

exceeds 15,000 subscribers, the system
Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations 53577

may maintain its then existing rates.

After exceeding the 15,000 subscriber

limit, any further rate adjustments shall

not reflect increases in external costs,

inflation or channel additions until the

system has re-established initial

permitted rates in accordance with some

other method of rate regulation

prescribed in this subpart.

[FR Doc. 97–27151 Filed 10–14–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

50 CFR Part 285

[I.D. 100797B]

Atlantic Tuna Fisheries; Atlantic

Bluefin Tuna General Category

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Opening of the New York Bight

fishery.

SUMMARY: NMFS opens the Atlantic

bluefin tuna (ABT) General category

New York Bight fishery. This action is

being taken to extend the season for the

General category, provide for fishing

opportunities in the New York Bight

area, and ensure additional collection of

biological assessment and monitoring

data.

DATES: Effective October 9, 1997, 1 a.m.

local time until December 31, 1997, or

until the date, published in the Federal

Register, that the set-aside quota is

determined to have been taken.

FOR FURTHER INFORMATION CONTACT:

Sarah McLaughlin, 301-713-2347, or Pat

Scida, 508-281-9260.

SUPPLEMENTARY INFORMATION:

Regulations implemented under the

authority of the Atlantic Tunas

Convention Act (16 U.S.C. 971 et seq.)

governing the harvest of ABT by persons

and vessels subject to U.S. jurisdiction

are found at 50 CFR part 285. Section

285.22 subdivides the U.S. quota

recommended by the International

Commission for the Conservation of

Atlantic Tunas among the various

domestic fishing categories.

Implementing regulations for the

Atlantic tuna fisheries at 50 CFR 285.22

provide for a subquota of 72 mt of large

medium and giant ABT to be harvested

from the regulatory area by vessels

permitted in the General category

during the period beginning October 1

and ending December 31. Due to an

overharvest of 1 mt in the September

period subquota, and the transfer of 70

mt from other categories (62 FR 51608,

October 2, 1997), the October-December

period subquota was adjusted to 141 mt.

The October-December subquota is

divided into a coastwide subquota of

131 mt and 10 mt for the traditional fall

New York Bight set-aside area, defined

as the waters south and west of a

straight line originating at a point on the

southern shore of Long Island at 72°27’

W. long. (Shinnecock Inlet) and running

SSE 150° true, and north of 38°47’ N.

lat. (Delaware Bay).

NMFS previously announced the

closure of the General category fishery

for the October-December time period

effective October 5, 1997, which

published in the Federal Register on

October 9, 1997. After tallying the

landings following the closure, NMFS

has determined the remaining

unharvested coastwide quota

(approximately 10 mt) is insufficient to

warrant a reopening of the coastwide

General category because daily catch

rates in September and October have

averaged 30 mt.

The New York Bight set-aside of 10

mt will open effective Thursday,

October 9, at 1 a.m. local time. Upon the

effective date of the New York Bight setaside, persons aboard vessels permitted

in the General category may fish for,

retain, possess, or land large medium

and giant ABT only in the New York

Bight set-aside area specified above,

until the set-aside quota for that area has

been harvested. ABT harvested from

waters outside the defined set-aside area

may not be brought into the set-aside

area. Vessels permitted in the Charter/

Headboat category, when fishing for

large medium and giant ABT, are

subject to the same rules as General

category vessels when the General

category is open.

The announcement of the closure date

will be filed with the Office of the

Federal Register, and further

communicated through the Highly

Migratory Species (HMS) Fax Network,

the HMS Information Line, NOAA

weather radio, and Coast Guard Notice

to Mariners. Although notification of

closure will be provided as far in

advance as possible, fishermen are

encouraged to call the HMS Information

Line to check the status of the fishery

before leaving for a fishing trip. The

phone numbers for the HMS

Information Line are (301) 713-1279 and

(508) 281-9305. Information regarding

the Atlantic tuna fisheries is also

available toll-free through NextLink

Interactive, Inc., at (888) USA-TUNA.

Classification

This action is taken under 50 CFR

285.22 and is exempt from review under

E.O. 12866.

Authority: 16 U.S.C. 971 et seq.

Dated: October 8, 1997.

Gary C. Matlock,

Director, Office of Sustainable Fisheries,

National Marine Fisheries Service.

[FR Doc. 97–27133 Filed 10–8–97; 3:19 pm]

BILLING CODE 3510–22–F

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

50 CFR Part 660

[Docket No. 961227373–6373–01; I.D.

092497C]

Fisheries Off West Coast States and in

the Western Pacific; Pacific Coast

Groundfish Fishery; Nontrawl

Sablefish Mop-Up Fishery;

Announcement of Extension

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Nontrawl sablefish mop-up

fishery and delay of the limited entry

daily trip limit fishery; announcement

of extension.

SUMMARY: NMFS announces the

extension of and new ending date for

the mop-up fishery for nontrawl limited

entry sablefish. This action will delay

the beginning of the October limited

entry daily trip limit fishery. This action

is taken in response to unusually bad

coastwide weather during the first week

of the mop-up fishery. This action is

intended to increase safety while

providing for harvest of the remainder

of the 1997 limited entry nontrawl

allocation for sablefish.

DATES: This action is effective on

October 9, 1997. The nontrawl sablefish

mop-up fishery began at 1201 hours

local time (l.t.), October 1, 1997, and

will end at 1200 hours l.t., October 22,

1997, at which time the limited entry

daily trip limit fishery resumes. The

daily trip limits for the nontrawl

sablefish fishery will remain in effect

until the effective date of the 1998

annual specifications and management

measures for the Pacific coast

groundfish fishery, which will be

published in the Federal Register.

Comments will be accepted through

October 22, 1997.

ADDRESSES: Comments on these actions

should be sent to William Stelle, Jr.,