Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Rules and Regulations 6491

2. In 180.442, by adding a new

paragraph (c) to read as follows:

§ 180.442 Bifenthrin; tolerances for

residues.

* * * * *

(c) A time-limited tolerance is

established for residues of the combined

residues of the insecticide bifenthrin [2-

methyl[1,1′-biphenyl]-3-yl)methyl-3-(2-

chloro-3,3,3,-trifluoro-1-propenyl)-2,2-

dimethylcyclopropanecarboxylate in

connection with use of the pesticide

under section 18 emergency exemptions

granted by EPA. These tolerances are

specified in the following table. These

tolerances will expire and be

automatically revoked on the date

specified in the table without further

action by EPA.

Commodity Parts per million Expiration/Revocation

Date

Broccoli ............................................................................................................................................... 0.1 January 31, 1998

Cauliflower .......................................................................................................................................... 0.05 January 31, 1998

[FR Doc. 97–3380 Filed 2–11–97; 8:45 am]

BILLING CODE 6560–50–F

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 76

[MM Docket No. 92–266; FCC 96–491]

Cable Television Consumer Protection

and Competition Act of 1992

AGENCY: Federal Communications

Commission.

ACTION: Final Rule.

SUMMARY: In this Memorandum Opinion

and Order, we adopt rule changes

responsive to the decision of the court

in Time Warner Entertainment Co. v.

FCC, 56 F.3d 151 (D.C. Cir. 1995). In its

decision, the court considered rules

adopted by the Commission to

implement rate regulation and related

provisions of the Cable Television

Consumer Protection and Competition

Act of 1992 (‘‘1992 Cable Act’’). The

rules were largely affirmed by the court.

In five discrete areas, however, the court

reversed the Commission’s

implementing decisions and rules. The

order is intended to conform the rules

to the court’s decision.

DATES: The amendments to 47 CFR

Sections 76.905 and 76.921 shall

become effective March 14, 1997, and

the amendments to 47 CFR Sections

76.922 and 76.913 will become effective

upon approval by the Office of

Management and Budget of the

information collection requirements, but

no sooner than March 14, 1997. The

Commission will publish a document at

a later date establishing this effective

date. Written comments by the public

on the modified information collections

are due April 14, 1997.

ADDRESSES: A copy of any comments on

the information collections contained

herein should be submitted to Dorothy

Conway, Federal Communications

Commission, Room 234, 1919 M Street,

N.W., Washington, DC 20554, or via the

Internet to dconway@fcc.gov.

FOR FURTHER INFORMATION CONTACT: For

additional information concerning this

rulemaking contact Meryl S. Icove or

Hugh Boyle, Cable Services Bureau,

(202) 418–7200. For additional

information concerning the information

collections contained in this rulemaking

contact Dorothy Conway at (202) 418–

0217, or via the Internet at

dconway@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Memorandum Opinion

and Order in MM Docket No. 96–266,

FCC 96–491, adopted December 23,

1996 and released December 31, 1996.

The complete text of this Order is

available for inspection and copying

during normal business hours in the

FCC Reference Center (room 239), 1919

M Street, NW., Washington, DC, and

also may be purchased from the

Commission’s copy contractor,

International Transcription Services,

Inc. (‘‘ITS Inc.’’) at (202) 857–3800, 2100

M Street, NW., Suite 140, Washington,

DC 20017.

PAPERWORK REDUCTION ACT: This

rulemaking contains modified

information collections. The

Commission, as part of its continuing

effort to reduce paperwork burdens,

invites the general public to comment

on the information collections

contained in this rulemaking, as

required by the Paperwork Reduction

Act of 1995. Public comments are due

April 14, 1997. Comments should

address: (a) whether the proposed

collection of information is necessary

for the proper performance of the

functions of the Commission, including

whether the information shall have

practical utility; (b) the accuracy of the

Commission’s burden estimates; (c)

ways to enhance the quality, utility, and

clarity of the information collected; and

(d) ways to minimize the burden of the

collection of information on the

respondents, including the use of

automated collection techniques or

other forms of information technology.

OMB Approval Number: 3060–0561

Title: Section 76.913 Assumption of

jurisdiction by the Commission.

Type of Review: Revision of existing

collection.

Respondents: State, local and tribal

governments.

Number of Respondents: 50.

Estimated Time Per Response: 8

hours.

Total Annual Burden: 400 hours.

Estimated costs per respondent: $500.

Postage and stationery costs are

estimated at an average of $10 per

petition. 50 petitions × $10 = $500.

Needs and Uses: 76.913 permits local

franchising authorities (‘‘LFAs’’) that are

unable to meet certification standards to

petition the Commission to regulate the

rates for basic cable service and

associated equipment of their respective

franchisees. The Commission has

amended its rules as follows: If the local

franchising authority lacks the resources

to administer rate regulation, its petition

no longer must be accompanied by a

demonstration that franchise fees are

insufficient to fund any additional

activities required to administer basic

service rate regulation. Elimination of

this requirement constitutes a modified

information collection; all other

requirements remain intact.

The information in the petitions is

used by Commission staff to identify

situations where it should exercise

jurisdiction over basic service and

equipment rates in place of a local

franchising authority. If the information

were not collected, the basic cable rates

of some franchise areas not subject to

effective competition would remain

unregulated in contravention of the

goals of the 1992 Cable Act.

OMB Approval Number: 3060–0607.

Title: Section 76.922 Rates for Basic

Service Tiers and Cable Programming

Tiers.

Type of Review: Revision of existing

collection.
6492 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Rules and Regulations

1The definition of effective competition is found

in 47 CFR § 543(l)(1). The Telecommunications Act

of 1996 amends Section 543(l)(1) by adding a

subsection (D), which contains a fourth test for

effective competition. See Telecommunications Act

of 1996, Section 301(b)(3). The Commission has

incorporated this new test into its rules. See 47 CFR

§ 76.905(b)(4). See also Implementation of Cable

Act Reform Provisions of the Telecommunications

Act of 1996, Order and Notice of Proposed

Rulemaking (‘‘Cable Act Reform’’), CS Docket No.

96–85, FCC 96–154 (released April 9, 1996), 11 FCC

Rcd 5937 (1996), 61 FR 19013 (April 30, 1996); 47

CFR § 76.1401. All references herein to Section

543(l)(1) do not include this amendment.

Respondents: Businesses and other for

profit entities; State, local and tribal

governments.

Number of Respondents: 2,200

operators filing gap period rate

adjustments + 1,100 LFAs reviewing

such adjustments + 25 small systems

opting for the streamlined rate reduction

process + 600 headend upgrade

certifications = 3,925.

Estimated Time Per Response: 1–12

hours.

Total Annual Burden: 4,400 + 2,200 +

300 + 600 = 7,500 hours as explained

below.

76.922(d)(3)(vii) contains a one-time

only information collection

requirement. We estimate that the

average burden for operators to supply

gap period data on their next rate

adjustment filing will be 2 hours per

filing and that there will be

approximately 2,200 such filings made

in the next year (1,100 filed with the

Commission, 1,100 filed with LFAs).

The burden to operators to file = 2,200

filings × 2 hours = 4,400 hours. The

burden to LFAs to review this

information is estimated to be an

average of 2 hours per filing, therefore

1,100 filings reviewed by LFAs × 2

hours = 2,200 hours.

76.922(b)(5) streamlined rate

reduction process. We estimate that 25

systems per year use this process. The

average burden for undergoing all

aspects of each streamlined rate

reduction process (all rate calculation,

notice and reporting requirements) is

estimated to be 12 hours per

respondent. 25 systems × 12 hours = 300

hours.

76.922(e)(7) headend upgrade

certification process. Qualifying cable

systems owned by small cable

companies may certify their eligibility

to use the Commission’s headend

upgrade incentive. The average burden

to complete the certification process is

estimated to be 1 hour. We estimate 600

certifications are currently filed per

year. 600 certifications × 1 hour = 600

hours.

Estimated costs per respondent: $250

+ $3,000 = $3,250 for all respondents as

explained as follows. There are no costs

incurred for gap period rate adjustments

because they are made as part of regular

rate adjustment filings. Postage and

stationery costs are estimated at an

average of $10 per each complete

streamlined rate reduction process. 25 ×

$10 = $250. Postage and stationery costs

are estimated at an average of $5 per

each headend upgrade certification. 600

× $5 = $3,000.

Needs and Uses: 76.922(d)(3)(vii) has

been amended to permit cable operators

to adjust their current permissible rates

to reflect the rates the operators would

currently be charging if they had been

permitted to include increases in

external costs occurring between

September 30, 1992 and their initial

date of regulation (this period of time is

also referred to as the ‘‘gap period’’)

reduced by inflation increases already

received with respect to those costs. The

increase in rates due to external cost

changes that occurred during the gap

period shall be reflected in the cable

operator’s next rate adjustment filing in

accordance with the Commission’s

current rules. The burden imposed by

reporting gap period cost data is

reported under this OMB control

number 3060–0607 for the following

reasons: 1) to avoid confusing this

requirement as being an additional

filing requirement, 2) because it is a

temporary one-time only information

collection, and 3) because neither of the

Commission’s cable rate adjustment

forms [FCC Form 1210 approved under

OMB control number 3060–0595 and

FCC Form 1240 approved under OMB

control number 3060–0601] have been

modified to furnish this data.

All other information collection

requirements contained in 76.922 and

reported under this OMB control

number 3060–0607 remain intact. Those

requirements are found in 76.922(b)(5)

(Streamlined rate reduction process)

and 76.922(e)(7) (Headend upgrades).

76.922(b)(5) provides that an eligible

small system that elects to use the

streamlined rate reduction process must

implement the required rate reductions

and provide written notice of such

reductions to local subscribers, the local

franchising authority (‘‘LFA’’), and the

Commission.

76.922(e)(7) permits qualified small

systems and small systems owned by

small multiple system operators to

increase rates to recover the actual cost

of the headend equipment required to

add up to seven channels to Cable

Programming Service Tiers (‘‘CPSTs’’)

and single-tier systems, not to exceed

$5,000 per additional channel. These

rate increases may occur between

January 1, 1995 and December 31, 1997,

as a result of additional channels offered

on those tiers after May 14, 1994. In

order to recover costs for headend

equipment pursuant to this paragraph,

systems must certify to the Commission

their eligibility to use this paragraph,

and the level of costs they have actually

incurred for adding the headend

equipment and the depreciation

schedule for the equipment.

Synopsis of Order

1. In this Memorandum Opinion and

Order, we adopt rule changes

responsive to the decision of the court

in Time Warner Entertainment Co. v.

FCC, 56 F.3d 151 (D.C. Cir. 1995). In its

decision, the court considered rules

adopted by the Commission to

implement rate regulation and related

provisions of the Cable Television

Consumer Protection and Competition

Act of 1992 (‘‘1992 Cable Act’’). The

rules were largely affirmed by the court.

In five discrete areas, however, the court

reversed the Commission’s

implementing decisions and rules. First,

the court concluded that the

Commission construed the term

‘‘effective competition’’ too narrowly in

terms of the entities that could be

counted as providing direct competition

to existing cable operators. Second, the

Commission erred in concluding that

the requirement for a uniform rate

structure applies to all systems,

including those facing effective

competition and not otherwise subject

to rate regulation under the statute.

Third, the Commission’s conclusion

that the statute’s tier buy-through

provision applies to systems subject to

effective competition was found to

conflict with the structure and the

language of the statute. Fourth, the

Commission was found to have

exceeded its authority by establishing a

presumption that franchising authorities

seeking to cede the basic rate regulation

function to the Commission could

themselves fund rate regulation locally

if they were collecting franchise fees.

Fifth, the court vacated the

Commission’s rules relating to so-called

gap period external costs. The following

sections address each of these findings

in relation to our previous decisions and

rules.

2. Effective Competition. The 1992

Cable Act defined three types of systems

that are subject to ‘‘effective

competition’’ and therefore exempt from

rate regulation: low penetration systems,

competing provider systems, and

municipal systems.1 Effective

competition resulting from a competing

provider exists if the franchise area is—

(i) served by at least two unaffiliated

multichannel video programming

distributors each of which offers
Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Rules and Regulations 6493

2Section 301(b)(2) of the Telecommunications

Act of 1996 amends Section 543(d). All references

herein to Section 543(d) do not include this

amendment.

comparable video programming to at

least 50 percent of the households in the

franchise area; and

(ii) the number of households

subscribing to programming services

offered by multichannel video

programming distributors other than the

largest multichannel video

programming distributor exceeds 15

percent of the households in the

franchise area * * *.

On review, the court concluded that,

although the Commission’s definition of

competing providers was theoretically

sound, it conflicted with the plain

language of the statute, and Congress

did not limit the 15% threshold in

Section 543(l)(1)(B)(ii) to those cable

systems that satisfy the requirements of

Section 543(l)(1)(B)(i).

3. In response to the court’s decision

we are amending the rules relating to

the definition of effective competition as

reflected below. With this change in

place, a demonstration of ‘‘competing

provider’’ effective competition requires

only evidence that the franchise area is

served by at least two unaffiliated

multichannel video programming

distributors each of which offers

comparable video programming to at

least 50% of the households in the

franchise area and that the number of

households subscribing to programming

services offered by multichannel video

programming distributors other than the

largest multichannel video

programming distributor exceeds 15%

of the households in the franchise area.

4. Uniform Rate Structure. Section

543(d) 2 provides:

A cable operator shall have a rate

structure, for the provision of cable

service, that is uniform throughout the

geographic area in which cable service

is provided over its cable system.

The Commission initially determined

that the focus of this uniform rate

structure provision was properly ‘‘on

regulated systems in regulated markets,’’

that is, systems that did not face

effective competition as defined by the

1992 Cable Act. On reconsideration,

however, the Commission decided that

the uniform rate structure provision

applied not only to regulated systems,

but also to systems subject to effective

competition and otherwise exempt from

rate regulation under the 1992 Cable

Act. The Commission reasoned that the

harms targeted by the uniform rate

provision—‘‘charging different

subscribers different rates with no

economic justification and unfairly

undercutting competitors’ prices’’—

exist equally in areas where ‘‘effective

competition’’ exists.

5. The court concluded the latter

interpretation conflicts with the

language and legislative purpose of the

1992 Cable Act. Because it found that

Section 543(d) regulates rates within the

meaning of Section 543(a)(2), the court

concluded that the Commission’s

uniform rate structure regulation was

contrary to the statute insofar as it

applied to cable operators subject to

‘‘effective competition.’’ The court

stated that, by requiring competitive

systems to charge uniform rates, the

Commission undermined a hallmark

purpose of the 1992 Cable Act, which is

to allow market forces to determine the

rates charged by cable systems that are

subject to ‘‘effective competition’’ as

defined by Congress.

6. Section 310(b)(2) of the

Telecommunications Act of 1996

amended Section 543(d) by adding,

inter alia, the following language to the

end of that section:

This subsection does not apply to (1)

a cable operator with respect to the

provision of cable service over its cable

system in any geographic area in which

the video programming services offered

by the operator in that area are subject

to effective competition, * * *.

The Commission has amended its

rules to reflect this statutory

amendment, and in so doing has

complied with the court’s decision with

respect to the uniform rates

requirement.

7. Tier Buy-through. In an order, the

Commission concluded that the tier

buy-through provision applies not only

to regulated systems, but also to systems

subject to ‘‘effective competition’’ and

thus not subject to rate regulation under

the 1992 Cable Act. The court found

that the Commission’s interpretation of

the tier buy-through provision was not

permissible under the 1992 Cable Act.

In response to the court’s decision, we

are amending our rules as reflected in

below to provide that the tier buythrough requirement applies only to

systems not subject to effective

competition.

8. Franchising Authorities/Franchise

Fees. The Commission, reasoning that

some franchising authorities might wish

to have basic rates regulated but lack the

legal power or resources to do so at the

local level, concluded that its general

mandate to ‘‘ensure that the rates for the

basic service tier are reasonable’’

empowered it to regulate basic rates

upon the request of such franchising

authorities. Rather than requiring these

franchising authorities to file a

certification application that was

intended to be denied in order to

establish their lack of power or

resources, the Commission decided to

allow the authorities affirmatively to

request federal regulation of basic rates.

However, the Commission decided to

require a showing that the franchising

authority could not afford to regulate

when a franchising authority that

collects franchise fees claims financial

incapacity. The Commission established

a presumption that franchising

authorities receiving franchise fees have

the resources to regulate and required

any franchising authority seeking to

have the Commission exercise

jurisdiction over basic rates to rebut this

presumption with evidence showing

why the proceeds of the franchise fees

could not be used to cover the cost of

rate regulation.

9. The court concluded, however, that

the Commission erred in establishing

this presumption because the

presumption implies that the

franchising authority must use any

available franchise fees for purposes of

rate regulation. In response to the

court’s decision, we will no longer

establish a relationship between the

franchising authority’s ability to

regulate and its franchise fee collection.

The Commission will continue,

however, to exercise authority over the

basic tier in response to a franchising

authority’s request only when justified

by a franchising authority’s financial or

legal inability to proceed on its own. We

are amending our rules as reflected

below to incorporate the court’s

decision regarding franchising

authorities requests for Commission

assumption of jurisdiction.

10 External Costs Treatment. The

court held that the Commission’s

decision to preclude a rate adjustment

designed to recover changes in external

costs increases resulting from the period

between September 30, 1992 and an

operator’s initial date of regulation was

arbitrary and capricious. In response to

the court’s decision, we are amending

our rules to permit operators to adjust

their current permissible rates to reflect

the rates the operators would currently

be charging if they had been permitted

to include increases in external costs

occurring between September 30, 1992

and their initial date of regulation

reduced by inflation increases already

received with respect to those costs.

11. The operator will calculate an

adjustment which will be incorporated

into a Form 1210 or Form 1240, and

which will be added to the operator’s

rate. To calculate the adjustment, the

operator will use information from a

previously filed Form 1200. A more

detailed explanation of how to make the
6494 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Rules and Regulations

adjustment is provided below. The

general methodology is as follows: the

operator should calculate and subtract

(a) the ‘‘average monthly external cost

per subscriber per tier as of September

30, 1992, as adjusted for inflation

through the initial date of regulation’’

from (b) the ‘‘average monthly external

cost per subscriber per tier as of the

initial date of regulation.’’ To determine

(a), the operator would increase the

average monthly external cost per

subscriber per tier as of September 30,

1992 by the same inflation factor as was

applied in the calculation of initial

maximum permitted rates. The

difference between (a) and (b) is the

allowed adjustment. When using Form

1210 or Form 1240 to reflect these

adjustments, the operator shall disclose

that the adjustment has been included

in rates and shall provide its

calculations.

Final Regulatory Flexibility Act

Analysis.

12. As required by Section 603 of the

Regulatory Flexibility Act, 5 U.S.C.

§ 603 (RFA), an Initial Regulatory

Flexibility Analysis (IRFA) was

incorporated in the Notice of Proposed

Rulemaking in MM Docket 92–266 and

in several further notices of proposed

rulemaking. The Commission therein

sought written public comments on the

proposals, including comments on the

IRFAs, and addressed these comments

in previous orders. See, e.g., 8 FCC Rcd

5631, 5978 (1993), 58 FR 29736 (May

21, 1993); 9 FCC Rcd 1164, 1253 (1993),

58 FR 46718 (September 2, 1993); 9 FCC

Rcd 4119, 4249 (1994), 59 FR 17943

(April 15, 1994). This FRFA thus

addresses the impact of regulations on

small entitities only as adopted or

modified in the action and not as

adopted or modified in earlier stages of

this rulemaking proceeding. The

Commission’s Final Regulatory

Flexibility Analysis (FRFA) conforms to

the RFA, as amended by the Contract

with America Advancement Act of 1996

(CWAAA), Public Law No. 104–121, 110

Stat. 847.

13. Need and Purpose for Action: This

action is taken to conform the

Commission’s rules to the court’s

decision in Time Warner Entertainment

Co. v. FCC, 56 F.3d 151 (D.C. Cir. 1995).

14. Summary of Issues Raised by the

Public Comments in Response to the

Initial Regulatory Flexibility Analysis:

This order is adopted in direct response

to a judicial remand and has been

adopted without a further notice and

comment cycle.

15. Description and Estimate of the

Number of Small Entities Impacted:

Cable Systems: SBA has developed a

definition of small entities for cable and

other pay television services, which

includes all such companies generating

less than $11 million in revenue

annually. This definition includes cable

system operators, closed circuit

television services, direct broadcast

satellite services, multipoint

distribution systems, satellite master

antenna systems and subscription

television services. According to the

Census Bureau, there were 1,323 such

cable and other pay television services

generating less than $11 million in

revenue that were in operation for at

least one year at the end of 1992. The

Commission has developed its own

definition of a small cable system

operator for the purposes of rate

regulation. Under the Commission’s

rules, a ‘‘small cable company,’’ is one

serving fewer than 400,000 subscribers

nationwide. Based on our most recent

information, we estimate that there were

1,439 cable operators that qualified as

small cable system operators at the end

of 1995. Since then, some of those

companies may have grown to serve

over 400,000 subscribers, and others

may have been involved in transactions

that caused them to be combined with

other cable operators. Consequently, we

estimate that there are fewer than 1,439

small entity cable system operators that

may be affected by the decisions and

rules adopted in this Memorandum

Opinion and Order. The

Communications Act also contains a

definition of a small cable system

operator, which is ‘‘a cable 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.’’ The Commission has

determined that there are 61,700,000

subscribers in the United States.

Therefore, we found that an operator

serving fewer than 617,000 subscribers

shall be deemed a small operator, if its

annual revenues, when combined with

the total annual revenues of all of its

affiliates, do not exceed $250 million in

the aggregate. Based on available data,

we find that the number of cable

operators serving 617,000 subscribers or

less totals 1,450. Although it seems

certain that some of these cable system

operators are affiliated with entities

whose gross annual revenues exceed

$250,000,000, we are unable at this time

to estimate with greater precision the

number of cable system operators that

would qualify as small cable operators

under the definition in the

Communications Act.

16. Municipalities: The term ‘‘small

governmental jurisdiction’’ is defined as

‘‘governments of * * * districts, with a

population of less than fifty thousand.’’

There are 85,006 governmental entities

in the United States. This number

includes such entities as states,

counties, cities, utility districts and

school districts. We note that any

official actions with respect to cable

systems will typically be undertaken by

LFAs, which primarily consist of

counties, cities and towns. Of the 85,006

governmental entities, 38,978 are

counties, cities and towns. The

remainder are primarily utility districts,

school districts, and states, which

typically are not LFAs. Of the 38,978

counties, cities and towns, 37,566 or

96%, have populations of fewer than

50,000. Thus, approximately 37,500

‘‘small governmental jurisdictions’’ may

be affected by the rules adopted in this

Memorandum Opinion and Order.

17. Reporting, Recordkeeping, and

Other Compliance Requirements: The

rules do not establish any filing

requirements. However, an operator

choosing to adjust its rates to account

for changes in its external costs as

permitted by the rule adopted here will

have to make additional calculations in

conjunction with the filing of its form.

The franshising authority will review

these calculations in conjunction with

its review of the form. The rule will not

require any additional special skills

beyond any which are already needed in

the cable rate regulatory context.

18. Steps Taken to Minimize the

Economic Impact on Small Entities and

Significant Alternatives Rejected: The

rule changes adopted in this Order are

required by the court’s decision, and, if

anything, they result in decreasing the

regulatory burdens on cable operators. If

the revised interpretation of the

statutory definition of effective

competition results in a system being

subject to effective competition, then

the system will not be subject to rate

regulation. The amendment to the tier

buy-through rule provides more

flexibility for cable systems subject to

effective competition. The requirement

that the Commission not establish a

relationship between the franchising

authority’s ability to regulate and its

franchise fee collection may simplify

the franchising authority’s request that

the Commission assume jurisdiction.

The cable operator may choose whether

or not to adjust its rate to account for

changes in external costs as permitted

by the rule. If a system is regulated and

it chooses to adjust its rate, it can do so

the next time it is scheduled to file a

form.
Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Rules and Regulations 6495

19. Report to Congress: The

Commission shall send a copy of this

Final Regulatory Flexibility Analysis,

along with this Memorandum Opinion

and 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). A copy of

this FRFA will also be published in the

Federal Register.

20. Accordingly, it is ordered that,

pursuant to the authority contained in

Section 4(i) and (j) and 303 of the

Communications Act of 1934, as

amended, and the Cable Television

Consumer Protection and Competition

Act of 1992, Public Law No. 102–385,

Part 76 of the Commission Rules, 47

CFR Part 76, IS AMENDED as set forth

below.

21. It is further ordered that the

amendments to 47 CFR Sections 76.905

and 76.921 shall become effective

March 14, 1997, and the amendments to

47 CFR Sections 76.922 and 76.913 will

become effective upon approval by the

Office of Managment and Budget of the

information collection requirements, but

no sooner than March 14, 1997.

List of Subjects in 47 CFR Part 76

Cable television.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Part 76 of Chapter I 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 76.905 is amended by

revising paragraph (f) to read as follows:

§ 76.905 Standards for identification of

cable systems subject to effective

competition.

* * * * *

(f) For purposes of determining the

number of households subscribing to

the services of a multichannel video

programming distributor other than the

largest multichannel video

programming distributor, under

paragraph (b)(2)(ii) of this section, the

number of subscribers of all

multichannel video programming

distributors that offer service in the

franchise area will be aggregated.

* * * * *

3. Section 76.913 is amended by

revising paragraph (b)(1) to read as

follows:

§ 76.913 Assumption of jurisdiction by the

Commission.

* * * * *

(b) * * *

(1) The franchising authority lacks the

resources to administer rate regulation.

* * * * *

4. Section 76.921 is revised to read as

follows:

§ 76.921 Buy-through of other tiers

prohibited.

(a) No cable system operator, other

than an operator subject to effective

competition, 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

services as a condition of access to one

or more tiers of cable programming

services.

(b) A cable operator not subject to

effective competition 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 perchannel or per-program charge basis.

(c) With respect to cable systems not

subject to effective competition, prior to

October 5, 2002, the provisions of

paragraph (a) of this section shall not

apply to any cable system that lacks the

capacity to offer basic service and all

programming distributed on a per

channel or per program basis without

also providing other intermediate tiers

of service:

(1) By controlling subscriber access to

nonbasic channels of service through

addressable equipment electronically

controlled from a central control point;

or

(2) Through the installation,

noninstallation, or removal of frequency

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) With respect to cable systems not

subject to effective competition, any

retiering of channels or services that is

not undertaken in order to accomplish

legitimate regulatory, technical, or

customer service objectives and that is

intended to frustrate or has the effect of

frustrating compliance with paragraphs

(a) through (c) of this section is

prohibited.

5. Section 76.922 is amended by

revising paragraph (f)(4) to read as

follows:

§ 76.922 Rates for the basic service tier

and cable programming services tiers.

* * * * *

(f) * * *

(4) The starting date for adjustments

on account of external costs for a tier of

regulated programming service shall be

the earlier of the initial date of

regulation for any basic or cable service

tier or February 28, 1994. Except, for

regulated FCC Form 1200 rates set on

the basis of rates at September 30, 1992

(using either March 31, 1994 rates

initially determined from FCC Form 393

Worksheet 2 or using Form 1200 Full

Reduction Rates from Line J6), the

starting date shall be September 30,

1992. Operators in this latter group may

make adjustment for changes in external

costs for the period between September

30, 1992, and the initial date of

regulation or February 28, 1994,

whichever is applicable, based either on

changes in the GNP–PI over that period

or on the actual change in the external

costs over that period. Thereafter,

adjustment for external costs may be

made on the basis of actual changes in

external costs only.

* * * * *

This attachment will not be published in

the Code of Federal Regulations.

Attachment

This adjustment may be made only to rates

set under the benchmark methodology on the

basis of rates in effect at September 30, 1992

(using either March 31, 1994 rates initially

determined from FCC Form 393 Worksheet 2

or using Form 1200 Full Reduction Rates

from Line J6). This is a one-time adjustment

to rates and may be made on a FCC Form

1210 or FCC Form 1240. To adjust such rates

to include fully the change in external costs

occurring between September 30, 1992 and

the initial date of regulation or February 28,

1994, whichever is earlier, the operator will

make the adjustments pursuant to the

procedure outlined below.

Step 1. Identify the average external cost

per subscriber per tier as of the initial date

of regulation or February 28, 1994, as

applicable.

This information is found on Line B7 of

Form 1200.

Step 2. Identify the average monthly

external cost per subscriber per tier as of

September 30, 1992.

This should be calculated using the same

methodology used to determine the external

cost per subscriber per tier on the initial date

of regulation, and the operator shall therefore

follow the instructions for Lines B2 through

B7 on FCC Form 1200. In such case

‘‘Beginning Date’’ shall be considered to be

September 30, 1992 for purposes of following

these instructions.
6496 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Rules and Regulations

Step 3. Determine the inflation factor

applied in the calculation of initial maximum

permitted rates to adjust for inflation for the

period from September 30, 1992 to the initial

date of regulation or February 28, 1994, as

applicable.

If the rates being adjusted were determined

on FCC Form 1200 based on rates in effect

on September 30, 1992 under the FCC Form

1200 Full Reduction Methodology (i.e., the

rates on both Line I18 and Line J6 of FCC

Form 1200), the inflation factor applied is

3%. In determining Full Reduction Rates on

FCC Form 1200, the September 30, 1992 rates

were adjusted to September 30, 1993 (on Line

G10) using 3%.

If the rates being adjusted were determined

on FCC Form 1200 based on rates current at

March 31, 1994 but initially determined on

FCC Form 393 from September 30, 1992 rates

(under the Worksheet 2 methodology), the

inflation factor applied from September 30,

1992 to the initial date of regulation is the

factor found on Line 401 of FCC Form 393.

This is the factor used by the operator

initially to set rates using FCC Form 393,

unless a corrected factor was ordered by a

regulatory authority. If the factor was

corrected, the regulator-ordered factor for

Line 401 shall be used.

Step 4. Adjust the amount from Step 2 by

the factor identified in Step 3.

Step 5. Subtract the amount calculated in

Step 4 from the amount determined in Step

1, i.e., from the average monthly external cost

per subscriber per tier as of the initial date

of regulation. The resultant amount is the

permanent adjustment—a one-time average

monthly per subscriber per tier adjustment to

the operator’s maximum permitted rate.

Step 6. Complete FCC Form 1210 or FCC

Form 1240 in accordance with Commission

rules and procedures for the applicable form,

but include the adjustment calculated in Step

5.

If a FCC Form 1210 is used, the resultant

adjustment amount from Step 5 should be

added to the amount on Line J8 (Aggregate

Full Reduction Rate) or, if transition rates are

being adjusted, the adjustment should be

added to the amounts on Lines I8 (Updated

Transition Rate per Tier) and J8.

If a FCC Form 1240 is used, the resultant

adjustment amount from Step 5 should be

added to Line H9 (Maximum Permitted Rate

for Projected Period).

Along with the FCC Form 1210 or FCC

Form 1240 adjusted, the operator shall

disclose that the adjustment has been

included in rates and shall provide its

calculations of the adjustment amount.

The operator shall provide the level of

external cost adjustment disclosure shown in

Module B, Line B2 through B14 of FCC Form

1200, except that it shall also disclose the

adjustment for inflation applied to the

average monthly external cost per subscriber

per tier as of September 30, 1992.

[FR Doc. 97–3454 Filed 2–11–97; 8:45 am]

BILLING CODE 6712–01–P