63492 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Proposed Rules

FOR FURTHER INFORMATION CONTACT:

Michael Specht, Senior Engineer,

Network Services Division, Common

Carrier Bureau, (202) 418–2378 or

Elizabeth Nightingale, Attorney,

Network Services Division, Common

Carrier Bureau, (202) 418–2352.

SUPPLEMENTARY INFORMATION: This

summarizes the Commission’s Fourth

Notice of Proposed Rulemaking in the

matter of Calling Number Identification

Service—Caller ID, (CC Docket No. 91–

281, FCC 95–480, adopted November

30, 1995 and released December 1,

1995). The file is available for

inspection and copying during the

weekday hours of 9 a.m. to 4:30 p.m. in

the Commission’s Reference Center,

room 239, 1919 M St., N.W.,

Washington, D.C., or copies may be

purchased from the Commission’s

duplicating contractor, ITS, Inc. 2100 M

St., N.W., Suite 140, Washington, D.C.

20037, phone (202) 857–3800.

Analysis of Proceeding

On May 5, 1995, the Commission

affirmed its finding that interstate

delivery of a calling party’s number is

in the public interest. The Commission

noted that widespread availability of

CPN promotes new services, consistent

with Commission responsibilities under

Section 1 and 7 of the Communications

Act and benefits the public by enabling

consumers to conduct telephone

transactions more efficiently. The

Commission also continued to recognize

the importance of balancing the benefits

of such widespread availability with the

privacy interests of calling and called

parties and the need for reasonable

consumer education. The Commission

affirmed rules that require carriers with

Signalling System 7 (SS7) call set up

capability to transport CPN to

interconnecting carriers without

additional charge. The Commission also

affirmed rules that require originating

carriers to recognize *67 as the first

three digits of a call as a caller’s request

for privacy. The Commission permitted

per line blocking where state policy

allows and established rules that

carriers providing per line blocking

services recognize *82 as a caller’s

request that privacy not be provided.

Additionally, the Commission affirmed

rules that require carriers to notify

customers with respect to *67 and *82

capabilities.

Over the past several months, the

Commission has received numerous

requests from petitioners seeking

waivers, stays or declaratory rulings of

the Commission’s caller ID rules. On

October 30, 1995, the Commission

released an Order that addressed some

of these requests for relief. See Rules

and Policies Regarding Calling

Numbering Identification Service—

Caller ID, Order, CC Docket No. 91–281,

FCC 95–446, released October 30, 1995.

On November 30, 1995, the Common

Carrier Bureau, pursuant to delegated

authority, adopted an Order that

addressed the remaining petitions for

relief. See Rules and Policies Regarding

Calling Number Identification Service—

Caller ID, Order, CC Docket No. 91–281,

DA 95–2415 (Com. Car. Bur. adopted

November 30, 1995).

The Fourth NPRM tentatively

concludes that LEC switches not

equipped with CLASS software should

not be required to pass CPN and that

they should be permitted to pass it only

if they can provide the blocking and

unblocking capabilities specified in

Section 64.1601(b) of the Commission’s

rules. The Fourth NPRM seeks comment

on its tentative conclusions, and

specifically on the economic feasibility

of adding blocking and unblocking

capabilities to switches already able to

pass CPN.

Ordering Clauses

It is further ordered, pursuant to

Sections 1, 4(i) and (j), 201–205, 218 of

the Communications Act as amended,

47 U.S.C. 151, 154(i), 154(j), 201–205,

and 218, that notice is hereby given of

the proposed changes in policies

regarding the application of caller ID

rules to switches without CLASS

software, and comment is invited on

this proposal.

List of Subjects in 47 CFR Part 64

Calling party telephone number,

Communications common carriers,

Telephone.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 95–30051 Filed 12–8–95; 8:45 am]

BILLING CODE 6712–01–M

47 CFR Part 76

[CS Docket No. 95–174; FCC 95–472]

Cable Television Act of 1992

AGENCY: Federal Communications

Commission.

ACTION: Proposed rule.

SUMMARY: This Notice of Proposed

Rulemaking seeks comment on

proposed methods for cable operators’

setting of uniform rates for uniform

services offered in multiple franchising

areas. The Commission is exploring this

issue to solicit comment on possibly

permitting operators to establish

uniform rates. The item will help the

Commission create a record on this

issue, which will assist the Commission

in designing new or amending current

regulations to allow operators to

establish uniform rates.

DATES: Comments are due on or before

January 12, 1996 and reply comments

are due on or before February 12, 1996.

ADDRESSES: Federal Communications

Commission, 1919 M Street NW.,

Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

Larry Walke, (202) 416–0847.

SUPPLEMENTARY INFORMATION: The text of

this document 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

Service, (202) 857–3800, 2100 M Street

NW., Washington, DC 20037.

[CS Docket No. 95–174]

In the matter of Implementation of Sections

of the Cable Television Consumer Protection

and Competition Act of 1992—Rate

Regulation Uniform Rate-Setting

Methodology.

Notice of Proposed Rulemaking

Adopted: November 28, 1995.

Released: November 29, 1995.

By the Commission:

Comment Date: January 12, 1996.

Reply Comment Date: February 12,

1996.

I. Introduction

1. Under the Commission’s cable

service rate regulations, a cable operator

serving multiple franchise areas must

establish maximum permitted service

rates in each franchise area. These rates

often vary from franchise area to

franchise area, even if each area receives

the identical package of program

services. This outcome may cause

needless confusion for subscribers, as

well as unnecessary administrative

burdens for cable companies. In

addition, a cable operator’s ability to

market its product on a regional basis

may be hindered. Therefore, in this

Notice of Proposed Rulemaking

(‘‘NPRM’’), we explore the design and

implementation of an optional ratesetting methodology under which a

cable operator could establish uniform

rates for uniform cable service tiers

offered in multiple franchise area.

II. Background

2. Under the Cable Television

Consumer Protection and Competition

Act of 1992 (the ‘‘1992 Cable Act’’), the

rates charged by a cable system are
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Proposed Rules 63493

subject to regulation unless the system

faces effective competition. In

particular, the 1992 Cable Act directed

the Commission to establish regulations

designed to protect subscribers from

unreasonable rates for certain types of

cable services offered by such systems.

Rate-regulated services consist of the

basic service tier (‘‘BST’’) and the cable

programming services tier (‘‘CPST’’).

3. Every cable operator subject to rate

regulation must offer a BST that

includes all local broadcast stations that

the operator carries on its system, plus

all public, educational, and

governmental (‘‘PEG’’) access channels

required by the operator’s franchise

agreement with its local franchising

authority. If it so chooses, a cable

operator may offer additional

programming on its BST beyond these

minimum requirements. Subscribers to

a rate-regulated cable system must

purchase the BST in order to have

access to any other tier of service.

CPSTs include all non-BST

programming offered over the cable

system, other than programming offered

to subscribers on a per channel or per

program basis. There is no general

requirement that an operator offer a

CPST, and some operators offer no

CPST. Per channel and per program

offerings are generally exempt from rate

regulation.

4. Congress identified several specific

factors that the Commission must

consider in establishing regulations

governing BST and CPST rates. The

Commission may take other factors into

account as well. In addition, the 1992

Cable Act required that the Commission

‘‘seek to reduce administrative burdens

on subscribers, cable operators,

franchising authorities and the

Commission’’ in establishing its

regulations.

5. Under the primary method of rate

regulation adopted by the Commission,

a regulated cable system determines the

maximum permitted initial rates for

cable services pursuant to a benchmark

formula. In selecting a primary

regulatory model, the Commission

employed a benchmark formula instead

of the cost-of-service methodology that

is traditionally applied to public

utilities because of the often significant

administrative costs and burdens on

regulators and regulated companies

associated with cost-of-service

regulation. However, operators subject

to regulation do have the option of

setting rates in accordance with a costof-service methodology that the

Commission has developed.

6. To set or justify its initial rates in

accordance with the benchmark

formula, a cable operator first must use

FCC Form 1200. This form generates a

maximum permitted rate as of May 15,

1994 for a particular franchise area,

based upon various characteristics

specific to the cable system within that

franchise area. These variables include

channels per tier, number of regulated

non-broadcast channels per tier, number

of subscribers in the local franchise

area, number of tier changes, the census

income level for the franchise area,

number of additional outlets and remote

control units in the franchise area,

system-wide subscribership, whether

the system is part of a multiple system

operation (‘‘MSO’’), and the number of

systems in the MSO. A benchmark

operator may, and sometimes must,

adjust the rates permitted by Form 1200

to take account of changes in inflation

and other costs since May 15, 1994.

Currently, the operator must use FCC

Form 1210 to calculate these

adjustments. As of the effective date of

the Form 1240 promulgated pursuant to

the recently adopted Thirteenth Order

on Reconsideration, 60 FR 52106

(October 6, 1995), operators may make

rate adjustments as provided by FCC

Form 1240 in lieu of Form 1210.

Whereas an operator can file Form 1210

as often as once per calendar quarter to

adjust rates to take account of costs

already incurred by the operator, Form

1240 will be filed no more than

annually but will permit the operator to

adjust rates based on costs to be

incurred within the coming year. In

addition, operators may increase rates to

reflect the addition of new programming

services to regulated tiers. Our rules

provide two methods for adjusting rates

for the addition of programming

services. First, an operator can add

channels to CPSTs using our original

‘‘going-forward’’ rules, which allow the

operator to charge subscribers the cost

of the additional programming plus up

to an additional 7.5% markup on that

cost. Second, an operator may add

programming services under the

Commission’s more recently adopted

going-forward option, which allows an

operator to charge subscribers up to

$0.20 per channel for additional

channels and up to a further $0.30 in

associated licensing fees. The latter

going-forward rules similarly require

specific decreases in subscriber rates

when an operator deletes channels from

its lineup, depending on when the

channel in question was added.

7. Enforcement of the Commission

rate regulations is divided between

qualified local franchising authorities

and the Commission. A local

franchising authority may enforce

regulation of the cable operator’s BST

once the Commission has received and

approved the local franchising

authority’s certification that it has the

legal and practical ability to do so. Upon

receiving notification that the

franchising authority has been certified

by the Commission to regulate rates, a

cable operator opting for benchmark

regulation must justify its existing BST

rates pursuant to the benchmark

formula. Once regulated, the operator

also must seek local approval for future

BST rate increases. The operator seeks

such approvals by filing the forms

described above. The operator also must

justify its rates for equipment and

installations associated with the BST.

The franchising authority must then

review the forms, may request

additional information if reasonably

necessary to complete its review, and

ultimately issue an order approving or

disapproving the rates proposed by the

operator.

8. The participation by local

franchising authorities in the regulation

of cable service is critical. Generally, the

Commission establishes federal

standards and procedures concerning

various aspects of cable service which

local franchising authorities implement.

These rules include but are not limited

to subscriber rates, cable service

technical standards, and customer

service. Local franchising authorities are

the first line of enforcement of these

numerous regulations. While the

Commission may be on hand, either by

statute or informally, to help resolve any

disputes that may arise between a cable

provider and a local franchising

authority, the responsibility to oversee

cable service regulations falls primarily

on the franchise authorities. Generally,

the Commission gives significant

deference to decisions by local

franchising authorities. For example,

where a cable operator appeals a

franchising authority’s rate decision, the

Commission will not conduct de novo

review of the decision; rather, the

Commission will defer to the local

authority’s decision provided there is a

rational basis for the decision. This

process is just one example of the

Commission’s significant reliance upon

local franchising authorities in the

regulation of basic cable service.

Moreover, in all but the most rare

situations, local authorities administer

cable service regulation without federal

assistance.

9. An operator’s CPST is subject to

regulation directly by the Commission.

Commission enforcement of CPST rate

regulation is triggered by the filing of a

complaint by a subscriber or franchising

authority or other relevant state or local

regulatory authority. Upon the filing of
63494 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Proposed Rules

such a complaint, the operator must file

the necessary forms with the

Commission, which then follows a

review process analogous to that used

by local franchising authorities

regulating BST rates.

10. The benchmark approach

described above requires operators to

establish a separate rate structure in

each franchise area served, since many

of the variable used to generate the

maximum rate are franchise specific.

For example, while the data on whether

the system is part of an MSO will be

identical throughout all of the franchise

areas served, the census income and

subscribership variables are measured

on a franchise area basis and necessarily

will vary among franchise areas.

Similarly, costs associated with PEG

channels and other franchise-related

costs may vary among franchise areas. A

disparity in rates among franchise areas

will occur even if the operator provides

service to multiple franchise areas

through a single, integrated cable

system, since even in that case rates are

set separately for each franchise area on

the basis of variables specific to the

franchise area.

11. Relatedly, we note that the

acquisition and clustering of

neighboring cable systems by MSOs has

become fairly common. An operator

seeking to establish uniform rates and

services for clustered systems likely will

need to add channels to the

programming lineups of certain system

and delete channels from the lineups of

other systems. While the Commission’s

‘‘going-forward’’ rate regulations

typically provide operators with the

flexibility to establish a uniform

package of programming services, the

operator’s efforts to equalize prices will

be severely constrained because the

rules quite specifically dictate permitted

changes in rates that must accompany

changes in level of service and do not

permit regional averaging of the data

used to complete rates.

III. Discussion

12. We tentatively conclude that

permitting operators serving multiple

franchise areas to establish uniform

services at uniform rates in all such

areas would be beneficial for

subscribers, franchising authorities, and

operators. For example, facilitating an

operator’s ability to advertise a single

rate for cable service over a broad

geographic region may lower marketing

costs and enhance the operator’s

efficiency in responding to competition

from alternative service providers that

typically may establish and market

uniform services and rates without

regard to franchise area boundaries. The

increased ability of operators to compete

resulting from this approach may

increase penetration in a particular

franchise area. Such an approach could

reduce consumer confusion because a

subscriber moving from one part of the

operator’s service area to another would

not experience any difference in price or

service offerings. We explore below two

alternatives for permitting an operator to

establish uniform rates for uniform

services across multiple franchise areas,

while fully protecting subscribers from

unreasonable rates, and solicit comment

on these and any other possible

approaches. Before discussing these two

methodologies, we will identify several

issues that will arise regardless of which

methodology we ultimately adopt.

13. Cable operators currently serve

multiple franchise areas using a variety

of system structure; some operators

serve multiple areas with a single,

integrated cable system while others use

multiple, distinct systems. An operator’s

rates are not dependent on whether

single or multiple systems are used to

deliver service. We propose that under

a uniform rate0-setting option, a cable

operator be allowed to establish uniform

rates for uniform service offerings in

multiple franchise areas regardless of

whether the operator serves the multiple

franchise areas with on integrated cable

system (i.e., one ‘‘headend’’) or with

multiple separate cable systems, and

seek comment on this proposal.

14. We believe that cable operators

primarily will seek to establish uniform

rates for systems serving multiple

franchise areas that are located within

some measure of proximity to each

other, perhaps for purposes of regional

adverting. Moreover, it is likely that the

service costs and characteristics, such as

the number of channels, density of

subscribers, and median income level,

associated with various franchise areas

typically will vary as the geographic

distances increase between the multiple

franchise areas. This circumstance can

increase the complexity of uniform ratesetting across multiple franchise areas.

We note that a cable operator’s

obligation under the ‘‘must-carry’’ rules

to carry local over-the-air broadcast

stations, as well as the operator’s

copyright fee responsibilities, are

determined based on the Area of

Dominant Influence (‘‘ADI’’) in which

the system is located. Section 4 of the

1992 Cable Act specifies that a

commercial broadcasting station’s

market shall be determined in the

manner provided in § 73.3555(d)(3)(i) of

the Commission’s Rules, as in effect on

May 1, 1991. This section of the rules,

now redesignated § 73.3555(e)(3)(i),

refers to Arbitron’s ADI for purposes of

the broadcast multiple ownership rules.

Section 76.55(e) of the Commission’s

Rules provides that the ADIs to be used

for purposes of the initial

implementation of the mandatory

carriage rules are those published in

Arbitron’s 1991–1992 Television Market

Guide. This Arbitron Guide is available

at the Federal Communications

Commission, 2033 M Street, N.W.,

Room 200, Washington, D.C. We note

that Arbitron, the company that

establishes the boundaries for ADIs, has

ceased updating its ADI market list.

Commission staff is currently exploring

the designation of a replacement

measure. Accordingly, we seek

comment on whether the ADI, or some

other region, would be appropriate for

the setting of uniform rates. We seek

comment on additional benefits of

limiting uniform rate-setting to

franchise areas located within the same

ADI or similar region, as well as any

difficulties resulting from this

limitation. We further seek comment on

the benefits or detriments of limiting

rates to franchise areas located within

the same county or state. Finally, we

seek comment on the costs and benefits

of permitting cable operators to select

the region in which to set uniform rates

under a uniform rate-setting method.

15. Below we describe two possible

approaches for permitting cable

operators to establish uniform rates for

uniform packages of services offered to

multiple franchise areas. We invite

comment from interested parties as to

these approaches and we seek

suggestions as to any other alternatives

that would further the goals discussed

above.

16. The first approach would work

generally as follows. A cable operator

first would determine or identify BST

and CPST rates established in each local

franchise area pursuant to our existing

rate regulations, as adjusted to reflect

permitted or required rate changes

resulting from the addition or deletion

of channels necessary to structure

uniform tiers throughout the franchise

areas served. We seek comment on

whether an operator would similarly

follow our existing regulations

concerning rates for equipment. BST

rates then would be equalized by

reducing all BST rates charged in the

relevant region to the lowest regulated

BST rate charged in any one franchise

area located in the region. The new

uniform BST rate would now constitute

the operator’s maximum permitted rate

for basic cable service in all the relevant

franchise areas. The operator then

would add the total amount of ‘‘lost’’

revenue resulting from the various BST

rate reductions to the total CPST
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Proposed Rules 63495

revenues to which the operator is

otherwise entitled, under our existing

rules, for all franchise areas in the

relevant region. The operator then

would determine a uniform CPST rate

by dividing the total of the displaced

BST revenues and existing CPST

revenues by all CPST subscribers in the

region. Thereafter, the operator would

apply our going-forward policies and

annual rate adjustment regulations on a

regional basis. A numerical example of

this option can be found below.

17. In some instances, cable systems

may be regulated in certain franchise

areas within the region and unregulated

in others. We proposed that operators be

free to establish uniform rates under the

uniform rate-setting approach in

unregulated as well as regulated

franchise areas for purposes of

uniformity. We believe that in such

situations, an operator may elect to base

uniform rates in part on data from

unregulated areas only if such uniform

rates also are charged in the unregulated

areas. We believe that this optional

approach further enhances operators’

flexibility in establishing uniform rates.

Moreover, uniform rates calculated

pursuant to the method ultimately

adopted in this proceeding, and charged

in unregulated areas, should increase an

operator’s regulatory certainty with

respect to whether the subscriber rates

charged in the unregulated areas are

reasonable under our rules should the

operator later become subject to rate

regulation in one of those areas. An

operator later becoming subject to

regulation would follow our existing

procedures for establishing regulated

rates, including determining an initial

rate pursuant to our benchmark formula

or cost-of-service rules, and seeking the

approval of rates from the local

franchising authority. We seek comment

on this approach. We also seek

comment on how an operator’s

regulated rates for equipment may affect

the setting of uniform rates.

18. An operator’s rates would remain

subject to the dual jurisdictions of the

affected local franchising authorities

and the Commission. Upon the initial

application of this approach, BST rates

would be unchanged in at least one

franchise area and would be reduced in

each franchise area with higher rates.

Thus, this proposal may benefit many

subscribers who receive only basic cable

service, and should be cost-neutral to

the remaining basic-only subscribers in

the franchise area(s) with the lowest

current BST rates. Certified local

franchising authorities would retain

jurisdiction to ensure that the operator’s

BST rates are in compliance with our

rules. The operator would recoup the

costs of reduced BST rates through the

averaged CPST rates over which the

Commission would retain jurisdiction.

We seek comment on this proposed

approach, including comment on: (1)

the costs and benefits of requiring

operators to reduce BST rates to the

lowest common rate under this option,

(2) the impact of an operator’s

redistribution of BST rate reductions

among CPST rates charged in

neighboring franchise areas, and (3) the

application of our going-forward

policies and annual rate adjustment on

a regional basis. We note that our rules

allow franchising authorities to review

and approve operators’ proposed BST

rates and increases to those rates. Under

this option, however, pre-approval of

uniform BST rates by franchising

authorities generally will be

unnecessary given that subscriber rates

typically will decrease or remain

unchanged. We seek comment on the

benefits and costs of this approach for

local franchising authorities, and

whether this approach will protect

subscribers from unreasonable rates.

19. Under the second possible

approach for establishing uniform rates

for uniform services, a cable operator

would determine or identify BST and

CPST rates charged in each of the

relevant franchise areas pursuant to our

existing rate regulations, as adjusted for

rate changes resulting from the addition

or deletion of channels necessary to

structure uniform service tiers. We seek

comment on whether an operator

similarly would follow our existing

regulations concerning rates for

equipment. After aggregating the BST

rates and revenues for all the franchise

areas in the region, and then the CPST

rates and revenues for all franchise

areas, the operator would determine a

single ‘‘blended’’ rate for BSTs, and a

single blended rate for CPSTs, to be

charged in all franchise areas in the

region pursuant to a formula designed

by the Commission. The blended rates

for BSTs and CPSTs would be

determined by averaging the operator’s

total BST and CPST rates, respectively,

on a per subscriber basis for all

subscribers in the region, in order to

ensure that the establishment of uniform

rates is revenue-neutral to the cable

operator. A numerical example of this

option can be found below. The

operator would be required to justify its

blended rates to each local franchising

authority certified to regulate rates. The

operator would be free, of course, to

establish this rate in uncertified areas,

for purposes of uniformity across a wide

region. As noted for the other proposed

approach, we propose that an operator

may elect a base uniform rates in part

on data from unregulated areas only if

such uniform rates also are charged in

the unregulated areas, and believe that

similar benefits for operators and

subscribers will result from this

requirement under both possible

approaches. We seek comment on this

tentative conclusion, as well as

comment on other benefits and

detriments of the cable operator basing

the blended rate in part on data from

such unregulated areas. We also seek

comment on how an operator’s

establishment of uniform rates in

uncertified areas may impact on the

operator’s ability to later implement

required refunds or prospective rate

reductions in certified areas.

20. After setting initial uniform rates,

the operator would apply our goingforward policies and the recently

adopted annual adjustment method on a

regional basis to adjust future rates.

Again, the dual jurisdictional

boundaries of franchising authorities

and the Commission would remain

intact. We seek comment on this

approach generally, including comment

on: (1) any associated burdens for

regulated cable companies and

regulators, (2) whether this approach

would protect cable subscribers from

unreasonable rates in accordance with

the 1992 Cable Act, (3) the proposed

calculation of the blended rate, and (4)

the application of our going-forward

policies and annual adjustment method

on a regional basis. We note that under

this approach subscribers’ BST rates

may increase in certain jurisdictions

(and decrease in others) as BST rates are

adjusted to establish uniformity. We

seek comment on the benefits and costs

of adopting this formula given that

certain BST subscribers may experience

rate increases.

21. Both proposed uniform rate

setting methodologies will result in

increases in CPST rates for some

subscribers. In light of the cost savings

to cable operators likely to be created by

implementation of uniform rates, we

seek comment on whether it is

appropriate to either limit the amount of

increase a CPST subscriber must pay in

a given year as a result of this institution

of uniform rates or to phase-in

significant increases over a two-year

period. Comments should also address

what administrative burdens such a

limitation or phased-in increase would

create for operators.

22. Several potential timing

circumstances may affect the

implementation of a uniform rate-setting

approach. For example, where an

operator has submitted justifications,

the operator may be subject to multiple
63496 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Proposed Rules

local tolling orders of varying durations

which can complicate implementation

of uniform BST rates. After the initial 30

day notice period that must precede any

rate adjustment, franchising authorities

can toll the effective date of a proposed

rate for an additional 90 days in

benchmark cases or 150 days in cost of

service cases. We seek suggestions of

procedures that would permit a cable

operator in this situation to establish

uniform rates as expeditiously as

possible. We solicit comment on

allowing proposed uniform rates to take

effect automatically after some period of

time, subject to ultimate resolution in a

later ‘‘truing-up’’ process, in which rate

discrepancies could be reflected in rates

for the following year.

23. In proposing to give cable

operators flexibility to charge uniform

rates for uniform services, we in no way

seek to circumscribe the authority of

local franchising authorities to negotiate

franchise-specific terms in their

agreements with cable operators. For

example, we note that local franchising

authorities typically establish

requirements in a franchise agreement

with respect to the designation or use of

the franchised cable operator’s channel

capacity of PEG services. This could

result in a cable system having a nonuniform channel line-up within

franchise areas where it seeks to

establish uniform rates. We seek

comment on whether our uniform rate

proposals require any modification or

adjustment to accommodate such nonuniform offerings.

24. A further problem may arise

because PEG requirements and other

franchise obligations will vary between

franchise areas, such that the operator’s

‘‘franchise related costs,’’ one of the

variables used to establish and adjust

rates, also will vary among franchise

areas. We seek to provide cable

operators with uniform rate alternatives

while allowing franchising authorities

flexibility to negotiate franchise terms

and conditions that respond to

particular community needs. We also

seek to ensure that the uniform rate

proposal does not allow franchisespecific costs to be shifted from one

community to another. One alternative

for resolving this issue would be to

permit the cable operator simply to

itemize and charge for franchise-related

costs outside the uniform rate-setting

formula. We seek comment on this

approach. We also seek suggestions of

other methods that could compensate

operators for legitimately incurred

expenses while protecting subscribers

from unreasonable rates. Finally, we

seek comment on additional potential

obstacles to the establishment of

uniform rates and service offerings, and

possible resolutions to such obstacles.

IV. Initial Regulatory Flexibility Act

Analysis

25. Pursuant to Section 603 of the

Regulatory Flexibility Act, the

Commission has prepared the following

initial regulatory flexibility analysis

(‘‘IRFA’’) of the expected impact of

these proposed policies and rules on

small entities. Written public comments

are requested on the IRFA. These

comments must be filed in accordance

with the same filing deadlines as

comments on the rest of the NPRM, but

they must have a separate and distinct

heading designating them as responses

to the regulatory flexibility analysis. The

Secretary shall cause a copy of the

NPRM, including the initial regulatory

flexibility analysis, to be sent to the

Chief Counsel for Advocacy of the Small

Business Administration in accordance

with Section 603(a) of the Regulatory

Flexibility Act, Pub. L. No. 96–354, 94

Stat. 1164, 5 U.S.C. 601 et seq. (1981).

26. Reason for Action. The

Commission has perceived that our

cable service rate regulations may

impede a cable operator’s ability to

establish uniform rates for uniform

services offered in multiple clustered

franchise areas. We believe that

allowing operators to set such uniform

rates may facilitate operators’ regional

marketing of services, reduce

administrative burdens on both

regulators and cable companies, and

reduce consumer confusion resulting

from disparate rates. The NPRM

proposes two possible alternatives for

setting uniform rates, and solicits

comments on further approaches.

27. Objectives. To explore a method

under which a cable operator could

establish uniform rates for uniform

services offered in multiple franchise

areas.

28. Legal Basis. Action as proposed

for this rulemaking is contained in

Section 623 of the Communications Act

of 1934, as amended, 47 U.S.C. § 543.

29. Description, Potential Impact and

Number of Small Entities Affected. The

proposals, if adopted, will not have a

significant effect on a substantial

number of small entities.

30. Reporting, Recordkeeping and

Other Compliance Requirements. None.

31. Federal Rules which Overlap,

duplicate or Conflict with these Rules.

None.

32. Any Significant Alternatives

Minimizing Impact on Small Entities

and Consistent with Stated Objectives.

None.

V. Paperwork Reduction Act

33. This NPRM contains either a

proposed or modified information

collection. The Commission, as part of

its continuing effort to reduce

paperwork burdens, invites the general

public and the Office of Management

and Budget (OMB) to comment on the

information collections contained in

this NPRM, as required by the

Paperwork Reduction Act of 1995, Pub.

L. No. 104–13. Public and agency

comments are due to the same time as

other comments on this NPRM; OMB

comments are due 60 days from date of

publication of this NPRM in the Federal

Register. 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.

VI. Procedural Provisions

34. Ex parte Rules—Non-Restricted

Proceeding. This is a non-restricted

notice and comment rulemaking

proceeding. Ex parte presentations are

permitted, except during the Sunshine

Agenda period, provided that they are

disclosed as provided in Commission’s

rules. See generally 47 CFR §§ 1.1202,

1.1203, and 1.1206(a).

35. To file formally in this

proceeding, you must file an original

plus four copies of all comments, reply

comments, and supporting comments. If

you want each Commissioner to receive

a personal copy of your comments and

reply comments, you must file an

original plus nine copies. Comments are

due by January 12, 1996, and reply

comments are due by February 12, 1996.

You should send comments and reply

comments to Office of the Secretary,

Federal Communications Commission,

1919 M Street NW., Washington, DC

20554. Comments and reply comments

will be available for public inspection

during regular business hours in the

FCC Reference Center, Room 239,

Federal Communications Commission,

1919 M Street NW., Washington, DC

20554.

36. In addition to filing comments

with the Secretary, a copy of any

comments on the information

collections contained herein should be

submitted to Dorothy Conway, Federal
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Proposed Rules 63497

Communications Commission, Room

234, 1919 M Street, N.W., Washington,

DC 20554, or via the Internet to

dconway@fcc.gov, and to Timothy Fain,

OMB Desk Officer, 10236, NEBO, 725—

17th Street, N.W., Washington, DC

20503 or via the Internet to fain—

t@al.eop.gov.

37. For additional information

concerning the information collections

contained in this NPRM contact Dorothy

Conway at 202–418–0217, or via the

Internet at dconway@fcc.gov.

VII. Ordering Clauses

38. It is ordered that, pursuant to

Sections 623 of the Communications

Act of 1934, as amended, 47 U.S.C. 543

notice is hereby given of proposed

amendments to Part 76, in accordance

with the proposals, discussions, and

statement of issues in this NPRM, and

that COMMENT IS SOUGHT regarding

such proposals, discussion, and

statement of issues.

39. It is further ordered that the

Secretary shall send a copy of this

NPRM, including the Initial Regulatory

Flexibility Analysis, to the Chief

Counsel for Advocacy of the Small

Business Administration in accordance

with paragraph 603(a) of the Regulatory

Flexibility Act, Public Law 96–354, 94

Stat. 1164, 5 U.S.C. §§ 601 et seq. (1981).

List of Subjects in 47 CFR Part 76

[Cable television.]

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Examples of Proposed Methods

Current rates Franchise A Franchise B Franchise C

BST .............................................................................................................................................. $10 $11 $11

CPST ............................................................................................................................................ 21 21 20

Total .................................................................................................................................. 31 32 31

*Each franchise area has 11,000 BST subscribers and 10,000 CPST subscribers.

First Proposed Method:

Step 1: BST rates reduced to lowest in

region: BST rates in franchise areas ‘‘B’’

and ‘‘C’’ reduced to $10.

Step 2: ‘‘Lost’’ BST revenues is

totaled; $1/subscriber in franchise areas

‘‘B’’ and

‘‘C’’=($1×11,000)+($1×11,000)=$22,000.

Step 3: Current CPST revenue is

totaled:

($21×10,000)+($21×10,000)+

($20×10,000)=$620,000.

Step 4: Current CPST revenue is

added to Lost BST revenue to create

new CPST revenue requirement:

$620,000+$22,000=$642,000.

Step 5: New CPST revenue

requirement is divided evenly by all

CPST subcribers in the region to

calculate new uniform CPST rate:

$642,000/30,000=$21.40.

Current rates Franchise A Franchise B Franchise C

BST .............................................................................................................................................. $10.00 $10.00 $10.00

CPST ............................................................................................................................................ 21.40 21.40 21.40

Total .................................................................................................................................. 31.40 31.40 31.40

Franchise A: no change in BST rates;

increase in CPST and overall rates.

Franchise B: decrease in BST rates;

increase in CPST rates; decrease in

overall rates.

Franchise C: decrease in BST rates;

increase in overall rates.

Second Proposed Method:

Step 1: Average current BST rates on

a per BST subscriber basis to calculate

average, uniform BST rate:

$10(11,000)+$11(11,000)+$11(11,000)

=$10.67/BST subscriber.

Step 2: Average current CPST rates on

a per CPST subscriber basis to calculate

average, uniform CPST rate:

$21(10,000)+$21(10,000)+$20(10,000)

=$20.67/CPST subscriber.

Total: $31.34/subscriber.

New rates Franchise A Franchise B Franchise C

BST .............................................................................................................................................. $10.67 $10.67 $10.67

CPST ............................................................................................................................................ 20.67 20.67 20.67

Total .................................................................................................................................. 31.34 31.34 31.34

Franchise A: increase in BST rates;

decrease in CPST; increase in overall

rates.

Franchise B: decrease in BST rates;

decrease in CPST rates; decrease in

overall rates.

Franchise C: decrease in BST rates;

increase in CPST rates; increase in

overall rates.

The results under each proposed

method will vary widely depending on

the current rates and the numbers of

subscribers in each franchise area. In

addition, these examples do not account

for the impact of channel changes that

may be necessary to achieve uniform

packages of services.

[FR Doc. 95–29807 Filed 12–8–95; 8:45 am]

BILLING CODE 6712–01–M