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FCC adopts cable rate rules; text not yet available.

The Federal Communications Commission (FCC) adopted rules governing the regulation of cable television rates on April 1, 1993. In a 13 page press release and summary the FCC highlighted what its final rules will say. The Report and Order, which contains the actual text of the final rules, will be published in the Federal Register within 30 days.

Once released, it will be possible to obtain a copy of the Report and Order by calling ITS, the FCC's printing contractor, at (202) 857-3822 or by ordering that issue of the Federal Register by calling (202) 783-3238.

According to the FCC press release and summary, it appears that the rate regulation rules most significant for local governments include the following:

* the FCC adopted a national per channel benchmark rate method of determining reasonable rates. Rate reductions will be based on rate levels as of September 30, 1992. Depending on the characteristics of the cable system, a table containing a series of benchmarks will determine the actual benchmark rate for your system. If the rates for a cable system on September 30, 1992 were above the benchmark rate, such rates may be reduced to the benchmark rate or by 10%, whichever rate reduction is less. The regulated rate is adjusted to take into account the rate of inflation since September 30, 1992.

* the rules will go into effect approximately 75 days after the adoption of the Report and Order,

* local franchising authorities have the right to regulate the basic service tier if certified by the FCC; however, the FCC may regulate basic rates in a jurisdiction if a local government indicates that is does not have the legal authority (e.g. due to a state prohibition on rate regulation) or the resources to regulate.

* the Commission ordered a rate freeze for 120 days for all cable rates in effect on April 5, 1993, other than rates for premium and pay-per-view program services and equipment.

* there is no automatic rate reduction. Local franchising authorities will have to be certified to regulate basic rates before such rates can be reduced. The FCC is authorized to reduce rates for "cable programming service" tiers only in response to complaints by consumers, franchising authorities or other relevant state or local government authorities.

* cable operators are presumed not to be subject to effective competition; a franchising authority may rely on this presumption when applying for certification.

* franchising authorities may begin filing for certification to regulate basic rates 30 days after publication of the FCC Report and Order in the Federal Register.

* franchising authorities may order rate refunds if it is determined that a basic rate is not reasonable; the FCC may order refunds if the rate for a "cable programming service" tier is unreasonable. Reasonableness is based on the benchmark rate.

* the same benchmark rate will apply to both the basic service tier (which contains local television broadcast stations and PEG access channels at a minimum) and the "cable programming service" tier (which contains programming other than local television broadcast stations, PEG access channels, premiums and pay-per-view channels) in order to decrease incentives to create "stripped-down" basic service tiers.

* after August 1993, the Commission will conduct cost studies of selected operators and test the accuracy of its benchmark model. After receiving and analyzing the data, the FCC may order additional rate reductions if necessary.
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Title Annotation:includes related article on the National Association of Telecommunications Officers and Advisors; Federal Communications Commission
Author:Winsky, Renee M.
Publication:Nation's Cities Weekly
Date:Apr 5, 1993
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