Federal Communications Commission 
, Before the 
Federal Communications Commission 
Washington, D.C. 20554 
In the Matter of: 
COX COMMUNICATIONS, INC., 
d/b/a Dimension Cable Services 
Appeal of Local Rate Order 
of City of Chillicothe, Ohio 
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MEMORANDUM OPINION AND ORDER 
DA 96-1286 
Adopted: August 9, 1996 Released: August 27, 1996 
By the Chief, Cable Services Bureau: 
INTRODUCTION 
1. On May 10, 1995, Cox Communications, Inc., d/b/a Dimension Cable Services 
("Dimension"), operator of a cable system in the City of Chillicothe, Ohio ("the City"), filed an 
appeal of a local rate order issued by the City on April 10, 1995. The City's rate order reviewed 
Dimension's rates in effect after July 14, 1994. Dimension's appeal argues that the rate order 
is invalid, on the grounds that the City lacks authority to regulate Dimension's rates, that the 
order determined erroneously that Dimension's a la carte package of channels is a regulated tier, 
and that the order improperly disallowed a charge assessed on cable programming service tier 
subscribers having additional outlets. 1 The City filed an opposition to the appeal on May 2, 1995, 
and Dimension filed a reply on June 19, 1995.2 
2. Under our rules, rate orders made by local franchising authorities may be appealed 
to the Commission.3 In ruling on appeals of local rate orders, the Commission will not conduct 
a de novo review, but instead will sustain the franchising authority's decision as long as there is 
1Dimension filed a petition for a stay pending review on May 10, 1995. Because we are resolving the appeal 
on its merits, the petition for stay is rendered moot. 
2Dimension's reply was accompanied by a motion to accept late-filed pleading, stating that the reply could not 
be filed by its original due date of June 8, 1995, because the City had not served Dimension with a copy of the 
opposition prior to that date. Dimension was granted an extension until June 19, 1995 to file a reply. 
3See 47 C.F.R. § 76.944. 
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a reasonable basis for that decision.4 The Commission will reverse a franchising authority's 
decision only if it determines that the franchising authority acted unreasonably in applying the 
Commission's rules in rendering its local rate order.5 If the Commission reverses a franchising 
authority's decision, it will not substitute its own decision but instead will remand the issue to 
the franchising authority with instructions to resolve the case consistent with the Commission's 
decision on appeal. 6 With respect to a determination made by a franchising authority on the 
regulatory status of an a la carte package as part of its final decision setting rates for the basic 
service tier, the Commission has stated that "the Commission will defer to the local authority's 
findings of fact if there is a reasonable basis for the local findings," and the Commission "will 
then apply FCC rules and precedent to those facts to determine the appropriate regulatory status 
of the [a la carte package] in question. "7 
DISCUSSION 
A. The City's Authority to Regulate Cable System Rates 
3. Dimension claims that the City lacks authority to regulate cable system rates, 
because the City failed to adopt cable rate regulations within 120 days from the effective date of 
certification pursuant to Commission regulations.8 We reject this claim. The City submitted a 
Form 328 for certification to the Commission on September 7, 1993, and in the absence of any 
contrary notification to the City pursuant to Section 76.910(e), the City's certification became 
effective thirty days later on October 7, 1993.9 The City adopted cable rate regulations on May 
23, 1994. 10 On June 7, 1994, the City notified Dimension that it 'Yas subject to cable rate 
regulation by the City .. The City received a Form 393, dated August 11, 1994 and Forms 1200, 
1205 and 1215, dated August 14, 1994 from Dimension in response to that notification. The City 
issued a rate order on April 10, 1995. Dimension did not challenge the City's authority to 
4See Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: 
Rate Regulation, MM Docket No. 92-266, Report and Order and Further Notice of Proposed Rulemaking, 8 FCC 
Red 5631, 573 I (I 993) ("Rate Order"); Implementation of Sections of the Cable Television Consumer Protection 
and Competition Act of 1992: Rate Regulation, MM Docket No. 92-266, and Buy-Through Prohibition, MM Docket 
No. 92-262, Third Order on Reconsideration, 9 FCC Red 4316, 4346 (1994) (''Third Recon. Order"). 
1See Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed Ruemaking, MM 
Docket 92-266, 9 FCC Red 4119, 4217 (I 994). 
8 
"A franchising authority must be certified by the Commission in order to regulate the basic tier and associated 
equipment of a cable system within its jurisdiction." See 47 C.F.R. § 91 O(a). 
947 C.F.R. § 76.910(e). 
10see Dimension appeal, Exhibit 5, City of Chillicothe Ordinance No. 37-94. 
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Federal Communications Commission DA 96-1286 
regulate its basic tier or equipment rates by means of a petition for reconsideration nor request 
a stay of rate regulation pursuant to Section 76.91l(a)(2) and (c)(2), nor did it seek revocation 
of the City's certification pursuant to Section 76.914(c), 11 at any time prior to the filing of this 
appeal. 
4. We do not agree that the City's failure to adopt regulations within 120 days of the 
effective date of certification invalidated the City's authority to regulate basic tier and equipment 
rates, as suggested by Dimension. Section 623(a)(4) of the Communications Act, as amended, 
provides that a franchise authority's certification shall be effective 30 days after being filed with 
the Commission, unless the Commission make "findings (a) that regulations adopted by the 
franchise authority are not consistent with regulations prescribed under Section 623(b ); (b) that 
the franchise authority does not have authority to adopt or the personnel to administer such 
regulations; or ( c) that an opportunity to consider the views of interested parties is not provided 
by the regulations or procedures adopted by such authority .12 ·The Commission has made no such 
findings with respect to the certification at issue in this matter. Moreover, p.either Dimension nor 
any other party filed either a petition for reconsideration or a petition for revocation of the City's 
certification pursuant to our rules. 13 
5. The Commission stated in the Rate Order in this connection, "The franchise 
authority must notify the cable operator that it has been certified and has adopted appropriate 
regulations before it can begin regulating rates and, if necessary, ordering refunds. "14 Section 
76.910(e) of our rules provides franchise authorities with 120 days following the effective date 
of certification in which to adopt regulations consistent with this Commission's regulations 
governing the basic tier and providing opportunity. for consideration of views of interested 
parties.15 However, the mere lapse of 120 days without rules being adopted cannot be deemed 
by itself to be determinative, under Section 623(a)(4), that the franchise authority is unable or 
unwilling to adopt rules consistent with our regulations, and that its otherwise valid certification 
should therefore be revoked. Furthermore, while we acknowledge that the City failed to adopt 
rules within the prescribed period, we find that City's adoption of procedures to regulate rates 
cured any procedural .defects that may have existed due to its tardiness in adopting those 
procedures. We find that any such tardiness by the City was, on these facts, harmless error. 
11See 47 C.F.R. § 76.91 l(a)(2) and (c)(2), and §76.914(c). 
1247 U.S.C. § 543(a)(4). 
13See 47 C.F.R. §§ 76.911 and 76.914. 
14See Rate Order, 8 FCC Red 5631, 5693 (if 87). The Commission also made it clear that if a challenge to a 
certification presented under Section 76.911 or Section 76.914 on other than effective competition grounds were 
upheld, opportunity would be provided to the franchise authority to modify or otherwise cure any defects in its 
certification. Id. at 5696 (t;j 93). 
1547 C.F.R. § 76.910(e). 
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Federal Communications Commission DA 96-1286 
6. We further hold that Dimension is estopped from challenging the authority of the 
City to regulate its basic tier and equipment rates. We believe it would be patently unfair to 
permit Dimension to submit itself to the City for review of its cable rates, without raising any 
objections to the City's authority to regulate those rates, and then, upon issuance by the City of 
a decision deemed unfavorable in some respects, to raise objections to the City's authority to 
regulate for the first time in an appeal to this Commission. 
B. A La Carte Package 
7. Effective August 31, 1993, Dimension introduced an a la carte package consisting 
of four channels, which could be purchased individually for $1.10 each or as a discounted 
package for $2.20. The a la carte package was created by restructuring a twelve-channel Basic 
tier and a twenty-two-channel Preferred Dimension tier offering into an eighteen-channel Basic 
tier, a twelve-channel Dimension tier, and a four-channel Preferred Dimension Package offering. 
Dimension asserts that the City, for purposes of setting Basic tier rates, improperly treated the 
collective offering of the four a la carte channels as a regulated tier. Dimension argues that this 
a la carte package complies with the provisions of the 1992 Cable Act, which . it contends 
encourages cable operators to unbundle programming services from regulated tiers and to offer 
them on a per-channel basis.16 Dimension further argues that the a la carte package fully 
complies with Commission rules for unregulated treatment existing at the time the package was 
created. 17 · 
8. In its opposition the City argues that the Commission's regulations in effect at the 
time the a la carte package was created indicate that these channels should be treated as a rate­
regulated tier. The City asserts that such treatment is required because the a la carte channels 
could not be purchased separately until after Dimension installed traps permitting separate 
ordering in February 1995. Dimension states that the inability to block basic-only subscribers 
who do not order the a la carte package or the individual channels from receiving those services 
was remedied when the required traps were installed commencing in February 1995 and 
completed shortly thereafter, before the City issued its rate order on April 10, 1995. 
9. The facts presented in this appeal resemble the facts presented in several of our 
letter of inquiry decisions in which a la carte packages were deemed to be a "new product tier" 
and should not be treated as a rate-regulated tier for purposes of calculating a cable system's 
16Appeal at 4-5. 
11See Rate Order, 8 FCC Red at 5836-5838; Implementation of Sections of the Cable Television Consumer 
Protection and Competition Act of 1992: Rate Regulation, First Order on Reconsideration, MM Docket 92-266, 9 
FCC Red 1164, 1184-85 (I 993). 
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Federal Communications Commission DA 96-1286 
basic rates. 18 For example, the a la carte package at issue in the Comcast of Mt. Clemens order 
consisted of a fom-channel package, made up of channels formerly available on its basic tier and 
on its two cable programming service tiers, and which was offered as part of a restructuring of 
the operator's channel line up. In that case, after considering the restructuring put into effect 
there under the various tests set forth in the Commission's Rate Order, in the Second 
Reconsideration Order, and in Implementation of Sections of the Cable Television Consumer 
Protection and Competition Act of 1992: Rate Regulation, Sixth Order on Reconsideration and 
Fifth Report and Order,19 we still were unable to find that the a la carte package at issue clearly 
was not a permissible non-rate regulated offering under our rules. We further concluded that, in 
light of prior confusion over what constituted a permissible non-rate-regulated a la carte offering, 
it would be inequitable to subject the operator to refund liability or to require the operator to 
restructure its tiers and return the channels offered in the a la carte package to regulated tiers. 
Instead, we .found that the a la carte package at issue there could be treated as a new product tier 
under the Going Forward Order. 
10. However, in Washington Court House, we decided an appeal of a rate order issued 
by a local franchising authority in which all of the operator's subscribers received all of the 
channels of a package at no additional cost as a result of the operator's inability to obtain the 
necessary blocking equipment.20 In that case, we explained that our rules required that the 
operator offer the channels in the package on an individual basis as well as a collective basis in 
order to be categorized as an unregulated a la carte package.21 We ruled that the package in 
question was not a true a la carte package becau5e it did not meet the threshold requirement that 
channels be offered on a per-channel basis.22 In the case before us no_w, unlike in Washington 
Court House, the package in question became a true a la carte package upon completion by 
18See, for example, Comcast Cablevision (Mt. Clemens, Michigan), 10 FCC Red 103 (Cab. Serv. Bur. 1994) 
("Comcast of Mt. Clemens'~. St!e also Paragon Cable (Irving, TX), 9 FCC Red 7333 (Cab. Serv. Bur. 1994) 
("Paragon.Irving TX)," and Century Cable TV (Huntington, WV), 9 FCC Red 7337 (Cab. Serv. Bur. 1994). 
19See MM Docket Nos. 92-266 and 93-215, 10 FCC Red 1226 (1994) ("Going Forward Order"). New product 
tiers are cable programming services that, subject to certain conditions, are not rate-regulated. Going Forward Order, 
10 FCC Red at 1233-39. In the Going Forward Order, the Commission reconsidered its regulatory treatment of 
collective offerings of a la carte channels. Specifically, the Commission determined that such packages are cable 
programming service tiers within the meaning of Section 3(1 )(2) of the 1992 Cable Act and therefore will be subject 
to our general rate regulation rules. Id at 1243. However, the Commission also stated that with respect to packages 
created between April 1, 1993, and September 30, 1994, where it is not clear that a particular package was not a 
permissible offering under the a la carte rules in effect at the time it was created, the package may be treated as a 
new product tier. Id. 
20See In the Matter of Chillicothe Cablevision, Inc., d/b/a/ Dimension Cable Services (Washington Court House, 
Ohio) Order, DA 95-479 (Cab. Serv. Bur., Rel. March 14, 1995) at ii 10 ("Washington Court House"). 
21 Washington Court House at~ 11. 
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Federal Communications Commission DA 96-1286 
Dimension of the installation of traps, which then permitted an offering of the channels in the 
package individually on an unregulated basis. 
11. On the record before us, we find that the City's rate order is unreasonable to the 
extent that, in setting basic tier rates and ordering refunds, it fails to take into account completion 
by Dimension of the installation of traps permitting subscribers to order the a la carte channels 
separately. To that extent we find that the City's determination that Dimension's a la carte 
package is a regulated tier is inconsistent with the action taken in our a la carte letter of inquiry 
orders, and in particular in our order in Comcast of Mt. Clemens.23 We further find that 
Dimension's a la carte package, once the traps were installed, should not have been treated as a 
standard rate-regulated tier of service, and that the channels comprising it should be treated as 
non-rate-regulated for purposes of rate justification. Accordingly, we are remanding this issue 
to the City for the entry of an order (a) that does not treat Dimension's a la carte package of four 
channels as regulated services from and after completion of installation of traps permitting 
subscribers to order individual a la carte channels separately and (b) that establishes basic rates 
and requires refunds consistent with such treatment of the a la carte channels and with this order. 
·C. Charge for Additional Outlets for Cable Programming Service 
12. The City disallowed a $2.32 per month charge imposed by Dimension for each 
additional outlet provided to cable programming service tier ("CPST") subscribers with multiple 
outlets and ordered refunds of those charges, on the grounds that the charge was unreasonable 
because Dimension had not provided an adequate explanation or any cost support for the charge. 
Dimension contends that the additional outlet charge is subject to- regulation only by the 
Commission pursuant to CPST rate complaint procedures.24 In its appeal Dimension asserts that 
the Cable Services Bureau has previously found additional outlet rates to be CPST rates, in 
instances where such additional outlet rates were imposed only in connection with programming 
carried on the CPST, over which the Commission, not the City, has jurisdiction. 
13. Dimension is correct that the City has no jurisdiction over an additional outlet 
charge that is imposed only in connection with programming carried on the CPS tier.25 We note 
further that Dimension was required, by commitments made by Cox Communications, Inc and 
its subsidiaries in the Cox Resolution Order6 to eliminate ~barges for regulated additional outlets 
23 See n. 19, above. 
24See 47 C.F.R. § 76.950. 
25See Community Cablevision Company, d/b/a Dimension Cable Services (Irvine, California), DA 95-456 (Cab. 
Serv. Bur., March 10, 1995), for example. Rates for cable progranuning services are subject to regulation only by 
the Commission. See 47 U.S.C. § 543(a)(2)(A) & (B). 
26See In the Matter of Cox Communications, Inc. and Times Mirror Cable Television, Inc., 11 FCC Red 1972 
(FCC 95-483, Released December 1, 1995) ("Cox Resolution Order"). Neither Dimension nor the City submitted 
any comment on the impact of the Cox Resolution Order on our resolution of this proceeding. 
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Federal Communications Commission DA 96-1286 
as of the January 1996 billing cycle or the first billing cycle beginning sixty days after the 
effective date of that Order, whichever occurred later. Also, the additional outlet charges collected 
by Dimension on its Chillicothe, Ohio system were incorporated within the overall rate settlement 
arrangements approved in the Cox Resolution Order. The record before us provides no specific 
information regarding whether the additional outlet rate in question here applies only to CPS tier 
subscribers. However, the City has not contested Dimension's assertion that theadditional outlet 
charge applies only to CPS tier subscribers.27 Further, the Cox Resolution Order treated the 
additional outlet charge as a CPS tier charge. Accordingly, we set aside that portion of the City's 
order disallowing the additional outlet charge and requiring any refund of moneys collected by 
Dimension pursuant to additional outlet charges. 
ORDERING CLAUSES 
14. Accordingly, IT IS ORDERED that Dimension's appeal of the local order of the 
City of Chillicothe, Ohio IS GRANTED to the extent indicated herein and is otherwise 
DENIED, and the cause IS REMANDED to the City for further proceedings consistent with this 
Order. 
15. IT IS FURTHER ORDERED that the petition for stay IS DISMISSED as moot. 
16. This action is taken by the Chief, Cable Services Bureau, pursuant to authority 
delegated by Section 0.321 of the Commission's rules, 47 C.F.R. § 0.321. 
FEDERAL COMMUNICATIONS COMMISSION 
Meredith J. Jones 
Chief, Cable Services Bureau 
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7 Appeal at 4. 
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