Federal Communications Commission DA 96-1600
Before the
Federal Communications Commission 
Washington, D.C. 20554
In the Matter of )
) Tele-Media Company of the Mid-South ) CUID No. IN0213 City of Loogootee
Small System Filing to Support ) 
Basic Service Tier Rate )
ORDER
Adopted: September 23, 1996 Released: September 24, 1996
By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau:
1. In this Order we consider the rate that Tele-Media Company of the Mid-South 
("Tele-Media") was charging for its basic service tier ("BST") in the franchise area referenced 
above. On September 16, 1994, the City of Loogootee ("the City") petitioned the Federal 
Communications Commission ("Commission") requesting assistance in reviewing the BST cost 
of service showing filed by Tele-Media on August 17, 1994.' The Commission granted the 
City's request on February 10, 1995, and agreed to review Tele-Media's BST cost of service 
filing.2
2. On December 15, 1995, Tele-Media filed FCC Form 1230, seeking to justify its 
BST rates through the simplified small system cost of service procedures under the Commission's 
Small System Order.3 In this Order we grant Tele-Media's request for small system relief under
1 See Third Order on Reconsideration in MM Docket Nos. 92-266 and 92-262 ("Third Recon. Order"), 9 FCC 
4316,4338-39 (1994) (authorizing requests by local franchising authorities for assistance in reviewing cost of service 
showings for basic tier rates); 47 C.F.R. § 76.933(d).
2 See Letter dated February 10, 1995 from Jacqueline Spindler, Deputy Chief, Financial Analysis and 
Compliance Division, to the Honorable William E. Parker.
3 Sixth Report and Order and Eleventh Order on Reconsideration, MM Docket Nos. 92-266 & 93-215,10 FCC 
Red 7393 (1995) ("Small System Order"). Tele-Media initially filed FCC Form 1220 to justify its BST rate on 
August 17, 1994. The FCC Form 1230 supersedes the previous filings.
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Federal Communications Commission DA 96-1600'
the Small System Order and, based on our review of Tele-Media's FCC Form 1230 filing, find 
the BST rate to be not unreasonable.
3. Under the Commission's rules, an operator may attempt to justify its BST rate 
through a benchmark showing, a cost of service showing, or a small system cost of service 
showing. In any case, the operator has the burden of demonstrating that its rate is not 
unreasonable.4 Under cost of service regulation a cable system's rates are reviewed under 
traditional rate of return analysis. Cost of service regulation imposes heavy burdens upon 
regulators and the regulated entity because of the significant administrative and compliance costs 
associated with this regulatory model.5 The Commission recognized that some local franchising 
authorities may have resources and personnel sufficient to conduct a review of the rate-setting 
justification based on the benchmark approach but not to examine a cost of service showing. The 
Commission also understood that this concern may have discouraged certification by many local 
franchising authorities.6 Therefore, it established procedures under which the Commission, if 
requested by the local franchising authority in a petition for special relief under Section 76.7 of 
the Commission's rules, will issue a ruling that makes cost determinations for the BST.7
4. The Commission's original rate regulations took effect on September 1,1993. The 
Commission subsequently revised its rate regulations effective May 15,1994.8 In a further effort 
to offer small cable companies administrative relief from rate regulation, the Commission 
amended the definition of small cable companies and small systems and introduced a simplified 
form of small system rate relief in the Small System Order. Cable systems serving 15,000 or 
fewer subscribers, and owned by a company having 400,000 or fewer subscribers, may elect to 
use the new small cable system rate mechanism in lieu of other Commission rate processes, 
provided the Commission has not reached a final resolution on the rate complaints filed against 
the system. Operators attempting to justify their rates through small system relief must file FCC 
Form 1230. FCC Form 1230 requires that the Operator Selected Per Subscriber Monthly 
Programming Rate Per Channel (FCC Form 1230, Line All) not exceed the Per Subscriber, Per
4 47 C.F.R. §§ 76.956(d) and 76.934.
5 See 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 ("Rate Order").
6 Id.
1 Third Recon. Order, 9 FCC Red at 4338.
8 Id; see also 47 C.F.R. § 76.933(d).
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Federal Communications Commission DA 96-1600"
Channel Monthly Programming Costs (FCC Form 1230, Line A6).9 If the maximum rate 
established on FCC Form 1230 does not exceed $1.24 per channel, the rate shall be presumed 
reasonable.
5. On December 15, 1995, Tele-Media filed FCC Form 1230 seeking to justify its 
BST rate through the simplified small system cost of service procedures under the Commission's 
Small System Order. We find that Tele-Media is a company with fewer than 400,000 total 
subscribers and that the system in question serves fewer than 15,000 subscribers, making it 
eligible for small system relief. Further, Tele-Media's filing shows that its actual rate per channel 
for regulated cable service (FCC Form 1230, Line All) does not exceed its per subscriber, per 
channel monthly programming costs (FCC Form 1230, Line A6) and the Maximum Permitted 
Rate (FCC Form 1230, Line A10) does not exceed $1.24. We, therefore, find the rate to be not 
unreasonable. 10
6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's 
rules, 47 C.F.R. § 0.321, that Tele-Media's request for small system relief is GRANTED.
7. IT IS FURTHER ORDERED that the BST rate charged by Tele-Media during the 
period under review with respect to the above-referenced CUED number IS JUSTIFIED.
8. IT IS FURTHER ORDERED, pursuant to Section 76.933(d) of the Commission's 
Rules, 47 C.F.R. § 76.933(d), that this decision is binding on the local franchising authority, the 
City of Loogootee, Indiana and the cable operator, Tele-Media Company of the Mid-South.
FEDERAL COMMUNICATIONS COMMISSION
Elizabeth W. Beaty
Chief, Financial Analysis and Compliance Division
Cable Services Bureau
9 See instructions for Line Al 1, FCC Form 1230, page 3.
10 This finding is based solely on the representations of the operator. Should information come to our attention 
that these representations were materially inaccurate, we reserve the right to take appropriate action. This Order is 
not to be construed as a finding that we have accepted as correct any specific entry, explanation or argument made 
by any party to this proceeding not specifically addressed herein.
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