CATV Rate Regulation
(from Maine Townsman, December 1993)
by William Livengood

Freeze on Rates Extended

As of September 1, municipalities have been authorized to seek authority from the FCC to regulate rates for the basic tier of cable television services. In order to prevent cable companies from adjusting their rates so as to defeat the purpose of rate regulation, the FCC also froze average subscriber rates at April 5, 1993 levels until November 15, 1993. Since few local jurisdictions have filed Form 328 in order to seek regulatory authority (including most Maine towns and cities), the FCC has extended its freeze on cable rates to February 15, 1994. It is hoped that this extension will allow more towns to begin the regulatory process before rates are adjusted upwards by cable operators.

The FCC order does not delay regulation by towns which have already received certification or which receive it before February 15, 1994. Also, cable operators may petition the FCC for relief if they feel the freeze is "causing severe economic hardship or threatens the viability of continued provision of cable service." After February 15, cable operators may raise base cable rates to any level, unless regulated by the municipality.

Rate Regulation Revisited/Sample Ordinance & Notice

To initiate the rate regulation process, a franchising authority (the municipality, acting by the municipal officers) must first file a one-page form with the FCC (Form 328, available from MMA Legal Services). The form requires that the town pledge to regulate rates consistent with FCC rules and to adopt regulations which it will follow in this process. These regulations must be adopted within 120 days after certification is effective. Unless you hear otherwise, certification is effective 30 days after the form is filed with the FCC. Before starting to regulate rates, the town must also notify the cable operator, by certified mail, return receipt requested, that it has become certified to regulate rates and has adopted the required regulations. (For a more detailed discussion of the rate regulation process see "Cable Regulation," MAINE TOWNSMAN, August 1993.)

Maine law gives the municipal officers (not town meeting) the exclusive power to enact ordinances pertaining to cable TV. (See 30A M.R.S.A. 3008(2)) It also requires that notice of the meeting at which a cable TV ordinance is to be considered must be given seven days in advance of the meeting, in the manner provided for town meetings. A suggested format for this notice accompanies this article.

A model ordinance for rate regulation appears on the facing page. It was prepared by Barbara Krause, Esq., of Drummond, Woodsum, Plimpton and McMahon, 25 Commercial Street, Portland, Maine 04101-1117 (772-1941). We have also prepared a sample letter to your cable operator giving notice that the rate regulation process has begun.

The format below is suggested for the notice required by 30-A M.R.S.A. 3008(2).


SAMPLE NOTICE TO CABLE OPERATOR OF RATE REGULATION

December 9,1993

<name of cable operator>

<address>

Re: Rate Regulation

Dear <name>:

This letter is to advise you that the <town/city> is now authorized to regulate rates for basic cable service and the charges for related equipment, installation and services. The <town/city> has also adopted regulations, as required by the FCC, pertaining to the regulation of rates (see attached copy).

In accordance with FCC regulations, please provide us with your completed FCC form 393 for determination of maximum initial permitted rates for basic cable programming services and equipment within 30 days from your receipt of this letter.

Sincerely,

For the <town/city>


Public Notice:

To _______________, a constable of the town of _______________, in the County of _______________.

Greeting:

In the name of the State of Maine, you are hereby required to notify and warn the voters of the town of _______________ that the municipal officers of said town will meet at ______________ on _____________, the _______ day of ____________, 20____, at _______o'clock in the _____________________ and then and there consider the enactment of the following ordinance:

Town of ________________

Cable Television Rate Regulation Ordinance

The public will be given an opportunity to be heard prior to the consideration of the above ordinance by the Board of Selectmen.

Given under our hands this ___________ day of ______________, 20______.

_______________________________

_______________________________

_______________________________

Municipal Officers of

_______________________________

Attest:

Return

Town of __________________, _________________, 20____

Pursuant to the within order of notice, I have notified and warned the voters of the town _______________ that the municipal officers will meet at the time and place and for the purpose therein named, by posting this day an attested copy.

Model Ordinance, Cable Television Rate Regulation Ordinance (from Maine Townsman, December 1993)


Bill Livengood is Director of Legal Services for the Maine Municipal Association.