Parties are also asked to submit comments on diskette. Such diskette submissions would be in addition to and not a substitute for the formal filing requirements addressed above. Parties submitting diskettes should submit them to Sheryl Todd, Universal Service Branch. Accounting an Audits Division, Common Carrier Bureau, 2100 M Street, N.W., Room 8611, Washington, D.C. 20554. Such a submission should be on a 3.5 inch diskette in an IBM compatible format using WordPerfect 5.1 for Windows software in a "read only" mode. The diskette should be clearly labelled with the party's name, proceeding, and date of submission. The diskette should be accompanied by a cover letter.

Before the

Federal Communications Commission
Washington, D.C. 20554

In re

Falcon Holding Group, L.P., Falcon Cable Systems
Company, Falcon Classic Cable Income Properties,
L.P., Falcon First Communications, L.P., Falcon Video
Communications, L.P., Enstar VII, Enstar VIII,
Enstar IX, Enstar X, Enstar XI, Enstar Income Program)
1984-1, Enstar Income Program II-1, Enstar Income
Program II-2, Enstar Income Program IV-3, Enstar
IV/PBD Systems Venture, Enstar Cable of Cumberland
Valley, Enstar Cable of Macoupin County, Enstar Inc./
Growth Program Six-A, Enstar Inc./Growth Program Six-B)

CSR Nos: 4644-D, 4635-D, 4634-D, 4654-D, 4653-D, 4639-D, 4640-D, 4643-D, 4641-D, 4642-D, 4662-D, 4656-D, 4664-D, 4661-D, 4657-D, 4659-D, 4663-D, 4660-D, 4658-D

1. In this Order, we review 19 petitions for special relief filed by entities that operate systems under the Falcon name. In their requests, Petitioners uniformly contend that they satisfy the technical criteria for special relief pursuant to the Sixth Report and Order and Eleventh Order on Reconsideration, MM Docket Nos. 92-266 and 93-215 ("Small System Order").' Each Petitioner seeks a declaration that it is eligible for small system regulatory relief. Because the petitions raise common substantive issues involving common entities and set forth identical grounds and arguments for special relief, we have consolidated the disposition of these petitions in this Order.2 For reasons set forth below, the petitions are denied.

2

Where appropriate, we will refer to each petition separately. When discussed collectively, we will refer to them as the "petitions."

2. Section 623(i) of the Communications Act of 1934, as amended ("Communications Act"), requires that the Commission design rate regulations that reduce the administrative burdens and the cost of regulatory compliance for cable systems with 1,000 or fewer subscribers.3 Accordingly, in the course of establishing the standard benchmark and cost-of-service ratemaking methodologies generally available to cable operators, the Commission adopted various measures aimed specifically at easing regulatory burdens for these smaller systems. In the Small System Order, the Commission further extended small system rate relief to certain systems that exceed the 1,000-subscriber standard. These systems were deemed eligible for small system rate relief because they were found to face higher costs and other burdens disproportionate to their size."

3. The Small System Order defines a small system as any system that serves 15,000 or fewer subscribers.' The Commission recognized that systems with no more than 15,000 subscribers were qualitatively different from larger systems with respect to a number of characteristics, including: (1) average monthly regulated revenues per channel per subscriber; (2) average number of subscribers per mile; and (3) average annual premium revenues per subscriber. The magnitude of the differences between the two classes of systems as to these characteristics indicated that the 15,000 subscriber threshold was the appropriate point of demarcation for purposes of providing for substantive and procedural regulatory relief."

See, e.g., Report and Order and Further Notice of Proposed Rulemaking in MM Docket No. 92-266, FCC 93-177, 8 FCC Rcd 5631 (1993); Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed Rulemaking in MM Docket No. 92-266, FCC 94-38, 9 FCC Rcd 4119 (1994); Fifth Order on Reconsideration and Further Notice of Proposed Rulemaking in MM Docket Nos. 93-215 & 93-266, 9 FCC Rcd 5327 (1994); Eighth Order on Reconsideration in MM Docket Nos. 92-266 & 93-215, FCC 95-42, 10 FCC Rcd 5179 (1995).

Small System Order, 10 FCC Rcd at 7406.

Id. at 7407. More recently, Congress amended Section 623 of the Communications Act to allow greater deregulation for "small cable operators," defined as operators that "directly or through an affiliate, [serve] in the aggregate fewer than 1 percent of all subscribers in the United States and [are] not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000." Telecommunications Act of 1996 ("1996 Act"), Pub. L. No. 104-104, § 301(c), 110 Stat. 56, approved February 8, 1996; Communications Act § 623(m), 47 U.S.C. § 543(m). Pursuant to this amendment, the rate regulation requirements of Sections 623(a), (b) and (c) do not apply to a small cable operator with respect to "(A) cable programming services, or (B) a basic service tier that was the only service tier subject to regulation as of December 31, 1994," in areas where the operator serves 50,000 or fewer subscribers. Id.