Assignment of Proceeding

Rachelle B. Chong is the assigned Commissioner and Timothy J. Sullivan is the assigned Administrative Law Judge in this proceeding.

1. D.07-03-014 dated March 1, 2007 adopted a user fee process for Fiscal Year 2007-2008 based on a pro-rata share of households in each franchise holder's video service area. For Fiscal Year 2008-2009 and all future years, the user fee is calculated based upon the percentage of all state video franchise holders' gross state video franchise revenues that is attributable to an individual state video franchise holder.

2. Incumbent cable operators were not eligible for a state franchise until January 2, 2008. They reported no gross state video franchise revenue for calendar year 2007. As a result, the entire burden of user fee, if it were to be based on a pro-rata share of revenue received in 2007, would be borne by the new entrants.

3. The incumbent cable operators will earn the vast majority of video revenue in 2008 and would bear the burden of the majority of user fee for Fiscal Year 2009-2010.

4. By Fiscal Year 2012-2013, it is likely that revenues earned by the incumbents and new entrants will have stabilized enough to result in a reasonable apportionment of the cost burden if determined on a pro-rata revenue basis.

Assessing user fees on state video franchisees based on their pro-rata share of households in the holder's video franchise territory is the most reasonable approach through the 2012-2013 fiscal year.

ORDER

IT IS ORDERED that:

1. Decision 07-03-014 and General Order 169 are modified to adopt a user fee process for Fiscal Year 2008-2009 to Fiscal Year 2012-2013 to allocate the Digital Infrastructure and Video Competition Act of 2006 implementation costs based on a pro-rata share of the number of households in each state franchise holder's video service territory.

2. A copy of this order shall be served on all those who have already received video franchises, so that they are aware of the obligations upon them.

3. Rulemaking 06-10-005 is closed.

This order is effective today.

Dated April 16, 2009, at San Francisco, California.

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