Hydroxylation of desacetoxicephalosporin C in 3'position to form deacetylcephalosporin C. 2-oxoglutarate + deacetoxycephalosporin C + O2 = CO2 + deacetylcephalosporin C + succinate Antibiotic biosynthesis; cephalosporin C biosynthesis. Belongs to the iron/ascorbate-dependent oxidoreductase family.