FOR FCC RECORD ONLY
$/US Cable Corporation, Letter, DA 94-1509
$/47 C.F.R. 76.922(e)(1)

                    FEDERAL COMMUNICATIONS COMMISSION
                         WASHINGTON, D.C. 20554
                                    
                                    
                                                       IN REPLY REFER TO:
                             December 19, 1994                   DA 94-1509
                                               Released:  December 23, 1994
J. Christopher Redding, Esq.
Dow, Lohnes & Albertson
1255 Twenty-Third Street
Washington, D.C.  20037-1194

Dear Mr. Redding:

     This letter is in response to your inquiry of December 12, 1994 seeking clarification of
the new "going forward" rules on behalf of US Cable Corporation.  You specifically ask
about the Commission's policy governing the addition of new programming channels in the
fourth quarter of 1994.  You note that a provision of the Going Forward Order and the rules
implementing the Order may be inconsistent.  Specifically, you point to the language in the
Order which states:

     while we are requiring that operators use either the existing or the new going forward
     rules consistently for channel additions to CPSTs after December 31, 1994, an operator
     that chooses to use the new rules after that date may, but is not required to, adjust
     rates to reflect the new rules for channel additions made between May 15, 1994 and
     December 31, 1994.

You then state that Section 76.922(e)(1) of the rules seems to permit operators to choose
between the existing rules and the new rules only where a system has not only added a
channel by December 31, 1994 but has also adjusted its rates, under the old formula, for that
channel by that date.   You indicate this would seemingly preclude an operator from using
the existing "going forward" rules for new channel additions in the fourth quarter of 1994 if
an operator wishes to take advantage of the new "going forward" channel adjustment
methodology for channels added after December 31, 1994.  You also suggest that such a
result would clearly be contrary to the Commission's intentions to allow operators who
actually added channels in 1994 in reliance on the existing rules, to continue to apply the
existing rate adjustment rules to those channels while opting to apply the new rules to
channels added in 1995 and thereafter.  

     As you note, the new "going forward" rules require that an operator elect to
apply either our new rules or our current rules the first time it adjusts rates on a system after
December 31, 1994, to reflect a channel addition to a CPST (as defined in the Order) or, in
the case of a single tier system, to the basic service tier that occurred on or after May 15,
1994.  The operator must then use the elected methodology for all rate adjustments for the
system through December 31, 1997.  Under our rules, a system's rate may be adjusted
quarterly to reflect channel additions through the end of the previous calendar quarter.  The
rules also require that a system's rates must be adjusted within a year to reflect channel
additions made prior to October 1, 1994 or the right is lost.  As you suggest, the requirement
that an operator use the current or the new "going forward" rules consistently beginning the
first time it adjusts rates on a system after December 31, 1994 to reflect a channel addition
occurring after May 15, 1994 seems to preclude the operator from using the existing "going
forward" rules for new channels added in fourth quarter of 1994 if the operator wants to use
the new "going forward" channel adjustment methodology for channels added after December
31, 1994.

     This reading would be inconsistent with the policy behind the Commission's decision
to allow, but not to require, an operator that chooses to use the new rules after December 31,
1994 also to adjust rates for channel additions made between May 15, 1994 and December 31,
1994 under the new rules.  That flexibility was allowed because some operators may have
relied on the current rules in deciding to add channels prior to December 31, 1994 but before
the new Going Forward Order was released.  Furthermore, operators who added channels
prior to October 1, 1994 may have relied on our rules that allow rate adjustments to occur up
to year after the channel addition.   The same reliance issues exist with respect to channels
added during the last calendar quarter of 1994  if the operator was contractually bound, prior
to the release of the Going Forward Order, to introduce a channel no later than that time
period.  Therefore, to the extent the Going Forward Order and Section 76.922(e)(1) of the
rules would preclude raising rates under the existing rules after December 31, 1994 for
channels added by that date, and then adjusting rates under the new "going forward" rules for
channels added after that date, we find good cause to waive the rule.  We believe this
decision best balances operators' need for a stable planning environment, their legitimate
reliance on existing rules, and subscribers' interests in receiving additional services at
reasonable rates.  Given that this same rationale is applicable to other cable operators this
letter constitutes a blanket waiver applicable to all similarly situated operators.

     Sincerely,


     Meredith J. Jones
     Chief
     Cable Services Bureau