FOR FCC RECORD ONLY $/Tele-Communications, Inc., Letter, DA 95-56/$ $/47 C.F.R. 76.922(e)(1)/$ FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 IN REPLY REFER TO: January 14, 1995 DA 95-56 Released: January 18, 1995 Mr. Douglas R. Watts Senior Vice President Tele-Communications, Inc. Terrace Tower II 5619 DTC Parkway Englewood, CO 80111-3000 Dear Mr. Watts: This letter is in response to your inquiry of December 12, 1994 seeking clarification of the new "going forward" rules as they relate to channel additions on behalf of Tele- Communications, Inc ("TCI"). You ask whether the election between using Section 76.922(e)(2) ("initial going forward rules") and Section 76.922(e)(3) ("new going forward rules") for rate adjustments made after December 31, 1994 is made through written notification to the Commission or whether the election is made automatically through implementation of the rate adjustment. You argue that where the first rate increase after December 31, 1994 was set in motion prior to the release of Going Forward Order, it would be inequitable for the first rate increase in 1995 to constitute an automatic election between the initial going forward rules and the new going forward rules. Accordingly, you ask the Commission to clarify that the election by a cable operator under Section 76.922(e)(1) takes the form of a declaration by the cable operator of how it intends to implement the new going forward rules. Your letter states that TCI issued notices in subscribers' billing statements indicating that rate adjustments would be made in the first quarter of 1995 for new programming added in 1994. You indicated in telephone conversations on December 28, 1994 and January 11, 1995 that TCI added these channels in October 1994 and November 1994. TCI was contractually bound to add these new channels prior to December 31, 1994 and these contracts were negotiated prior to the release of the Going Forward Order. You also stated that TCI added additional channels on December 31, 1994 and that TCI intends to increase rates using the new going forward rules to reflect these channels beginning in February 1995. You indicated that TCI generally was not contractually obligated to add these channels as of November 18, 1994. We believe that an automatic election is preferable to requiring a written election because a written election would impose unnecessary administrative burdens on cable operators and regulators. Based on your recitation of your factual situation, we believe that you will not be prejudiced by automatic election between the initial and the new going forward rules. No prejudice should result because the Cable Services Bureau has issued a blanket waiver that preserves an operator's flexibility to elect between the initial and the new going forward rules that applies to your factual situation. Specifically, where an operator was contractually obligated, prior to the November 18, 1994 release of the Going Forward Order, to add new channels before December 31, 1994, the operator may make the rate adjustment for such channels under our initial going forward rules in the first quarter of 1995 while preserving the right to elect to use our new going forward rules for all channel additions made after December 31, 1994. Based on your description of the facts, the rate increases for channels added in October 1994 and November 1994 fall within the terms of the waiver and you retain the option of using either the initial or the new going forward rules to adjust rates for later channel additions. We believe our prior blanket waiver resolves your concerns about allowing an automatic election between initial and new going forward rules. Accordingly, we conclude the election of a rate adjustment methodology should be automatic upon the first rate adjustment in 1995 for (a) a channel added after December 31, 1994 or (b) for a channel added after the November 18, 1994 release date of the Going Forward Order where the operator was not contractually bound to add as of that date. At the time the operator makes this election, the operator may, but is not required to, include a notice in the operator's public inspection file that states which rate adjustment methodology it has chosen. Sincerely, Meredith J. Jones Chief Cable Services Bureau