WPC>_ 2BJ Z Courier3|x BoldCG TimesX@`7X@HP LaserJet 4_230_1HPLAS4.PRS 4x  @\_)^X@2 6F,  3|x CourierCourier Bold"i~'K2^$(8<><q*"xxxxWWxxxWWkkxxx$$#%%Heading 2Underlined Heading Flush Left14 Heading 1Centered Headingcal Style 4G Y * Ã  Bullet ListIndented Bullet List*M0 Y XX` ` (#` 08-23-94 02:53p 52#<Qc&<(K*f 0CourierCourier BoldCG TimesCG Times BoldTimes New RomanTimes New Roman Bold?xxx,)x `7X8wC;,Xw PE37XPD7zC;,c!Xz_ pi7Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdCourierCourier BoldCG TimesCG Times BoldTimes New RomandDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd"  Y-expenses.# Xy-#o\  PC+XP#э While the instructions accompanying FCC Form 1205, one of the successor forms to FCC Form 393, specifically require that interest expenses be deducted from income taxes, the instructions accompanying FCC Form 393 do not contain such a directive. FCC Form 1205,  X4-at pps. 89; FCC Form 393, at pps. 3334. As noted in footnote 7, supra, MGC did deduct its interest expenses when it recalculated its income tax obligations on FCC Form 1205. # The Communities rebut MGC's argument by contending that MGC should have read FCC Form 393 to assume the obvious principle of the tax deductibility of interest expenses when it calculated its income tax obligations on Schedules A and C of FCC Form 393.  Y-x10.` ` MGC also advances what it terms an "analytically discrete" reason why it should not be required to refund its alleged equipment and installation overcharges. MGC claims that the Communities' consultant's report states that MGC could have charged its subscribers up to an additional $3.5 million per year for basic tier service. Thus, MGC claims that had it been adequately advised as to what was required in the FCC Form 393 equipment and installation calculations, it would have increased slightly its basic service rates in order to keep revenues at the level that management decided were required. The Communities effectively rebut this argument by pointing out that MGC had the opportunity to make this precise adjustment beginning July 15, 1994, when it began deducting interest expenses from its total income tax obligation in its equipment and installation calculations on FCC Form 1205. MGC declined to do so.  Yy-x11.` ` As noted in paragraph 5, supra, the Commission will sustain a franchising authority's decision as long as there is a reasonable basis for that decision. After a careful review of the record in the instant proceeding, and given the wellknown principle of the tax deductibility of certain interest expenses, we find that the Communities' Ordinances are based upon a reasonable interpretation and application of the Commission's rules and forms.  Y-Accordingly, we deny MGC's Appeal. @  X- IV.xOrdering Clauses  Y-  Y- x12.` ` Accordingly, IT IS ORDERED that the Appeal filed by Media General Cable  Y-of Fairfax County, Inc. is DENIED.  Yi- x13.` ` IT IS FURTHER ORDERED that, in light of the resolution of its Appeal  YS-herein, the Request for Stay filed by Media General Cable of Fairfax County, Inc. IS  Y=-DISMISSED as moot .  Y-x14.` ` This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission's rules. 47 C.F.R. 0.321. " 0*((!"Ԍ Y- x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau "_0*(("  Y-10.xNeither the FCC Form 393, its accompanying instructions, nor the Commission's rules specifically provide that cable operators must deduct interest expenses when calculating their income tax obligations. It was, therefore, reasonable for MGC to assume that, in the absence of any such directive from the Commission, it was not required to deduct its interest expenses from its income tax calculations on Schedules A and C of FCC Form 393. Accordingly, we find that the Communities' decision to order MGC to refund equipment and installation overcharges based upon MGC's failure to deduct interest expenses from its income tax calculations was unreasonable. In order to comply with the requirements of FCC Form 393, the Communities must recalculate MGC's maximum permitted equipment and  Y1-installation rates without deducting interest expenses from MGC's income tax calculations in Column G of Schedules A and C, and modify their Ordinances accordingly.