FOR FCC RECORD ONLY $//Vista Cablevision of Witchita Falls, TX, MO&O, DA-95435//$ $/76.922 Rates for Cable Programming Service tier/$ $/benchmark cable rates/$ Before the Federal Communications Commission Washington, D.C. DA 95-435 In the matter of ) ) Vista Cablevision Inc. ) Time Warner Cable National Division ) Wichita Falls, Texas ) CUID No. TX0483 ) Benchmark Filing To Support ) Cable Programming Service Price ) Memorandum Opinion and Order Adopted: March 8, 1995 Released: March 9, 1995 By the Chief, Cable Services Bureau: Introduction 1. Here we consider a complaint about the price Vista Cablevision Inc. ("Vista") was charging for its cable programming service ("CPS") tier in Wichita Falls, Texas, CUID No. TX0483. Vista has chosen to attempt to justify its price through a benchmark showing on FCC Form 393. This Order addresses the reasonableness of Vista's price only through May 14, 1994. At a later time we will issue a separate order addressing the reasonableness of the price after that date. 2. Under the Cable Television Consumer Protection and Competition Act of 1992, and our rules implementing it, 47 C.F.R. Part 76, Subpart N, the Commission must review CPS prices upon the filing of a valid complaint. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPS prices. Under our rules, an operator may attempt to justify its prices through either a benchmark showing or a cost-of-service showing. In either case, the operator has the burden of demonstrating that its CPS prices are not unreasonable. 3. The Commission's original rate regulations took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. Operators with valid CPS complaints filed against them prior to May 15, 1994 must demonstrate that their CPS prices were in compliance with the Commission's initial rules from the time the complaint was filed through May 14, 1994, and that their prices were in compliance with the revised rules from May 15, 1994, forward. Operators attempting to justify their prices for the period prior to May 15, 1994, through a benchmark showing must complete and file FCC Form 393. Generally, to justify their prices for the period beginning May 15, 1994, through a benchmark showing, operators must use the FCC Form 1200 series. Procedural Matters 4. The first valid CPS complaint for the City of Wichita Falls, Texas, CUID No. TX0483, was served on Vista on September 1, 1993. The Commission received the complaint on September 7, 1993. 5. Vista attempted to justify its CPS price through an FCC Form 393 filed on November 15, 1993 and re-filed an identical Form 393 on May 25, 1994. Vista amended its justification on July 7, 1994 in response to a Cable Services Bureau Order citing common deficiencies observed in benchmark filings generally. Discussion 6. Vista claims that its monthly CPS tier price of $10.77 per subscriber is justified by its benchmark filings, which show a maximum permitted charge of $10.78. However, upon review we have determined that Vista has not correctly calculated its maximum permitted price, and it is appropriate to make the following adjustment to Vista's calculations in the Form 393: a. On its Form 393 filing, Vista calculated the Inflation Adjustment Factor (line 127, Worksheet 1, Part II) as of the end of October 1993. However, Vista's use of October 1993 as the date through which it calculated the inflation adjustment is impermissible. Vista was served with a rate complaint on September 1, 1993. The instructions to FCC Form 393, page 11, require that the Inflation Adjustment Factor be calculated using "the number of whole months from September 30, 1992 to the date you will submit this form." In general, a cable operator must submit a justification of its rates no more than 30 days after service of the earliest valid complaint. Vista cannot be permitted to claim an additional inflation adjustment simply because it did not file its Form 393 within this 30-day period. We must therefore recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the latest date contemplated by the Form 393 instructions. On July 29, 1994, the Department of Commerce released corrected inflation data including Gross National Product Price Index ("GNP-PI") figures of 122.3 for the third quarter of 1992 and 125.7 for the third quarter of 1993. Using these GNP-PI figures, we calculate 1.028 as the Inflation Adjustment Factor through September 1993, the base date Vista should have used in justifying its rates. 7. This adjustment has the effect of reducing the maximum permitted monthly price for the CPS tier from $10.78 to $10.60. Conclusions 8. Upon review of the record herein, we conclude that Vista's showing supports a maximum reasonable CPS tier price of $10.60 per month (plus franchise fee) for the period of September 7, 1993 to May 14, 1994 for CUID No. TX0483. We further determine that we will order appropriate refunds pursuant to Section 76.957 of the Commission's Rules, 47 C.F.R.  76.957, in order to reimburse subscribers for the amount they paid in excess of a reasonable price. 9. We further conclude that Vista must reflect in its Form 1200 rate filing for the period after May 14, 1994 the fact that Vista's price during the earlier period was unreasonable. We reserve the right to make further adjustments to Vista's price for the period after May 14, 1994, upon completion of our review of Vista's FCC Form 1200 rate filing. 10. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321, that the September 1, 1993 complaint against the cable programming service price charged by Vista Cablevision Inc. in Wichita Falls, Texas, CUID No. TX0483, IS GRANTED TO THE EXTENT INDICATED HEREIN. 11. IT IS FURTHER ORDERED that the benchmark filing submitted by Vista Cablevision Inc. with respect to the City of Wichita Falls, Texas, CUID No. TX0843, for the period of September 7, 1993 to May 14, 1994, justifies a maximum price of $10.60 per month (plus franchise fee) for Vista's cable programming service tier. 12. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's Rules, 47 C.F.R.  76.961, that Vista Cablevision Inc. shall refund to subscribers that portion of the amounts paid for cable programming service from September 7, 1993 to May 14, 1994 for the City of Wichita Falls, Texas, CUID No. TX0483, that exceeded $10.60 per month (plus franchise fee) and was thus unreasonable, plus interest to the date of the refund. 13. IT IS FURTHER ORDERED that Vista Cablevision Inc. shall promptly determine the overcharges to CPS subscribers for the stated periods, and shall within 30 days of the release of this Order file a report with the Chief, Cable Services Bureau, stating the cumulative refund amount so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refunds within 60 days of Commission approval thereof. 14. IT IS FURTHER ORDERED, pursuant to Section 76.922(b)(4)(C) of the Commission's rules, 47 C.F.R.  76.922(b)(4)(C), that Vista Cablevision Inc. shall, within 30 days of the release of this Order, revise its Form 1200 filing with respect to Wichita Falls, Texas, for the period beginning May 15, 1994, to reduce the monthly charge per tier as of March 31, 1994 for Tier 2 (Line A6b) to equal the maximum price (plus franchise fee). 15. IT IS FURTHER ORDERED that Vista Cablevision Inc. shall place into effect, within 30 days after its submission of the revised Form 1200 filing required above, a CPS tier price for Wichita Falls, Texas, CUID No. TX0483, that reflects the reduction in the CPS rate determined in this Order. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau