WPC4x 2?BEJ ZCourier c-#XR  P7jQXP#HP LaserJet 4_230_1HPLAS4.PRS 4x  @\_)^X@3|wCG Times Bold#XR  P7jQ}XP#2qvpQCourierCG Times907_1HPLAS4SI.PRSx  @\iX@3|wa8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . 2kk^vna6DocumentgDocument Style Style GX  a5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  A.  a7DocumentgDocument Style StyleyXX` ` (#` 2nt $ BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` a3DocumentgDocument Style Style B b  ?  1.  2  L   a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# 23  c c a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p Tech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technicala1DocumentgDocument Style Style\s0  zN8F I. ׃  2es!a5TechnicalTechnical Document Style)WD (1) . a6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   a3TechnicalTechnical Document Style9Wg  2  1.   2nba4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . 23e<Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:><q*"xxxxWWxxxWWkkxxx)0*0*0*)" earlier period, which is used as the starting point to calculate its prices for the prospective  Yy-period, was unreasonabl#XP\  P6QXP#e.  See 47 C.F.R.  76.922(b)(4)(C)."e0*0*0*"Ԍ" 0*0*0*"Ԍ Y-  x2. Under the Cable Television Consumer Protection and Competition Act of 1992,x4 Yy<ԍ#Xw PE37}XP##XR  P7jQ}XP# Pub. L. No. 102385, 106 Stat. 1460 (1992); Communications Act,  623(c), as  Yd-amended, 47 U.S.C.  543(c) (1993). 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  Y-obligation on behalf of the cable operator to file a justification of its CPS prices.fx4 Y<ԍ#Xw PE37}XP# #XR  P7jQ}XP#47 C.F.R.  76.956. Under our rules, an operator may attempt to justify its prices through either a benchmark showing or a  Y-costofservice showing.x4 YU <ԍ#Xw PE37}XP# #XR  P7jQ}XP#47 C.F.R.  76.956(b). In either case, the operator has the burden of demonstrating that its  Yv-CPS prices are not unreasonable.vx4 Y <ԍ#Xw PE37}XP# #XRo=  x7.Q E:XX## Xw PE37}XP#Id.ħ  YH-x3. The Commission's original rate regulations took effect on September 1, 1993.H{x4 Yt<ԍ#Xw PE37}XP# #XRo=  x7.Q E:XX## XR  P7jQ}XP#Order in MM Docket No. 92266, Implementation of Sections of the Cable  Y_-Television Consumer Protection and Competition Act of 1992: Rate Regulation, FCC 93372, 58 Fed. Reg. 41042 (Aug. 2, 1993).  Y1-The Commission subsequently revised its rate regulations effective May 15, 1994.1 x4 Y<ԍ#Xw PE37}XP# #XR  P7jQ}XP# 47 C.F.R.  76.922(b). 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  Y -compliance with the revised rules from May 15, 1994 forward. x4 Y9<ԍ#Xw PE37}XP# #XR  P7jQ}XP#See Second Order on Reconsideration, 9 FCC Rcd at 4190, paras. 150152. Operators attempting to justify their prices for the period prior to May 15, 1994 through a benchmark showing must  Y -complete and file FCC Form 393. fx4 Y<ԍ#Xw PE37}XP# #XRo=  x7.Q E:XX## Xw PE37}XP#Id.ĭ Generally, to justify their prices for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200  Yy-series. yx4 YC"<ԍ#Xw PE37}XP# #XR  P7jQ}XP#47 C.F.R.  76.922(b)(6); see also Second Order on Reconsideration, 9 FCC Rcd at 4189 n.195. "b 0*((g"  X- Procedural Matters  x4. The first complete and timely CPS complaints in the franchise areas addressed in this Order were completed and served on Cablevision and received by the Commission on the dates set forth in Appendix A. x5. Cablevision filed its FCC Forms 393 for the franchise areas addressed in this  YH-Order on the dates set forth in Appendix B.   Cablevision amended its justification on June 24, 1994, for CUID Nos. OH0775 and OH1944, and on July 1, 1994, for CUID Nos. OH0175, OH0775 and OH0986, in response to a Cable Services Bureau Order citing  Y -common deficiencies observed in benchmark filings generally.  x4 Y| -#XR  P7jQ}XP#э Cable Operators' Rate Justification Filings, DA 94526, 9 FCC Rcd 7752 (Cab. Serv. Bur. 1994).  Y - Background x6. Cablevision restructured its rates in an effort to comply with the Commission's Rules on September 1, 1993. In October 1993, Cablevision changed its channel lineup by deleting Channel 37 from HSN II, a nonsatellite channel on the CPS tier, and adding WQHS, a nonsatellite channel on the basic tier. On January 1, 1994, Cablevision again changed its channel lineup by moving Channel 17, a satellite channel on the CPS tier, to the basic tier. These changes in Cablevision's channel lineup were unaccompanied by any change in Cablevision's prices for its basic and CPS tiers. Cablevision completed Part II of Form 393 using its channel lineup as of October 1993. In Part I of Form 393, Cablevision performed alternative calculations using its number of channels as of September 1, 1993, and as of October 1993.  X- Discussion x7. Cablevision acknowledges that its CPS price is higher than the maximum permitted price if Form 393 is calculated using the number of channels Cablevision offered  YO-as of October 1993. _Odx4 Yd -#Xw PE37}XP#э#Xw PE37}XP# Cablevision asserts that when it initially restructured its monthly CPS tier price on September 1, 1993, it had one additional CPS channel and one fewer basic tier channel. If Cablevision had computed Part I of Form 393 based on the number of channels offered on September 1, 1993, its price would have been lower than the maximum permitted perchannel charge as calculated in the filings. However, as recognized by Cablevision, Form 393 must be completed using the number of channels offered by the operator as of the initial date of regulation.  Thus, Cablevision has failed to demonstrate that its price for the CPS tier was not unreasonable. Furthermore, upon review of Cablevision's Form 393 filings, we"8 0*((." have found that Cablevision has not correctly calculated its maximum permitted price as of the initial date of regulation, and it is therefore appropriate to make the following adjustments to Cablevision's calculations in Form 393:  Y-x` ` a. In its Form 393 filings, Cablevision's calculations for its rateregulated (#(#Xxpackage as of the initial date of regulation (Form 393, Part II, Worksheet 1 and Form x393, Part I) do not count Channel 30 as a regulated satellite channel. Similarly, xCablevision's calculations for its rateregulated tiers as of September 30, 1992 (Form x393, Part II, Worksheet 2) do not count Channel 29 as a regulated satellite channel. xHowever, according to the channel lineups included with Cablevision's responses to xcomplaints, as of the initial date of regulation Channel 30 carried Bravo, which is a xnonrateregulated payperchannel service, for 76 hours per week and carried CSpan xII, which is a rateregulated satellite service offered on the CPS tier, for 92 hours per xweek. The same programming in the same proportion was carried on Channel 29 as xof September 30, 1992.  Y-x` ` b. Our policy on "split" channels is to categorize them according to their (#(#X Yy-xpreponderance of use. This policy is based on the fact that the 1992 price survey (#(#Xxunderlying the benchmark system was analyzed based on whole, not fractional, xchannel counts. Under the benchmark system in effect prior to May 15, 1994, all xchannels must be characterized as either rateregulated or not subject to rate xregulation and as either satellite or nonsatellite. A "channel" is defined as a "unit of xcable service identified and selected by a channel number or similar designation." xFCC Form 393, p. 10. The preponderanceofuse test is the only one consistent with  Y-xthis conceptual framework. x4 YQ-#XR  P7jQ}XP##XR  P7jQ}XP#э See Viacom Cable, Nashville, Tennessee, CUID No. TN0148, DA 941151, at para. 6a6c (Cab. Serv. Bur., released Nov. 9, 1994).  Y-   Y-x` ` c. Under our rules, pay channels may not be counted as regulated  0(#(#X Y-xchannels or as satellite channels. cdx4 Y-#XR  P7jQ}XP#э#XR  P7jQ}XP# See General Instructions for Completing FCC Form 393, Instruction No. 5 ("Cable programming service consists of all video programming distributed over a cable system that  Y|-is not included in the basic service tier or offered on a perchannel or perprogram basis");   Ye -Instructions for Worksheet 1, Line 121 ("For purposes of using the benchmark tables, a 'satellitedelivered signal' is any cable program service or 'superstation' delivered on a communications satellite that is not a premium service (pay channel or payperview  Y"#-channel)").#XR  P7jQ}XP#  However, under the preponderanceofuse test, xthe channel that was split between Bravo and CSpan II is not a pay channel because xit was used for a rateregulated service the majority of the programming week. xCablevision therefore should have counted Channel 30 as a satellite channel on the xCPS tier on Form 393, Part II, Worksheet 1 and Part I, and it should have counted"7 0*((." xChannel 29 as a satellite channel on the basic tier on Form 393, Part II, Worksheet  Y-x2.x4 Yb-#Xw PE37}XP#э Cablevision offered only a single tier of programming on this system as of September 30, 1992. Channel 29 was part of this tier. x` ` d. Cablevision's calculations for its rateregulated channels as of the initial xdate of regulation (Form 393, Part II, Worksheet 1 and Form 393, Part I) count xChannel 17 as a regulated satellite channel on the CPS tier. However, according to  Yv-xthe channel lineups submitted by Cablevision, Channel 17 was moved from the (#(#X xCPS tier to the basic tier before the filing of the first valid complaint in these xfranchise areas. The channels used in completing Form 393 should be those channels  Y1-xoffered on the initial date of regulation for each franchise area.o1bx4 YD -#Xw PE37}XP#э See note 12, supra.o Since the change in xthe use of Channel 17 occurred before any complaints were filed pertaining to these xfranchise areas, that change must be reflected in the channel counts. x` ` e. In order to correct for the net effect of the channelcounting errors xdiscussed above, we increase the number of satellite channels used in calculating the xbenchmark on Form 393, Part II, Worksheet 2, Line 220 from 22 to 23 and increase xthe number of total regulated channels in the same calculation from 32 to 33. We xalso increase the number of channels on Form 393, Part II, Worksheet 2, Line 202 xfrom 32 to 33. On Form 393, Part II, Worksheet 1, we increase the number of total xregulated channels and satellite channels used to calculate the benchmark on Line 121 xfrom 31 to 32 and 21 to 22, respectively. We also increase the number of channels in xthe basic tier on Line 102 from 10 to 11. These adjustments have the net effect of xreducing the benchmark channel rates entered on Line 121 of Worksheet 1 and Line x220 of Worksheet 2 and decreasing the base rates per channel on Part II, Worksheet x1, Line 110 and Part II, Worksheet 2, Line 210. x8. Because Cablevision has failed to demonstrate that its price for the CPS tier was not unreasonable, we will set prices for this tier, incorporating the adjustments discussed above. In doing so, we must also recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the dates that Cablevision was required to file  YN-Form 393 in each franchise area.-Nx4 Y"-#XR  P7jQ}XP#э See  47 C.F.R.  76.922(b)(9)(iii) (if a cable operator fails to justify its rates, rates  Y"-must be adjusted in accordance with the most accurate data available at the time of analysis). - Our rules require a cable operator to respond to a complaint that is not returned by the Commission within 30 days after the complaint is served. 47 C.F.R  76.956(c). In CUID No. OH0175, Cablevision did not comply with this rule. Cablevision cannot be permitted an additional inflation adjustment simply because" 0*(("  Y-it filed Form 393 late.x4 Yy<ԍ#Xw PE37}XP# See Times Mirror Cable Television of Orange County, San Clemente, California, DA 941334 (Cab. Serv. Bur., released Nov. 29, 1994). On July 29, 1994, the Department of Commerce released corrected inflation data including Gross National Product Price Index ("GNPPI") figures of 122.3 for the third quarter of 1992 and 126.5 for the fourth quarter of 1993. Using these GNPPI figures, we calculate 1.037 as the Inflation Adjustment Factor through January 1994, the base date Cablevision should have used in justifying its rate for CUID No. OH0175, and 1.039 as the Inflation Adjustment Factor through February 1994, the base date Cablevision properly used in justifying its rate for the other franchise areas which are the subject of this Order. 9. These adjustments have the cumulative effect of yielding the maximum permitted monthly CPS tier price for each franchise area set forth in Appendix C.  X - Conclusions  x10. Upon review of the record herein, we conclude that Cablevision's showing supports the maximum reasonable CPS tier price for each franchise area set forth in Appendix C (plus franchise fee) for the period from the filing of the earliest complaint in  Yy-each franchise area (as set forth on Appendix A) to May 14, 1994.exydx4 Y-#XR  P7jQ}XP#э This finding is based solely on the representations of Cablevision listed in paragraph 5,  Yw-supra, and the modifications described in paragraphs 7 and 8, supra. Should information come to our attention that these representations were materially inaccurate, we reserve the right to take appropriate action. This Order is not to be construed as a finding that we have accepted as correct any specific entry, explanation or argument made by any party to this proceeding not specifically addressed herein.e 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. x x11. We further conclude that Cablevision must reflect in its FCC Form 1200 rate filings for the period after May 14, 1994 the fact that Cablevision's price during the earlier period was unreasonable. We reserve the right to make further adjustments to Cablevision's price for the period after May 14, 1994, upon completion of our review of Cablevision's FCC Form 1200 rate filings. x12. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321, that the complaints referred to in Appendix A against the cable programming service price charged by V Cable, Inc. d/b/a Cablevision in the City of Shaker Heights, Ohio, CUID No. OH0175; the City of University Heights, Ohio, CUID No. OH0662; the City of Richmond Heights, Ohio, CUID No. OH0765; the Village of"  0*((" Woodmere, Ohio, CUID No. OH0775; Mayfield Village, Ohio, CUID No. OH0862; the City of Highland Heights, Ohio, CUID No. OH0986; and the City of Gates Mills, Ohio, CUID No. OH1944, and all other complaints in these franchise areas related to the same price, ARE GRANTED TO THE EXTENT INDICATED HEREIN. x13. IT IS FURTHER ORDERED that the benchmark filings submitted by V Cable, Inc. d/b/a Cablevision with respect to the City of Shaker Heights, Ohio, CUID No. OH0175; the City of University Heights, Ohio, CUID No. OH0662; the City of Richmond Heights, Ohio, CUID No. OH0765; the Village of Woodmere, Ohio, CUID No. OH0775; Mayfield Village, Ohio, CUID No. OH0862; the City of Highland Heights, Ohio, CUID No. OH0986; and the City of Gates Mills, Ohio, CUID NO. OH1944, for the period beginning with the filing of the first valid complaint in each franchise area (as set forth in Appendix A) and ending on May 14, 1994 justify the maximum price in each franchise area set forth in Appendix C (plus franchise fee) for V Cable, Inc. d/b/a Cablevision's cable programming service tier. x14. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's Rules, 47 C.F.R.  76.961, that V Cable, Inc. d/b/a Cablevision shall refund to subscribers that portion of the amounts paid for cable programming service for the period from the filing  YK-of the first valid complaint in each franchise area (as set forth on Appendix A)Kx4 Y-#XR  P7jQ}XP#э Our jurisdiction to order a refund dates from the earliest date a valid complaint is filed with the Commission. 47 C.F.R.  76.961(b). to May 14, 1994 which exceeded the maximum price for each franchise area set forth in Appendix C (plus franchise fee) per month and was thus unreasonable, plus interest to the date of the refund. x15. IT IS FURTHER ORDERED that V Cable, Inc. d/b/a Cablevision 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 refund within 60 days of Commission approval thereof.T x16. 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 V Cable Inc. d/b/a Cablevision shall, within 30 days of the release of this Order, revise its Form 1200 filings with respect to the City of Shaker Heights, Ohio, CUID No. OH0175; the City of University Heights, Ohio, CUID No. OH0662; the City of Richmond Heights, Ohio, CUID No. OH0765; the Village of Woodmere, Ohio, CUID No. OH0775; Mayfield Village, Ohio, CUID No. OH0862; the City of Highland Heights, Ohio, CUID No. OH0986; and the City of Gates Mills, Ohio, CUID No. OH1944, 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 in each"#b0*(($"  Y-franchise area set forth in Appendix C (plus franchise fee).   x17. IT IS FURTHER ORDERED that V Cable, Inc. d/b/a Cablevision shall place into effect, within 30 days after its submission of the revised Form 1200 filings required  Y-above, prices that reflect the reductions in the CPS rates determined in this Order. 0 x` `  x` `  FEDERAL COMMUNICATIONS COMMISSION x` `  Meredith J. Jones x` `  Chief, Cable Services Bureau " 0*(("  Y-0 #XP\  P6QyoXP#Appendix A  Y- #XR  P7jQ}XP#CUID No.` `  Date First ComplaintppDate Complaint  Y-x` `  Filed with FCChppServed  Y`-0175x` `  1/25/94@hpp1/17/94  YI-0662x` `  2/25/94@hpp2/25/94  Y2-0765x` `  2/24/94@hpp2/24/94  Y -0775x` `  2/24/94@hpp2/24/94  Y -0862x` `  2/24/94@hpp2/24/94  Y -0986x` `  2/22/94@hpp2/7/94  Y -1944x` `  2/25/94@hpp2/25/94" 0*0*0* "  Y-- Appendix B  Y-   Y-CUID No.` `  Date Form 393 Filed  Y-  Y-0175x` `  3/29/94  Yw-0662x` `  3/29/94  Y`-0765x` `  3/29/94  YI-0775x` `  3/29/94@hpp  Y2-0862x` `  3/29/94  Y -0986x` `  3/11/94  Y -1944  x` `   4/12/94  Y - " 0*0*0*0 "  Y-- Appendix C ă  Y-CUID No.` `  Actual Rates@hppMaximum Reasonable Rates x  Y`-0175x` `  $14.34@hpp$13.38  YI-0662x` `  $14.34@hpp$13.42  Y2-0765x` `  $14.34@hpp$13.42  Y -0775x` `  $14.34@hpp$13.42  Y -0862x` `  $14.34@hpp$13.42  Y -0986x` `  $14.34@hpp$13.42  Y -1944x` `  $14.34@hpp$13.42  Y-   x` `  hh@hpp x` `  hh@hpp x` `  hh@hpp  Y-T ă  ?<#x6X@`7X@#