FOR FCC RECORD ONLY $//Paragon Cable, Gardena, Torrence, and Hawthorne, CA, MO&O, DA 95-513//$ $/76.922 Rates for Cable Programming Service tiers/$ $/benchmark cable rates/$ Before the Federal Communications Commission Washington, D.C. DA 95-513 In the matter of ) ) Paragon Cable ) CUID Nos. CA0934, CA0941, CA1022 ) Gardena, Torrence, and Hawthorne, ) California ) ) Benchmark Filing To Support ) Cable Programming Service Price ) Memorandum Opinion and Order Adopted: March 16, 1995 Released: March 17, 1995 By the Deputy Chief, Cable Services Bureau: Introduction 1. Here we consider complaints about the price Paragon Cable ("Paragon") was charging for its cable programming service ("CPS") tier in the California communities designated by the CUID numbers referenced above. Paragon has attempted to justify its price through a benchmark showing on FCC Form 393. This Order addresses the reasonableness of Paragon'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 in each community was completed and served on Paragon and received by the Commission on the dates set forth on Appendix A. 5. Paragon attempted to justify its CPS price through an FCC Form 393 filed on August 1, 1994. Paragon amended its justification on February 1, 1995 in response to a report of the consultants to the Local Franchising Authority. Discussion 6. In its amended benchmark filing of February 1, 1995, Paragon calculated a maximum permitted rate of $3.39 per month (plus franchise fee) for the CPS tier in the communities which are the subject of this Order. Upon review of this filing, we have found no apparent errors that would require a recalculation of this maximum permitted rate. However, Paragon's actual monthly charge for its CPS tier was $3.42 (plus franchise fee). Thus, Paragon has failed to demonstrate that the actual charge for its CPS tier was at or below the maximum permitted rate. Conclusions 7. Upon review of the record herein, we conclude that Paragon's showing supports a maximum reasonable CPS tier price of $3.39 per month (plus franchise fee) for the period from the filing of the first complaint in each franchise area (as shown on Appendix A) to May 14, 1994. However, we further determine that the total overcharge per subscriber is such a de minimis amount that it would not serve the public interest to order a refund. 8. We further conclude that Paragon must reflect in its FCC Form 1200 rate filing for the period after May 14, 1994 the fact that Paragon's price during the earlier period was unreasonable. We reserve the right to make further adjustments to Paragon's price for the period after May 14, 1994 upon completion of our review of Paragon's FCC Form 1200 rate filing. 9. 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 Paragon Cable in Gardena, California, CUID No. CA0934; Torrence, California, CUID No. CA0941; and Hawthorne, California, CUID No. CA1022, and all other complaints in these franchise areas relating to the same price, ARE GRANTED TO THE EXTENT INDICATED HEREIN AND DENIED TO THE EXTENT INDICATED HEREIN. 10. IT IS FURTHER ORDERED that the benchmark filing submitted by Paragon Cable with respect to Gardena, California, CUID No. CA0934; Torrence, California, CUID No. CA0941; and Hawthorne, California, CUID No. CA1022, for the period from the filing of the first valid complaint in each franchise area (as shown in Appendix A) to May 14, 1994, justifies a maximum price of $3.39 per month (plus franchise fee) for the cable programming service tier. 11. 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 Paragon Cable shall, within 30 days of the release of this Order, revise its Form 1200 filing with respect to Gardena, California, CUID No. CA0934; Torrence, California, CUID No. CA0941; and Hawthorne, California, CUID No. CA1022, 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 permitted rate (plus franchise fee). 12. IT IS FURTHER ORDERED that Paragon Cable shall place into effect, within 30 days after its submission of the revised Form 1200 filing required above, a CPS tier price that reflects the reduction in the CPS rate determined in this Order. FEDERAL COMMUNICATIONS COMMISSION Gregory J. Vogt Deputy Chief, Cable Services Bureau Appendix A CUID No. Date First Complaint Date Complaint Filed with FCC Served 0934 11/16/93 11/11/93 0941 10/26/93 10/20/93 1022 2/28/942/28/94