FOR FCC RECORD ONLY $//Century Southwest Cable Television I, Los Angeles, California, MO&O, DA-95-516//$ $/76.922 Rates for Cable Programming Service tiers/$ $/benchmark cable rates/$ Before the Federal Communications Commission Washington, D.C. DA 95-516 In the matter of ) ) Century Southwest Cable Television I ) Los Angeles, California ) CUID No. CA0253, Area G ) Benchmark Filing To Support ) Cable Programming Service Prices ) 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 prices Century Southwest Cable Television I ("Century") was charging for its cable programming service ("CPS") tiers in Los Angeles, California, CUID No. CA0253, Area G. Century has chosen to attempt to justify its prices through a benchmark showing on FCC Form 393. This Order addresses the reasonableness of Century's prices only through May 14, 1994. At a later time we will issue a separate order addressing the reasonableness of the prices 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 complete and timely complaint was served on Century on October 6, 1993. The Commission received the complaint on November 9, 1993. 5. Century states that it restructured its service offerings on September 1, 1993. In addition to its basic service tier, Century stated that it began offering twelve channels on an individual, or a la carte, basis. These a la carte channels could also be purchased collectively as one twelve-channel package (Century Select 12) or in two packages of six channels each (Century Select 6A and 6B). This restructuring was addressed in our letter of inquiry ("LOI") order released on December 22, 1994, in which we resolved the regulatory status of a la carte packages offered by Century in Beverly Hills and Los Angeles, California. In the LOI order, we found that the retiering in Beverly Hills and Los Angeles constituted an evasion of rate regulation. We concluded that Century's a la carte packages must be treated as rate-regulated cable programming service tiers and that the channels composing them must be counted as rate-regulated channels as of September 1, 1993, for purposes of completing the rate justification forms. Based upon this decision, and in response to our December 29, 1994 Public Notice, Century filed an FCC Form 393 for Los Angeles, Area G, for the first time on February 7, 1995, in which it treated the twelve- channel package of a la carte channels as a CPS tier. 6. On February 23, 1995, Century amended its FCC Form 393 in response to a Commission letter which requested clarification of Century's showing. On February 27, 1995, Century submitted documents explaining that Century had further restructured its service offerings on April 1, 1994. Specifically, Century removed the Arts and Entertainment ("A&E") channel and Video Hits 1 ("VH1") channel from the Century Select packages and replaced those channels with Court TV and ESPN2. A&E and VH1 were instead offered as a separate, two-channel CPS tier for $1.34 per month (plus franchise fee). This newly-created A&E/VH1 Satellite Tier was provided free of charge to subscribers who purchased seven or more Century Select channels. 7. On January 23, 1995, Century filed an Application for Review which argued that the Commission should reverse the Bureau's LOI decision regarding the treatment of its a la carte packages in Beverly Hills and Los Angeles. Century then filed a motion on January 26, 1995 requesting the Bureau to defer action on the complaints pending against its CPS rates in Beverly Hills and Los Angeles until the Commission rules on the Application for Review. Discussion 8. In its amended benchmark filing of February 23, 1995, Century calculated a maximum permitted rate for the Century Select 12 tier of $8.09 per month (plus franchise fee). Century did not, however, attempt to justify either its monthly price of $4.00 (plus franchise fee) for the Century Select 6A and 6B tiers or its monthly price of $1.34 (plus franchise fee) for the A&E/VH1 Satellite Tier. Upon review, we have found no apparent errors that would result in Century's price for the Century Select 12 tier exceeding the maximum permitted price. We further find that Century's prices for the Century Select 6A and 6B tiers and the A&E/VH1 Satellite Tier are less than or equal to the maximum permitted prices for these tiers. 9. In light of our conclusion that Century's actual prices for its CPS tiers did not exceed its maximum permitted prices, it is unnecessary to grant Century's motion to defer action as applied to this case. Conclusions 10. Upon review of the record herein, we conclude that, for the period from November 9, 1993 to May 14, 1994, Century's showing supports as reasonable its CPS tier prices of $6.00 per month (plus franchise fee) for the Century Select 12 tier and $4.00 per month (plus franchise fee) for the Century Select 6A and 6B tiers. We further conclude that, for the period from April 1, 1994 to May 14, 1994, Century's showing supports as reasonable its price of $1.34 per month (plus franchise fee) for the A&E/VH1 Satellite Tier. 11. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321, that the October 6, 1993 complaint against the cable programming service prices charged by Century Southwest Cable Television I in Los Angeles, California, CUID No. CA0253, Area G, and all other complaints relating to the same prices, ARE DENIED TO THE EXTENT INDICATED HEREIN. 12. IT IS FURTHER ORDERED that the benchmark filing submitted by Century Southwest Cable Television I, with respect to Los Angeles, California, CUID No. CA0253, Area G, for the period November 9, 1993 to May 14, 1994, justifies its prices of $6.00 per month (plus franchise fee) for the Century Select 12 tier and $4.00 per month (plus franchise fee) for the Century Select 6A and 6B tiers. 13. IT IS FURTHER ORDERED that the benchmark filing submitted by Century Southwest Cable Television I, with respect to Los Angeles, California, CUID No. CA0253, Area G, for the period April 1, 1994 to May 14, 1994, justifies its price of $1.34 per month (plus franchise fee) for the A&E/VH1 Satellite Tier. FEDERAL COMMUNICATIONS COMMISSION Gregory J. Vogt Deputy Chief, Cable Services Bureau