FOR FCC RECORD ONLY $// Multimedia Cablevision, Inc., IL, MO&O, DA 95-531//$ $/76.922 Rates for Cable Programming Service tier/$ $/benchmark cable rates/$ Before the Federal Communications Commission Washington, D.C. DA-95-531 In the matter of ) ) Multimedia Cablevision, Inc. ) CUID Nos. IL0537, IL0538, IL0838, IL1123, ) IL1303, IL1304, IL1420 Order Dismissing Complaints ) Memorandum Opinion and Order Adopted: March 17, 1995 Released: March 20, 1995 By the Deputy Chief, Cable Services Bureau: Introduction 1. Here we consider complaints about the prices Multimedia Cablevision, Inc. ("Multimedia") was charging for its cable programming service ("CPS") tiers in numerous communities in Illinois (the "subject communities"). See Appendix for a list of the subject communities and the number of basic and CPS channels Multimedia offered in each community both before and after September 1, 1993. Rather than attempting to justify its prices through a benchmark or cost of service showing, Multimedia responded to the complaints by stating that it has no CPS tier in those systems. On March 3, 1995, Multimedia submitted information supporting its claim that CPS tiers subject to rate regulation did not exist as of September l, 1993 and still do not exist in any of the subject communities in response to a letter from the Commission staff. 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. Background 4. The Cable Services Bureau has addressed the regulatory status of packages of channels offered on an a la carte basis in several orders resolving letters of inquiry ("LOIs") directed to cable operators. Of particular relevance to this case, the Cable Services Bureau has released orders resolving LOIs regarding Century Cable TV's ("Century") systems in Huntington, West Virginia; Morgantown, West Virginia; Muncie, Indiana; Owensboro, Kentucky; Yuma, Arizona; Brunswick, Georgia; and San Juan, Puerto Rico. Relying on the Commission's Going Forward Order, the Bureau's orders addressed the restructured service offerings implemented in these communities beginning September 1, 1993, in which Century eliminated its CPS tiers and offered instead only a basic service tier and a few a la carte channels. In each of these orders, the Bureau found that Century's restructured service offerings did not constitute a clear evasion of our rate rules. Specifically, the Bureau found that Century did not avoid rate regulation of most of its previous CPS channels because it moved those channels into a rate-regulated basic tier. With regard to the other channels, the orders permit Century to treat its a la carte packages as new product tiers that may be priced at market levels under the Going Forward Order. 5. Since the LOI orders found that the elimination of Century's CPS tiers did not constitute a clear evasion of rate regulation and those channels not placed on the basic service tier could be treated as new product tiers, there were no CPS tiers in those communities, as of September 1, 1993, that were subject to rate regulation pursuant to Section 76.922 of our rules. Therefore, the Bureau subsequently dismissed all FCC Form 329 complaints filed against Century in each of those seven communities. Discussion 6. The rate cards and channel line-up cards submitted by Multimedia for each of the subject communities indicate that Multimedia restructured its service offerings in the subject communities on September 1, 1993 in essentially the same way that Century did for the seven areas mentioned above where LOI orders have been issued. Multimedia discontinued its CPS offerings and placed all of its channels into a single basic service tier, except for five channels which it moved from the basic service tier into an eight channel a la carte package. The remaining three channels in the a la carte package were not previously offered on either Multimedia's basic service tier or its cable programming services tier. 7. We feel that we have sufficient information regarding Multimedia's restructured offerings in the subject communities to conclude, in accord with the Going Forward Order, that they should be treated the same way that we treated Century's restructured offerings in the seven communities where we issued LOI orders. As in these latter communities, although the instant restructuring resulted in the elimination of Multimedia's CPS tiers, the small number of channels that were removed from rate-regulated tiers and offered in the a la carte packages did not constitute an evasion of our then existing rules. Therefore, consistent with the action taken in the LOI orders, we will allow Multimedia to treat its a la carte packages in the subject communities as new product tiers even though they would not qualify as new product tiers under the Going Forward Order because one of the conditions for a new product tier is that channels may not be removed from a basic service tier or a CPS tier. Thus, we need not rule on the FCC Form 329 complaints filed against Multimedia in the subject communities because there were no CPS tiers subject to rate regulation pursuant to Section 76.922 of our rules as of September 1, 1993. In addition, nothing in these complaints indicates that Multimedia's new product tiers violate any of the conditions for establishing those tiers outlined in the Going Forward Order. Conclusion 8. Accordingly, IT IS ORDERED that the a la carte packages created by Multimedia Cablevision, Inc. in the communities listed in the attached Appendix may be treated as new product tiers under our Going Forward Order. 9. IT IS FURTHER ORDERED that all FCC Form 329 complaints pending against the CPS rates of Multimedia Cablevision, Inc. in each of the communities listed in the attached Appendix are DISMISSED. 10. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Gregory J. Vogt Deputy Chief, Cable Services Bureau APPENDIX 8/31/93 9/1/93 Pre-Regulation Post Regulation CUID Community Basic Tiers Basic Tiers A la Carte IL0537 Batavia 19 24 38 0 8 IL0538 Lisle 19 22 38 0 8 IL0838 Alsip 18 24 38 0 8 IL1123 Cook County 18 22 38 0 8 IL1303 North Barrington 12 21 30 0 8 IL1304 Inverness 12 21 30 0 8 IL1420 Barrington Hills 12 21 30 0 8 Federal Communications Commission CABLE SERVICES BUREAU RELEASE COVER NOTE DATE March 15, 1995 TYPE OF ITEM Benchmark Rate Order SUBJECT Multimedia (Illinois) NEED TO BE ADOPTED BY NEED TO BE RELEASED BY DATE/TIME REC'D BY NO SUMMARY OF ITEM Number of Subscribers: n/a Number of Complaints: 9 Refund Amounts: none Summary of Item: Dismissal on the basis that there is no CPS tier over which to exercise jurisdiction. CLEARANCES: Initiator(s) Initial/Date Phone No(s). Zenji Nakazawa Jeff Steinberg Division Chief Reviewer(s) Initial/Date Phone No(s). Greg Vogt Bill Johnson FINAL APPROVAL: BUREAU CHIEF Upon approval of the Bureau Chief, please forward this package to the Notification Office, Room 907 for processing. Comments: