FOR FCC RECORD ONLY
$//Bresnan Communications Company, MI, MO&O, DA 95-534//$
$/76.922 Rates for Cable Programming Service tiers/$
$/benchmark cable rates/$
                                Before the
                     Federal Communications Commission
                             Washington, D.C.

                                                                  DA 95-534


In the matter of                   )
                              )
Bresnan Communications Company     )      CUID Nos. MI0029 and MI0136
Sault Ste. Marie, Michigan              )
Calumet, Michigan                  )
                              )
Benchmark Filings To Support       )
Cable Programming Service Prices        )

                       Memorandum Opinion and Order

     Adopted:  March 17, 1995                Released:  March 20, 1995  

By the Chief, Cable Services Bureau:

Introduction

     1.  Here we consider complaints about the prices Bresnan Communications Company
("Operator") was charging for its cable programming service ("CPS") tier in Sault Ste.
Marie, Michigan, CUID No. MI0029; and Calumet, Michigan, CUID No. MI0136. 
Operator has attempted to justify its prices through separate benchmark showings on FCC
Form 393.  This Order addresses the reasonableness of Operator'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, 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 complaints were completed and served on Operator on
October 13, 1993 for CUID No. MI0029, and on October 8, 1993 for CUID No. MI0136. 
The Commission received the complaints on October 18, 1993 for MI0029, and on October
8, 1993 for CUID No. MI0136.

     5.  Operator attempted to justify its CPS prices through separate FCC Forms 393
filed on November 15, 1993 for CUID Nos. MI0029 and MI0136.  Operator amended its
justifications for CUID Nos. MI0029 and MI0136 on February 7, 1995, in response to a
Cable Services Bureau Public Notice offering operators the opportunity to make optional
supplemental filings. 

Discussion

     6.  Operator asserts that its monthly CPS tier prices of $12.33 in CUID No. MI0029
and $10.98 in CUID No. MI0136 are justified by its benchmark filings because its prices are
less than the maximum permitted charges calculated in the filings.  Upon review of
Operator's filings, we have found the following errors that require a recalculation of
Operator's maximum permitted CPS prices:  

          a.   In Line 3 of Step A of Part III of its FCC Form 393, Operator did not 
     correctly calculate its customer equipment and installation costs using the percentages
     of total maintenance and installation costs stated on Line 2.  We therefore adjusted
     Line 3 to equal the percentages stated on Line 2 of the total costs entered on Line 1,
     and adjusted subsequent steps accordingly.  
          
          b.   In Columns A, B, C and D of Worksheet 1 of Part II of its FCC Forms
     393, Operator completed information for four separate tiers although its rate cards
     showed only two tier offerings consisting of basic and CPS programming with related
     charges.  Accordingly, Worksheet 1 was adjusted to reflect only the two tiers and to
     include tier channels and tier charge information consistent with the rate cards. 

          c.   Operator's Form 393, Worksheet 1, Line 104 entries do not represent its
     current monthly equipment revenue as of the initial date of regulation.  Since
     Operator restructured its rates, including its equipment rates, on September 1, 1993,
     in an attempt to comply with the Commission's regulations, the monthly equipment
     cost figures it entered on Line 34 of Step G of Part III should have been close or
     identical to its Line 104 entries.  However, Operator's entries on Line 104 differed
     substantially from its entries on Line 34.  We therefore adjusted Line 104 to equal the
     amounts entered on Line 34, as adjusted pursuant to paragraph 6a, supra.

     7.  Because of these errors, we conclude that Operator has failed to demonstrate that
its prices for the CPS tier were not unreasonable.  We will therefore set prices for this tier,
incorporating the adjustments discussed above.  In doing so, we must also recalculate the
Inflation Adjustment Factor in Form 393, Part II, Worksheet 1, on the basis of the most
accurate data currently available for the date for which Operator filed.  On its Forms 393,
Operator entered 13 months on Line 124, indicating that it calculated the Inflation
Adjustment Factor through October 1993.  On July 29, 1994, the U.S. 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 an Inflation Adjustment Factor through
October 1993, the base date Operator used in justifying its rates, of 1.030.  

     8.  These adjustments have the cumulative effect of reducing the maximum permitted
monthly CPS tier prices from $12.42 and $11.07 per month (as Operator calculated) to
$12.17 and $10.56 per month for Sault Ste. Marie, Michigan, CUID No. MI0029; and
Calumet, Michigan, CUID No. MI0136, respectively.

Conclusions

     9.  Upon review of the record herein, we conclude that Operator's showings support
maximum reasonable CPS tier prices of $12.17 and $10.56 per month (plus franchise fee) for
Sault Ste. Marie, Michigan, CUID No. MI0029; and Calumet, Michigan, CUID No.
MI0136, respectively, for the period October 18, 1993 to May 14, 1994 for CUID No.
MI0029, and for the period October 8, 1993 to May 14, 1994 for CUID No. MI0136.  We
further determine that we will order an appropriate refund 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.  

     10.  We further conclude that Operator must reflect in its Form 1200 rate filings for
the period after May 14, 1994 the fact that Operator's prices during the earlier period were
unreasonable.  We reserve the right to make further adjustments to Operator's prices for the
period after May 14, 1994, upon completion of our review of Operator's FCC Form 1200
rate filings.

     11.  We further conclude that Operator has submitted in good faith timely optional
supplemental filings in response to our December 29, 1994 Public Notice.  As provided in
the Public Notice, we will relieve Operator of its obligation to obtain advance Commission
approval of adjustments to its CPS prices for one year following the release of this Order.  

     12.  Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's
Rules, 47 C.F.R.  0.321, that the complaints against the cable programming service prices
charged by Operator in Sault Ste. Marie, Michigan, CUID No. MI0029; and Calumet,
Michigan, CUID No. MI0136, ARE GRANTED TO THE EXTENT INDICATED
HEREIN.

     13.  IT IS FURTHER ORDERED that the benchmark filings submitted by Operator 
with respect to Sault Ste. Marie, Michigan, CUID No. MI0029, for the period of October
18, 1993 to May 14, 1994; and Calumet, Michigan, CUID No. MI0136, for the period of
October 8, 1993 to May 14, 1994, justify maximum prices of $12.17 and $10.56 per month
(plus franchise fee) for Sault Ste. Marie, Michigan, CUID No. MI0029; and Calumet,
Michigan, CUID No. MI0136, respectively, for the cable programming service tier.

     14.  IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's
Rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers that portion of the
amounts paid for cable programming service from October 18, 1993 (in CUID No. MI0029)
and October 8, 1993 (in CUID No. MI0136) to May 14, 1994, that exceeded $12.17 and
$10.56 per month (plus franchise fee) for Sault Ste. Marie, Michigan, CUID No. MI0029;
and Calumet, Michigan, CUID No. MI0136, respectively, and was thus unreasonable, plus
interest to the date of the refund.

     15.  IT IS FURTHER ORDERED that Operator shall promptly determine the
overcharges to CPS subscribers for the same 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.

     16.  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 Operator shall, within 30 days of the
release of this Order, revise its Form 1200 filings for Sault Ste. Marie, Michigan, CUID No.
MI0029; and Calumet, Michigan, CUID No. MI0136, 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 for each franchise area (plus franchise fee).

     17.  IT IS FURTHER ORDERED that Operator shall place into effect, within 30
days after submission of the revised Form 1200 filings required above, CPS tier prices for
Sault Ste. Marie, Michigan, CUID No. MI0029; and Calumet, Michigan, CUID No.
MI0136, that reflect the reductions in the CPS rate determined in this Order.

     18.  IT IS FURTHER ORDERED, pursuant to Section 76.960 of the Commission's
Rules, 47 C.F.R.  76.960, that Operator shall not be required to obtain advance
Commission approval of adjustments to its CPS prices for one year following the release of
this Order.

                                                     FEDERAL COMMUNICATIONS COMMISSION



                                                     Meredith J. Jones
                                                     Chief, Cable Service Bureau