FOR FCC RECORD ONLY
$//Telecable Associates, Inc., Bryan and College Station, TX, MO&O, DA 95-544//$
$/76.922 Rates for Cable Programming Service tiers/$
$/benchmark cable rates/$

              Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                          Washington, D.C. 20554 
                                                                DA 95-544


In the matter of     )              
              )
Telecable Associates, Inc.          )      CUID Nos. TX0043, TX0044  
Bryan and College Station, Texas           )
              )      
Benchmark Filings to Support        )
Cable Programming Service Price     )

                       MEMORANDUM OPINION AND ORDER

              Adopted:  March 20, 1995         Released:  March 22, 1995

By the Chief, Cable Services Bureau:

       1.  Here we consider complaints about the price Telecable Associates, Inc. d/b/a TCA
Cable TV ("Operator") was charging for its cable programming service ("CPS") tier in the
communities designated above.  Operator has chosen to attempt to justify its price through 
identical benchmark showings on FCC Form 393.  This Order addresses the reasonableness
of Operator's price only through May 14, 1994.  At a later date 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.

     4.   The first valid CPS complaints in the franchise areas which are the subject of this
Order were completed and served on Operator and received by the Commission on the dates
set forth on Appendix A.  Operator filed FCC Form 393 submissions on November 22,
1993; Operator has also filed supplemental information,  most recently on February 7,
1995.  

     5.  Operator asserts that its monthly CPS tier price of $10.51 is justified by its
benchmark filings because its price is lower than the maximum permitted charge as
calculated in the filings.  Upon review of Operator's Form 393 filings, we have found that it
has not correctly calculated its maximum permitted price, and it is therefore appropriate to
make the following adjustment to Operator's calculations in Form 393:

          a.  In Column G of Schedules A and C of Part III of its FCC Form 393,
     Operator did not correctly account for its income tax expense.  By placing entries in
     these columns, Operator confirms that it is a tax-paying entity (i.e., a "C"
     corporation).  However, Operator incorrectly calculated its income tax by simply
     applying the corporate tax rate to its return on investment.  The Commission has
     stated that tax-paying business entities must gross-up their tax entries in Column G of
     Schedules A and C (i.e., calculate the tax as a percentage of return on investment
     plus tax).  By understating its tax entries in Column G, an operator reduces its
     effective rate of return on equipment and installations and thereby could increase its
     CPS price.  We therefore recalculate Column G of Schedules A and C (and
     subsequent steps) using correctly grossed-up tax entries.   

     6.  Because of this error, we conclude that Operator has failed to demonstrate that its
price for the CPS tier was not unreasonable.  We will therefore set a price for this tier,
incorporating the adjustment 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 as to which Operator filed.  On its Form 393,
Operator calculated the Inflation Adjustment Factor as of the end of October 1993 using data
released on August 31, 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.
     
     7.  Upon review of the record herein, and having incorporated the adjustments
discussed above, we conclude that Operator's showing supports the maximum reasonable
CPS tier price of $10.38 (plus franchise fee) for the period from the filing of the first valid
complaint (as shown on Appendix A) to May 14, 1994.  
     
     8.  We further conclude that Operator must reflect in its FCC Form 1200 rate filing
for the period after May 14, 1994 the fact that Operator's price during the earlier period was
unreasonable.  We reserve the right to make further adjustments to Operator's price for the
period after May 14, 1994, upon completion of our review of Operator's FCC Form 1200
rate filings.

     9.  We further conclude that Operator has submitted in good faith a timely optional
supplemental filing in response to our 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 price for one year following the release of this Order. 

     10.  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 in Bryan, Texas, CUID No. TX0043, and College
Station, Texas, CUID No. TX0044 referenced at Appendix A herein ARE GRANTED TO
THE EXTENT INDICATED HEREIN.

     11.  IT IS FURTHER ORDERED that the benchmark filings submitted by Operator
justify the maximum reasonable price of $10.38 (plus franchise fee) for Operator's cable
programming service tier.

     12.  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 in Bryan, Texas, CUID
No. TX0043, and College Station, Texas, CUID No. TX0044, that portion of the amounts
paid for cable programming service for the period from the filing of the first valid complaint
in each franchise area (as set forth on Appendix A) to May 14, 1994 which exceeded
$10.38 (plus franchise fee) per month and was thus unreasonable, plus interest to the date of
the refund.

     13.  IT IS FURTHER ORDERED that Operator 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.         

     14.  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 with respect to Bryan, Texas, CUID No.
TX0043, and College Station, Texas, CUID No. TX0044, 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 $10.38 (plus franchise fee).

     15.  IT IS FURTHER ORDERED that Operator shall place into effect, within 30
days after its submission of the revised Form 1200 filings required above, a price that
reflects the reduction in the CPS rate determined in this Order.

     16.  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 approval of
adjustments to its CPS price in the franchise areas addressed herein for one year following
the release of this Order, due to Operator's having submitted in good faith optional
supplemental filings in response to our Public Notice.  

                         FEDERAL COMMUNICATIONS COMMISSION



                         Meredith J. Jones
                         Chief, Cable Services Bureau  
                                     

                         Appendix A



CUID No.       Date First Complaint          Date Complaint 
               Filed with FCC           Served    

TX0043         12/13/93                 12/13/93            
TX0044         12/20/93                 12/16/93