WPCh 2BEJ Z Courier Y-#XR  P7jQXP#HP LaserJet 4_230_1HPLAS4.PRS 4x  @\oeX@26{/3|wCG Times Bold#XR  P7jQ}XP#CourierCG Times907_1HPLAS4SI.PRSx  @\iX@3|wCourierCG TimesCG Times BoldCG Times Italic2f Fv p"k",tB^ f ^;C]ddCCCdCCCCddddddddddCCY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYd4dddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d<|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`La8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  2)k/v?ta5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  A.  a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# 2[   ?a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  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A. a.(1)(a) i) a)Documentg2& e$ %%PleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:xxxxxPxxxxxxxxxCkkkkkkkkkkPCPCPCPCxxxxxxxxxxkxxxxxxjxjjjxxjxxjxxxxxxxPCxxxxPxxxxCVxHCxxxxxVVx[[[xVCxxxxxxxxjjjxxxxxxPxxPPPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxPkbbxxxxxxTxxxxTPP||x>>xxxxxP|x!T"x}xExPPPxxxxPxkxofxkkPPPPk]kxkPCkkxkxxxkkPxkPPxxxxxxxPxkP8D%nZZB 3nMnMn..s[",tB^ f ^GPoxxPPPxPPPPxxxxxxxxxxPPx]sPPPxxPxkkTxCPCxk]Pxxxkxxxx>xxxxxPxxxxxxxxCxxxxxkkkkk]C]C]C]Cxxxxxxxxxxxxxjjxxjxxjxxxxx[Cxxx]xxC`x]Cxxjjx[][x`RxxjkjxxxxPxxPPPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxPxffxxxxxxTxxxxTPPx>>xxxxxPxT"xxExPPPxxxxPxkxsfxxxPPPPk]kkk]Ckkxkxxxkk]xkPPxxxxxxxPxkP8D%nZZB 3nMnMn..s[<?xxx,2x6X@`7X@8wC;,Xw PE37XPDPG, PE37PDBPG,q_ pi7D7zC;,c!Xz_ pi7XV"G($,hG PE37hP<R&HHH,,H6X@`7h@6uC;,E:Xu&_ x7XXتֽG}oy:`S b! jofJW"3!.s0WDD6Wgbv{<@DDzE!n14 4GM0CourierCG TimesCG Times Bo22]Lf QI\'"i~'K2^$(8<><q*"xxxxWWxxxWWkkxxx  YB<ԍ#XR  P7jQXP# The findings in this Order do not in any way prejudge the reasonableness of the price for CPS service after May 14, 1994 under our new rate regulations. However, to the extent Operator has sought to take advantage of the refund deferral period under the Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed  Y!-Rulemaking, MM Docket No. 92266, FCC 9438, 9 FCC Rcd 4119 (1994) ("Second Order  Y"-on Reconsideration"), the maximum permitted CPS price determined herein might also apply  Y#-from May 15, 1994 until the date on which Operator #XR  P7jQXP#implemented its CPS prices under the  Y$<new regulations. See para. 3, infra.#x6X@`72X@# #XR  P7jQXP#Further, to the extent that the price as of March 31, 1994 is found to be excessive, reductions in Operator's price for the period after May 14, 1994 may be required to reflect the fact that Operator's price during the earlier period, which is used as the starting point to calculate its price for the prospective period, was  YK(-unreasonable. See 47 C.F.R.  76.922(b)(4)(C).> " 0*0*0*"Ԍ Y-  2. Under the Cable Television Consumer Protection and Competition Act of 1992,x4 Yy<ԍ#XR  P7jQ}XP# Pub. L. No. 102385, 106 Stat. 1460 (1992); Communications Act,  623(c), as  Yd-amended, 47 U.S.C.  543(c) (1993). and our rules implementing it, 47 C.F.R. Part 76, Subpart N, the Commission must review""0*0*0*" CPS prices upon the filing of a valid complaint. The filing of a valid complaint triggers an  Y-obligation on behalf of the cable operator to file a justification of its CPS prices.fx4 Yb<ԍ#Xw PE37}XP# 47 C.F.R.  76.956.f Under our rules, an operator may attempt to justify its prices through either a benchmark showing or a  Y-costofservice showing.iyx4 Y<ԍ#Xw PE37}XP# 47 C.F.R.  76.956(b).i In either case, the operator has the burden of demonstrating that its  Y-CPS prices are not unreasonable.Y*x4 Y <ԍ#Xw PE37}XP# Id.Y  Yv-3. The Commission's original rate regulations took effect on September 1, 1993.vx4 Y <ԍ#Xw PE37}XP# Order in MM Docket No. 92266, Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, FCC 93372, 58 Fed. Reg. 41042 (Aug. 2, 1993).  Y_-The Commission subsequently revised its rate regulations effective May 15, 1994.{_` x4 Yp<ԍ#Xw PE37}XP# 47 C.F.R.  76.922(b).{ 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  Y -compliance with the revised rules from May 15, 1994 forward.  x4 Y<ԍ#Xw PE37}XP# See Second Order on Reconsideration, 9 FCC Rcd at 4190, paras. 150152. Operators attempting to justify their prices for the period prior to May 15, 1994 through a benchmark showing must  Y -complete and file FCC Form 393.{ x4 YJ<ԍ#Xw PE37}XP# #Xu&_ x7E:XX# Id.{ Generally, to justify their prices for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200  Y -series.  wx4 Y<ԍ#Xw PE37}XP# 47 C.F.R.  76.922(b)(6); see also Second Order on Reconsideration, 9 FCC Rcd at 4189 n.195.  Yy- 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,  Y-1995. x4 Y%<ԍ#Xw PE37}XP# Operator submitted additional information in response to a Cable Services Bureau Public Notice offering operators the opportunity to make optional supplemental filings. "& 0*((&" Public Notice: Cable Services Bureau Announces Optional Procedures with Respect to Pending PreMay 15 Benchmark Cases, DA 941556 (Dec. 29, 1994) and Public Notice: Cable Services Bureau Announces Extension of Time to File Under Optional Procedures with Respect to Pending PreMay 15 Benchmark Cases, DA 9587 (Jan. 20, 1995) (together,  Y4-Public Notice). " 0*((("Ԍ  Y-  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 taxpaying 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 taxpaying business entities must grossup their tax entries in ColumnG of Schedules A and C (i.e., calculate the tax as a percentage of return on investment  Y-plus tax). ax4 Y2-#Xw PE37}XP#э First Order on Reconsideration, Second Report and Order, and Third Notice of Proposed Rulemaking, MM Docket No. 92266, FCC 93428, 9FCC Rcd 1164, 1196 n.92  Y-(1993) ("Our provision to grossup the return amount for income taxes applies to all tax paying business entities to the extent that they have a state or federal income tax obligation").  Y-See also Cable Television Rate Regulation Questions and Answers Relating To FCC Form 393, Question and Answer No.14 (released July 30, 1993) ("The federal tax expense should be calculated based upon a pretax return on investment"). 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  YK-subsequent steps) using correctly grossedup tax entries.      Y- 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" 0*(("  Y-accurate data currently available for the date as to which Operator filed. x4 Yy-#Xw PE37}XP#э See 47 C.F.R.  76.922(b)(9)(iii) (if a cable operator fails to justify its rates, rates must be adjusted in accordance with the most accurate data available at the time of analysis). 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 ("GNPPI") figures of 122.3 for the third quarter of 1992 and 125.7 for the third quarter of 1993. Using these GNPPI figures, we calculate an Inflation Adjustment Factor through October 1993, the base date Operator used in justifying its rates, of 1.030.  Y_-   7. Upon review of the record herein, and having incorporated the adjustments discussed above, we conclude that Operator's showing supports the maximum reasonable  Y -CPS tier price of $10.38 (plus franchise fee) dx4 Y/-#Xw PE37}XP#э These adjustments have the effect of causing Operator to calculate its permitted rates from Form 393, Part II, Worksheet 2 rather than Worksheet 1. However, Operator failed to complete Worksheet 2 of Form 393. Therefore, we have computed Worksheet 2 by using data supplied by Operator on its Form 1200 filing. for the period from the filing of the first valid  Y -complaint (as shown on Appendix A) to May 14, 1994.c x4 Y-#Xw PE37}XP#э This finding is based solely on the representations of Operator and the modifications  Ym-described herein. Should information come to our attention that these representations were  YV-materially inaccurate, we reserve the right to take appropriate action. This Order is not to be construed as a finding that we have accepted as correct any specific entry, explanation or  Y(-argument made by any party to this proceeding not specifically addressed herein.c  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  Y -unreasonable. % x4 Y}-#Xw PE37}XP#э We reviewed Operator's FCC Form 1200 rate filing and confirmed that Operator calculated its rates for the period after May 14, 1994 using the rate that we find in this Order to be 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  Y4-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"0*((" 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  Y -in each franchise area (as set forth on Appendix A) x4 Ye <ԍ#Xw PE37}XP# Our jurisdiction to order a refund dates from the earliest date a valid complaint is filed with the Commission. 47 C.F.R.  76.961(b). 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.l 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 $10.38 (plus franchise fee). 15. IT IS FURTHER ORDERED that Operator shall place into effect, within 30 days after its submission of the revised Form 1200 filings required above, a price that reflects the reduction in the CPS rate determined in this Order. 16. IT IS FURTHER ORDERED, pursuant to Section 76.960 of the Commission's rules, 47 C.F.R.  76.960, that Operator shall not be required to obtain advance approval of adjustments to its CPS price in the franchise areas addressed herein for one year following the release of this Order, due to Operator's having submitted in good faith optional  Y"-supplemental filings in response to our Public Notice. "#b0*(($"Ԍ` `  hh,FEDERAL COMMUNICATIONS COMMISSION ` `  hh,Meredith J. Jones ` `  hh,Chief, Cable Services Bureau   Yv-l ă "H0*(("  X- ` `  hh,Appendix A  Y-CUID No.` `  Date First ComplaintppDate Complaint xx-  Y-` `  Filed with FCCVppServed    Y_-TX0043` `  12/13/93hh,Vpp12/13/93  xx- X(#(#  YH-TX0044` `  12/20/93hh,Vpp12/16/93