FOR FCC RECORD ONLY
$//Cox Cable Roanake, Inc., MO&O, DA 95-678//$
$/76.922 Rates for cable programming service tiers/$
$/benchmark cable rates/$

                                Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                          Washington, D.C. 20554 
                                                                DA 95-678


In the Matter of     )              
              )      
Cox Cable Roanoke, Inc.             )      CUID No. VA0151
Roanoke, Virginia    )
              )      
Benchmark Filing to Support         )
Cable Programming Service Price     )

                       MEMORANDUM OPINION AND ORDER

              Adopted:  March 30, 1995     Released:  April 5, 1995

By the Chief, Cable Services Bureau:

       1.  Here we consider complaints about the price that the above-captioned operator
("Operator") was charging for its cable programming service ("CPS") tier in the community
designated above.  Operator has chosen to attempt to justify its price through a benchmark
showing 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 complaint in the franchise area which is the subject of this
Order was completed and served on Operator and received by the Commission on September
22, 1993 and September 24, 1993, respectively.  Operator filed FCC Form 393 in response;
Operator has also filed amended and supplemental Form 393 filings, most recently on
February 7, 1995.  
     5.  In its February 7, 1995 amended filing Operator calculated a maximum permitted
price for the CPS tier of $12.19 per month.  However, Operator's actual price for the CPS
tier was $12.31 per month.  Thus, Operator has failed to show that its CPS rate is not
unreasonable.  Furthermore, 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 adjustments 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 subchapter "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 prices.  We therefore recalculate Column G of Schedules A and C (and
     subsequent steps) using correctly grossed-up tax entries.

     b.   Since Operator restructured its rates, including its equipment rates, on
     September 1, 1993, the current monthly equipment revenue figure it entered in Part
     II, Worksheet 1, Line 104 should have been close or identical to its equipment cost
     on Part III, Step G, Line 34.  However, Operator's entries on these two lines varied
     substantially.  Accordingly, on Line 104 we enter the same figure that appears on
     Line 34, as adjusted pursuant to paragraph 5a, supra.
     
     6.  Upon review of the record herein, and having incorporated the adjustments
discussed above, we conclude that Operator has failed to justify the rate it was charging
during the period in question. Operator's showing justifies the maximum reasonable CPS tier
price of $12.10 (plus franchise fee) for the period from September 24, 1993 to May 14,
1994.   

       7.  Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's
rules, 47 C.F.R.  0.321, that the September 22, 1993 complaint against the cable
programming service price charged by Operator in CUID No. VA0151, and all other
complaints in this franchise area related to the same price, ARE GRANTED TO THE
EXTENT INDICATED HEREIN.

       8.  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 CUID No. VA0151,
that portion of the amounts paid for cable programming service for the period from
September 24, 1993 to May 14, 1994 which exceeded the maximum price for CUID No.
VA0151 (plus franchise fee) per month, plus interest to the date of the refund.

     9.  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 of the plan.
                                     
     10.  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 filing with respect to CUID No. VA0151, 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 in CUID No. VA0151 (plus franchise
fee).

     11.  IT IS FURTHER ORDERED that Operator shall place into effect, within 30
days after its submission of the revised Form 1200 filing required above, prices that reflect
the reductions in the CPS rate determined in this Order.  

     12.  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 CUID No. VA0151 for one year following the release of this
Order, due to Operator's having submitted in good faith an optional supplemental filing in
response to our Public Notice.  

                         FEDERAL COMMUNICATIONS COMMISSION



                         Meredith J. Jones
                         Chief, Cable Services Bureau