WPCh 2BEJ Z Courier c-#XR  P7jQXP#HP LaserJet 4_230_1HPLAS4.PRS 4x  @\oeX@2#6{/3|wCG Times Bold#XR  P7jQ}XP#CourierCG Times907_1HPLAS4SI.PRSx  @\iX@3|w CourierCG TimesCG Times BoldCG Times ItalicCourier Italic2 f Uv p1k",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  28k>vNta5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  A.  a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# 2j   Na1Right ParRight-Aligned Paragraph Numbers:`S@ I.  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A. a.(1)(a) i) a)Documentg2%& e$%%PleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:xxxxxPxxxxxxxxxCkkkkkkkkkkPCPCPCPCxxxxxxxxxxkxxxxxxjxjjjxxjxxjxxxxxxxPCxxxxPxxxxCVxHCxxxxxVVx[[[xVCxxxxxxxxjjjxxxxxxPxxPPPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxPkbbxxxxxxTxxxxTPP||x>>xxxxxP|x!T"x}xExPPPxxxxPxkxofxkkPPPPk]kxkPCkkxkxxxkkPxkPPxxxxxxxPxkP8D%nZZB 3nMnMn..s[2A]Lf QI\'"i~'K2^$(8<><q*"xxxxWWxxxWWkkxxxxxxxxPxxxxxxxxCxxxxxkkkkk]C]C]C]Cxxxxxxxxxxxxxjjxxjxxjxxxxx[Cxxx]xxC`x]Cxxjjx[][x`RxxjkjxxxxPxxPPPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxPxffxxxxxxTxxxxTPPx>>xxxxxPxT"xxExPPPxxxxPxkxsfxxxPPPPk]kkk]Ckkxkxxxkk]xkPPxxxxxxxPxkP8D%nZZB 3nMnMn..s[2f s] +Fh",tB^ f ^;C`ddCCCdCCCCddddddddddCCdxxxsCYoxxdoxxooCCCddCddYdY8dd88Y8ddddLL8dYYYLYdYd4dddddCddddddddd8xdxdxdxdxdYxYxYxYxYC8C8C8C8dddddddddoYxddddoYdxdxdxdxdXXddxxXxdxdxXdddddddD8ddddCdddddp8pHodp8p8dxddddxLxLxddLdLdLddpHp8odddddddodpLpLpLdoddddododxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCd]]ddddddFddddFCCddd88ddzzdddkddCddF"ddd9dCCzCdzdoddCdYds]zUvdYYCCCCzzzozoYzNoYdYC8YooYdYzzdzddoYoYzzozzzzzCdoozYzzzzCCddddzdddooozCsdYC\   pxtll\tll@\@\`L X- FOR FCC RECORD ONLY $//Cox Cable Roanake, Inc., MO&O, DA 95678//$ $/76.922 Rates for cable programming service tiers/$  Y-$/benchmark cable rates/$  c< -Before the FEDERAL COMMUNICATIONS COMMISSION  e<Washington, D.C. 20554  X- DA 95678 ĐX(#P  Y} -In the Matter of hh@)hpp  Yf -x` `  hh@)h  YO -Cox Cable Roanoke, Inc.hh@)hCUID No. VA0151  Y8 -Roanoke, Virginia hh@)  Y!-x` `  hh@)h  Y -Benchmark Filing to Supporthh@)  Y-Cable Programming Service Pricehh@)  Y-}  MEMORANDUM OPINION AND ORDER ă  Y-x` ` Adopted: March 30, 1995 hReleased: April 5, 1995 By the Chief, Cable Services Bureau:  Y<- I. A. 1. a.(1)(a) i) a) I. 1. 1. a.(1)(a) i) a)  x1. Here we consider complaints about the price that the abovecaptioned 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  Y-reasonableness of the price after that date.=  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 price 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-  x2. Under the Cable Television Consumer Protection and Competition Act of 1992, N YC'<ԍ#XR  P7jQ}XP# Pub. L. No. 102385, 106 Stat. 1460 (1992); Communications Act,  623(c), as  Y.(-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-x3. 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.Z x4 YJ<ԍ#Xw PE37}XP# Id.Z 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-#Xw PE37}XP# #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- x4. 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  Y-February 7, 1995. Jx4 Y%<ԍ#Xw PE37}XP#Operator filed an amended FCC Form 393 on June 28, 1994 in response to a Cable Services Bureau Order citing common deficiencies observed in benchmark filings generally. "& 0*((&"  Y-Cable Operators' Rate Justification Filings, 9 FCC Rcd 7752 (Cab. Serv. Bur. 1994). Operator submitted additional information on February 7, 1995 in response to a Cable Services Bureau Public Notice offering operators the opportunity to make optional supplemental filings. 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,  Y-1995) (together, Public Notice). " 0*((("Ԍ Y-  x5. In its February 7, 1995 amended filing Operator calculated a maximum permitted  Y-price for the CPS tier of $12.19 per month.P  x4 Y<ԍ#Xw PE37}XP#Operator amended its previous filings by counting rateregulated and satellite channels and calculating the inflation adjustment in accordance with the principles set out in  Y-the Public Notice.#x6X@`7X@#P 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:  Y1-Xxa.` ` 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 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 taxpaying business entities must grossup their tax entries in Column G of Schedules A and C (i.e., calculate the tax as a percentage of return on investment  Y-plus tax). a1x4 Yr<ԍ#Xw PE37}XP#First Order on Reconsideration, Second Report and Order, and Third Notice of Proposed Rulemaking, MM Docket No. 92266, FCC 93428, 9 FCC Rcd 1164, 1196 n. 92 (1995) ("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  Y#-be calculated based upon a pretax return on investment.")#x6X@`7X@# 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 grossedup tax entries.(# "4Z 0*(("Ԍ Y-Xxb.` ` 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  Y-on Part III, Step G, Line 34.x4 Y4<ԍ#Xw PE37}XP#See Questions and Answers on Completion of FCC Form 393 and Associated Filing  Y-Requirements, Question and Answer No. 7 (released Nov. 10, 1993) ("Where operators have restructured equipment rates a s of September 1, 1993 in accordance with our regulations...operators will enter on Line 104 the same, or nearly the same, number as on  Y-Line 301.")#x6X@`7X@# However, Operator's entries on these two lines varied substantially. Accordingly, on Line 104 we enter the same figure that appears on  Y-Line 34, as adjusted pursuant to paragraph 5a, supra.(# Xx(#  Ya-x6. 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,  Y -1994.Ov !x4 Y<ԍ#XR  P7jQ}XP# This finding is based solely on the representations of Operator and the modifications described herein. Should information come to our attention that these  Y-representations were 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 argument made by any party to this proceeding not specifically  Yd-addressed herein.O  Y -x7. 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.  YM-x8. 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  Y-September 24, 1993_ x4 Y"<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 the maximum price for CUID No. VA0151 (plus franchise fee) per month, plus interest to the date of the refund.  Y-x9. 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"0*((}" 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. T  Y-x 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  Y1-fee)./1x4 Y <ԍ#Xw PE37}XP#We reserve the right to make further adjustments to Operator's price for the period  Y -after May 14, 1994, upon completion of our review of Operator's Form 1200 filing.#x6X@`7X@#/  Y -x 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.  Y -x 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  YK-response to our Public Notice. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau