FOR FCC RECORD ONLY $//Cencom Cable Income Partners II, L.P., Jasper, TX, MO&O, DA 95-681//$ $/76.922 Rates for Cable Programming Service tiers/$ $/benchmark cable rates/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-681 In the Matter of ) ) Cencom Cable Income Partners II, L.P. ) CUID No. TX0061, Jasper, TX ) Benchmark Filing to Support ) Cable Programming Service Price ) MEMORANDUM OPINION AND ORDER Adopted: March 30, 1995 Released: April 7, 1995 By the Chief, Cable Services Bureau: 1. Here we consider a complaint about the price Cencom Cable Income Partners II, L.P. ("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 the dates set forth on Appendix A. Operator filed an FCC Form 393 submission in response to this rate complaint; Operator has also filed amended and supplemental Form 393 filings, most recently on March 21, 1995, in response to an inquiry by Commission staff. 5. In its amended benchmark filing, Operator calculated a maximum permitted price for the CPS tier of $14.31 per month. However, Operator's actual price for the CPS tier was $14.69 per month. Thus, Operator has failed to demonstrate that its price for the CPS tier was not unreasonable. Furthermore, upon review of Operator's Form 393 filing, we have found that Operator has not correctly calculated its maximum permitted price, and it is therefore appropriate to make the following adjustments to Operator's calculations in its Form 393: a. In its amended filing, Operator states that it calculated the Inflation Adjustment Factor (Form 393, Part II, Worksheet 1, Line 127, and Form 393, Part II, Worksheet 4, Line 401) using data it relied on when it set its CPS price. If Operator had done so correctly (i.e., if it had completed Form 393 with accurate data, including the most recent inflation data available as of the time it set its price), and if, based on this data, Form 393 indicated that its prices were reasonable, then Operator would have successfully justified its prices under paragraph 94 of the Third Order on Reconsideration. However, Operator admits that the CPS price was excessive even when set. b. Moreover, the figures Operator used are not consistent with data on which it should have relied in setting its CPS price. According to Operator's amended filing, Operator calculated this price prior to September 1, 1993. Operator used Gross National Product Price Index ("GNP-PI") data released by the U.S. Department of Commerce on May 28, 1993, to complete Lines 122, 123 and 125, but Operator claimed an Adjustment Time Period extending through September 1993 (Line 124), which is inconsistent with an attempt to justify rates based on May 1993 data. Operator's calculation of the Inflation Adjustment Factor is thus incorrect. c. We must therefore recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the date for which Operator filed. On its amended Form 393, Operator entered 12 months on Line 124, indicating that its filing was as of the end of September 1993. On July 29, 1994, the Department of Commerce released corrected inflation data including 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 September 1993, the base date Operator used in justifying its rates, of 1.028. 6. 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 shown on Appendix B (plus franchise fee) for the period from the filing of the earliest complaint in each franchise area (as set forth in Appendix A) to May 14, 1994. 7. ACCORDINGLY, IT IS ORDERED that the complaint referred to in Appendix A against the cable programming service price charged by Operator in the area referenced above and at Appendix A herein IS GRANTED TO THE EXTENT INDICATED HEREIN. 8. IT IS FURTHER ORDERED that the benchmark filing submitted by Operator justifies the maximum reasonable price set forth in Appendix B (plus franchise fee) for Operator's cable programming service tier. 9. 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 the community addressed herein that portion of the amounts paid for cable programming service for the period from the filing of the first valid complaint (as set forth on Appendix A) to May 14, 1994 which exceeded the maximum price set forth in Appendix B (plus franchise fee) per month and was thus unreasonable, plus interest to the date of the refund. 10. IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to CPS subscribers for the stated period, 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. 11. 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 the community listed herein, 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 set forth in Appendix B (plus franchise fee). 12. IT IS FURTHER ORDERED that Operator shall place into effect, within 30 days after its submission of the revised Form 1200 filing required above, a price that reflects the reduction in the CPS rate determined in this Order. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau Appendix A CUID No. Date First Complaint Date Complaint Filed with FCC Served TX0061 11/15/93 11/26/93 Appendix B CUID No. Actual Rates Maximum Permitted Rates TX0061 $14.69 $14.17