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A. a.(1)(a) i) a)Documentg22e)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["i~'K2^$(8<><q*"xxxxWWxxxWWkkxxxxxxxxPxxxxxxxxCxxxxxkkkkk]C]C]C]Cxxxxxxxxxxxxxjjxxjxxjxxxxx[Cxxx]xxC`x]Cxxjjx[][x`RxxjkjxxxxPxxPPPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxPxffxxxxxxTxxxxTPPx>>xxxxxPxT"xxExPPPxxxxPxkxsfxxxPPPPk]kkk]Ckkxkxxxkk]xkPPxxxxxxxPxkP8D%nZZB 3nMnMn..s[2n\_f BcZ<?xxx,2x6X@`7X@ 7jC:,Xj\  P6G;XP 8wC;,Xw PE37XPD7zC;,!c!Xz_ pi7XDPG, PE37PDBPG,!q_ pi7V"G($,hG PE37hP<R&HHH,,H6X@`7h@6uC;,/cXu&_ x7XX",tB^ f ^;C`ddCCCdCCCCddddddddddCCdxxxsCYoxxdoxxooCCCddCddYdY8dd88Y8ddddLL8dYYYLYdYd4dddddCddddddddd8xdxdxdxdxdYxYxYxYxYC8C8C8C8dddddddddoYxddddoYdxdxdxdxdXXddxxXxdxdxXdddddddD8ddddCdddddp8pHodp8p8dxddddxLxLxddLdLdLddpHp8odddddddodpLpLpLdoddddododxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCd]]ddddddFddddFCCddd88ddzzdddkddCddF"ddd9dCCzCdzdoddCdYds]zUvdYYCCCCzzzozoYzNoYdYC8YooYdYzzdzddoYoYzzozzzzzCdoozYzzzzCCddddzdddooozCsdYC\   pxtll\tll@\@\`L2n X- FOR FCC RECORD ONLY  Y- $//Monmouth Cablevision Associates, MO&O, DA 95682//$ $76.922 Rates for cable programming service tiers/$ $/benchmark cable rates/$  c< -Before the FEDERAL COMMUNICATIONS COMMISSION  e<Washington, D.C. 20554  X- DA 95682 ĐX(#P  Y} -In the Matter of hh@)hpp  Yf -x` `  hh@) h  YO -Monmouth Cablevision Associateshh@) CUID No. NJ0346 (Jackson) x` `  hh@)  Y!-Benchmark Filing to Supporthh@)hpp   xx 0  Y -Cable Programming Service Pricehh@)hpp  X-  } M EMORANDUM OPINION AND ORDER ă  Y-xAdopted: March 30, 1995 @hReleased: April 5, 1995 By the Chief, Cable Services Bureau:  YR- 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  Y$-designated above.)$N Y<ԍ#Xw PE37XP# Subsequent to the time period covered by this Order, Operator was purchased by Cablevision of Monmouth, Inc. As required by the context, the term "Operator" as used herein includes Operator's successors in interest.) 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.i KN Y <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  Yj%-on Reconsideration"), the maximum permitted CPS prices determined herein might also  YU&-apply from May 15, 1994 until the date on which Opeartor #XR  P7jQXP#implemented its CPS price under  Y>'<the 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, a reduction 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")0*0*0*i)" is used as the starting point to calculate its prices for the prospective period, was  Yy-unreasonable. See 47 C.F.R.  76.922(b)(4)(C).i"d0*0*0*"Ԍ" 0*0*0*"Ԍ Y-  x2. Under the Cable Television Consumer Protection and Competition Act of 1992,k- 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 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.ffk- Y<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.ik- YU <ԍ#Xw PE37}XP# 47 C.F.R.  76.956(b).i In either case, the operator has the burden of demonstrating that its  Yv-CPS prices are not unreasonable.Yvk- Y <ԍ#Xw PE37}XP# Id.Y  YH-x3. The Commission's original rate regulations took effect on September 1, 1993.H{k- Yt<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).  Y1-The Commission subsequently revised its rate regulations effective May 15, 1994.{1 k- Y<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. k- Y5<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 bk- Y<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  Yy-1200 series. yk- Y?"<#Xw PE37}XP# #x6X@`7X@#э#Xw PE37}XP# 47 C.F.R.  76.922(b)(6); see also Second Order on Reconsideration, 9 FCC Rcd at 4189 n.195.  YK- x4. The first valid CPS complaint was completed and served on Operator on October 12, 1993 and received by the Commission on October 18, 1993. Operator filed FCC Form 393 in response; Operator has also filed amended and supplemental Form 393 filings, most" 0*((7"  Y-recently on February 7, 1995.} ak- YK<ԍ#Xw PE37}XP# Operator's February 7, 1995 submission was made 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, 1995) (together,  Y -Public Notice).} Operator filed additional information on March 27, 1995, in  Y-response to an inquiry by Commission staff. k- Y] <ԍ#Xw PE37}XP# Letter from Jeffrey S. Steinberg, FCC, to Christopher A. Holt, attorney for Operator (Mar. 21, 1995). x5. On November 18, 1993, Operator filed a motion to dismiss the October 12, 1993 complaint. Operator argues that the complaint should be dismissed because the complainant (1) included rates and channel offerings on the basic tier, as well as CPS rates and programming, in response to questions 8 and 9 of FCC Form 329 as it then existed; (2) incorrectly indicated in response to question 6 that he was complaining about a rate increase after September 1, 1993, rather than the rate in effect on September 1, 1993; and (3) incorrectly identified the local franchising authority in response to question 2. Operator's assertions do not persuade us that the complaint is invalid or should be dismissed. In general, we will find valid any complaint that states a claim on which relief can be granted and provides adequate information to allow us to process the complaint, despite minor flaws or inaccuracies. We believe this approach best implements the mandate of the 1992 Cable Act. Because the complainant's response to question number 9 includes channels contained on the CPS tier and because the rates listed in answer number 8 and on the attached bill indicate that the complainant received the CPS tier, we find it reasonable to conclude that the complainant objected to the CPS rate in effect on September 1, 1993 and that he believed that rate was unreasonable. Furthermore, even if complainant incorrectly identified the local  Y-franchising authority, that fact has not materially impeded our processing of the complaint.N k- YY<ԍ#Xw PE37}XP# We also note that based on the copy of a bill that the complainant attached to his complaint, Operator apparently did not include the name, address, and phone number of the local franchising authority on the bill as required under 47 C.F.R.  76.952.N  Y-We therefore find the complaint valid and deny Operator's motion to dismiss the complaint.Sk- Y#<ԍ#Xw PE37}XP# Operator has also moved to dismiss complaints that were filed later than the October 12, 1993 complaint. Because we have accepted the earliest complaint as properly filed, we find it unnecessary to rule on Operator's objections to the later filed complaints.S  Y-  x6. In its February 7, 1995 amended filing, Operator calculated a maximum permitted"0*((" price for the CPS tier of $10.78 per month. However, Operator's actual price for the CPS tier was $11.04 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 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:  Y_- Xx` ` a. The 1992 Cable Act requires operators to fully unbundle equipment and  YH-installation costs from programming costs.iHk- Y <ԍ#Xw PE37}XP# 47 U.S.C.  543(b)(3).i The Commission's regulations implement Congress' directive by requiring operators to establish an equipment basket which includes "all costs associated with providing customer equipment and  Y -installation."i yk- Y-<ԍ#Xw PE37}XP# 47 C.F.R.  76.923(c).i In Part III of FCC Form 393, an operator calculates its total customer equipment and installation costs which constitute the equipment basket. Form 393, Part II, Worksheet 3 unbundles these costs from the operator's total permitted regulated revenues in order to establish its maximum service rates.(# Xx` ` b. In reporting its capital costs of leased customer equipment on Form 393, Part III, Schedule C, Operator did not include any costs for remotes. Operator's rate cards indicate that as of September 30, 1992 it leased remotes to customers for a monthly fee, and as of the initial date of regulation it provided remotes at "no fee" per month. Thus, Operator's monthly equipment revenue as of September 30, 1992 on Form 393, Part II, Worksheet 2, Line 204 includes revenue derived from the rental of remotes, but its unbundling figure on Part II, Worksheet 3, Line 301 does not include any costs associated with remotes. Because Operator calculates its permitted programming rates based on its September 30, 1992 regulated revenues and is not subtracting its costs for remotes from these revenues, Operator is recovering the costs associated with its rental of remotes through its charges for the basic and CPS tiers. Such a result is contrary to the statutory and regulatory unbundling requirement. Under our rules, an operator may choose not to charge customers for premises equipment, but it may not recover its costs associated with customer  YN-equipment through its programming rates.N*k- Y)!<ԍ#Xw PE37}XP# We also note that according to Operator's rate card, as of the initial date of regulation it offered new and used remotes for sale to subscribers. This practice creates a potential for Operator to recover its costs associated with remotes twice: once through its charges for rateregulated services, and again through its sales revenues.(# Xx` ` c. Because Operator has not reported its equipment costs for remotes, we" 0*((-"  Y-must calculate a cost based on the best evidence available to us.k- Yy<ԍ#Xw PE37}XP# See Third Order on Reconsideration, MM Docket Nos. 92266 and 92262, FCC 9490, 9 FCC Rcd 4316 at 4348,  90 (1994); Cable Operators' Rate Justification Filings,  YM-DA 94526, 9 FCC Rcd 7752 (Cab. Serv. Bur. 1994); see also TCI Cablevision of Greater  Y8-Michigan, Inc., CUID Nos. MI0025 et al., DA 95271, para. 8e (Cab. Serv. Bur., released Feb. 21, 1995). In order to do so, we examined the Form 393 filings made by Operator's affiliates in the State of New Jersey, and we observed that the reported gross book cost per unit of remotes ranged from $8.01 to $9.20. We then imputed to Operator a gross book cost per remote at the midpoint of this range, or $8.61. We further assumed, consistent with the filings of Operator's affiliates, that the number of remotes in service equalled the number of converters in service, and that Operator's remotes were depreciated according to the same schedule as its converters. Based on these assumptions, we calculated Operator's total annual capital costs for remotes to be $9,758. We therefore increased Operator's annual customer equipment and installation costs on Part III, Step G, Line 32 by $9,758, and made corresponding adjustments to Part III, Step G, Line 34 and Part II, Worksheet 3, Line 301.(# Xx` ` d. In its most recent amended filing, Operator entered $13.27 for the basic service tier and $10.78 for the CPS tier as its current monthly rates as of the initial date of regulation on Form 393, Part II, Worksheet 1, Line 101. However, Operator's rate card indicates that its actual monthly rates, exclusive of franchise fees, were $13.58 for the basic tier and $11.04 for the CPS tier. These figures are consistent with Operator's entries on Form 393, Part I and with Operator's Line 101 entries in its earlier Form 393 filings. The instructions to Form 393 require the operator to enter on Line 101 its actual current monthly charges. We have therefore corrected Line 101 to match the figures on Operator's rate card.(# Xx` ` e. Operator's Form 393, Part II, Worksheet 1, Line 104 entry does not represent its current monthly equipment revenue as of the initial date of regulation. Instead of entering its current monthly equipment revenue, as required by the Form 393 instructions, Operator entered a figure based on its prior equipment rates. This observation is confirmed by the fact that Operator's Worksheet 2, Line 204 entry is the same as its Worksheet 1, Line 104 entry. As a result, Operator's Line 104 entry must be revised to reflect its current monthly equipment revenue. Since Operator restructured its rates, including its equipment rates, on September 1, 1993 in an attempt to comply with the Commission's regulations, the monthly equipment cost figure it entered on Line 34 of Step G of Part III should have been close or identical  Y -to its Line 104 revenue entry. #k- Y%<ԍ#Xw PE37}XP# See Questions and Answers on Completion of FCC Form 393 and Associated Filing Requirements, Question and Answer No. 7 (released Nov. 10, 1993) ("Where"&0*((&" operators have restructured equipment rates as of September 1, 1993 in accordance with our regulations . . . operators will enter on Line 104 the same, or nearly the same, number as on Line 301."). Accordingly, we correct Operator's Line 104 entry to" K0*(("  Y-equal Line 34, as adjusted pursuant to paragraph 6c, supra.(# Xx` ` f. In its most recent amended Form 393 filing, Operator calculated the Inflation Adjustment Factor (Line 127, Worksheet 1, Part II) as of the end of January 1994 using data released by the U.S. Department of Commerce on December 1, 1993. However, Operator's use of January 1994 as the base date through which it calculated the inflation adjustment is impermissible. Based on the date that the earliest valid complaint was served, the instructions to Form 393 permitted Operator  YJ-an inflation adjustment only through October 1993.JKk- YF <ԍ#Xw PE37}XP# See FCC Form 393, page 11, instructions for line 124 (Inflation Adjustment Factor is calculated using "the number of whole months from September 30, 1992 to the date you will submit this form"); 47 C.F.R.  76.956(a) (operator must file a response within 30 days of the date of service of a complaint). Operator cannot be permitted to claim an additional inflation adjustment simply because it later amended its Form 393 filing. We must therefore recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the date that Operator timely filed Form  Y -393. k- YX<ԍ#Xw PE37}XP# 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 July 29, 1994, the 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 1.030 as the Inflation Adjustment Factor through October 1993, the base date Operator should have used in justifying its rates. (#  Yd-  x7. 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 a maximum reasonable CPS tier price of $10.64 (plus franchise fee) for the period from the filing of the earliest complaint to  Y-May 14, 1994.OvU k- 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  Y%-addressed herein.O x8. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's"0*((" rules, 47 C.F.R.  0.321, that Operator's motion to dismiss the October 12, 1993 complaint IS DENIED. x9. IT IS FURTHER ORDERED that the October 12, 1993 complaint against the cable programming service price charged by Operator in the area referenced in the caption, and all other complaints in this franchise area related to the same price, ARE GRANTED TO THE EXTENT INDICATED HEREIN. x10. 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 shown in the caption that portion of the amounts paid for cable programming service for the period  Y -from October 18, 1993 k- 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 $10.64 (plus franchise fee) per month, plus interest to the date of the refund. x11. 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 of the plan.T x12. 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 addressed 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 permitted price (plus franchise  Y-fee).bk- Y<ԍ#Xw PE37}XP# 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 Form 1200 filing. x13. 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."N0*((>" x14. 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 area addressed herein for one year following the release of this Order, due to Operator's having submitted in good faith an optional  Yv-supplemental filing in response to our Public Notice. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau " 0*((0 "   Y-T