NOTICE ************************************************************************* NOTICE ************************************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* FOR FCC RECORD ONLY $//Cox Cable Santa Barbara, Inc., Goleta, California, MO&O 95-813//$ $/76.922 Rates for Cable Programming Service tier/$ $/Benchmark cable rates/$ Before the Federal Communications Commission Washington, D.C. DA 95-813 In the Matter of ) ) Cox Cable Santa Barbara, Inc. ) CUID Nos: Goleta, California ) CA0017 (City of Carpinteria) ) CA0023 (City of Santa Barbara) ) CA1279 (County of Santa Barbara) Benchmark Filing To Support ) Cable Programming Service Price ) Memorandum Opinion and Order Adopted: April 12, 1995 Released: April 17, 1995 By the Chief, Cable Services Bureau: Introduction 1. Here we consider complaints about the price Cox Cable Santa Barbara, Inc. ("Operator") was charging for its cable programming service ("CPS") tier in its Santa Barbara, California system, CUID Nos. CA0017, CA0023 and CA1279. 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 time 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 complete and timely complaint. The filing of a complete and timely 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 complete and timely 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. Procedural Matters 4. The first complete and timely CPS complaints in the franchise areas addressed in this Order were completed and served on Operator and received by the Commission on the dates set forth in Appendix A. 5. Operator filed original and amended Forms 393 on the dates set forth in Appendix B. In addition, on January 31, 1995 Operator filed a response to a Cable Services Bureau Public Notice offering operators the opportunity to make optional supplemental filings, which concerned the franchise areas covered by this Order. Discussion 6. In its January 31, 1995 amended filing Operator calculated a maximum permitted price for the CPS tier of $7.22 per month for all three franchise areas covered by this Order. However, Operator's actual price for the CPS tier was $7.29 per month for all three franchise areas covered by this Order. Thus, Operator has failed to show that its CPS rate 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: a. 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 to or identical to its equipment cost on Part III, Step G, Line 34. However, Operator's entries on these two lines differed substantially. Accordingly, we changed Line 104 to equal the figure that appears on Line 34. b. Because Operator has failed to demonstrate that its price for the CPS tier was not unreasonable, we must also recalculate the Inflation Adjustment Factor in Form 393, Part II, Worksheet 1. On its Form 393, Operator apparently calculated the Inflation Adjustment Factor using data it relied on when it set its $7.22 CPS price. If based on this data Form 393 indicated that Operator's price was reasonable, then Operator would have successfully justified its price under paragraph 94 of the Third Order on Reconsideration. However, Operator has not shown that its price was reasonable, so we must recalculate the Inflation Adjustment Factor on the basis of the most accurate data for the date Operator was required to file Form 393 for each franchise area. On July 29, 1994, the U.S. Department of Commerce released corrected inflation data including GNP-PI figures of 122.3 for the third quarter of 1992, 125.7 for the third quarter of 1993, and 126.5 for the fourth quarter of 1993. Using these GNP-PI figures, we calculate Inflation Adjustment Factors of 1.030 through October 1993 for CUID No. CA0017, 1.034 through December 1993 for CUID No. CA0023, and 1.032 through November 1993 for CUID No. CA1279. Conclusions 7. Upon review of the record herein, and having incorporated the adjustments discussed above, we conclude that Operator's showing supports a maximum reasonable monthly CPS tier price of $7.19 for CUID No. CA0017, $7.22 for CUID No. CA0023, and $7.21 for CUID No. CA1279 (plus franchise fees) for the period that begins with the date the Commission received the first complete and timely CPS complaint for each franchise area, as listed in Appendix A, to May 14, 1994. With respect to CUID Nos. CA0023 and CA1279, we determine that the refund at issue is such a de minimis amount that it would not serve the public interest to order a refund. With respect to CUID No. CA0017, we will order appropriate refunds pursuant to Section 76.957 of the Commission's Rules, 47 C.F.R. 76.957, in order to reimburse subscribers for the amount they paid in excess of a reasonable price. 8. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321, that the complaints referenced in Appendix A against the cable programming service price charged by Cox Cable Santa Barbara, Inc., in CUID Nos. CA0017, CA0023 and CA1279, and all other complaints in these franchise areas relating to the same price, ARE GRANTED TO THE EXTENT INDICATED HEREIN. 9. IT IS FURTHER ORDERED that the benchmark filing submitted by Cox Cable Santa Barbara, Inc., with respect to CUID Nos. CA0017, CA0023 and CA1279, for the period beginning with the receipt by the Commission of a complete and timely complaint for each franchise area covered by this Order (see Appendix A) and ending on May 14, 1994, justifies a maximum monthly price of $7.19 for CUID No. CA0017, $7.22 for CUID No. CA0023, and $7.21 for CUID No. CA1279 (plus franchise fees) for Operator's cable programming service tier. 10. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's Rules, 47 C.F.R.  76.961, that Cox Cable Santa Barbara, Inc. shall refund to subscribers in the franchise area designated by CUID No. CA0017 that portion of the amount paid for cable programming service from September 21, 1993, to May 14, 1994, that exceeded $7.19 (plus franchise fee) per month and was thus unreasonable, plus interest to the date of the refund. 11. IT IS FURTHER ORDERED that Cox Cable Santa Barbara, Inc. shall promptly determine the overcharges to CPS subscribers in CUID No. CA0017 for the same 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. 12. 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 Cox Cable Santa Barbara, Inc. shall, within 30 days of the release of this Order, revise its Form 1200 filings for CUID Nos. CA0017, CA0023 and CA1279 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 in each franchise area (plus franchise fee). 13. IT IS FURTHER ORDERED that Cox Cable Santa Barbara, Inc. shall place into effect, within 30 days after submission of the revised Form 1200 filings required above, CPS tier prices for CUID Nos. CA0017, CA0023 and CA1279 that reflect the reductions in the CPS rate determined in this Order. 14. 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 prices in the franchise areas addressed herein 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 Service Bureau APPENDIX A CUID No. Date First Complaint Date Complaint Filed with FCC Served on Cox Cable CA0017 09/21/93 09/17/93 CA0023 12/30/93 12/23/93 CA1279 11/23/93 11/17/93 APPENDIX B CUID No. DATE FIRST FORM DATE AMENDED FORM 393 FILED 393 FILED CA0017 01/12/94 02/22/94 CA0023 01/12/94 03/21/94 CA1279 11/15/93 None Filed