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MN0196 (Eden Prairie)(#(#X  Y -Paragon Cable hh@)hpp MN0197 (Edina)  Yz -x` `  hh@)hpp MN0198 (Hopkins)  Yc -Benchmark Filing to Supporthh@)hpp MN0199 (Richfield)  YL-Cable Programming Service Pricehh@)hpp MN0200 (Minnetonka)  Y-}  MEMORANDUM OPINION AND ORDER ă  Y-x` ` Adopted: April 24, 1995 @hppReleased: April 28, 1995 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau:  Y- I. A. 1. a.(1)(a) i) a) I. 1. 1. a.(1)(a) i) a)  x1. Here we consider a single complaint about the price that the abovecaptioned operator ("Operator") was charging for its cable programming service ("CPS") tier in the communities 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  Y"-addressing the reasonableness of the price after that date.+ "^ 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  Y*!-on Reconsideration"), the maximum permitted CPS price determined herein might also apply 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@`7iX@# #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 are used as the starting point to calculate its price for the prospective period, was  Y&-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, Yy<ԍ#XR  P7jQXP# 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"""0*0*0*?" CPS prices upon the filing of a valid complaint. The filing of a valid complaint triggers an"""0*0*0*?"  Y-obligation on behalf of the cable operator to file a justification of its CPS prices.f Yy<ԍ#Xw PE37XP# 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.iy Y<ԍ#Xw PE37XP# 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* Y<ԍ#Xw PE37XP# Id.Y  Y-x3. The Commission's original rate regulations took effect on September 1, 1993. Y <ԍ#Xw PE37XP# 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).  Yv-The Commission subsequently revised its rate regulations effective May 15, 1994.{v`  Y<ԍ#Xw PE37XP# 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.   Y<ԍ#Xw PE37XP# 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  Ya<ԍ#Xw PE37XP# 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. I w Y-w#Xw PE37XP# #Xw PE37XP#47 C.F.R.  76.922(b)(6); see also Second Order on Reconsideration, 9 FCC Rcd at 4189 n.195. x4. The complaint was completed and served on Operator on November 2, 1993 and received by the Commission on November 8, 1993. Operator filed FCC Form 393 in response; Operator has also filed amended and supplemental Form 393 filings, most recently  YK-on July 11, 1994.L K Y$<ԍ#Xw PE37XP# For example, Operator filed an amended FCC Form 393 in response to a Cable Services Bureau Order citing common deficiencies observed in benchmark filings generally. Cable Operators' Rate Justification Filings, 9 FCC Rcd 7752 (Cab. Serv. Bur. 1994). L Operator further amended its justification on March 1, 1995, March 24, 1995, and April 17, 1995, in response to Commission letters which requested clarification of"4  0*((G"  Y-Operator's showing. K Y<ԍ #Xu&_ x7QXX#See #Xw PE37XP# letter from Peter G. Wolfe, FCC, to Steven J. Horvitz, counsel for Paragon (Feb. 14, 1995); letter from Peter G. Wolfe, FCC, to Matthew Zinn, counsel for Paragon (Mar. 10, 1995); letter from Peter G. Wolfe, FCC, to Steven Horvitz, counsel for Paragon (Apr. 12, 1995); letter from Peter G. Wolfe, FCC, to Steven Horvitz, counsel for Paragon (Apr. 13, 1995).  Y- x  5. On November 26, 1993, Operator filed a Motion to Dismiss the complaint referenced herein. First, Operator asserts that the complainant incorrectly answered question number 8 on FCC Form 393 as it then existed because it included the rate for service on the basic tier, as well as for service on the CPS tier. Second, Operator asserts that the complainant incorrectly answered question number 9 because it included channels that are offered on the basic tier, as well as channels that are offered on the CPS tier. 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 include the rate for the CPS tier, we find it reasonable to conclude that the complainant objected to the CPS tier rate and  Yy-that it believed that rate was unreasonable. y  Y<ԍ #Xw PE37XP# We note that in January 1994 the Commission released a revised Form 329 that omitted question 9. We therefore find the complaint valid and deny Operator's Motion to Dismiss. x6. In its supplemental filing of July 11, 1994, Operator calculated a maximum permitted rate for the CPS tier of $7.18 per month (plus franchise fee). Upon review of this filing, we have found no apparent errors that would require a recalculation of this maximum permitted rate. However, Operator's actual monthly charge for its CPS tier was $7.22 (plus franchise fee). Thus, Operator has failed to demonstrate that the actual charge for its CPS tier was at or below the maximum permitted rate. We must therefore recalculate the Inflation Adjustment Factor in Form 393, Part II, Worksheet 1, on the basis of the most"< 0*(("  Y-accurate data currently available for the date for which Operator filed.> Yy-#Xw PE37XP# #Xw PE37XP#  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 its amended Form 393, Operator calculated the Inflation Adjustment Factor as of the end of October 1993 using data released on August 31, 1993. On July 29, 1994, the U.S. 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 an Inflation Adjustment Factor through October 1993, the base date Operator used in justifying its rates, of 1.030.  Y_-    YH-  x7. Upon review of the record herein, 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 $7.14 per month (plus franchise fee) for the period  Y -from November 8, 1993 to May 14, 1994.( M Y<ԍ#XR  P7jQXP# This finding is based solely on the representations of Operator. Should  Y-information come to our attention that these 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  Y-party to this proceeding not specifically addressed herein.( However, we further determine that the total  Y -overcharge per subscriber is de minimis.  Therefore, it would not serve the public interest to order a refund. x8. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321, that the Operator's motion to dismiss the complaint referenced herein IS DENIED. x9. IT IS FURTHER ORDERED that the complaint against the cable programming service price charged by Operator in the areas referenced in the caption IS GRANTED TO THE EXTENT INDICATED HEREIN. x10. 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 communities listed herein, for the period beginning May 15, 1994, to reduce the monthly charge per tier as of  Y-March 31, 1994 for Tier 2 (Line A6b) to $7.14 (plus franchise fee).  Y#<#Xw PE37XP##x6Nhez7 XH#э# Xw PE37XP# We reserve the right to make further adjustments to Operator's price for the period  Y$-after May 14, 1994, upon completion of our review of Operator's Form 1200 filing.#x6Nhez7 XH# x"g< 0*((]" x11. 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. x x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhJoAnn Lucanik x` `  hhChief, Financial Analysis and Compliance Division x` `  hhCable Services Bureau   Y -T