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 THE FCC RECORD ONLY $//Warner Cable of Greater Cincinnati, OH, MO&O, DA 95-929//$ $/76.922 Rates for Cable Programming Service Tier/$ $/Benchmark cable rates/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-929 In the Matter of ) ) CUID Nos. OH0708 (Blue Ash) Warner Cable of Greater Cincinnati ) OH0710 (Sycamore Township) ) OH0712 (Village of Greenhills) Benchmark Filings to Support ) OH0715 (Symmes Township) Cable Programming Service Price ) OH0720 (Village of Harrison) ) OH0726 (Mason) ) OH0731 (City of Springdale) ) OH0743 (City of Reading) ) OH0790 (Village of Evendale) ) OH0793 (Springfield Township) ) OH0796 (City of Milford) ) OH0865 (City of Lebanon) ) OH0866 (City of Cincinnati) MEMORANDUM OPINION AND ORDER Adopted: April 25, 1995 Released: May 1, 1995 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. Here we consider complaints about the price that the above-captioned 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 benchmark showings 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 complaints in each of the franchise areas which are the subject of this Order were completed and served on Operator and received by the Commission on the dates set forth on Appendix A. Operator filed FCC Form 393 in response; Operator has also filed amended and supplemental Form 393 filings for some franchise areas, most recently on December 20, 1993 for CUID No. OH0710, December 22, 1993 for CUID No. OH0731, and March 4, 1994 for CUID No. OH0866. 5. Operator asserts that its monthly CPS tier price is justified by its benchmark filings because its price is equal to the maximum permitted charges as calculated in the filings. Upon review of Operator's Form 393 filings, we have found that it has not correctly calculated its maximum permitted prices, and it is therefore appropriate to make the following adjustments to Operator's calculations in Form 393: a. In its most recent Form 393 filings, Operator calculated the Inflation Adjustment Factor (Line 127, Worksheet 1, Part II) as of the end of January 1994 for CUID Nos. OH0708 and OH0866, and as of the end of November 1993 for all other franchise areas which are the subject of this Order. With respect to CUID Nos. OH0712, OH0715, OH0720, OH0726, OH0790, OH0793, OH0796, and OH0866, Operator's use of these base dates as the dates through which it calculated the inflation adjustment is impermissible. Operator was required to file justifications of its CPS price for CUID Nos. OH0712, OH0715, OH0720, OH0726, OH0790, OH0793, OH0796 and OH0866 no later than the end of November 1993. Since Operator filed its initial justifications in a timely fashion, the instructions to Form 393 required it to calculate the inflation adjustment only through the end of October 1993. Moreover, for all franchise areas which are the subject of this Order, the figures Operator used are not consistent with data on which it should have relied in calculating the Inflation Adjustment Factor. Operator used the Gross National Product Price Index ("GNP-PI") data released by the U.S. Department of Commerce on August 31, 1993 to complete Lines 122 and 125, but used an outdated GNP-PI of 121.8 for the third quarter of 1992 in calculating Line 123. The GNP-PI figure for the third quarter of 1992 released on August 31, 1993 was 122.5. Operator's calculation of the Inflation Adjustment Factor is thus incorrect. b. 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 or should have filed 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 the Inflation Adjustment Factors for the base dates Operator used or should have used in justifying its rates of 1.037 through January 1994 for CUID No. OH0708; 1.032 through November 1993 for CUID Nos. OH0710, OH0731, OH0743 and OH0865; and 1.030 through October 1993 for CUID Nos. OH0712, OH0715, OH0720, OH0726, OH0790, OH0793, OH0796, and OH0866. 6. 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 prices 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. However, we further determine that the total overcharge per subscriber in each franchise area is de minimis. Therefore, it would not serve the public interest to order a refund. 7. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaints referred to in Appendix A against the cable programming service price charged by Operator in the areas referenced in the caption and at Appendix A herein, and all other complaints in these franchise areas related to the same price, ARE GRANTED TO THE EXTENT INDICATED HEREIN. 8. 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 filings with respect to the communities 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 in each franchise area set forth in Appendix B (plus franchise fee). 9. IT IS FURTHER ORDERED that Operator shall place into effect, within 30 days after its submission of the revised Form 1200 filings required above, prices that reflect the reductions in the CPS rate determined in this Order. FEDERAL COMMUNICATIONS COMMISSION JoAnn Lucanik Chief, Financial Analysis and Compliance Division Cable Services Bureau Appendix A CUID No. Date First Complaint Date Complaint Filed with FCC Served OH0708 2/28/94 2/25/94 OH0710 11/24/93 11/24/93 OH0712 11/2/93 10/28/93 OH0715 10/15/93 10/6/93 OH0720 9/29/93 9/24/93 OH0726 10/18/93 10/14/93 OH0731 11/29/93 11/26/93 OH0743 12/14/93 12/9/93 OH0790 10/15/93 10/11/93 OH0793 11/1/93 10/28/93 OH0796 10/26/93 10/22/93 OH0865 11/4/93 11/1/93 OH0866 10/15/93 10/10/93 Appendix B CUID No. Actual Rates Maximum Permitted Rates OH0708 $2.89 $2.86 OH0710 $2.89 $2.84 OH0712 $2.89 $2.84 OH0715 $2.89 $2.84 OH0720 $2.89 $2.84 OH0726 $2.89 $2.84 OH0731 $2.89 $2.84 OH0743 $2.89 $2.84 OH0790 $2.89 $2.84 OH0793 $2.89 $2.84 OH0796 $2.89 $2.84 OH0865 $2.89 $2.84 OH0866 $2.89 $2.84