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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** FOR FCC RECORD ONLY $//V Cable Inc., Solon, OH, MO&O, DA 95-984//$ $/76.922 Rates for Cable Programming Service tiers/$ $/benchmark cable rates/$ Before the Federal Communications Commission Washington, D.C. 20554 DA 95-984 In the Matter of ) ) V Cable, Inc. ) CUID No. OH0968 Solon, Ohio ) ) Benchmark Filing To Support ) Cable Programming Service Price ) Memorandum Opinion and Order Adopted: April 28, 1995 Released: May 4, 1995 By the Chief, Cable Services Bureau: Introduction 1. Here we consider a complaint about the price V Cable, Inc. d/b/a Cablevision ("Cablevision") was charging for its cable programming service ("CPS") tier in Solon, Ohio, CUID No. OH0968. Cablevision has chosen to attempt to justify its price through a benchmark showing on FCC Form 393. This Order addresses the reasonableness of Cablevision'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. Procedural Matters 4. The first complete and timely CPS complaint in Solon, Ohio, CUID No. OH0968, was completed and served on Cablevision on November 17, 1993 and received by the Commission on November 22, 1993. 5. Cablevision filed its FCC Form 393 on December 27, 1993. Cablevision amended its justification on February 17, 1995, and April 13, 1995, in response to Commission letters which requested further clarification of Cablevision's amended showing. Background 6. Cablevision restructured its rates in an effort to comply with the Commission's Rules on September 1, 1993. In October 1993, Cablevision changed its channel line-up on Channel 37 by deleting HSN II, a satellite channel on the CPS tier, and adding WQHS, a non-satellite channel on the basic tier. On January 1, 1994, Cablevision again changed its channel line-up by moving Channel 17, a satellite channel on the CPS tier, to the basic tier. These changes in Cablevision's channel line-up were unaccompanied by any change in Cablevision's prices for its basic and CPS tiers. Cablevision completed Part II of Form 393 using its channel line-up after the October 1993 change. In Part I of Form 393, Cablevision performed alternative calculations using its number of channels as of September 1, 1993, and after the October 1993 line-up change. Discussion 7. Cablevision acknowledges that its CPS price is higher than the maximum permitted price if Form 393 is calculated using the number of channels Cablevision offered as of November 1993. Thus, Cablevision has failed to demonstrate that its price for the CPS tier was not unreasonable. Furthermore, upon review we have found that Cablevision has not correctly calculated its maximum permitted price as of the initial date of regulation, and it is therefore appropriate to make the following adjustment to Cablevision's calculations on Form 393: In its Form 393 filing, Cablevision calculated the Inflation Adjustment Factor (line 127, Worksheet 1, Part II) as of the end of December 1993 using data released by the U.S. Department of Commerce on August 31, 1993. However, Cablevision's use of December 1993 as the date through which it calculated the inflation adjustment is impermissible. Cablevision was required to file a justification of its CPS price for the Solon franchise area no later than December 17, 1993. If Cablevision had filed its justification in a timely fashion, the instructions to Form 393 would have required it to calculate the inflation adjustment only through November 1993. We must therefore recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the date on which Cablevision should have filed. On July 29, 1994, the Department of Commerce released corrected inflation data including Gross National Product Price Index ("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 1.032 as the Inflation Adjustment Factor through November 1993, the base date Cablevision should have used in justifying its rate. 8. This adjustment has the effect of yielding the maximum permitted monthly CPS tier price for Solon, Ohio, CUID No. OH0968, as of the initial date of regulation set forth in Appendix A. 9. As described in paragraph 6, supra, on January 1, 1994, Cablevision moved Channel 17 from the CPS tier to the basic tier. Cablevision thus increased the rate charged for its service by reducing the number of channels available on the CPS tier without a consequent reduction in price. Cablevision failed to notify the Commission of the rate change and submit a revised rate justification as required by the instructions to Form 393. To determine Cablevision's subsequent permitted per channel charge as of January 1, 1994, and thus Cablevision's maximum permitted price, we rely on the Commission's rules then in effect and therefore reduce the number of channels on the CPS tier on Form 393, Part I effective January 1, 1994 from 23 to 22. This adjustment has been reflected in Appendix A for the period after December 31, 1993. Conclusions 10. Upon review of the record herein, we conclude that Cablevision's showing supports the maximum CPS tier prices set forth in Appendix A (plus franchise fee) for the periods set forth in Appendix A. We further determine that 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. 11. We further conclude that Cablevision must reflect in its FCC Form 1200 rate filing for the period after May 14, 1994 the fact that Cablevision's price as of March 31, 1994 was unreasonable. We reserve the right to make further adjustments to Cablevision's price for the period after May 14, 1994, upon completion of our review of Cablevision's FCC Form 1200 rate filing. 12. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321, that the complaint filed on November 22, 1993 against the cable programming service price charged by V Cable, Inc. d/b/a Cablevision in Solon, Ohio, CUID No. OH0968 IS GRANTED TO THE EXTENT INDICATED HEREIN. 13. IT IS FURTHER ORDERED that the benchmark filing submitted by V Cable, Inc. d/b/a Cablevision with respect to Solon, Ohio, CUID No. OH0968, for the periods set forth in Appendix A justifies the maximum prices set forth in Appendix A (plus franchise fee) for V Cable, Inc. d/b/a Cablevision's cable programming service tier. 14. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's Rules, 47 C.F.R.  76.961, that V Cable, Inc. d/b/a Cablevision shall refund to subscribers that portion of the amounts paid for cable programming service for the periods set forth in Appendix A to May 14, 1994 which exceeded the maximum prices set forth in Appendix A (plus franchise fee) per month and was thus unreasonable, plus interest to the date of the refund. 15. IT IS FURTHER ORDERED that V Cable, Inc. d/b/a Cablevision shall promptly determine the overcharges to CPS subscribers for the stated periods, 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. 16. 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 V Cable Inc. d/b/a Cablevision shall, within 30 days of the release of this Order, revise its Form 1200 filing with respect to Solon, Ohio, CUID No. OH0968, 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 A (plus franchise fee). 17. IT IS FURTHER ORDERED that V Cable, Inc. d/b/a Cablevision 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 Actual Rate $13.83 First Period Maximum Rate $12.07 for 11/22/93- 12/31/93 Second Period Maximum Rate $11.55 for 1/1/94- 5/14/94