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 $//Vantage Cable Associates, L.P., Wyoming, MO&O, DA 95-1011//$ $76.922 Rates for Cable Programming Service tiers/$ $/benchmark cable rates/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-1011 In the Matter of ) ) CUID Nos. WY0017 (Diamondville, WY) Vantage Cable Associates, L.P. ) WY0019 (Kemmerer, WY) ) Benchmark Filings to Support ) Cable Programming Service Price ) MEMORANDUM OPINION AND ORDER Adopted: May 2, 1995 Released: May 5, 1995 By the Chief, Cable Services Bureau: 1. Here we consider complaints about the price that the above-captioned operator ("Vantage Cable") was charging for its cable programming service ("CPS") tier in the communities designated above. Vantage Cable has chosen to attempt to justify its price through benchmark showings on FCC Form 393. This Order addresses the reasonableness of Vantage Cable's price only through May 14, 1994. At a later date we will issue a separate order addressing the reasonableness of the prices 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 Vantage Cable and received by the Commission on the dates set forth on Appendix A. Vantage Cable filed FCC Forms 393 in response. 5. In its benchmark filings, Vantage Cable calculated different maximum permitted prices for the CPS tier in each of the two franchise areas addressed in this order. However, both of these price were below its actual price for the CPS tier. Thus, Vantage Cable has failed to demonstrate that its price for the CPS tier was not unreasonable. Upon review of Vantage Cable'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 Vantage Cable's calculations in the Forms 393: a. Vantage Cable's Form 393, Worksheet 1, Line 104 entries do not represent its current monthly equipment revenue as of the initial date of regulation. Since Vantage Cable restructured its rates, including its equipment rates, on September 1, 1993, the monthly equipment revenue figure it entered on Part II, Worksheet 1, Line 104 should have been close or identical to its equipment cost figure on Line 34 of Step G of Part III. However, Vantage Cable's entries on these two lines varied substantially . Accordingly, we have changed Line 104 to equal the figure entered on Line 34 in each franchise area, as adjusted pursuant to paragraph 5a, supra. b. Because Vantage Cable has failed to demonstrate that its prices for the CPS tier was not unreasonable, we must also recalculate the Inflation Adjustment Factor in Form 393, Part II, Worksheets 1 and 4, on the basis of the most acurate data currently available for the date for which Vantage Cable filed. On its amended Form 393s, Vantage Cable calculated the Inflation Adjustment Factor as of the end of January 1994 using data released on December 1, 1993. On July 29, 1994, the U.S. 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 126.5 for the fourth quarter of 1993. Using these GNP-PI figures, we calculate an Inflation Adjustment Factor through Februar, 1994, the base date Vantage Cable used in justifying its rate for the franchise areas under consideration in this Order, of 1.039. 6. Upon review of the record herein, and having incorporated the adjustments discussed above, we conclude that Vantage Cable has failed to justify the rate it was charging during the period in question. Vantage Cable'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. 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 Vantage Cable Associates, L.P. in the areas referenced in the caption and at Appendix A herein ARE GRANTED TO THE EXTENT INDICATED HEREIN. 8. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Vantage Cable Associates, L.P. shall refund to subscribers in the communities shown in Appendix B that portion of the amounts paid for cable programming service for the period from the filing of the first valid complaint in each franchise area (as set forth on Appendix A) to May 14, 1994 which exceeded the maximum price for each franchise area set forth in Appendix B (plus franchise fee) per month, plus interest to the date of the refund. 9. IT IS FURTHER ORDERED that Vantage Cable Associates, L.P. 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 of the plan. 10. 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 Vantage Cable Associates, L.P. 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). 11. IT IS FURTHER ORDERED that Vantage Cable Associates, L.P. 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 rates determined in this Order. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau Appendix A CUID No. Date First Complaint Date Complaint Inflation Filed with FCC Served Adj. Factor WY0017 2/22/942/08/94 1.039 WY0019 2/08/941/31/94 1.039 Appendix B CUID No. Actual Rates Maximum Permitted Rates WY0017 $13.15 $11.60 WY0019 $13.15 $11.71