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WY0017 (Diamondville, WY)  YP -Vantage Cable Associates, L.P.hh,V)pp WY0019 (Kemmerer, WY)  Y9 -` `  hh,V)  Y"-Benchmark Filings to Supporthh,V)  Y -Cable Programming Service Pricehh,V)  Y-}  MEMORANDUM OPINION AND ORDER ă  Yk-` ` Adopted: May 2, 1995 VReleased: May 5, 1995 By the Chief, Cable Services Bureau:  Y- I. A. 1. a.(1)(a) i) a) I. 1. 1. a.(1)(a) i) a)  1. Here we consider complaints about the price that the abovecaptioned 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  Y-order addressing the reasonableness of the prices after that date.d ^ Y <ԍ#XR  P7jQXP# The findings in this Order do not in any way prejudge the reasonableness of the prices for CPS service after May 14, 1994 under our new rate regulations. However, to the extent Vantage Cable 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 prices determined herein might also apply from May 15, 1994 until the date on which Operator #XR  P7jQXP#implemented its CPS prices under  Yx&<the 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, reductions in Vantage Cable's prices for the period after May 14, 1994 may be required to reflect the fact that Vantage Cable's price during the earlier period, which is used as the starting point to calculate its prices for the prospective period,"5)0*0*0*)"  Y-was unreasonable. See 47 C.F.R.  76.922(b)(4)(C).d"{0*0*0*"Ԍ" 0*0*0*"Ԍ Y-  2. 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 CPS prices upon the filing of a valid complaint. The filing of a valid complaint triggers an  Y-obligation on behalf of the cable operator to file a justification of its CPS prices.ff Y<ԍ#XR  P7jQXP# 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.i YU <ԍ#XR  P7jQXP# 47 C.F.R.  76.956(b).i In either case, the operator has the burden of demonstrating that its  Yv-CPS prices are not unreasonable.Yv Y <ԍ#XR  P7jQXP# Id.Y  YH-3. The Commission's original rate regulations took effect on September 1, 1993.H{ Yt<ԍ#XR  P7jQXP# 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).  Y1-The Commission subsequently revised its rate regulations effective May 15, 1994.i1  Y<ԍ#XR  P7jQXP# 47 C.F.R.  76.922(b).i 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.  Y5<ԍ#XR  P7jQXP# 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.Y b Y<ԍ#XR  P7jQXP# Id.Y Generally, to justify their prices for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200  Yy-series. y Y?"<ԍ #XR  P7jQXP#47 C.F.R.  76.922(b)(6); see also Second Order on Reconsideration, 9 FCC Rcd at 4189 n.195.  YK- 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." 0*((7"Ԍ Y-ԙ  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  Y -III.   YN-#XR  P7jQXP#э See Questions and Answers on Completion of FCC Form 393 and Associated Filing Requirements, Question and Answer No. 7 (released Nov. 10, 1993) ("Where operators have restructured equipment rates as of September 1, 1993 in accordance with our regulations... operators will enter on Line 104 the same, or nearly the same, number as on Line 301.").  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  Y -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  Y6-available for the date for which Vantage Cable filed. 66 Y<ԍ #XR  P7jQXP#See 47 C.F.R.  76.922(b)(9)(iii)(if a cable operator fails to justify its rates, rate must be adjusted in accordance with the most accurate data available at the time of analysis). 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 ("GNPPI") figures of 122.3 for the third quarter of 1992 and 126.5 for the fourth quarter of 1993. Using these GNPPI 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.     YP- e   {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"  0*(("  Y-earliest complaint in each franchise area (as set forth in Appendix A) to May 14, 1994. v Yy<ԍ#XR  P7jQXP# This finding is based solely on the representations of Vantage Cable and the modifications described herein. Should 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 party to this proceeding not specifically addressed herein. {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  Y -franchise area (as set forth on Appendix A)  Y<ԍ#XR  P7jQXP# Our jurisdiction to order a refund dates from the earliest date a valid complaint is filed with the Commission. 47 C.F.R.  76.961(b). 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.i {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  Y|-each franchise area set forth in Appendix B (plus franchise fee).$|  Y$<ԍ#XR  P7jQXP# We reserve the right to make further adjustments to Vantage Cable Associates, L.P.'s prices for the period after May 14, 1994, upon completion of our review of Vantage Cable Associates, L.P.'s Form 1200 filings.$ "e# 0*((]"Ԍ{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. { {  m m  &FEDERAL COMMUNICATIONS COMMISSION {  m m  &Meredith J. Jones {  m m  &Chief, Cable Services Bureau " 0*((` "   Y-A Appendix A ă  Y-CUID No.  m m Date First Complaint|Date Complaint Inflation  Yw-{  m m Filed with FCCuuQ|Served}}Adj. Factor  YI-WY0017  m m 2/22/94&uuQ|2/08/94}}1.039  Y2-WY0019  m m 2/08/94&uuQ|1/31/94}}1.039  Y -i Ã" 0*0*0*` "  X-BAppendix B ĐiPe i  Y-CUID No.  m m  Actual RatesuuQ|Maximum Permitted Rates  Y_-WY0017  m m  $13.15uuQ|%%$11.60  YH-WY0019  m m  $13.15uuQ|%%$11.71