WPCw 2a BEK Z Courier c-#XR  P7jQXP#HP4M; Local Printer; LPT1tional)HL4MPCAD.PRSx  @\eX@CY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYd4dddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d<|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`L3|wer; LPT1tional)HL4MPCAD.PRSXw PE37\eXP2   / Z- CourierCG TimesCG Times Bold#Xw PE37=XP#3|wCourierCG TimesCG Times BoldCG Times Italic P7jQ=XP#HP LaserJet 4M (PCL)HPLA4MPC.PRSx  @\)(JX@29/ v p^kCourierCG TimesCG Times BoldCG Times Italica8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  2ekkv{ta5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  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A. a.(1)(a) i) a)Documentg2R& e$I%%PleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:xxxxxPxxxxxxxxxCkkkkkkkkkkPCPCPCPCxxxxxxxxxxkxxxxxxjxjjjxxjxxjxxxxxxxPCxxxxPxxxxCVxHCxxxxxVVx[[[xVCxxxxxxxxjjjxxxxxxPxxPPPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxPkbbxxxxxxTxxxxTPP||x>>xxxxxP|x!T"x}xExPPPxxxxPxkxofxkkPPPPk]kxkPCkkxkxxxkkPxkPPxxxxxxxPxkP8D%nZZB 3nMnMn..s[2hf DLZWn]J",tB^ f ^GPoxxPPPxPPPPxxxxxxxxxxPPx]sPPPxxPxkkTxCPCxk]Pxxxkxxxx>xxxxxPxxxxxxxxCxxxxxkkkkk]C]C]C]Cxxxxxxxxxxxxxjjxxjxxjxxxxx[Cxxx]xxC`x]Cxxjjx[][x`RxxjkjxxxxPxxPPPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxPxffxxxxxxTxxxxTPPx>>xxxxxPxT"xxExPPPxxxxPxkxsfxxxPPPPk]kkk]Ckkxkxxxkk]xkPPxxxxxxxPxkP8D%nZZB 3nMnMn..s[<?xxx,ix6X@`7X@8wC;,Xw PE37XPD7zC;,mXz_ pi7XDPG,J PE37PDBPG,%9_ pi7V"G($,=hG PE37hP<R&HHH,>K,H6X@`7h@xxxWIxkWWWWWWWWWW(x><q*"xxxxWWxxxWWkkxxxK,H6X@`7h@6uC;,QXu&_ x7XXCG TimesCourierCG TimesCourie7C:\WPJTC{TD.1\WP}WP{PJ.1CG TimesCG Times BoldCG Ti H FOR FCC RECORD ONLY $//PostNewsweek, MO&O, DA 951071//$ $76.922 Rates for Cable Programming Service tiers/$  Y-$/benchmark cable rates/$lă  c<  Њ E Before the  FEDERAL COMMUNICATIONS COMMISSION  c< Washington, D.C. 20554 Đ X-lU2* DA 95 1071 Đ(#U  Y{ -In the Matter of hh,V)pp  Yd -` `  hh,V)CUID No. CA0019 (Modesto, CA)  YM -PostNewsweek Cable, Inc.hh,V)pp CA0670 (Stanislaus, CA)  Y6 -` `  hh,V)pp CA0925 (Burlingame, CA)  Y-` `  hh,V)pp IN0189 (Greenwood, IN)  Y-` `  hh,V)pp IN0191 (New Whiteland, IN)  Y-` `  hh,V)pp TX0024 (Port Lavaca, TX)  Y-` `  hh,V)pp TX0095 (Livingston, TX)  Y-Benchmark Filings to Supporthh,V)  Y-Cable Programming Service Priceshh,V)  Yg-}  MEMORANDUM OPINION AND ORDER ă  Y:-` ` Adopted: May 11, 1995 V ppReleased: May 18, 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 prices 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 prices through benchmark showings on FCC Form 393. This Order addresses the reasonableness of Operator's prices only through May 14, 1994. At a later date we will issue a separate order addressing the  Yk-reasonableness of the prices after that date.Z7kg 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 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  Ys&-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  YG(<the new regulations. See para. 3, infra.#x6X@`7iX@# #XR  P7jQXP#Further, to the extent that the prices as of March 31, 1994 are found to be excessive, reductions in Operator's prices for the period after May"2)0*0*0*)" 14, 1994 may be required to reflect the fact that Operator's prices during the earlier period, which are used as the starting point to calculate its prices for the prospective period, were  Yb-unreasonable. See 47 C.F.R.  76.922(b)(4)(C).Z"kM0*0*0*g "Ԍ Y-ԙ2. Under the Cable Television Consumer Protection and Competition Act of 1992,Mg Y<ԍ#XR  P7jQXP# Pub. L. No. 102385, 106 Stat. 1460 (1992); Communications Act,  623(c), as  Y-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.ffF 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.iF 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.YvF Y <ԍ#XR  P7jQXP# Id.Y  YH-3. The Commission's original rate regulations took effect on September 1, 1993.H{F 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 F 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. F 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 bF 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. yF 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 Operator and received by the Commission on the dates set forth on Appendix A. Operator filed FCC Form 393 in response. " 0*((7"Ԍ5. On November 10, 1993, Operator moved by letter to dismiss the October 13, 1993 complaint in CUID No. CA0670 and the November 1, 1993 complaint in CUID No.  Y-CA0019.C F YK<ԍ #XR  P7jQXP#Operator also moved to dismiss several other complaints in CUID Nos. CA0019 and CA0670. These complaints were returned by the Commission pursuant to 47 C.F.R. 76.954, and the motions to dismiss were effectively granted by these actions. C Operator argues that the complaint in CUID No. CA0019 should be dismissed because the complainant (1) included charges for the basic tier, premium channels, and equipment as well as the CPS tier in response to question 8 of FCC Form 329 as it then existed; (2) included channels on the basic tier as well as the CP tier in response to question 9 on FCC form 329; and (3) incorrectly indicated in response to question 6 that he was complaining about a rate increase after September 1, 1993, rather than the rates in effect on September 1, 1993. Operator argues that the complaint in CUID No. CA0670 should be dismissed for the same reasons and also because the complainant (4) did not include a copy of his bill with the complaint that he sent to Operator; (5) did not indicate the date that he served Operator with a copy of the complaint in response to question 12; and (6) did not state in response to question 13 that he believed the CPS rate was unreasonable. Operator's assertions do not persuade us that the complaints are 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 complainants' responses to question number 9 include channels contained on the CPS tier and because the rates listed in answer number 8 and on the attached bills indicate that the complainants received the CPS tier, we find it reasonable to conclude that the complainants objected to the CPS rates in effect on September 1, 1993 and that they believed those rates were unreasonable. Furthermore, there is no evidence that Operator was hindered in responding to the complaint in CUID No. CA0670 by complainant's failure to include a copy of his bill or to indicate the service date. We therefore find the complaints valid and deny Operator's motions to dismiss the complaints. 6. On January 24, 1994, each of the complainants in CUID No. CA0925 filed a Motion to Strike PostNewsweek's rate justification for that franchise area on the ground that it was willfully false and deceptive. The complainants noted that in a cover sheet attached to its rate justification, PostNewsweek stated that for the period prior to September 1, 1993, it had 23 channels on its CPS tier, whereas on Form 393, Part II, Page 2, Line 202, PostNewsweek claimed 24 channels. The complainants further state that PostNewsweek should not have counted SportsChannel as a full CPS channel because it is used part of the time to provide payperview services, and therefore that PostNewsweek should have counted no more than 22.5 CPS channels as of September 30, 1992. For the period since September 1, 1993, the complainants argue that SportsChannel and three other channels should not be counted as full channels on the CPS tier because thay are used part of the time to provide payperview or payperchannel services. Therefore, they state that PostNewsweek should"!K 0*(("" haved counted fewer than 26 channels on the CPS tier on Form 393, Part II, Worksheet 1, Line 102. 7. PostNewsweek filed an Opposition to Motions to Strike on February 8, 1994. In its opposition, PostNewsweek explained the discrepancy between its cover sheet and its entry on Line 202 by stating that its cover sheet reported 23 channels immediately prior to September 1, 1993, whereas its Line 202 entry represented 24 CPS channels offered as of September 30, 1992. PostNewsweek also defended its counting of each of the channels that was used to provide both CPS and premium services as a rateregulated satellite channel. PostNewsweek stated that SportsChannel provided rateregulated services approximately 90 percent of the time that it was in use, and that each of the other channels provided CPS for 12 hours per day and premium services for 12 hours per day. 8. Upon review of the Motions to Strike and PostNewsweek's opposition, we find that PostNewsweek has sufficiently explained the apparent discrepancy between its cover memo and its entry on Line 202. We note that PostNewsweek's claim of 24 CPS channels as of September 30, 1992 is consistent with its channel lineup for that period. Our treatment of PostNewsweek's split channels is discussed at paragraphs 9d, 9e, and 9f below. Finally, we do not find that PostNewsweek's statements in its rate justification were willfully false and deceptive. Accordingly, we grant in part and deny in part the Motions to Strike. 9. Operator asserts that its monthly CPS tier prices are justified by its benchmark filings because its prices are equal to or less than 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:  Y|-   a. In Column G of Schedules A and C of Part III of its FCC Form 393, Operator did not correctly grossup its tax entries. By placing entries in these columns, Operator  YN-confirms that it is a taxpaying entity (i.e., a "C" corporation). However, Operator incorrectly calculated its income tax by simply applying the corporate tax rate to its return on investment. The Commission has stated that taxpaying business entities must grossup their tax entries in Column G of Schedules A and C (i.e., calculate the  Y-tax as a percentage of return on investment plus tax). ar Ym!<ԍ #XR  P7jQXP#First Order on Reconsideration, Second Report and Order, and Third Notice of Proposed Rulemaking, MM Docket No. 92266, FCC 93428, 9FCC Rcd 1164, 1196 n.92 (1993) ("Our provision to grossup the return amount for income taxes applies to all tax paying business entities to the extent that they have a state or federal income tax obligation").  Y%-See also Cable Television Rate Regulation Questions and Answers Relating To FCC Form 393, Question and Answer No.14 (released July 30, 1993) ("The federal tax expense should be calculated based upon a pretax return on investment"). By understating its tax entries" 0*((" in Column G, an operator reduces its effective rate of return on equipment and installations and thereby could increase its CPS price. We therefore recalculate Column G of Schedules A and C (and subsequent steps) using correctly adjusted tax entries.X` hp x (#%'0*,.8135@8: