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 $//TKR Cable of Greater Louisville County, MO&O, DA 95-1073//$ $/76.922 Rates for Cable Programming Service tier/$ $/benchmark cable rates/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. DA 95-1073 In the Matter of ) CUID Nos. ) KY0169, KY0426, KY0445, ) KY0452, KY0490, KY0491, ) KY0501, KY0518, KY0593, ) KY0616 (Louisville) ) TKR Cable of Greater Louisville ) CUID Nos. KY0493, KY0519 (Anchorage) County, Kentucky ) ) CUID No. KY0588 (Prospect) ) ) CUID No. KY0610 (Highland Heights) Benchmark Filing To Support ) Cable Programming Service Price ) CUID No. KY0670 (Crestview Hill) MEMORANDUM OPINION AND ORDER Adopted: May 11, 1995 Released: May 18, 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 Kentucky communities identified in the caption. Operator has chosen to attempt to justify its price through a benchmark showing on FCC Form 393. This order addresses the reasonableness of Operator's price only through May 14, 1994. At a later time 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 in the Appendix. Operator filed FCC Form 393 in response. 5. Operator asserts that its monthly CPS tier price of $9.54 is justified by its benchmark filing because it is lower than the maximum permitted price of $15.41 as calculated in the filing. However, upon review of Operator's submission, we have found that it has not correctly calculated its maximum permitted price, and it is therefore appropriate to make the following adjustments to Operator's calculations in Form 393: a. On Form 393, Part II, Worksheet 1, Line 101, Operator entered $10.18 for the basic service tier and $11.17 for the CPS tier as its rates as of the initial date of regulation. However, Operator's rate card shows that its actual prices were $10.81 for the basic service tier and $9.54 for the CPS tier. We therefore recalculated Line 101 using the prices for the basic and CPS tiers shown on Operator's rate card. b. Operator's Form 393, Worksheet 1, Line 104 entry does not represent its current monthly equipment revenue as of the initial date of regulation. Instead of entering its current monthly equipment revenue, Operator entered a figure based on its prior equipment rates. Since Operator restructured its rates, including its equipment rates, on September 1, 1993, in an attempt to comply with the Commission's regulations, the monthly equipment cost figure on Line 34 of Step G of Part III should be close or identical to its Line 104 entry. Accordingly, on Line 104 we have entered $294,579.00, the same figure that appears on Line 34. c. Because of these errors, Operator has failed to demonstrate that its price for the CPS tier was not unreasonable. Therefore, we must also recalculate the Inflation Adjustment Factor in Form 393, Part II, Worksheet 1, on the basis of the most accurate data currently available for the date for which Operator filed. On its amended Form 393, Operator calculated the Inflation Adjustment Factor as of the end of October 1993 using data released on August 31, 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 125.7 for the fourth quarter of 1993. Using these GNP-PI figures, we calculate an Inflation Adjustment Factor through October 1993, the base date Operator used in justifying its rates, of 1.030. 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 a maximum reasonable CPS tier price of $9.48 per month (plus franchise fee) for the period from the filing of the first complaint in each franchise area (as set forth in the Appendix) to May 14, 1994. However, we further determine that the total overcharge per subscriber 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 against the cable programming service price charged by Operator in the areas referenced in the caption and in the Appendix 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 filing 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 permitted price of $9.48 in the areas referenced in the caption and in the Appendix herein (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 filing required above, a price that reflects the reduction in the CPS rate determined in this Order. FEDERAL COMMUNICATIONS COMMISSION JoAnn Lucanik Chief, Financial Analysis and Compliance Division Cable Services Bureau Appendix CUID No. Date First Complaint Filed with FCC Date Complaint Served KY0169 11-15-93 11-08-93 KY0426 10-19-93 10-14-93 KY0445 03-24-94 03-21-94 KY0452 10-15-93 10-12-93 KY0490 03-24-94 03-21-94 KY0491 03-24-94 03-21-94 KY0493 11-15-93 11-01-93 KY0501 03-24-94 03-21-94 KY0518 03-24-94 03-21-94 KY0519 10-15-93 10-12-93 KY0588 10-13-93 10-07-93 KY0593 10-04-93 10-07-93 KY0610 02-18-94 02-07-94 KY0616 03-24-94 03-21-94 KY0670 01-21-94 01-03-94