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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** FOR FCC RECORD ONLY $//TCI Cablevision of Los Angles County, Inc., et al, MO&O, DA 95-1182//$ $/ 76.922 Rates for Cable Programming Service tier/$ $/benchmark cable rates/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-1182 In the Matter of ) ) TCI Cablevision of Los Angeles ) CUID No. CA1168 (South Whittier) County, Inc. ) ) TCI Cablevision of Florida, Inc. ) CUID Nos. FL0061 (District 5) and ) FL0518 (South Daytona) ) TCI Cablevision of Treasure ) CUID No. FL0230 (Vero Beach) Coast, Inc. ) ) Miami Tele-Communications, Inc. ) CUID No. FL0653 (Miami) ) TCI Cablevision of North Central ) CUID No. KY0569 (Mt. Washington) Kentucky, Inc.) ) TCI Cablevision of Cape Cod, Inc. ) CUID Nos. MA0006 (Yarmouth), ) MA0039 (Barnstable), MA0040 (Harwich) ) and MA0041 (Dennis) ) TCI Cablevision of West Michigan, Inc. ) CUID Nos. MI1153 (Cannon) and MI1729 ) (Tallmadge) ) TCI Cablevision of Asheville, Inc. ) CUID No. NC0032 (Asheville) ) TCI Cablevision of Ohio, Inc. ) CUID Nos. OH0028 (Conneaut), OH0893 ) (Kirtland), OH0896 (Mentor-on-the-Lake) ) and OH0960 (Perry) ) TCI Cablevision of Tulsa, Inc. ) CUID Nos. OK0065 (Broken Arrow) ) and OK0194 (Sapulpa) ) TCI TKR of Houston, Inc. ) CUID No. TX0424 (Texas City) ) TCI Cablevision of Dallas, Inc. ) CUID Nos. TX0624 (Farmers Branch) and ) TX0682 (Mesquite) ) Newport News Cablevision, Inc. ) CUID No. VA0031 (Newport News) ) TCI Cablevision of South Seattle, Inc. ) CUID No. WA0068 (Renton) ) TCI of Seattle, Inc. ) CUID Nos. WA0082 (King County S) ) and WA0083 (King County) ) TCI Cablevision of Southwest ) CUID No. WA0253 (King) Washington, Inc. ) ) Benchmark Filings to Support ) Cable Programming Service Prices ) MEMORANDUM OPINION AND ORDER Adopted: May 26, 1995 Released: June 7, 1995 By the Chief, Cable Services Bureau: 1. Here we consider complaints about the prices that the above-captioned operators (individually "Operator" and, collectively, "Operators") were charging for their cable programming service ("CPS") tiers in the communities designated above. Operators have chosen to attempt to justify their prices through benchmark showings on FCC Form 393. This Order addresses the reasonableness of Operators' prices 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 the respective Operators and received by the Commission on the dates set forth on Appendix A. Operators filed FCC Form 393s in response; Operators have also filed amended and supplemental Form 393 filings. 5. For the franchise areas designated by CUID Nos. FL0230, FL0653 and OK0194, Operators' actual CPS tier prices were above the maximum permitted prices that Operators calculated for the CPS tier and, thus, Operators failed to demonstrate that their prices for the CPS tier were not unreasonable. Furthermore, upon review of Operators' submissions for these franchise areas, we have found that Operators have not correctly calculated their maximum permitted prices, and it is therefore appropriate to make the following adjustments to Operators' calculations in their Form 393s: a. On Line 32, Step G, Part III of their Form 393s, Operators made an error in addition. For CUID No. FL0230, the Operator entered $538,191.90. The correct figure is $496,283.14 and we have revised this entry. For CUID No. FL0653, the Operator entered $945,690.19. The correct figure is $925,858.11 and we have revised this entry. For CUID No. OK0194, the Operator entered $3,991,817.04. The correct figure is $3,891,113.27 and we have revised this entry. b. Because the Operators have not demonstrated that their prices in these franchise areas were reasonable, we must also recalculate the Inflation Adjustment Factor using the most accurate data currently available for the date for which the Operators filed. The Operators on their amended Form 393s 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 third quarter of 1993. Using these GNP-PI figures, we calculate an Inflation Adjustment Factor through October 1993, the base date the Operators used in justifying their rates, of 1.030. 6. For the franchise area designated by CUID No. FL0518, the Operator's actual CPS tier price was above the maximum permitted price that it calculated for the CPS tier and, thus, the Operator failed to demonstrate that its price for the CPS tier was not unreasonable. Furthermore, upon review of the Operator's submission for this franchise area, we have found that the Operator has not correctly calculated its maximum permitted price, and it is therefore appropriate to make the following adjustment to the Operator's calculations in its Form 393: On its Form 393 filing for CUID No. FL0518, the Operator calculated the Inflation Adjustment Factor as of the end of December 1993. However, the Operator cannot permissibly calculate inflation through the end of December 1993. Based on the service date of the earliest valid complaint, the Operator was required to file a rate justification no later than November 29, 1993. If the Operator had filed FCC Form 393 by that date, the instructions to Form 393 would have required it to calculate the inflation adjustment only through October 1993. The Operator cannot claim an additional inflation adjustment simply because it filed Form 393 late. We therefore must recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the date that the Operator should have filed Form 393. 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 third quarter of 1993. Using these GNP-PI figures, we calculate an Inflation Adjustment Factor through October 1993, the base date the Operator should have used in justifying its rate for CUID No. FL0518, of 1.030. 7. For the remaining franchise areas, we have found no apparent errors in the Operators' calculation of their maximum permitted rates. However, the Operators' actual CPS tier prices were above the maximum permitted prices that the Operators calculated for the CPS tier. Accordingly, the Operators have failed to demonstrate that their prices for the CPS tier were not unreasonable, and we therefore must recalculate the Inflation Adjustment Factor in Form 393, Part II, Worksheets 1 and 4, on the basis of the most accurate data currently available for the date for which the Operators filed: a. Except for the franchise area designated by CUID No. FL0061, the Operators on their amended Form 393s, 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 third quarter of 1993. Using these GNP-PI figures, we calculate an Inflation Adjustment Factor through October 1993, the base date the Operators used in justifying their rates, of 1.030. b. For the franchise area designated by CUID No. FL0061, the Operator on its amended Form 393, calculated the Inflation Adjustment Factor as of the end of December 1993 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 December 1993, the base date the Operator used in justifying its rate, of 1.034. 8. Upon review of the record herein, and having incorporated the adjustments discussed above, we conclude that Operators have failed to justify the rates they were charging during the periods in question. Operators' showings justify 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. However, we further determine that for CUID Nos. MA0006, MA0039, MA0040 and MA0041, the total overcharge per subscriber is de minimis. Therefore, it would not serve the public interest to order refunds in these franchise areas. 9. 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 prices charged by Operators in the areas referenced in the caption and at Appendix A herein, and all other complaints in these franchise areas related to the same prices, ARE GRANTED TO THE EXTENT INDICATED HEREIN. 10. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operators shall refund to subscribers in the communities shown in Appendix B, except for CUID Nos. MA0006, MA0039, MA0040 and MA0041, 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. 11. IT IS FURTHER ORDERED that Operators shall promptly determine the overcharges to their 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. 12. 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 Operators shall, within 30 days of the release of this Order, revise their 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). 13. IT IS FURTHER ORDERED that Operators shall place into effect, within 30 days after their 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 Filed with FCC Served CA1168 10/15/93 10/12/93 FL0061 3/10/94 3/5/94 FL0518 11/3/93 10/29/93 FL0230 9/24/93 9/14/93 FL0653 9/27/93 9/17/93 KY0569 9/30/93 9/27/93 MA0006 2/2/94 1/26/94 MA0039 2/2/94 1/26/94 MA0040 2/2/94 1/26/94 MA0041 2/2/94 1/26/94 MI1153 12/9/93 11/12/93 MI1729 11/23/93 10/18/93 NC0032 10/5/93 9/27/93 OH0028 2/17/94 2/17/94 OH0893 2/28/94 2/28/94 OH0896 2/28/94 2/25/94 OH0960 2/25/94 2/25/94 OK0065 12/6/93 11/30/93 OK0194 12/10/93 12/6/93 TX0424 1/24/94 1/13/94 TX0624 2/28/94 2/25/94 TX0682 11/29/93 11/24/93 VA0031 10/19/93 10/14/93 WA0068 12/20/93 12/16/93 WA0082 9/7/93 9/3/93 WA0083 9/7/93 9/3/93 WA0253 9/7/93 9/3/93 Appendix B CUID No. Actual Rates Maximum Permitted Rates CA1168 $11.10 $10.34 FL0061 $11.25 $10.73 FL0518 $11.25 $10.69 FL0230 $11.73 $11.23 FL0653 $13.89 $13.55 KY0569 $10.79 $10.57 MA0006 $11.48 $11.44 MA0039 $11.48 $11.44 MA0040 $11.48 $11.44 MA0041 $11.48 $11.44 MI1153 $11.80 $11.18 MI1729 $11.80 $11.18 NC0032 $11.17 $10.80 OH0028 $11.24 $10.71 OH0893 $11.89 $11.79 OH0896 $11.89 $11.79 OH0960 $11.89 $11.79 OK0065 $10.98 $10.48 OK0194 $10.98 $10.45 TX0424 $12.48 $11.45 TX0624 $9.98 $9.64 TX0682 $10.85 $10.38 VA0031 $12.87 $12.46 WA0068 $10.61 $10.13 WA0082 $9.98 $9.76 WA0083 $9.98 $9.76 WA0253 $10.56 $10.22