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NJ0083 (North Bergen) Cablevision of Riverview, Inc. ) NJ0111 (Hoboken) ) NJ0345 (Weehawken) Benchmark Filing to Support ) NJ0365 (West New York) Cable Programming Service Price ) NJ0366 (Union) MEMORANDUM OPINION AND ORDER Adopted: July 24, 1995 Released: August 2, 1995 By the Chief, 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 communities designated above. 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 date 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 served on Operator and received by the Commission on the dates set forth on the Appendix. Operator filed FCC Form 393 in response; Operator has also filed amended and supplemental Form 393 filings. 5. On March 28, 1994, Operator filed a Motion to Dismiss the complaints filed in each of the franchise areas by the State of New Jersey Board of Regulatory Commissioners because the complainant failed to list the channels included in the CPS tier or otherwise describe the cable programming service at issue. The complainant filed its complaints on a revised FCC Form 329, released by the Commission in January 1994, that does not require an itemization of the channels in the CPS tier. Operator argues that the revised FCC Form 329 is deficient because it does not request "a description of the cable programming service or associated equipment involved and, if applicable, how the service or associated equipment has changed." Operator's argument does not persuade us that the complaints are invalid or should be dismissed. The Commission revised FCC Form 329 because experience had shown that the prior form requested unnecessary information and was confusing to many complainants. FCC Form 329 was therefore revised consistent with the Congressional mandate to avoid imposing unnecessarily "technical or complicated" pleading requirements on complainants. 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. These complaints clearly relate to Operator's price for the CPS tier. We therefore find the complaints valid and deny Operator's motion to dismiss. 6. Operator's monthly CPS tier price of $10.10 (plus franchise fee) is not justified by its benchmark filing because its price is greater than the maximum permitted charge of $9.98 per month (plus franchise fee), as calculated in the filing. Upon review of Operator's Form 393 filing, we have found that it has not correctly calculated its maximum permitted price, and it is therefore appropriate to make the following adjustment to Operator's calculations in Form 393: Operator calculated the Inflation Adjustment Factor (Part II, Worksheet 1, Line 127) as of the end of April 1994 using data released by the U.S. Department of Commerce on May 27, 1994. However, Operator's use of April 1994 as the date through which it calculated the inflation adjustment is impermissible. Operator was required to file a justification of its CPS price for the franchise areas no later than January 27, 1994. If Operator had filed its justification in a timely fashion, the instructions to Form 393 would have required it to calculate the inflation adjustment only through December 1993. Operator cannot be permitted to claim an additional inflation adjustment simply because it filed Form 393 late. We must therefore recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the date on which Operator should have filed. On July 29, 1994, the 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 1.034 as the Inflation Adjustment Factor through December 1993, the base date Operator should have used in justifying its rate. 7. Upon review of the record herein, and having incorporated the adjustment discussed above, we conclude that Operator has failed to justify the rate it was charging during the periods in question. Operator's showing justifies the maximum reasonable CPS tier price of $9.63 per month (plus franchise fee) for the period from the filing of the earliest complaint in each franchise area (as set forth on the Appendix) to May 14, 1994. 8. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321, that the complaints referenced herein against the cable programming service price charged by Operator in the areas referenced in the caption, and all other complaints in these franchise areas related to the same price, ARE GRANTED TO THE EXTENT INDICATED HEREIN. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321, that Operator's motion to dismiss the complaints against its cable programming service price charged in the franchise areas referenced in the caption IS DENIED. 10. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's Rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the communities referenced in the caption 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 the Appendix) to May 14, 1994 which exceeded the maximum price per month (plus franchise fee) of $9.63, plus interest to the date of the refund. 11. IT IS FURTHER ORDERED that Operator 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. 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 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 price of $9.63 (plus franchise fee). 13. 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. 14. IT IS FURTHER ORDERED, pursuant to Section 76.960 of the Commission's Rules, 47 C.F.R.  76.960, that Operator shall not be required to obtain advance approval of adjustments to its CPS price in the franchise areas addressed herein for one year following the release of this Order, due to Operator's having submitted in good faith optional supplemental filings in response to our Public Notice. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau Appendix CUID No. Date First Complaint Date Complaint Filed with FCC Served NJ0083 2/28/94 2/25/94 NJ0111 2/28/94 2/25/94 NJ0345 2/28/94 2/25/94 NJ0365 2/28/94 2/25/94 NJ0366 1/3/94 12/28/93