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A. 1. a.(1)(a) i) a) I. 1. 1. a.(1)(a) i) a)ي$//ORDER, Joppa Associates, L.P., DA 951941//$ $/1.45 Pleadings; filing periods/$ $/1.80 Forfeiture proceedings/$ $/76.922 Rates for the basic service tier/$  Y-$/76.944 Commission Review of Franchising Authority Decisions/$`(#(#X01Í ÍX01Í Í #Xw PE37}XP#у  +B J( +B Before the W FEDERAL COMMUNICATIONS COMMISSION  XH-Washington, D.C. 20554 lU  Y -In the Matter of:fd )pp DA 951941 fd ) JOPPA ASSOCIATES, L.P., d/b/afd )  Y -CONSOLIDATED CABLEVISIONfd )pp  Y -fd )  Y -Appeals of Local Rate Orders fd )  Y-of the following Cities:fd ) Benton Charter Township, Michigan MI0200fd ) St. Joseph, Michigan MI0566fd )  Y5-8 CONSOLIDATED ORDER ă  Y- Adopted : September 11, 1995hh,V Released : September 15, 1995 By the Chief, Cable Services Bureau:  X- I.INTRODUCTION  Yh-1.` ` By this Order, we consolidate two appeals of local rate orders filed on September 28, 1994 by Joppa Associates, L.P., d/b/a Consolidated Cablevision ("Consolidated") and rule on the merits in each proceeding. In deciding this matter, the Bureau has reviewed all the pleadings filed in the separate proceedings. We have determined that the proceedings are sufficiently similar to justify the resolution of all the issues raised by  Y-each of the concerned parties in one consolidated proceeding.| Yn!-  ԍ Except for minor factual variations, the two separate appeals are identical and raise the   same issue: whether the local franchising authorities were correct in insisting that Consolidated   must file information regarding home shopping channel revenues as part of its Form 1210 filing. | Specifically, the Bureau resolves in this Consolidated Order the two separate appeals of local rate orders issued by the local franchising authorities, Benton Charter Township and St. Joseph, Michigan ("the Cities"). Consolidated initially filed for its rate increase with the Cities on June 30, 1994. The Cities dismissed the filings without prejudice for not being timely filed. On August 5, 1994, Consolidated refiled with the Cities. Both St. Joseph's and Benton Charter's local rate"#40*0*0*$" orders were issued on August 30, 1994. The rate orders deny proposed rate increases for  Y-Consolidated's basic service tier rates. Yb-  iԍ Under the Cable Television Consumer Protection and Competition Act of 1992 ("1992   Cable Act") and the Commission's implementing regulations, local franchising authorities may  Y4-  regulate rates for basic cable service and associated equipment. See Cable Television Consumer   YProtection and Competition Act, Pub. L. No. 102385, 106 Stat. 1460 (1992); Communications Act, 623(b), 47 U.S.C. 543(b). 2.` ` In the Cities' reviews of Consolidated's Form 1210s, which Consolidated filed in order to obtain approval for its proposed rate increases, the Cities rejected Consolidated's proposed increases for its basic service tier, ruling that Consolidated had to take into account revenue earned from home shopping channels in calculating its proposed rate adjustments. Consolidated argues that the Commission has already ruled that home shopping channel revenues are irrelevant to proposed rate increases such as those sought here by  Yv-Consolidated.xvb Y -ԍ Consolidated cites Letter to QVC Network, Inc. from Patrick J. Donovan on behalf of Alexandra M. Wilson, Acting Chief, Cable Services Bureau (May 9, 1994) ("QVC Letter"); and Letter to The Home Shopping Network from Patrick J. Donovan on behalf of Alexandra M. Wilson, Acting Chief, Cable Services Bureau (May 9, 1994) ("HSN Letter").x Consolidated argues that the Cities should be assessed forfeitures in the amount of $50,000 each for their disregard of the Commission's ruling. In their oppositions  YH-dated October 14, 1994,H Y-ԍ The Cities filed a Motion to Accept Late Filing with their oppositions. Because Consolidated has not opposed the latefiled pleadings, we grant the motions. the Cities state that the appeals are not timely; that the Commission's ruling on home shopping channels cannot apply generally and is only binding on the parties to whom it was addressed; and that the First Amendment of the United States Constitution requires that the Commission have a compelling government interest before it may grant a preference to certain programmers based on content. The Cities state that if the Commission applies the home shopping rulings generally, the Cities should be granted a  Y -waiver. On November 3, 1994, Consolidated filed Replies to the Cities' oppositions.81 h  Y-ԍ On November 28, 1994, the Cities each filed a Reply to Consolidated's Reply and a Motion for Leave to File Reply. On December 7, 1994, Consolidated filed Oppositions to the motions filed by the Cities. Our rules do not provide for a reply to a reply. Under the Commission's rules, additional pleadings may be filed only if specifically requested or authorized by the Commission. 47 C.F.R. 1.45(c). We did not request an additional filing from the Cities, nor have they provided us with a compelling reason to authorize the filing of their additional pleading. Therefore, the Cities' Motion for Leave to File Reply is denied. We note, however, that the arguments contained in the Cities' Reply would not have changed the Commission's decision as set forth in this Order. 8    X- II.DISCUSSION "a0*(("Ԍ Y-ԙ3.` ` Under our rules, rate orders made by local franchising authorities may be  Y-appealed to the Commission.J Yb-ԍ See 47 C.F.R. 76.944.J In ruling on appeals of local rate orders, the Commission will  Yv-not conduct a de novo review, but instead will sustain the franchising authority's decision as  Ya-long as there is a reasonable basis for that decision.ma{ Y -ԍ See Report and Order and Further Notice of Proposed Rulemaking in MM Docket 92 Yx -266, 8 FCC Rcd 5631, 5731(1993) ("Rate Order"); Third Order on Reconsideration in MM  Yc -Docket 92266, FCC 9440, 9 FCC Rcd 4316, 4345 (1994) ("Third Recon. Order").m The Commission will reverse a franchising authority's decision only if it determines that the franchising authority acted  Y3-unreasonably in applying the Commission's rules in rendering its local rate order.33 Y-ԍ Id.3 If the Commission reverses a franchising authority's decision, it will not substitute its own decision but instead will remand the issue to the franchising authority with instructions to resolve the  Y -case consistent with the Commission's decision on appeal.3  YV-ԍ Id.3  Y -4.` ` FCC Form 1210 is the official form an operator uses to justify adjustments in the rates it computed on its FCC Form 1200, the form used to establish an operator's initial maximum permitted rates under our rules that went into effect May 15, 1994, or on a previously filed Form 1210. An operator may increase its rates to reflect increases in  Yd-external costs, increases in the number of channels, and inflation. dj  Y-ԍ At the time of Consolidated's filings, an operator could adjust its full reduction rates for inflation, but not its provisional rates. Since that time, however, the Commission has  YQ-ruled that an operator may also adjust its provisional rates for inflation. See Ninth Order on Reconsideration in MM Docket No. 92266, FCC 9543 (rel. Feb. 6, 1995). Among the categories of external costs with respect to which operators can make adjustments to their rates are programming costs. An operator may file to increase its basic rates on account of changes in external costs for the period from the end of the last quarter for which an adjustment was previously made through the end of the quarter that has most recently closed preceding the  Y-filing of the Form 1210.K   Yz$-ԍ 47 C.F.R.  76.922(d)(3)(iii).K An operator may file a Form 1210 up to quarterly, but must file within the quarter following a decrease in costs due to channel deletions and within a year" 0*(("  Y-following a decrease in other costs.  Yy-ԍ 47 C.F.R.  76.922(d)(3)(i) & (ii). Inflation may only be recovered for increases in costs that are not external costs as defined in our rules. 47 C.F.R.  76.922(d)(2), .922(d)(3)(iv). An operator must file for a rate increase within a year  Y-of its increase in costs in order to recover those costs in its rates.I K Y-ԍ 47 C.F.R.  76.922(d)(3)(i).I  X-   X-A.` ` Timeliness (#`  Y-5.` ` In their oppositions, the Cities state that Consolidated's appeals were not timely filed since Consolidated failed to appeal the Cities' initial dismissal of Consolidated's original Form 1210 filings. The Cities contend that Consolidated should have raised any issues related to those filings within 30 days of the dismissal. Consolidated filed its Form 1210s on June 30, 1994. The City of St. Joseph dismissed without prejudice Consolidated's Form 1210 on July 25, 1994 and Benton Charter Township did the same on July 28, 1994, based on the timeliness of the filings, and on Consolidated's failure to provide the home shopping channels' revenue data. Shortly after the dismissals, on August 5, 1994, Consolidated refiled with the Cities. By definition, "dismissal without prejudice" means that the dismissal affects no right or remedy of the parties, is not on the merits, and does not bar  Y -a subsequent suit on the same cause of action.  YT-ԍ See, e.g., Brunswick Corp. v. Chrysler Corp., 287 F. Supp. 776, 77778 (E.D. Wisc. 1968). Consequently, when the Cities issued their  Y-final orders on August 30, 1994, Consolidated was free to appeal any issue relating to those filings and to that order. We therefore reject the Cities' argument that Consolidated's appeals are untimely.  X4- B.` ` Home Shopping Channels Revenue Data  Y-6.` ` Consolidated challenges the Cities' request that it submit information on its  Y-Form 1210 regarding the revenue it receives from home shopping channels. In our Rate  Y-Order, we determined that any revenues an operator receives from a programmer or shares with a programmer must be offset against programming costs for purposes of calculating  Y-whether there has been an increase or decrease in programming costs.Z Y!-ԍ Rate Order, 8 FCC Rcd at 5789 n.602.Z The Commission  Y-codified this requirement in the Second Order on Reconsideration, Fourth Report and Order,  Y-and Fifth Notice of Proposed Rulemaking ("Second Reconsideration Order").&K  Y~%-ԍ Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of  Yg&-Proposed Rulemaking, MM Docket No. 92266, FCC 9438, 9 FCC Rcd 4119 (1994). See  YR'-47 C.F.R.  76.922(d)(3)(x) (1993). & In response to" 0*((|" inquiries, the Bureau has stated that the rules require only that payments from programmers  Y-to operators must be offset on a per channel basis.E Yb-ԍ QVC Letter; and HSN Letter.E In other words, revenue an operator receives from a particular channel is only used to offset programming costs of that channel. If revenue exceeds programming costs, no costs are entered for that channel, but the excess revenue cannot be used to offset programming costs from other channels. The Commission  Y-codified this revision as part of the Sixth Order on Reconsideration, Fifth Report and Order,  Yx-and Seventh Notice of Proposed Rulemaking ("Going Forward Order").ixy Y -ԍ Sixth Order on Reconsideration, Fifth Report and Order, and Seventh Notice of  Y -Proposed Rulemaking, MM Docket No. 92266, FCC 94286, 10 FCC Rcd 1226, 1252  Yx -(1994); 47 C.F.R.  76.922(d)(3)(x). While the Sixth Order on Reconsideration also required the operator to offset revenues received from programmers against its perchannel  YL -adjustment under the new going forward methodology, id., the Twelfth Order on  Y7-Reconsideration, MM Docket No. 92266, FCC 95343 (rel. Aug. 8, 1995) eliminated this additional requirement.  YL-7.` ` Since revenues are offset against programming costs on a perchannel basis, home shopping revenue is only relevant to calculate adjustments to the respective home shopping channel costs. Consolidated has stated that it does not pay for carriage of its home shopping channels, and that its increase in programming costs did not include any costs for  Y -its home shopping channels.>  YK-ԍ Petitions at 5, n.4.> For these reasons, and because the home shopping revenues cannot offset increases in programming costs from other channels, Consolidated is correct in stating that the information requested was "not relevant" to the consideration of the rate increase.  Y}-8.` ` The Cities argue that the Bureau lettersE}[  Y-ԍ See n.4, supra.E on which Consolidated relies cannot apply generally, and that the letters are only binding on the parties to whom they were  YO-intended. The letters at issue were a clarification of our rules./O  Y -ԍ QVC Letter at 2 ("Accordingly, we clarify that Section 76.922(d)(3)(x) of the Commission's rules, and the relevant portions of the instructions to FCC Form 1210, require only that payments from programmers to operators be offset on a channelbychannel basis.")/ Consolidated was entitled to rely on them as an interpretation of our rules in determining its rates. The Cities also contend that the First Amendment requires that if the Commission's rules make a contentbased distinction among programmers, the Commission must have a compelling reason in " 0*(("Ԍ Y-support thereof. Yy-ԍ See, e.g., Turner Broadcasting System, Inc. v. FCC, ___ U.S. ___; 114 S. Ct. 2445 (1994). We find this argument lacks merit. The Commission's rules treat all channels the same, i.e., the revenues derived from each channel are offset against the programming costs for that channel without regard to the content of such programming. Thus, contrary to the Cities' assertion, the letters did not create a content based policy. Lastly, the Cities state that if the Commission generally applies the position taken in the QVC and HSN Letters, they should be granted a waiver of the rule because Consolidated  Yv-carries an excessive number of home shopping channels. To grant such a waiver would  Y_-require us to distinguish programming content , which we decline to do.3_d Yt -ԍ Id.3 For all these reasons, we remand this case to the Cities, with instructions to review the Form 1210  Y1-Consolidated has provided in a manner consistent with this decision.1 Y-ԍ Consolidated also requests that the Cities be assessed forfeitures of $50,000 each for their insistence that Consolidated provide the home shopping channels' revenue data, even though Consolidated had provided the Cities with the QVC Letter and the HSN Letter. Our  Y-rules address when forfeitures are appropriate. 47 C.F.R.  1.80(a). We do not believe forfeitures are appropriate in the situation before us.  X - IV.XORDERING CLAUSES (#  Y -9.` ` Accordingly, IT IS ORDERED that the Appeals of Joppa Associates, L.P., d/b/a Consolidated Cablevision of the local rate orders issued by Benton County Township and the City of St. Joseph, Michigan, with respect to calculation of home shopping revenue  Yz-data, ARE REMANDED to the Cities for resolution in accordance with this Order.  YM- 10.` ` This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission's rules. 47 C.F.R. 0.321. ` `  hh,FEDERAL COMMUNICATIONS COMMISSION ` `  hh,Meredith J. Jones ` `  hh,Chief, Cable Services Bureau