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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $//Jones Intercable, Inc., Western Springs, IL, MO&O, DA 95-2153//$ $/76.922 Rates for Cable Programming Service tiers/$ $/benchmark ca ble rates/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-2153 In the Matter of ) ) Jones Intercable, Inc. ) CUID No. IL0666 (Western Springs) ) Benchmark Filing to Support ) Cable Programming Service Price ) MEMORANDUM OPINION AND ORDER Adopted: October 12, 1995 Released: October 24, 1995 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. Here we consider a complaint about the price that the above-captioned operator ("Operator") was charging for its cable programming service ("CPS") tier in the community referenced 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 complaint in the franchise area which is the subject of this Order was served on Operator on February 26, 1994 and received by the Commission on February 28, 1994. Operator filed FCC Form 393 in response on May 24, 1994, and an amended Form 393 on August 14, 1995. 5. Operator asserts that its monthly CPS tier price of $9.74 (plus franchise fee) is justified by its benchmark filing because its price is equal to or lower than the maximum permitted charge of $10.78 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 adjustments to Operator's calculations in Form 393: a. Operator's Form 393, Part III, Step G, Line 34 entry does not represent its current monthly equipment revenue as of the initial date of regulation. Instead, it appears that Operator used the Monthly Equipment and Installation Cost figure for the entire system, of which the franchise listed in the caption is a part. According to our Instructions for Equipment and Installation Charges for Form 393, Operator must use an equipment and installation figure that corresponds to the franchise level. We therefore adjust operator's system figure that appears in Line 34 with the franchise figure for equipment and installation charges that Operator provided on Part II, Worksheet 3, Line 301 of its most recent amended Form 393 filing. In addition, we adjust Form 393, Part II, Worksheet 1, Line 104 to agree with the adjusted Line 34 figure. b. In its amended Form 393 filing, Operator incorrectly calculated the Inflation Adjustment Factor (Form 393, Part II, Worksheet 1, Line 127). Lines 122 and 125 of Form 393 require the operator to enter Gross National Product Price Index ("GNP- PI") data for the latest quarter for which data is available that ended before the date through which the Inflation Adjustment Factor is calculated. On its Form 393, Operator calculated the Inflation Adjustment Factor through September 1993. However, Operator completed Line 122 using GNP-PI data for the first quarter of 1993 (released May 28, 1993), when updated data was available at least through the second quarter of 1993 (released August 31, 1993). Additionally, Operator incorrectly entered on Line 125 that 6 months, rather than 9 months, had passed between the end of the third quarter of 1992 and the end of the most recent GNP-PI quarter. Operator's calculation of the Inflation Adjustment Factor is therefore incorrect. c. We must therefore recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available in accordance with the Form 393 Instructions. On July 29, 1994, the U.S. Department of Commerce released corrected inflation data including 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 1.028 as the Inflation Adjustment Factor through September 1993, the base date Operator used in justifying its rates. d. These adjustments result in a reduction of the Base Rate Per Channel (Form 393, Part II, Worksheet 1, Line 110) such that Line 110 is now less than Line 128E (Adjusted Benchmark Rate). As a result, in accordance with Form 393 instructions, Operator's Maximum Initial Rate Per Channel is calculated based upon Worksheet 1 rather than Worksheet 2. 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 $9.64 per month (plus franchise fee) for the period from February 28, 1994 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 complaint referenced herein against the cable programming service price charged by Operator in the franchise area referenced in the caption IS 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 franchise area referenced in the caption, 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 $9.64 (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