WPC0i 2MBVRKZ3|j7jC:,Xj\  P6G;XP"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdHP4Si; LPT1; Rm. 907_1HPLAS4SI.PRSXj\  P6G;\LSXP2[EK< X-#Xj\  P6G;XP#3|j"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdTimes New RomanTimes New Roman BoldTimes New Roman Italic2 Z Kv< HP4Si; LPT1; Rm. 907_1HPLAS4SI.PRSXj\  P6G;\LSXP"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd4lN@Document 1Document 11` hp x (#X` hp x (#X` hp x (#` hp x (#Technical 5Technical 52` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 6Technical 63` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 2Technical 24 2 F5l@6$XA7l|C8$CTechnical 3Technical 35 Technical 4Technical 46` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 1Technical 17 Technical 7Technical 78` hp x (#X` hp x (# X` hp x (#` hp x (#2N9$>F:bH;J<LTechnical 8Technical 89` hp x (#X` hp x (# X` hp x (#` hp x (#toc 1toc 1:` hp x (#!(#B!(#B` hp x (#toc 2toc 2;` hp x (#` !(#B` !(#B` hp x (#toc 3toc 3<` hp x (#` !(# ` !(# ` hp x (#2U=N> Q?*S@vHUtoc 4toc 4=` hp x (# !(#  !(# ` hp x (#toc 5toc 5>` hp x (#h!(# h!(# ` hp x (#toc 6toc 6?` hp x (#!(#!(#` hp x (#toc 7toc 7@ 2h^AUBXC,ZDJ\toc 8toc 8A` hp x (#!(#!(#` hp x (#toc 9toc 9B` hp x (#!(#B!(#B` hp x (#index 1index 1C` hp x (#` !(# ` !(# ` hp x (#index 2index 2D` hp x (#` !(#B` !(#B` hp x (#2 bE^Fv`Gl.aHratoatoaE` hp x (#!(# !(# ` hp x (#captioncaptionF _Equation Caption_Equation CaptionG endnote referenceendnote referenceH 2K>bKdZf.i"i~'^#)0< XA#-ԍxSocial Contract Order, slip op. at  94.b By this Order we implement several terms of the Social Contract, clarify the procedures for prospective rate reductions and/or refunds of rates restructured pursuant to the Social Contract, and address a number of waiver related issues.  II. BACKGROUNDTP  X>&-x2. The Social Contract resolves 148 pending basic service tier and cable programming">&{0*0*0*%" service tier cost of service rate cases and 229 pending cable programming service tier"l${0*0*0*F#"  X-benchmark rate cases.]> Xy-ԍxId.  at  7; Social Contract at 2. ] Continental is required to invest at least $1.35 billion to rebuild and upgrade all of its domestic systems from 1995 through 2000 and is required to make inkind"l$.0*0*0*d#"  X-refunds to affected customers totalling approximately $9.5 million.n> Xy-ԍxId. at  15 and 33; Social Contract at 6 and 20.n By January 1, 1996, Continental shall create a lifeline basic service tier by reducing rates on the basic service tier by 15% to 20% and offset this reduction in a revenue neutral manner by adjusting the rates  X-on the cable programming service tier.a{> X-ԍxId. at  44; Social Contract at 9 13.a Local franchising authorities have the authority to review the initial restructured basic service tier rate that Continental establishes to assure that  X-the rate is in compliance with the Commission's rules and the terms of the Social Contract.F.> Xl -ԍxId. at  74.F The Social Contract also provides that Continental may migrate up to four existing services  X_-from its cable programming service tier to a Migrated Product Tier ("MPT").]_> X -ԍxId. at  62; Social Contract at 22.] Initially, Continental is prohibited from increasing the price of any migrated channel except as  X1-permitted by the Commission's rules for inflation and external cost increases.\1> Xv-ԍxId. at  9; Social Contract at 23.\ The Social Contract further provides that Continental may add an unlimited number of channels to a  X -MPT at $.20 per added channel plus license fees.: G > X-ԍxId.: After January 1, 1997, Continental may  X -convert any MPT into a New Product Tier as defined by the Commission in Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, MM Nos. 92266, 92215, Sixth Order On Reconsideration, Fifth Report and  X -Order, and Seventh Notice of Proposed Rulemaking ("Going Forward Order"), provided that the tier can be purchased separately without having to buy any other tier of service other than  X}-the basic service tier.a } > X(-ԍxId. at  9; Social Contract at 23 24.a Under the Social Contract, Continental may add new services as  Xf-permitted under the Commission's Going Forward Order to the cable programming service tier from 1995 to 1997, and from 1998 through 2000 Continental may conduct a second round of channel additions in accordance with the terms for channel additions permitted by the  X#-Going Forward Order.: # > X!-ԍxId.: x x3. The Social Contract provides for waiver of any Commission rule necessary to  X-effectuate the terms of the Social Contract.b `> X%-ԍxSocial Contract Order, slip op. at  93.b Continental has indicated specific provisions of  X-our rules that it believes falls within this general waiver provision.` > X(-ԍxAugust 16, 1995 Letter; August 30, 1995 Letter.` We address below a" 0*0*0*"  X-number of waiver related issues and clarify procedures necessary to implement the Social  X-Contract Order. x +uIII. DiscussionTP xA. Rate Form x 8i. Filing RequirementsTP  X -x4. As indicated above, the Social Contract provides for the creation of an MPT and requires Continental to, among other things, restructure its rates. There are no official FCC forms, however, that Continental can use to implement the rate restructuring required under the Social Contract. As a result, the Social Contract contains a provision that permits modifications to the Commission's existing forms necessary to effectuate the terms of the  X-Social Contract.F ,y& Xq-ԍxId. at  93.F  Xf-x5. On August 16, 1995, Continental submitted a proposed Social Contract Rate Form ("Rate Form") which is designed to establish the initial resetting of rates required under the  X8-Social Contract.s8y& X-ԍxSee Letter ("August 16, 1995 Letter") from Margaret A. Sofio, Vice President and Counsel and James G. White, Regulatory Counsel, Continental to JoAnn Lucanik, Chief, Financial Analysis and Compliance Division (August 16, 1995). Continental revised the form after it obtained informal guidance from Commission staff.s Continental states that the proposed Rate Form provides for a reduction in the basic service tier rate by 15% to 20% to create the lifeline basic service tier and offsets the reduction in basic tier revenues in a revenue neutral manner based on per subscriber rates on the cable programming service tier. Continental further states that the proposed Rate Form reflects the rates resulting from Continental's migration of channels to an MPT. According to Continental, the proposed Rate Form starts with the Form 1200 rate as of March 31, 1994, or the current rate as defined in the Social Contract and uses the general principles and mechanics of the Form 1210 to reflect channel changes and changes in external costs from March 31, 1994, to and including January 1, 1996. Continental further indicates that the proposed Rate Form allows recovery for inflation through June 30, 1995. Continental states that the proposed Rate Form is designed to reflect all changes in rates contemplated by the Social Contract by providing for a onetime change in rates no later than January 1, 1996, reflecting all factors affecting Continental's rates through that date. Continental states that"$M 0*((" this is a onetime only form, to be used only for establishing the restructured rate that results from implementation of this Social Contract. Thereafter, Continental will establish rates in accordance with the Commission's rules and regulations utilizing FCC approved forms.  X-x6. Continental seeks to file the Rate Form with the Commission and with all currently certified local franchising authorities to implement the initial restructuring of rates pursuant to the Social Contract. Additionally, Continental requests that we waive Sections 76.922(b) and 76.956 of the Commission's rules to permit it to file the proposed Rate Form with local franchising authorities in response to Continental being notified that the local franchising authority is certified to regulate the basic service tier or with the Commission in response to a complaint in a franchise area that was unregulated prior to the effective date of the Social  X -Contract.X y& X| -ԍ 47 C.F.R.  76.922(b), 76.956.@X We have examined Continental's proposed Rate Form for compliance with the terms of the Social Contract. In general, the proposed Rate Form uses the Commission's methodology for establishing rates on a going forward basis and provides further calculations for purposes of implementing the terms of the Social Contract. We believe that the proposed Rate Form contains sufficient information to determine whether Continental is restructuring its rates in accordance with the terms of the Social Contract. Additionally, we have received correspondence from a local franchising authority in support of using the proposed Rate  Xb-Form.abyy& X-ԍxThe Massachusetts Cable Television Commission has expressed support for the use of Continental's proposed Rate Form to bring about rates in compliance with the Social Contract. In its review of the proposed Rate Form, the Massachusetts Cable Television Commission stated that it found that the Rate Form was direct in presenting the information required under  X0-the terms of the Social Contract and that the instructions were clear and precise. See Letter from Michael Mael, Director of Financial Analysis, Massachusetts Cable Television Commission (September 28, 1995).  X4-x7. The Commission seeks to simplify the review process for reviewing basic service tier rates and we find that the proposed Rate Form greatly simplifies the review of restructured rates under the Social Contract. The proposed Rate Form combines the principles of FCC Forms 1200 and 1210 and the goals of the Social Contract. Accordingly, we will permit Continental to file the Rate Form to effectuate the initial restructured rate with the Commission and with local franchising authorities who are regulating the basic service tier. Further, we grant waiver of Sections 76.922(b) and 76.956 of our rules to permit Continental to file the Rate Form in response to it being notified that a local franchising authority is certified to regulate rates or with the Commission in response to a complaint in a franchise area that was unregulated prior to the effective date of the Social Contract. However, we will permit Continental to use this Rate Form for basic service tier rates only to the extent that the local franchising authority agrees to review this Rate From. The local franchising authority may continue to review Continental's rates pursuant to FCC Form 1200 and 1210, taking into"  0*((\" consideration the requirements set forth in the Social Contract. Any local franchise authority wishing to use the Rate Form may contact the Commission staff who will provide informal guidance regarding use of the form. x ii. Inflation Adjustments T  Xv-TPx8. To further implement application of the proposed Rate Form, Continental asks that we waive Section 76.922(d)(2) of the Commission's rules which permits an operator to adjust  XH-rates annually for inflation.PHy& X -ԍ 47 C.F.R.  76.922 (d)(2).hhP First, Continental seeks authorization to use the U.S. Department of Commerce's current estimate of the inflation rate of 2.96% for the period from June 30, 1994 to June 30, 1995 because there will not be sufficient time in some but not all cases to recalculate rates based on the final inflation figure expected to be published prior to restructuring. If Continental is permitted to use the estimated inflation rate, Continental proposes at a later date to true up its rates by the difference between the estimated inflation figure and the actual inflation rate. Continental also employed an inflation adjustment of 2.15% for the period from September 30, 1993 through June 30, 1994 in its restructuring  X-filings for transition systems.yy& X-ԍxSee Public Notice, Questions and Answers On Cable Television Rate Regulation  X-Question 2 (July 25, 1995). The Commission stated that transition systems are entitled to a 2.15% inflation amount. Continental maintains that it is entitled to the full 5.21% inflation amount if the Commission subsequently changes this inflation figure for transition systems.   Xb-x9. An annual inflation adjustment of 1.0296 for this past year, based on changes in the Gross National Product Price Index ("GNPPI), was recently published by the Bureau of Economic Analysis of the United States Department of Commerce. Based on this publication, the Commission announced that operators may adjust rates for this year's inflation by 2.96%  X-anytime between October 1, 1995 and August 31, 1996.y& X-ԍ See Public Notice, New Annual Inflation Adjustment Figure For Cable Operators Now  X-Available (October 2, 1995). Thus, Continental's request for a waiver of Section 76.922 (d)(2) is moot for determining inflation for the period June 30, 1994  X-to June 30, 1995. x %iii. External Costs TP  Xe-x 10. Continental asks that we grant a waiver of Sections 76.922 (d)(3)(i) and 76.922 (d)(3)(vii) to permit it to charge rates to recover external cost changes that occurred or will  X7-occur between March 31, 1994 and December 31, 1995.i7 y& Xo'-ԍx47 C.F.R.  76.922 (d)(3)(1), 76.922 (d)(3)(vii).i Continental maintains that it would"78 0*((" have adjusted its rates or planned to modify its rates based on these external cost changes during the period September 30, 1995 through December 30, 1995, but it wanted to refrain from doing so until it could implement the terms of the Social Contract. Without this waiver Continental would restructure rates on January 1, 1996 consistent with the terms of the Social Contract and then again on February 1, 1996 pursuant to our rules to recover these external costs. We believe that waiver of Sections 76.922 (d)(3)(i) and 76.922 (d)(3)(vii) to change the period in which Continental may recover these external costs is appropriate and in the public interest. The waiver enables Continental to accomplish its rate restructuring all at one time thereby avoiding subscriber disruptions and administrative burdens associated with multiple rate filings. x  X -x 11. Continental also asks that we waive Section 76.922(d)(3)(iii) of the Commission's rules to allow Continental systems the option of including in their restructured rates known programming cost increases in effect as of January 1, 1996 for all services being received by  X -subscribers on the date of rate restructuring.T y& X7-ԍ 47 C.F.R.  76.922(d)(3)(iii).@T According to Continental, this waiver will allow its systems to change its rates once upon restructuring in January, 1996 and these systems can avoid changing rates again after March 31, 1996, the first date it could pass through these programming cost increases under current rules. According to Continental, although its initial rate restructuring will be completed by January, 1996, not all of its systems will restructure rates in January, 1996. Therefore, Continental asks that its systems that will restructure rates before the January, 1996 deadline be allowed to take externals as of June 30, 1995 instead of recovering external costs through the most recently completed calendar quarter which ends on September 30, 1995, as required by Section 76.922(d)(3)(iii) of the  X-Commission's rules.Ryy& X-ԍx47 C.F.R.  76.922(d)(3)(iii).R Continental states that changes in external costs occurring in the third quarter of 1995 in those systems that will restructure rates before January, 1996 will be reflected in the systems' next Form 1210 filing. x  X-x 12. Waiver of this provision of the Commission's rules promotes a one time modification of rates on account of both the rate restructuring under the Social Contract and external cost changes. Furthermore, because Continental is basing programming costs on known and external cost change increases, subscribers are protected against paying excessive rates. As an additional protection for subscribers, we direct Continental to modify its rates if its actual programming costs are different from those projected. This "true up" should be made the same time as its next rate change plus interest. Thus, we believe that waiver of Section 76.922(d)(3)(iii) is appropriate and in the public interest.  X -x 13. Continental seeks waiver of Sections 76.922 (d)(3)(i), 76.922 (d)(3)(ii), and 76.922 (d)(3)(iii) to reflect any decreases in external costs that occurred and will occur over"!*0*(( "  X-the period March 31, 1994 through December 31, 1995.|y& Xy-ԍx47 C.F.R.  76.922 (d)(3)(i), 76.922 (d)(3)(ii), and 76.922 (d)(3)(iii).| We are aware that during the course of the negotiation of the Social Contract, Continental did not make any adjustment in rates to reflect either increases or decreases in external costs. Our rules, however, require operators to adjust rates annually to reflect decreases in external costs that have not been  X-previously accounted for in the system's rates.Pyy& X-ԍx47 C.F.R.  76.922(d)(3)(i).P We will require Continental to adjust its rates to reflect decreases in external costs for any cost decreases not previously accounted for at the time it restructures rates under the Social Contract. This will further accomplish our  X_-objective of a one time rate restructuring.7z_*y& X: -ԍ We note that our grant of the waiver requests for regulatory treatment of external costs and inflation is consistent with the treatment recently accorded cable operators by the  X -Commission in a decision released subsequent to the adoption of the Social Contract. In the Matter of Sections of the Cable Television Consumer Protection and Competition Act of 1992:  X-Rate Regulation, MM Docket No. 92266, Thirteenth Order On Reconsideration, FCC 95397 (released September 22, 1995).7 xB. Refunds  X -x 14. The Social Contract provides that within 30 days of its effective date Continental must submit to the Commission for its review and approval proposed inkind refunds from  X -which customers can choose.  l y& X- 1. 1. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)ٍxSocial Contract Order, slip op. at  33; Social Contract at 7.  Continental is required to initiate inkind refunds no later than the start of the first full month beginning 90 days after the Commission approves  X -Continental's inkind refund options.:  y& Xw-ԍxId.: On August 28, 1995, Continental submitted a list of  X-inkind refund offers for Commission review and approval. y& X-ԍxSee Letter from Margaret A. Sofio, Vice President and Counsel, Continental to Meredith J. Jones, Chief, Cable Services Bureau (August 28, 1995)("August 28, 1995 Letter"). The proposed inkind refund options are divided into the following three price categories: (1) $2.00; (2) $4.50 $5.00; and (3) $8.00 $9.50 $10.00. According to Continental, it used the following criteria as  XK-required by the Social Contract,rKny& Xj#-ԍxSocial Contract Order, slip op. at  33, 40, and 41.r to select the proposed inkind refund offers: x` `  1. the retail cost of the inkind refunds must equal or exceed the"!0*((G"Ԍ X-x` ` refund obligation;y& Xy-ԍxContinental represents that in all cases the retail cost of the inkind refund offering is higher than the refund obligation. x x` ` 2. no customer will be required to purchase any other service in order  X-x` ` to take advantage of the inkind refund offer;by& X-ԍxContinental states, for example, that in a fully addressable system, the installation of an additional outlet also includes a free month of additional outlet service and a converter, if needed, to receive service. x x` ` 3. at the end of the refund offer period, the service will end unless the x` `  customer is informed about the price and has affirmatively requested x` ` that the service be continued. x Continental states that each Continental system will select a minimum of three options applicable to its refund obligation including at least two options that are not a program guide.  X -x15. Continental's proposed list of inkind refund offers varies according to the amount of the refund owed. Depending on the price category, Continental proposes to offer, among other things, free payperview movies, free converter rentals and free program guides. Continental's proposal also attempts to safeguard the interests of basiconly subscribers for whom premium services may not be a meaningful choice (because they may not have a cable converter box) by including options other than free premium or payperviewservices. In addition, subscribers will not be required to make an additional purchase to redeem their inkind refund. Based on our review of the proposed inkind refund offerings, we believe that Continental has satisfied the criteria established in the Social Contract regarding inkind refunds. Accordingly, subject to the provision that at least two options be included that are not a program guide, we approve use of the inkind refund options submitted by Continental  X-and as set out in the attached Appendix A. y& X-ԍ Continental has noted that not all of the inkind refund options contained in Appendix A are available in all systems. Additionally, the prices in Appendix A vary from system to system and the price ranges reflect regional differences.  X-x16. The Social Contract specifies the franchise areas that are eligible for inkind  X-refunds.!h y& X#-ԍxSocial Contract Order, Appendix A, Exhibits 1 5. Additionally, the City of Manteca California (CUID No. CA0817) has been added to the list of franchise areas entitled to inkind refunds in the $4.50 price category. The list is not included here, but as noted in the Social Contract, each franchise area is entitled to inkind refunds in a specific price category. Appendix A sets forth the options available for each price category."| !0*(("ԌxC. Remedies x  X-x17. The Social Contract states that "in order to allow subscribers the full benefit of a lowcost lifeline basic rate, local franchising authorities will not be permitted to toll the  X-effective date of the restructured basic service tier rates."g"y& X-ԍxSocial Contract Order, slip op. at  44 n.75.g Continental has requested that we clarify the procedural mechanism that applies if the basic service tier rates and/or the cable  Xv-programming service tier rates are restructured incorrectly.M#v{y& X -ԍxAugust 30, 1995 letter at 7.M Continental suggests that in order to preserve the right to order rate reductions and/or refunds, a local franchising authority should issue a written accounting order to Continental by the date the restructuring becomes  X1-effective.@$1,y& X-ԍxId. at 8.@ Continental also suggests that any refunds ordered by local franchising authorities or the Commission commence no earlier than the date rates were restructured under the Social  X -Contract.:% y& X-ԍxId.: Furthermore, Continental suggests that refunds for overcharges should be based on  X -the difference between the corrected rates and the originally implemented restructured rates.:& y& X/-ԍxId.: Finally, Continental suggests that prospective reductions in the basic service tier rate or cable programming service tier rate should be limited to what the restructured rates should have  X -been had the restructuring been implemented correctly.:' E y& X-ԍxId.:  Xy-x18. The Social Contract sets forth who will review restructured rates. As the Commission indicates in the Social Contract, "we recognize . . . a certain level of uncertainty with respect to the jurisdictional responsibilities of the local franchising authorities. Therefore, we have negotiated a modification to the Social Contract to clarify that the jurisdictional division set forth in the 1992 Cable Act and implemented by our rules has been  X-retained."b( y& X -ԍxSocial Contract Order, slip op. at  74.b Local franchising authorities will review the basic service tier rate and the Commission will review the cable programming service tier rates that Continental  X-establishes.:) y& X4$-ԍxId.:  X-x19. Local franchising authorities should follow the same procedures in reviewing restructured rates to preserve their authority to order reductions and/or refunds as they would" ^)0*((" use to review other rates subject to certain modifications that we believe are appropriate to  X-implement the Commission's order approving the Social Contract.  These procedures incorporate the protections of the current rules and the new procedures recently adopted by  X-the Commission. In the Matter of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, MM Docket No. 92266, Thirteen Order on  X-Reconsideration, FCC 95347 (released September 22, 1995) ("Thirteenth Reconsideration  Xz-Order"). Specifically, as provided by our rules, local franchising authorities will have a 30day review period to evaluate the reasonableness of Continental's initial restructured basic  XN-service tier rate, after Continental provides notice of the rate restructuring.J*Ny& X -ԍx47 C.F.R.  76.933(a).J In the order approving the Social Contract, the Commission held that local franchising authorities will not  X -be permitted to toll the effective date of the restructured basic service tier rate.+ yy& XJ -ԍxSocial Contract Order, slip op. at  44, n.75. Suspension of the tolling requirement will provide subscribers the full benefit of a lowcost lifeline basic rate.  X -x20. In order to implement the Commission's order with a minimum of difficulty, if the local franchising authority has not reached a decision in the initial 30day review period, the local franchising authority need not issue an accounting order to preserve its right to require a refund after the 30day review period. Thus, a local franchising authority may order refunds with respect to the initial restructured rate for the lesser of the period from the  X-effective date of the restructured rate to the date of its rate order or the 12 month period preceding the date of its rate order. However, at any time before the local franchising authority issues a rate order, Continental may inquire as to whether the local franchising authority is continuing to review Continental's initial restructured rate. If Continental makes such an inquiry, the local franchising authority must respond to Continental within 15 days of receiving the inquiry. If the local franchising authority fails to respond within 15 days to Continental, the local franchising authority will lose its ability to issue refunds with respect to the initial restructured rate after the initial 30day review period. If the local franchising authority does respond, it need only indicate whether it is continuing to review Continental's filing. Such response will preserve its right to order a refund. x  X-x21. Finally, Continental seeks clarification that where a local franchise authority or the Commission orders a reduction in the basic service tier rate or cable programming services tier rate that originally become effective pursuant to the restructuring requirement and that affects the revenue neutral restructuring provisions of the Social Contract, Continental may  X&-increase the other tier rates in a revenueneutral manner to offset such reduction.:,&y& X#-ԍxId.: Additionally, Continental seeks to clarify that it will be liable for refunds only to basiconly subscribers in cases where Continental's initial restructured rates for the basic service tier" ,0*((<"  X-were reduced because Continental implemented incorrect rates.:-y& Xy-ԍxId.:  X-x22. Under the provisions of the Social Contract, the initial basic service tier rate and the cable programming services rate are linked. As part of the initial restructuring of rates, Continental is required to reduce the basic service tier rate by 15% to 20% to create the lifeline basic tier. The Social Contract provides that such reduction shall be offset by an adjustment to the cable programming service tier rate to create a revenue neutral rate restructuring. Because the initial rates for the basic service tier and the cable programming services tier are related, an error in setting the basic service tier or the cable programming service tier rates affects this rate relationship. Therefore, we clarify that Continental may correct the initial basic service tier rate or cable programming service tier rate, if Continental initially restructures rates incorrectly.  X -x23. We further clarify that if it is determined that the initial basic service rate has been implemented incorrectly, any refunds ordered are limited to basiconly subscribers. This clarification only applies to the initial restructured rate. Changes in the rates due to externals and inflation are subject to review under our existing procedures. Although the basic service tier rate would decrease in this situation, Continental would be permitted to make an upward adjustment to the cable programming service tier rate to maintain the revenue neutral requirements of the Social Contract. Subscribers receiving both the basic service tier and the cable programming services tier would experience a decrease in the basic service tier rate and an upward adjustment in the cable programming service tier rate, if the revenue neutral requirements of the Social Contract were violated. x xD. Pending Complaints  X-x24. The Social Contract delegates authority to the Cable Services Bureau to dismiss  X-all pending complaints covered by the Social Contract.F.{y& X-ԍxId. at  94.F Accordingly, we hereby resolve all pending cable programming service tier benchmark rate cases and basic service tier and cable programming service tier cost of service cases before the Commission and all basic service tier cost of services cases pending before local franchising authorities without a finding by the  X7-Commission of any wrongdoing by Continental./7.y& X"-ԍxWe note that no local franchising authorities with pending basic service tier cost of  X"-service filings have elected to opt out of the Social Contract. See Public Notice, Deadline For "Opt Out" Period For Continental Social Contract Passes: No Communities File To Opt  X$-Out Of Social Contract Benefits, CS9515 (released September 12, 1995). x xE. Billing Requirements " /0*((<"Ԍ X-x25. Continental asks that we waive the advance notice requirements of Sections 76.309(c)(3)(i)(B) and 76.964. Continental seeks to add new services before the restructuring date for purposes of providing a free preview channel until subscribers are charged for such  X-service as of the restructuring date.k0y& X4-ԍx47 C.F.R.  Sections 76.309(c)(3)(i)(B) and 76.964.k Continental states that it will not be able to provide 30 days' advance notice of a service change to all of the affected subscribers because of the short time until implementation and when the customers in Continental's systems would be notified during a billing cycle. For example, if Continental were to give subscribers notice of a service change as a billing insert in December, subscribers who are billed at the beginning of the month would receive 30 days advance notice of the change in service but subscribers who are billed later in the month would not receive 30 days advance notice of this change before the January restructuring deadline. We believe that waiver of the advance notice provisions furthers our objective of allowing Continental to implement a onetime restructuring of rates. However, will require that Continental provide notice to affected customers in the most recent bill prior to the actual implementation. DIV. Ordering Clauses TP  Xy-x26. Accordingly, IT IS ORDERED, that use of the proposed Rate Form is approved.  XK-x27. IT IS FURTHER ORDERED, that waiver of 47 C.F.R.  76.922(b), IS GRANTED to the extent indicated herein. x  X-x28. IT IS FURTHER ORDERED, that waiver of 47 C.F.R.  76.956, IS GRANTED to the extent indicated herein. x  X-x29. IT IS FURTHER ORDERED, that waiver of 47 C.F.R.  76.922(d)(3)(i,ii, iii and vii), IS GRANTED to the extent indicated herein.  X|-x30. IT IS FURTHER ORDERED, that approval of the inkind refund offerings submitted by Continental Cablevision to the Commission, IS GRANTED.  X7-x31. IT IS FURTHER ORDERED, that waiver of 47 C.F.R.  76.309(c)(3)(i)(B), IS GRANTED to the extent indicated herein. x  X-x32. IT IS FURTHER ORDERED, that waiver of 47 C.F.R.  76.964, IS GRANTED to the extent indicated herein.  X!-x 33. IT IS FURTHER ORDERED, that waiver of 47 C.F.R.  76.960, IS GRANTED to the extent indicated herein. "# y00*((e"" x  X-x!34. IT IS FURTHER ORDERED, that waiver of 47 C.F.R.  76.930, IS GRANTED to the extent indicated herein.  X-x"35. IT IS FURTHER ORDERED, that waiver of 47 C.F.R.  76.933, IS GRANTED to the extent indicated herein. x` `  X_-x#36. IT IS FURTHER ORDERED, that all pending complaints covered by the Social Contract for Continental Cablevision, Inc. ARE DISMISSED. x x` `  hhFEDERAL COMMUNICATIONS COMMISSION x x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau x` `  X- " 00*((u"  X-xyky& yO-y#X\  P6G;ɓP#Appendix A  yO-# Page 1 of 3#Xj\  P6G;yoXP#ѐX(#PՐ.APPENDIX A  Social Contract for Continental Cablevision InKind Refund Value: $2.00TP x  X_-xOPTION hh@hpp x x  X -x,` ` 1 PayPerView Movie@hpp x  X -x,` ` 1 Issue of Better Viewing Guidehpp  X -x,` ` 2 Months Introductory Subscription to the Cable Guide  xx 0(#(#Xx` `  X-x,` ` 2 Months Interactive Program Guide Where An Addressable Converter Is x` ` Already In The Home  XK-x,` ` 1 Month Free Converter Rental, If Picked Up And Returned By The Customer "00*((7"  X-ykymq yO-y#X\  P6G;ɓP#Appendix A  yO-# Page 2 of 3#Xj\  P6G;yoXP#ѐX(#P.APPENDIX A  Social Contract for Continental Cablevision  InKind Refund Value: $4.50. $5.00TP x  Xv-xOPTION hh@hpp x  X1-x,` ` Installations Of Additional Outlets And Free Month of A/O Service  X -x,` ` 2 Free PayPerView Movieshpp  X -x,` ` Installation And 1 Month Of An Incremental, Premium Service  X -x,` ` 2 Issues Of Better Viewing Guide  Xy-x,` ` 3 Months Introductory Subscription To The Cable Guide  XK-x,` ` 3 Months Of The Interactive Program Guide Where Addressable Converter Is x` ` Already In The Home  X-x,` ` VCR HookUphh@hpp  X-x,` ` Coupon Gift For Free Installationhpp x"00*&&"  X-ymyoq yO-y#X\  P6G;ɓP#Appendix A  yO-# Page 3 of 3#Xj\  P6G;yoXP#ѐX(#P.APPENDIX A  Social Contract for Continental Cablevision V InKind Refund Value: $8.00 $9.50 $10.00 TP  X-xOPTION hh@hpp x  XH-x,` ` Installation of Additional Outlet Free Month Of A/O Service and Converter If x` ` Needed to Receive Service x  X -x,` ` 3 Free PayPerView Movieshpp  X -x,` ` Installation and 1 Month Of An Incremental Premium Service  X -x,` ` 4 Issues Of Better Viewing Guidehpp  Xy-x,` ` 5 Or 6 Months Introductory Subscription to the Cable Guidexx 0(#(#Xx` `   XK-x,` ` 5 or 6 Months Of The Interactive Program Guide Where An Addressable x` ` Converter Is Already In The Home  X-x,` ` Free Converter Rental For:  X-x` ` A) 1 Month, If Delivered@ x` ` B) 3 Months, If Picked Up And Returned By the Customer  X-x,` ` VCR HookUphh@hpp  X|-x,` ` Coupon Gift For Free Installation x x x` `