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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $//TKR Cable Company of Elizabeth, MO&O, DA95-2268//$ $/76.922 Rates for Cable Programming Service Tier/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-2268 In the Matter of ) ) TKR Cable Company of Elizabeth ) CUID No. NJ0117 (City of Elizabeth) ) Order Denying Jurisdiction ) MEMORANDUM OPINION AND ORDER Adopted: October 31, 1995 Released: November 13, 1995 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. Here we consider complaints about the prices TKR Cable Company of Elizabeth ("TKR") was charging for its cable programming service (CPS) tier in the city of Elizabeth, New Jersey (the "subject community"). Rather than attempting to justify its prices through a benchmark or cost of service showing, TKR responded to the complaints by stating that it has no CPS tier in this system. On March 28, 1994, TKR filed FCC Form 393, rate cards, and channel line-ups for the subject community. TKR filed these documents in support of its claim that a CPS tier subject to rate regulation did not exist as of September 1, 1993 and still does not exist in the subject community. 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 the 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 Cable Services Bureau has addressed the regulatory status of packages of channels offered on an a la carte basis in several orders resolving letters of inquiry ("LOIs") directed to cable operators. Of particular relevance to this case, the Cable Services Bureau has released orders resolving LOIs regarding Century Cable TV's ("Century") systems in Huntington, West Virginia; Morgantown, West Virginia; Muncie, Indiana; Owensboro, Kentucky; Yuma, Arizona; Brunswick, Georgia; and San Juan, Puerto Rico. Relying on the Commission's Going Forward Order, the Bureau's orders addressed the restructured service offerings implemented in these communities beginning September 1, 1993, in which Century eliminated its CPS tiers and offered instead only a basic service tier and a few a la carte channels. In each of these orders, the Bureau found that Century's restructured service offerings do not constitute a clear evasion of our rate rules. Specifically, the Bureau found that Century did not avoid rate regulation of most of its previous CPS channels because it moved those channels into a rate-regulated basic tier. With regard to the other channels, the orders permit Century to treat its a la carte packages as new product tiers that may be priced at market levels under the Going Forward Order. 5. Since the LOI orders found that the elimination of Century's CPS tiers did not constitute a clear evasion of rate regulation and those channels not placed on the basic service tier could be treated as a new product tier, there were no CPS tiers in those communities, as of September 1, 1993 that were subject to rate regulation pursuant to section 76.922 of our rules. Therefore, the Bureau subsequently dismissed all FCC Form 329 complaints filed against Century in each of those seven communities. 6. The rate cards and channel line-up cards submitted by TKR for the subject community indicate that TKR restructured its service offerings in the subject community prior to September 1, 1993 in essentially the same way that Century did for the seven areas mentioned above where LOI orders have been issued. TKR discontinued its CPS offerings and placed all of its channels into a single basic service tier, except for three channels which it offered on an a la carte basis. Two of these channels (TNT and MSG/CNBC) were previously offered on TKR's CPS tier; the third channel (TBS) was not available in this community until just prior to September 1, 1993. 7. We feel that we have sufficient information regarding TKR's restructured offerings in the subject community to conclude, in accord with the Going Forward Order, that they should be treated the same way that we treated Century's restructured offerings in the seven communities where we issued LOI orders. As in these latter communities, although the instant restructuring resulted in the elimination of Century's CPS tiers, the small number of channels that were offered in the a la carte packages did not constitute an evasion of our then existing rules. Therefore, consistent with the action taken in the LOI orders, we will allow TKR to treat its a la carte package in the subject community as a new product tier even though it would not qualify as a new product tier under the Going Forward Order because one of the conditions for a new product tier is that channels may not be removed from a basic service tier or a CPS tier. Thus, we need not rule on the FCC Form 329 complaints filed against TKR in the subject community because there was no CPS tier subject to rate regulation pursuant to Section 76.922 of our rules as of September 1, 1993. In addition, nothing in these complaints indicates that TKR's product tier violates any of the conditions for establishing that tier outlined in the Going Forward Order. 8. Accordingly, IT IS ORDERED that the a la carte package created by TKR in the subject community may be treated as a new product tier under our Going Forward Order. 9. IT IS FURTHER ORDERED that all FCC Form 329 complaints pending against the CPS rates of TKR Cable Company of Elizabeth in the subject community ARE DISMISSED. 10. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's Rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION JoAnn Lucanik Chief, Financial Analysis and Compliance Division Cable Services Bureau