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X-  X-x A.` ` Line C6 of Form 1200 Number of Additional Outlets  X_-x7.` ` In computing its benchmark rate level in Module C, an operator is required to provide entries for the various benchmark variables. The benchmark formula is intended to derive a rate level which approximates the level a similarly situated operator subject to competition would charge. The benchmark rate level is determined by considering several variables, such as the number of subscribers, the number of channels, and the number of  X -additional outlets charged, all of which affect the benchmark rate level.m :  Xe -ԍxSee Second Recon. Order, 9 FCC Rcd at 41774178.m The benchmark formula's only function in the new system is to identify "lowpriced" systems subject to  X -transition relief which are not required to set their rates based on their full reduction rates.Q {:  X-ԍxSee 47 C.F.R.  76.922.Q  X -An operator with (i) a current (i.e., March 31, 1994) rate level below the benchmark rate level or (ii) a current rate level above the benchmark rate level but with a full reduction rate level  X{-below the benchmark, is a lowpriced system.@ {.:  XZ-ԍxId.@ The lowpriced system with a current rate level below the benchmark generally does not have to reduce its rate level, and the lowpriced system with a current rate level above the benchmark rate level but with a full reduction rate  X6-level below the benchmark is required to reduce its rate level only to the benchmark.@6:  X-ԍxId.@  X- x 8.` ` Included among the variables used in the benchmark formula is the number of additional outlets in fiscal year 1993, which is entered on Line C6. TCI provided an entry of 10,060 for additional outlets in its 1200 filing, which was disallowed by the County because  X-TCI did not charge subscribers for the additional outlets.R:  X -ԍxSee County Rate Order at 2.R The County recalculated TCI's benchmark by entering zero for the number of outlets on Line C6, which TCI argues results in a reduction in the operator's maximum permitted basic tier rate. TCI argues that there was a cost of providing additional outlets even though no charge was made, and that an operator such as itself that "bundled" its additional outlet costs into its other rates cannot charge as high a rate as an otherwise identical operator that separately itemized its additional outlets.  X"-x9.` ` Our instructions for Line C6 of Form 1200 ask the operator to provide the average monthly number of additional outlets for which there was a charge to subscribers in" G 0*((" fiscal year 1993, and to compute the average number of additional outlets over only those  X-months in the year for which there was a charge for additional outlets.:  Xb-ԍxInstructions for FCC Form 1200, Setting Maximum Initial Permitted Rates for Regulated Cable Services Pursuant to Rules Adopted February 22, 1994, at 17. A Benchmark Fact Sheet further explaining our instructions for calculating an operator's benchmark rate restates  X-this instruction.b:  X-ԍx"Enter the average monthly number of additional outlets charged to subscribers in your fiscal year 1993. Include all additional residential outlets for each subscriber, other than the primary outlet. This average should be computed over just those months for which there was  X -a charge for additional outlets." Fact Sheet, Benchmark Fact Sheet at 3 (April 29, 1994).  Neither our rules, nor our instructions for completing Form 1200, permit operators to include additional outlets for which no charge is assessed on Line C6 as a benchmark variable.  X_-x10.` ` We note that the revised benchmark formula is designed to approximate the rate level of a similarly situated operator facing competition. The Commission's rate survey upon which the benchmark formula was based requested data on additional outlets for which a  X -fee was charged. :  X-ԍxSee FCC Cable TV Rate Survey, Schedules 7 and 12, Line 14 (December 1992). The benchmark formula includes the rate survey data on charged additional outlets because we determined that this variable was statistically significant in  X -approximating the rate level of similarly situated operators facing competition.q :  X -ԍxSecond. Recon. Order, Appendix C, 9 FCC Rcd at 4278.q To ensure consistency in the application of the benchmark formula, we must disallow consideration of  X -additional outlets for which there was no charge.  6 :  X-ԍxOperators who are dissatisfied with the rates they are permitted to charge under the benchmark rules have the option to submit a cost of service showing using Form 1220 or  Xw-Form 1225. See 47 C.F.R.  76.922(b).  We find that the County's decision to disallow TCI's entry of additional outlets on Line C6 of Form 1200 was in accordance with the instruction to the Form 1200 and reasonable. Accordingly, we deny TCI's appeal on this  Xy-issue._Py:  X-ԍxSee TCI Cablevision of Oregon, Inc. (Mt. Hood Cable Regulatory Commission of Multnomah County and Portland, Oregon), DA 952269, at  811 (Cab. Serv. Bur., released  X!-November 14, 1995) ("Mt. Hood Appeal") (held that local franchising authority's decision to disallow entry of additional outlets for which there was no charge on Line C6 of Form 1200  X#-was reasonable); TCI Cablevision of Washington, Inc. (Aberdeen, Washington), DA 951495,  Xv$-at  812 (Cab. Serv. Bur., released July 10, 1995) ("Aberdeen Appeal") (same); TCI Cablevision of Washington, Inc. (Lacey and Olympia, Washington), DA 95631, at  710  XJ&-(Cab. Serv. Bur., released March 29, 1995) ("Lacey Appeal") (same). _ "b0*(("Ԍ X- x B.` ` Refund Liability  X-x11.` ` TCI argues that the County's rate order fails to account for any intervening upward rate adjustments to which TCI would be entitled under our rules. The relevant language that TCI challenges states: "The refund shall apply to charges in effect from the period beginning July 14, 1994 until TCI's rate reductions pursuant to this order become  Xv-effective."Hv:  X-ԍxCounty Rate Order at 2.H TCI asserts that, to properly calculate refund liability over an extended time  X_-period, it is essential that maximum permitted rates be updated._y:  X -ԍxTCI states that, during the period of review, its maximum permitted rates rose due to inflation and "certain external cost increases." Appeal at 4. Thus, TCI claims, the operator must be credited for increases to its maximum permitted rates, even if the operator has not yet requested and/or implemented specific rate adjustments. If such credit is denied, TCI argues, operators effectively will be encouraged to file and implement every Form 1210  X -adjustment "as quickly as possible."G :  X-ԍxId. at 56. G TCI also asserts that the reasoning that led the Commission to conclude that offsetting is required where an operator had priced some rate components too high and some rate components too low is applicable here. Finally, TCI argues that, if the Commission affirms the County's treatment of Form 1200, Line C6, TCI must, at a minimum, be allowed to calculate refunds by claiming credit for any intervening increases justified under an appropriate Form 1210.  Xb-x12.` ` The County asserts that TCI's reliance upon Commission decisions that considered the relationship between basic service rates and equipment charges is misplaced. In those decisions, the County notes, the Commission allowed cable operators to offset refund liability for basic service overcharges with undercharges for equipment and installation charges. The County asserts that, in this case, there are no offsetting credits for equipment and installation charges. The County further asserts that TCI is already charging at the maximum permitted level for all service and installation charges. The County states that TCI has not filed a Form 1210 with the County seeking to increase its maximum permitted rates. The County argues that while TCI is allowed to file a Form 1210, and the Commission's rules allow for prospective application for any adjustments which are justified, such adjustments cannot be made retroactively.  XN-x13.` ` Under our rules, a rate adjustment with respect to basic rates only becomes effective once it has been approved by the regulator or once the review period for such  X -approval has lapsed.G :  X%-ԍx47 C.F.R.  76.933.G An operator's per month refund liability, i.e., the difference between the amount actually charged and the permitted rate, continues at the same level until the operator reduces its actual rate or the operator, in accordance with our rules, obtains increases"w0*((Z" in its maximum permitted rate. The per month refund liability does not decrease just because  X-the operator might be able to propose an increase in its rates but did not do so.:  Xb-ԍx See TCI Cablevision of North Central Kentucky, 10 FCC Rcd 926 (1994). See also  XM-Third Recon. Order, 9 FCC Rcd at 4353. Operators, however, may not set programming service rates at higher than permitted maximum rates to recover lost equipment revenues when they voluntarily price equipment rates below their maximum permitted levels. To permit operators to do so would undermine Congress's  X-intention to create a competitive market of cable equipment providers.8xf:  X -ԍxUnited Cable Television of California, Inc., d/b/a TCI Cablevision of Davis (Davis,  X -California), DA 95784,  7 n.12 (Cab. Serv. Bur., released Apr. 12, 1995). See  Xx -Communications Act,  624A(c)(2)(C), 47 U.S.C.  544A(c)(2)(C); Implementation of Section 17 of the Cable Television Consumer Protection and Competition Act of 1992: Compatibility Between Cable Systems and Consumer Electronics Equipment, First Report and Order, 9 FCC Rcd 1981, 1982 (1994). 8  X_-x14.` ` TCI's reference to our offsetting cases, in which we have held that refund liability is computed by comparing the operator's aggregate revenues to revenues that would have been realized from maximum permitted rates, is misplaced. Those decisions hold that the franchising authority must offset any undercharges in rates against overcharges in other rates. This is unrelated to the situation TCI poses here, where subsequent cost increases have allegedly occurred which it claims reduce its refund liability. Our current rules do not authorize rate increases or recognize an increase in permitted rates until reviewed and  X -approved by the local franchising authority.G :  X-ԍx47 C.F.R.  76.933.G Accordingly, we find that the County's rate order with respect to calculation of TCI's refunds are reasonable, and therefore TCI's appeal  X-on this issue is denied.[W :  X-ԍxSee Mt. Hood Appeal at  2427 (held that offsets of potential rate increases cannot  X<be effective until authorized by the local authority); Lacey Appeal at   1114 (same);  Xn-Aberdeen Appeal at  1316 (same). [  Xb-x C.` ` Increasing Rates  X4-x15.` ` TCI argues that the County's rate order denies it the right to increase existing rates to maximum permitted levels and potentially subjects such rate increases to a "second  X-round of local review."?:  X$-ԍxAppeal at 67.? The challenged provision of the rate order states:  X-xThe County is authorized under FCC Rules to review and establish rates for basic (#(#X X-xservice and associated equipment and installation charges. This order does not (#(#X"0*(("ԑxauthorize TCI to increase any rates or charges under the jurisdiction of the County, xeven where the maximum permitted rate may exceed the actual rate charged by TCI. xPursuant to applicable federal law, TCI shall not increase any basic rates or associated xequipment and installation charges to any subscriber or group of subscribers without  X-xprior review and approval by the County.[:  X-ԍxCounty Rate Order at 3. We note that the challenged provision here is strikingly  X-similar to the provision at issue in the Mt. Hood Appeal. See Mt. Hood Appeal at  15. ] TCI asserts that this provision contravenes the Commission's previous decisions permitting operators to increase "actual" rates to "maximum permitted levels."  X1-x16.` ` In response, the County asserts (and TCI does not dispute) that TCI has no existing rates for basic services or charges for equipment and installation which are below  X -maximum permitted levels.M  d:  X-ԍxSee Opposition at 78.M The County states that the rate order does not prevent TCI from seeking rate increases under a Form 1210 filing, or as otherwise provided under by the  X -Commission's rules.;! :  X-ԍxId. ; In its Opposition, the County notes that no such filing has been made  X -by TCI.A" :  X9-ԍxId. at 8. A When and if such a prospective filing is made, the County states that it would of course allow TCI to charge the maximum permitted rate prospectively.  Xy-x17.` ` In reply, TCI asserts that the County misinterpreted its objections to the  Xb-challenged provision.<#b}:  X-ԍxReply at 7.< TCI states that it "simply objects to the suggestion that a subbenchmark rate (were it to exist) could not be increased without another round of local review, if at all. [TCI] is asking here only for the Commission to clarify that cable operators retain the right to increase any rate component determined through regulatory review to have  X-been set below the applicable benchmark level.":$. :  X-ԍxId.:  X-x18.` ` The challenged provision in the County's rate order appears to be simply a  X-savings clause, intended to preserve the County's regulatory authority.% :  XS$-ԍxSee Mt. Hood Appeal at  2831 (addressing the same issue, which the Commission dismissed as moot). We are satisfied with the County's statements in its Opposition that the challenged provision is not intended to prevent TCI from increasing its rates, nor does it require TCI to keep any existing rates below"}%0*(("  X-maximum permitted rates.O&:  Xy-ԍxSee Opposition at 2021.O Furthermore, because TCI has no existing rates below maximum permitted levels, and in light of the County's statements on this point, TCI's appeal of this issue presents no controversy. Accordingly, we will deny TCI's appeal on this issue.  X- III.xORDERING CLAUSES  Xv-x19.` ` Accordingly, IT IS ORDERED that TCI's appeal of the County's rate order,  X_- with respect to the issue of additional outlets, IS DENIED .  X1-x20.` ` IT IS FURTHER ORDERED that TCI's appeal of the County's rate order,  X -with respect to the refund liability issue, IS DENIED.  X -x21. ` ` IT IS FURTHER ORDERED that TCI's appeal of the County's rate order,  X -regarding the issue of increasing rates, IS D ENIED.  X -x22.` ` IT IS FURTHER ORDERED that TCI's request for a stay of the County's  X-rate order pending the resolution of this appeal is DISMISSED as moot.  Xb-x23.` ` 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. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau