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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** FOR FCC RECORD ONLY $// In the Matter of TCI Communications, Inc., Settlement, FCC95-442 //$ $/ 79.922 Rates for the basic service tier and cable programming services tier /$ $/ 76.942 Refunds /$ $/ 76.950 Complaints regarding cable programming service tiers /$ $/ 76.986 A la Carte offerings /$ FCC 95-442 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of) ) ) TCI Communications, Inc. ) ) Rate Complaints ) ORDER Adopted: October 27, 1995 Released: October 30, 1995 By the Commission: 1. Pursuant to 47 C.F.R.  1.1204(b)(7), the Cable Services Bureau staff met with TCI Communications, Inc. to discuss the resolution of issues relating to complaints regarding the rates charged for cable programming service offerings. The staff of the Cable Services Bureau has received from TCI the attached proposal to resolve the rate complaints. On initial review the Commission believes that the proposal is a reasonable approach to resolve these matters. The Commission directs the Cable Services Bureau to serve a copy of this Proposed Resolution on (i) all local franchising authorities in benchmark and cost-of-service franchises at issue here; and (ii) any party other than a local franchising authority that filed a valid complaint. Parties wishing to comment on the proposal should do so by filing with the Secretary within thirty days of the date of this Order. Because it would by unduly burdensome to require that each complainant be served with every comment, pursuant to our Rate Order we will not require the parties to serve their comments on all parties. However, all comments will be publicly available. 2. Accordingly, it is ORDERED that the staff shall serve the complainants with this proposed resolution and provide thirty days for comment. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary TERMS OF PROPOSED RESOLUTION I. Introduction 1. This Proposed Resolution finally resolves all cable programming services tier ("CPST") complaints pending as of September 15, 1995 against TCI Communications, Inc. and its subsidiaries as of the same date ("TCI"). II. Background 2. Complaints have been filed with the Federal Communications Commission ("Commission"), pursuant to 47 C.F.R.  76.950, concerning the CPST rates charged by TCI in the communities listed in Exhibit 1 and Exhibit 2. TCI filed benchmark rate justifications for CPST rates charged in the communities listed in Exhibit 1 and cost-of-service justifications for CPST rates charged in the communities listed in Exhibit 2. 3. The Commission's Cable Services Bureau ("Bureau"), under delegated authority, has reviewed all of TCI's pending CPST benchmark and cost-of-service rate justifications pursuant to the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992) ("1992 Cable Act") and the Commission's cable rate regulations. As a result of that review, the Bureau has determined that certain refunds are owed to TCI subscribers. 4. TCI proposes to resolve all of its CPST rate cases filed under FCC Forms 393, 1200, 1210, and 1220 that were pending as of September 15, 1995, under the terms set forth below. III. Definitions 5. As used herein, the following definitions will apply. When used throughout this document, these definitions are capitalized. (a) "Benchmark Franchises" means those cable franchises in which TCI filed benchmark rate justifications as of September 15, 1995, as listed in Exhibit 1. (b) "Billing Cycle" means the time period during which monthly bills are sent to subscribers, but in no event longer than 31 days. (c) "Cost-of-Service Franchises" means those cable franchises in which TCI filed cost-of-service rate justifications as of September 15, 1995, as listed in Exhibit 2. (d) "CPST" means "Cable Programming Services Tier," as defined in 47 C.F.R.  76.901. (e) "Commission Rules" means all Commission rules currently in effect as of September 15, 1995, as well as all subsequent clarifications, amendments, and additions thereto, including, but not limited to, changes initiated by the Commission or changes required by or made pursuant to changes in federal law. (f) "Current Rates" means the CPST rates in effect in TCI franchises as of September 15, 1995, or the CPST rate included in FCC Form 1200, 1210, or 1220 and filed with the Commission if such rate had not been implemented as of September 15, 1995. (g) "Effective Date" means the date on which the Commission issues the Resolution Order regarding this Proposed Resolution. (h) "Eligible Subscribers" means CPST subscribers of record in Benchmark Franchises as of the date bills are issued reflecting Refunds. (i) "Going-Forward Rules" means the Commission's rules adopted in the Sixth Order on Reconsideration, 10 FCC Rcd. 1226 (1994), including all subsequent clarifications and amendments thereto. (j) "Migrated Product Tier" or "MPT" means a tier consisting of up to four (4) services moved from regulated tiers and to which other services may be added, as described in paragraph 12. (k) "Refund" means a credit on a subscriber's bill. (l) "Resolution Order" means a final order issued by the Commission regarding the terms of this Proposed Resolution. IV. Terms 6. TCI accepts the jurisdiction of the Commission over it and the subject matter of these rate resolutions for purposes of the Resolution Order. 7. All of TCI's CPST rate cases filed under FCC Forms 393, 1200, 1210, and 1220 for the period through September 15, 1995, are finally resolved under the terms provided herein. 8. TCI agrees that the terms contained in this Proposed Resolution shall be incorporated by reference in the Resolution Order. Assuming the adoption of these terms in the Resolution Order, TCI and the Commission will each actively defend the Resolution Order against any appeal of, or other legal challenge to, the Resolution Order by any third party. TCI and the Commission will reasonably cooperate in any such defense of these terms. 9. Assuming the adoption of these terms in the Resolution Order, TCI agrees that any violation of the Resolution Order shall constitute a violation of a Commission order, entitling the Commission to exercise any rights and remedies attendant to the enforcement of a Commission order. 10. These terms are for purposes of resolving outstanding cable programming service tier complaints only and do not constitute an admission by TCI of any violation of, or failure to conform to, the 1992 Cable Act, Commission Rules, or any other applicable law, rule, or policy. 11. The Commission will not institute, on its own motion, any proceedings against TCI based upon the information obtained during consideration of the Proposed Resolution. In addition, in the absence of additional facts, any allegations and other circumstances involved in consideration of this Proposed Resolution will not be used by any party against TCI with respect to any future proceeding. 12. In consideration for the resolution of all of TCI's CPST rate cases pending as of September 15, 1995, TCI hereby agrees to the following terms, conditions, and procedures which will facilitate a fair and expeditious resolution of those matters in a manner that serves the public interest: (a) In settlement of all of TCI's CPST rate cases in Benchmark Franchises, TCI will issue a $1.90 Refund to Eligible Subscribers. This Refund includes applicable interest through March 31, 1996. Refunds will be reflected as a one- time credit on subscriber bills. (b) TCI will issue Refunds to Eligible Subscribers during the later of: (1) the January 1996 or February 1996 Billing Cycle; or (2) the first monthly Billing Cycle beginning 60 days after the Effective Date. If Refunds are not included in a Billing Cycle beginning prior to March 1, 1996, TCI will adjust the Refunds to reflect additional interest for the period from March 31, 1996, to the date on which the Billing Cycle that includes the Refunds ends. (c) The Resolution Order issued by the Commission will find that Current Rates in TCI's Benchmark Franchises and Cost-of-Service Franchises, as adjusted for inflation and changes in external costs as of September 15, 1995, are deemed not unreasonable under the 1992 Cable Act and Commission Rules. TCI may adjust CPST rates in such franchises at any time after the Effective Date without prior Commission approval, subject to the terms of this Proposed Resolution. (d) TCI will set its CPST rates in Benchmark Franchises at the Current Rate and may adjust such rates for unrecovered inflation and external costs pursuant to Commission Rules. (e) After its initial review of TCI's cost-of-service filings in Dallas, TX (CUID TX0762); Washington, DC (CUID DC0002); and Chicago, IL (CUIDs IL1104 and IL1105), the Commission made an additional data request for TCI to recalculate its FCC Form 1220 rates in such franchises based on assumptions specified by the Commission. The Commission fully reviewed these recalculated rates and found no errors in TCI's calculation of its maximum permitted CPST rate in such franchises. Therefore, such recalculated CPST rates are not unreasonable. (f) The Commission reviewed TCI's FCC Form 1220 and supporting information for Mount Prospect, IL (CUIDs IL0554-0563; IL0840-0841; and IL1089). TCI's Current Rate in this system is supported by this showing. Such rate may be adjusted for inflation and external costs, except that recovery for inflation for the period from July 1, 1994 through June 30, 1995, shall be limited to one half the actual inflation for this period. (g) Orders issued by the Bureau prior hereto raise certain questions as to whether TCI properly unbundled its equipment and installation and service rates in the FCC Form 393 and FCC Form 1205 process. In support of the Proposed Resolution, TCI provided the Bureau with additional written information demonstrating how TCI implemented the Commission's unbundling rules in its franchises. Had the Bureau had this information before it at the time it reviewed TCI's CPST rates, the Bureau would not have raised questions regarding TCI's unbundling methodology. (h) TCI will not file any additional FCC Form 1220 cost-of-service rate justifications in any Benchmark Franchise or Cost-of-Service Franchise prior to May 15, 1996. TCI will not file any additional FCC Form 1220 cost-of-service rate justifications in the Mount Prospect, IL system prior to May 15, 1997. Notwithstanding the foregoing, TCI shall have the right to use other mechanisms permitted by law or regulation to recover its costs. Such mechanisms may include, but are not limited to, abbreviated cost-of-service filings covering upgrades or incentive upgrades. (i) As of the Effective Date, TCI may, at its discretion, move a maximum of any four (4) regulated services to a single MPT on each of its systems. TCI may not require the subscription to any other tier, other than the basic service tier, as a condition for subscription to the MPT and may not require subscription to the MPT as a condition for subscription to any other tier. The retiering of these services is permitted under 47 C.F.R.  76.981(b), does not constitute a negative option under the 1992 Cable Act, and, when the MPT is offered, TCI will not be required to re-market such MPT to existing subscribers who previously received the services which were migrated. These actions can be taken without regard to any state or local law which may be inconsistent with the terms of this subparagraph. (j) TCI will set the initial rate for an MPT at the same level, on a per-channel basis, as is set for the applicable franchise's regulated tiers. TCI may add any number of new services to its MPT and may increase the price for the MPT up to $0.20 plus the amount of the program license fee for each new service added. These new services shall not be considered new services added for purposes of the limit on service additions and/or rate increases pursuant to the Going-Forward Rules. TCI may also increase the price of an MPT for inflation and external costs consistent with Commission Rules governing CPSTs. (k) On or after May 15, 1997, TCI may reclassify each MPT as a "New Product Tier" ("NPT"), as defined in 47 C.F.R.  76.987, including subsequent clarifications or amendments thereto. These NPTs will be treated as all other NPTs under Commission Rules. This reclassification is permitted under 47 C.F.R.  76.981(b), does not constitute a negative option under the 1992 Cable Act, and does not require TCI to re-market the reclassified NPT to existing subscribers of the MPT. Nothing in this Proposed Resolution shall be construed to prevent TCI from creating other NPTs and/or offering a la carte channels or any other permissible package of services pursuant to Commission Rules or Commission order(s). These actions can be taken without regard to any state or local law which may be inconsistent with the terms of this subparagraph. (l) MPT adjustments which TCI has implemented under this Proposed Resolution will continue to apply to cable systems divested by TCI through a system sale or trade, including the right to convert such MPT to an unregulated NPT as of May 15, 1997. (m) As of the Effective Date, any Bureau orders which concern TCI's CPST rates charged in the franchises listed in Exhibits 1 and 2 are vacated. The Resolution Order supersedes any such Bureau orders. (n) As of the Effective Date, TCI will withdraw the Applications for Review and the Petitions for Stay of any Bureau orders relating to CPST cases filed with the Commission for the franchises listed in Exhibits 1 and 2. (o) A copy of this Proposed Resolution shall be provided to: (1) all LFAs in Benchmark Franchises and Cost-of-Service Franchises; and (2) each party that filed a valid complaint on FCC Form 329, pursuant to 47 C.F.R.  76.950, for their comment. (p) Except as provided in subparagraph (q) hereof, these terms may not be terminated or modified without the mutual written agreement of TCI and the Commission. The Commission's consent to any such modification or termination shall be demonstrated by an order by the Bureau or, at the Commission's option, by the Commission itself. (q) Notwithstanding the terms hereof, TCI may avail itself of any applicable modifications of any law or regulation governing the CPST rates charged in any TCI franchises listed in Exhibits 1 and 2, including the adoption by the Commission of any regulation governing rates as applied to the cable industry generally. If TCI exercises this election, the terms contained herein shall be superseded upon the effective date of such law or regulation, except that: (1) TCI will not file any additional FCC Form 1220 cost-of-service rate justifications in the Mount Prospect, IL system prior to May 15, 1997; and (2) TCI shall provide Refunds to Eligible Subscribers pursuant to the terms of this Proposed Resolution. (r) Nothing herein shall restrict the ability of any TCI system to adjust its rates in the event such rates are not regulated for any reason, including changes to the 1992 Cable Act or Commission Rules. 13. The Resolution Order shall affirmatively state that any and all waivers of Commission Rules, and any modifications to Commission forms, necessary to effectuate these terms are deemed to be granted. The Commission will not assert in any proceeding that TCI's compliance with the terms of the Proposed Resolution violates any Commission rule or order, and, in any proceeding before the Commission brought by a third party, a showing by TCI that it has complied with these terms shall constitute a defense to any claim that TCI's actions in meeting the terms constitute a violation of any applicable Commission rule or order. 14. Assuming the adoption of these terms, these terms shall become effective when the Commission issues the Resolution Order. 15. If any provision, clause, or part of this Proposed Resolution is invalidated, the remainder of this Proposed Resolution shall not be affected thereby and shall remain in effect; provided, however, that if such invalidation is material to this Proposed Resolution, TCI and the Commission shall attempt in good faith to reconstitute the Proposed Resolution in a form that is, to the maximum extent possible, consistent with the original intent of the Proposed Resolution.