NOTICE ********************************************************* NOTICE ********************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file how2ftp. File how2ftp (.txt & .wp) is in directory /pub/Bureaus/Miscellaneous/Public_Notices/ ***************************************************************** ******** $//Maryland Cable Partners, Prince Georges County, Maryland, MO&O, DA 96-78//$ $/76.922 Rates for cable programming service tiers/$ $benchmark cable rates/$ Before the Federal Communications Commission Washington, D.C. DA 96-78 In the matter of ) ) Maryland Cable Partners, L.P. ) CUID Nos. MD0140 Hyattsville ) MD0142 Berwyn Heights ) MD0143 College Park ) MD0144 Cottage City ) MD0146 Glenarden ) MD0148 Mount Rainier ) MD0150 Riverdale ) MD0151 University Park ) MD0171 New Carrollton ) MD0172 Prince Georges (N) ) MD0173 Greenbelt ) MD0200 Bowie Benchmark Filing to Support ) MD0201 Laurel Cable Programming Service Prices) MD0220 Brentwood Memorandum Opinion and Order Adopted: January 26, 1996 Released: February 28, 1996 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: Introduction 1. Here we consider complaints about the prices Maryland Cable Partners, L.P. ("Operator") was charging for its cable programming service ("CPS") tiers in numerous communities around Maryland (the "subject communities"). Rather than attempting to justify its prices through a benchmark or cost of service showing, Operator responded to the complaints by stating that it has no CPS tier in those systems. Operator also submitted rate cards and channel line-ups in support of its claim that CPS tiers subject to rate regulation did not exist as of September l, 1993 and still do not exist in any of the subject communities. 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. In addition to complaining about Operator's rates for CPS, some of the complainants objected to Operator's rates for equipment used to receive the basic tier. This equipment is regulated under basic tier service, and thus is generally outside the Commission's jurisdiction. This includes all equipment in a subscriber's home that is used to receive the basic service tier, regardless of whether such equipment is also used to receive a CPS tier. When only charges for equipment that is used to receive the basic tier are being challenged, the complaint should properly be brought to the attention of the local franchising authority in the first instance, and not filed with this Commission. Background 5. 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 an order resolving a LOI regarding MultiVision Cable TV's ("MultiVision") system in Prince George's County, Maryland. In the LOI Order, the cable company restructured its service, effective September 1, 1993, to offer a 30 channel basic service tier and a 27 channel CPS tier plus four channels on an individual and package basis. The four channels consisted of HTS, TNT,WTBS and WWOR. WTBS and WWOR were moved from the Limited Service basic tier and HTS and TNT were moved from the Satellite CPS Tier. On October 1, 1993, MultiVision added one new channel, ESPN2, which was made available both individually and as part of the a la carte package. In the LOI Order, the Bureau found that Multivision's restructuring did not constitute a clear evasion of our rate rules. In that case, although it appeared that the restructuring may have had the effect of avoiding rate regulation since MultiVision had removed channels from otherwise rate regulated tiers to create a new package of channels, the Bureau could not say that it was clear that MultiVision's collective offering was not a permissible a la carte package. As a result, the Bureau said it would not be equitable to subject the operator to refund liability on account of the restructuring. The Bureau held that MultiVision could treat the package as a new product tier under the Commission's Sixth Order on Reconsideration, Fifth Report and Order, and Seventh Notice of Proposed Rulemaking, 10 FCC Rcd 1226 (1994) (Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation) ("Going Forward Order"). 6. The rate cards and channel line-up cards submitted by Operator indicate that Operator restructured its service offerings in each of the subject communities on September 1, 1993 in essentially the same way that MultiVision had done for its Prince Georges County system. Except for five channels which it offered on an a la carte basis, Operator discontinued its CPS offerings and placed all of its channels into a single basic service tier. In each community, four of the five a la carte channels had been previously offered on the basic and CPS tiers, and the fifth channel had not been previously available over Operator's system. Discussion 7. Operator's a la carte package is similar to the a la carte package which was the subject of our LOI Order. In the subject communities, Operator removed a small number of channels from regulated tiers (and added one new channel) to create an a la carte package of five channels. The remaining CPS channels were consolidated with the channels on the basic service tier. In the LOI Order, four channels were moved from regulated tiers to create an a la carte package and the remaining CPS channels were consolidated with those on the basic tier. There are no facts in the record of this case that materially distinguish Operator's offerings from those in the LOI Order. Accordingly, in terms of their regulatory status, Operator's package in this case should be treated similarly to the package at issue in the LOI Order. Accordingly, we find that Operator's a la carte package may be treated as a new product tier under the Commission's Going Forward Order. Thus, we need not rule on the FCC Form 329 complaints filed against Operator in the subject communities because as of September 1, 1993, there were no CPS tiers subject to rate regulation pursuant to Section 76.922 of our rules. In addition, nothing in these complaints indicates that Operator's new product tiers violate any of the conditions for establishing those tiers outlined in the Going Forward Order. Conclusion 8. Accordingly, IT IS ORDERED that the a la carte packages created by Operator in the communities listed in the attached Appendix may be treated as new product tiers under the Commission's Going Forward Order. 9. IT IS FURTHER ORDERED that all FCC Form 329 complaints pending against the CPS rates of Operator in each of the communities listed in the attached Appendix 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 Service Bureau APPENDIX September l992 September 1993 Pre-Regulation Post Regulation CUID Community Basic Tiers Basic Tiers A la Carte MD0140 Hyattsville 29 32 31 27 5 MD0142 Berwyn Heights 29 32 31 27 5 MD0143 College Park 29 32 31 27 5 MD0144 Cottage City 29 32 31 27 5 MD0146 Glenarden 29 32 31 27 5 MD0148 Mount Rainier 29 32 31 27 5 MD0150 Riverdale 29 32 31 27 5 MD0151 University Park 29 32 31 27 5 MD0171 New Carrollton 29 32 31 27 5 MD0172 Prince Georges 28 32 31 27 5 MD0173 Greenbelt 29 32 31 27 5 MD0200 Bowie 29 32 31 27 5 MD0201 Laurel 29 32 31 27 5 MD0220 Brentwood 29 32 31 27 5