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File how2ftp (.txt & .wp) is in directory /pub/Bureaus/Miscellaneous/Public_Notices/ ***************************************************************** ******** z$//Lafayette Cable TV Company, Lafayette, GA, MO&O, DA 96-227//$ $/76.922 Rates for Cable Programming Service tiers/$ $/benchmark cable rates/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 96-227 In the Matter of ) ) Lafayette Cable TV Company ) CUID No. GA0094 (LaFayette) ) Benchmark Filings to Support ) Cable Programming Service Prices ) MEMORANDUM OPINION AND ORDER Adopted: February 22, 1996 Released: March 20, 1996 By the Chief, Cable Services Bureau: 1. Here we consider a complaint about the price that the above captioned operator ("Operator") is charging for its cable programming service ("CPS") tier in the above subject community. Operator has chosen to attempt to justify its price through a benchmark showing on FCC Form 393. This Order addresses the reasonableness of Operator's price only through May 14, 1994. At a later date we will issue a separate order addressing the reasonableness of the price after that date. 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. The first valid CPS complaint in the subject community was completed and served on Operator and received by the Commission on January 28, 1994. Operator filed FCC Form 393 in response on the same date. On November 28, 1995, Operator filed an amended Form 393 in response to an FCC letter requesting additional information. 5. In its benchmark filing of November 28, 1995, Operator calculated a maximum permitted rate for the CPS tier of $11.85 per month. However, Operator's actual price for the CPS tier was $12.29 per month. Thus, Operator has failed to demonstrate that its price for the CPS tier was not unreasonable. Furthermore, upon review of Operator's FCC Form 393, we have found the following errors: a. Operator calculated the Inflation Adjustment Factor (Line 127, Worksheet 1, Part II) as of the end of October 1993. However, the figures Operator used are not consistent with data on which it should have relied in calculating the Inflation Adjustment Factor. Operator used the Gross National Product Price Index ("GNP-PI") data released by the U.S. Department of Commerce on December 1, 1993 to complete Lines 122 and 125, but used an outdated GNP-PI of 126.2 for the third quarter of 1992 in calculating Line 123. The GNP-PI figure for the fourth quarter of 1993, released on July 29, 1994, was 126.5. Operator's calculation of the Inflation Adjustment Factor is thus incorrect. b. We must therefore recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the date for which Operator filed. On July 29, 1994, the U.S. Department of Commerce released corrected inflation data, including a GNP-PI figure of 126.5 for the fourth quarter of 1993. Using this GNP-PI figure, we calculate an Inflation Adjustment Factor of 1.035 through December 1993, the base date Operator used in justifying its rates. 7. Upon review of the record herein, and having incorporated the adjustments discussed above, we conclude that Operator has failed to justify the rate it was charging during the period in question. Operator's showing justifies a maximum reasonable CPS tier price of $11.70 per month (plus franchise fee) for the period from January 28, 1994 through May 14, 1994. 8. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint referenced herein against the cable programming service price charged by Operator in the subject community IS GRANTED TO THE EXTENT INDICATED HEREIN. 9. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's Rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the subject community that portion of the amount paid for cable programming service which exceeded the maximum price of $11.70 per month (plus franchise fee), plus interest to the refund date, for the period from January 28, 1994 through May 14, 1994. 10. IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to CPS subscribers for the stated period, and shall within 30 days of the release of this Order file a report with the Chief, Cable Services Bureau, stating the cumulative refund amount so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. 11. IT IS FURTHER ORDERED, pursuant to Section 76.922(b)(4)(C) of the Commission's rules, 47 C.F.R.  76.922(b)(4)(C), that Operator shall, within 30 days of the release of this Order, revise its Form 1200 filings with respect to the subject community, for the period beginning May 15, 1994, to reduce the monthly charge per tier as of March 31, 1994 for Tier 2 (Line A6b) to equal the maximum price of $11.70 (plus franchise fee). 12. IT IS FURTHER ORDERED that Operator shall place into effect, within 30 days after its submission of the revised Form 1200 filing required above, a price that reflects the reduction in the CPS rate determined in this Order. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau