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File how2ftp (.txt & .wp) is in directory /pub/Bureaus/Miscellaneous/Public_Notices/ ***************************************************************** ******** $//Lake Cablevision, Inc., Bethlehem, GA, MO&O, DA 96-228//$ $/76.922 Rates for Cable Programming Service tiers/$ $/benchmark cable rates/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 96-228 In the Matter of ) ) Lake Cablevision, Inc. ) CUID No. GA0937 (Bethlehem) ) 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 26, 1994. Operator filed FCC Form 393 in response on May 16, 1994. 5. On February 23, 1994, Operator filed a motion to dismiss the complaint. In its motion, Operator requests that the Commission dismiss the complaint for a number of reasons. First, Operator asserts that the complainant incorrectly answered question number 9 on FCC Form 329 as it then existed because she listed in her complaint channels that were sold on the basic service tier as well as channels that were offered on the CPS tier. In addition, Operator urges the Commission to find the complaint deficient on the ground that the complainant incorrectly answered question number 8. Operator argues that the challenged rate as listed by the complainant includes basic rates and therefore does not indicate what rate the complainant finds unreasonable. Operator's assertions do not persuade us that the complaint is invalid or should be dismissed. In general, we will find valid any complaint that states a claim on which relief can be granted and provides adequate information to allow us to process the complaint, despite minor flaws or inaccuracies. We believe this approach best implements the mandate of the 1992 Cable Act. Because the complainant's response to question number 9 includes channels contained on the CPS tier and because the rates listed in answer number 8 indicate that the complainant received the CPS tier, we find it reasonable to conclude that the complainant objected to the CPS tier rate and that she believed that rate was unreasonable. We therefore find the complaint valid and deny Operator's motion to dismiss. 6. In its benchmark filing of May 16, 1994, Operator calculated a maximum permitted rate for the CPS tier of $16.43 per month. However, Operator's actual price for the CPS tier was $16.68 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's calculations for its rate regulated package (Form 393, Part II, Worksheet 2) reflect 28 satellite channels. However, our examination of Operator's channel line-up reveals only 27 satellite channels. We therefore adjust the number of satellite channels reflected in Worksheet 2 from 28 to 27, reducing the benchmark channel rate entered on Line 220 of Worksheet 2. b. 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 August 31, 1993 to complete Lines 122 and 125, but used an outdated GNP-PI of 121.8 for the third quarter of 1992 in calculating Line 123. The GNP-PI figure for the fourth quarter of 1993, released on March 29, 1994, was 126.9. Operator's calculation of the Inflation Adjustment Factor is thus incorrect. c. We must therefore recalculate the Inflation Adjustment Factor on the basis of the most accurate date currently available for the date for which Operator filed. On March 29, 1994, the U. S. Department of Commerce released corrected inflation data, including a GNP-PI figure of 126.9 for the fourth quarter of 1993. Using this GNP-PI figure, we calculate an Inflation Adjustment Factor of 1.045 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 $15.84 per month (plus franchise fee) for the period from January 26, 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 $15.84 per month (plus franchise fee), plus interest to the refund date, for the period from January 26, 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 $15.84 (plus franchise fee) and to adjust the number of satellite channels on its FCC Form 1200 (Line H3). 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