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Eastern Iowaj)CUID No. IA0109 (City of Burlington) j)  X-Complaints Regardingj) Cable Programming Services Tierj) Rate Increasesj)  Xh -E ORDER ă  X: - Adopted: January 24, 1997 VppReleased: January 29, 1997  X# - By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau:  X-   1. 1. 1. a.(1)(a) i) a) I. 1. 1. a.(1)(a) i) a)1.` ` In this Order we consider complaints regarding the rate increases of TCI of Eastern   Iowa ("TCI") for its cable programming services tier ("CPST") in the City of Burlington, Iowa,   CUID No. IA0109. TCI increased its CPST rate on April 1, 1995 in the amount of $2.64, and   {again on June 1, 1996 in the amount of $1.74. TCI has attempted to justify its CPST rates   zthrough benchmark showings on FCC Forms 1200, 1210, and 1240. The first valid complaint   received by the Commission for this community is the complaint regarding TCI's April 1, 1995  XT-  CPST rate increase.=ZT9$ yO- xԍ The Commission received the first valid complaint on May 17, 1995, however this complaint was not part of  {O- xthe TCI settlement negotiations.  See In the Matter of TCI Communications, Inc., FCC 96187 (released April 26, 1996).= This Order addresses the reasonableness of both increases. We conclude  X=-  that the April 1, 1995 rate increase is unreasonable, but that any refund liability is de minimis,  X(-and that the June 1, 1996 rate increase is not unreasonable.  X-  R2.` ` Under the Communications Act,9$ {O-ԍ Communications Act, Section 623(c), as amended, 47 U.S.C. Section 543(c)(3) (1996). the Federal Communications Commission   ("Commission") is authorized to review the CPST rates of cable systems not subject to effective  X-  competition to ensure that rates charged are not unreasonable. If the Commission finds the rate  X-  to be unreasonable, it shall determine the correct rate and any refund liability.S|9$ {O"-ԍ  See 47 C.F.R. Section 76.957.S The  X-  Telecommunications Act of 1996U9$ yO]%-ԍ Pub. L. No. 104104, 110 Stat. 56 (1996). U ("1996 Act") and our rules implementing the new legislation,9$ {O&-  ԍ See Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 11 FCC Rcd 5937  {O'-(1996) ("Interim Rules").   require that complaints against the CPST rates be filed with the Commission by a local" ,))ZZ"   Lfranchising authority ("LFA") that has received subscriber complaints. An LFA may not file a   CPST rate complaint unless, within 90 days after such increase becomes effective, it receives  X-more than one subscriber complaint.; {OK-ԍ See Communications Act, Section 623(c), as amended, 47 U.S.C. Section 543(c)(3) (1996).  X-  `3.` ` To justify rates for the period beginning May 15, 1994 through a benchmark or  X-  Lcost of service showing, operators must use the FCC Form 1200 series.Z; {O-ԍ 47 C.F.R. Section 76.922(b)(6); see also Second Order on Reconsideration, 9 FCC Rcd at 4189 n. 195. Operators may justify   rate increases based on the addition and deletion of channels, changes in certain external costs,  X_-  and inflation, by filing FCC Form 1210.F_; yO -ԍ 47 C.F.R. Section 76.922(d).F FCC Form 1210 must be filed at least 30 days before  XH-  jnew rates are scheduled to go into effect where the Commission has found the CPST rate to be   unreasonable less than one year prior to the filing, or where there is a pending complaint against  X -  [the CPST rate.  |; {OG-ԍ 47 C.F.R. Section 76.960; see also Second Order on Reconsideration, 9 FCC Rcd at 4190. Operators may also justify adjustments to their rates on an annual basis using   FCC Form 1240 to reflect reasonably certain and quantifiable changes in external costs, inflation,   and the number of regulated channels that are projected for the twelve months following the rate  X -  xchange.V \ ; {O-  ԍ See In the Matter of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate  {O^-  Regulation, MM Docket No. 92266, Thirteenth Order on Reconsideration ("Thirteenth Reconsideration Order"), 11 FCC Rcd 388, 391 (1996).V Any incurred cost that is not projected may be accrued with interest and added to rates  X -  at a later time.; 2 ; {O-ԍ Id. at 392.; If actual and projected costs are different during the rate year a "trueup"  X -  mechanism is available to correct estimated costs with actual cost changes.5 ; {O-ԍ Id.5 The "trueup"   jrequires operators to decrease their rates or alternatively permits them to increase their rates to  Xy-make an adjustment for over or under estimations of these cost changes.< yV ; {O-  -ԍ Id. The Commission granted TCI a waiver to allow TCI, in its initial filing of FCC Form 1240, to include   cost adjustments over the period of time between the last date for which actual cost data is available and the effective   ,date of TCI's new rates. The cost adjustments included for this period are subject to a trueup at the same time that  {O -  the required trueup is performed on TCI's initial Form 1240 Projected Period Rates. See In the Matter of Annual   Rate Adjustment System for Cable Services Rates Request for Waiver of Requirements Contained in the Thirteenth  {Ol"-Order on Reconsideration, DA 96220, released February 22, 1996.<  XK-  4.` ` On May 17, 1995 a complaint was filed against TCI's CPST rate increase of   $14.36. TCI filed FCC Forms 1200 and 1210 in response to this complaint. The most recent  X-  1210 was filed for the period January 1, 1995 to June 30, 1995. TCI implemented its rate " ,N(N(ZZe"  X-  increase April 1, 1995, when it could not have properly done so until July 1, 1995.Q; {Oy-ԍ See 47 C.F.R. Section 76.922 (d).Q TCI's FCC   Form 1210 filing for the period from January 1, 1995 to June 30, 1995 reflects a maximum   permitted CPST rate of $14.41. However, as evidenced by a previous FCC Form 1210 submitted  X-  Nfor the period October 1, 1994 to December 31, 1994, TCI was only entitled to a maximum   permitted rate of $14.20 as of the effective date of the April 1, 1995 rate increase. At the time   !of the filing of the May 17, 1995 complaint, TCI's actual CPST rate was $14.36. This has   -resulted in an overcharge of $0.16 per month per subscriber. Thus, TCI has failed to demonstrate   -that the rate for its CPST was not unreasonable.However, we determine that the total overcharge  XH-per subscriber is de minimis. Therefore, it would not serve the public interest to order a refund.  X -  5.` ` On November 29, 1996, the City of Burlington, Iowa, the LFA in this instance,  X -  =filed a complaint against TCI's June 1, 1996 CPST rate increase. Z; {O-  Kԍ  See Letter dated November 20, 1996 from W.G. Lawley, Chair of the Burlington Cable Commission to the Federal Communications Commission, transmitting FCC Form 329 on behalf of the City of Burlington. As required by our rules, the   City included with its complaint a copy of the rate justification that TCI provided to the City.   KUpon review of the record before us we find that TCI has provided sufficient evidence to support its June 1, 1996 rate increase of $1.74.  X-  6.` ` Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's   ?rules, 47 C.F.R.  0.321, that TCI's April 1, 1995 CPST rate increase of $2.64 in the City of Burlington, Iowa, CUID No. IA0190, IS UNREASONABLE.  X6-  7.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules,   47 C.F.R.  0.321, that TCI's June 1, 1996 CPST rate increase of $1.74 in the City of Burlington, Iowa, CUID No. IA0190, IS NOT UNREASONABLE.  X-  8.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules,   z47 C.F.R.  0.321, that the complaint against the April 1, 1995 CPST rate increase charged by   TCI in the City of Burlington, Iowa, CUID No. IA0190 IS GRANTED TO THE EXTENT INDICATED HEREIN.   Xg-  9.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules,   \47 C.F.R.  0.321, that the complaint against the June 1, 1996 CPST rate increase charged by TCI in the City of Burlington, Iowa, CUID No. IA0190 IS DENIED. ` `  hh,VFEDERAL COMMUNICATIONS COMMISSION ` `  hh,VElizabeth W. Beaty ` `  hh,VChief, Financial Analysis and Compliance Division ` `  hh,VCable Services Bureau