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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 ) In the Matter of ) ) Suburban Cable TV, Inc. ) CUID No. PA1721 (Prospect Park) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: April 4, 1997 Released: April 9, 1997 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. Here we consider a complaint about the price Suburban Cable TV, Inc. ("Operator") was charging for its cable programming service tier ("CPST") in the community referenced above. Operator has chosen to attempt to justify its CPST rates through benchmark showings on FCC Form 1200, FCC Forms 1210 and FCC Forms 1240. 2. Under the Communications Act, the Federal Communications Commission ("Commission") is authorized to review the CPST rates of cable systems not subject to effective competition to ensure that rates charged are not unreasonable. If the Commission finds the rate to be unreasonable, it shall determine the correct rate and any refund liability. 3. To justify rates for the period beginning May 15, 1994 through a benchmark or cost of service showing, operators must use the FCC Form 1200 series. Cable operators may file an FCC Form 1210 to justify rate increases based on the addition and deletion of channels, changes in certain external costs and inflation. In addition, Operators must file a Form 1210 at least 30 days before new rates are scheduled to go into effect, where there is a pending complaint against the CPST rate. Operators may 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 change. Any incurred cost that is not projected may be accrued with interest and added to rates at a later time. If actual and projected costs are different during the rate year a "true-up" mechanism is available to correct estimated costs with actual cost changes. The "true-up" requires operators to decrease their rates or alternatively permits them to increase their rates to make an adjustment for over or under estimations of these cost changes. 4. A valid complaint was filed with the Commission on March 6, 1995 against Operator's February 10, 1995 CPST rate increase from $10.82 to $13.01, exclusive of franchise fees. 5. Upon review of Operator's FCC Form 1200 we find Operator's maximum permitted rate ("MPR") of $10.27 to be correct. Although we made minor adjustments to Operator's FCC Form 1210 for the period April 1, 1994 through December 31, 1994, we agree that the MPR of $11.97 is correct. 6. Upon review of Operator's FCC Form 1210 for the period January 1, 1995 through March 31, 1995, we made minor adjustments but agree that Operator's MPR of $13.49 is correct. Because Operator's actual rate of $13.01 is less than its MPR, we find Operator's CPST rate for the period February 10, 1995 through June 30, 1995 to be reasonable. 7. Upon review of Operator's FCC Form 1210 for the period April 1, 1995 through June 30, 1995, we find that Operator has correctly calculated its MPR of $13.78. Because Operator's actual rate of $13.01 is less than its MPR, we find Operator's CPST rate for the period July 1, 1995 through March 31, 1996 to be reasonable. 8. Further, we have reviewed the FCC Form 1240 filed by Operator for the projected period April 1, 1996 through March 31, 1997 and agree with Operator's MPR of $14.88. Because Operator's actual rate of $14.05 is less than its MPR, we find Operator's CPST rate for the period April 1, 1996 through March 31, 1997 to be reasonable. 9. We have also reviewed Operator's FCC Form 1240 for the projected period April 1, 1997 through March 31, 1998 and have made several adjustments. We have adjusted Line C1 and Worksheet 1 to account for the change in inflation factor. We also corrected Operator's calculation on Line F8. These calculations and other minor adjustments resulted in a revised MPR of $16.90 rather than Operator's $17.14. Because Operator's actual rate of $16.05 is less than its revised MPR, we find Operator's CPST rate for the period April 1, 1997 through March 31, 1998 to be reasonable. 10. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $13.01 charged by Operator in the community referenced above for the period February 10, 1995 through March 31, 1996, IS REASONABLE TO THE EXTENT INDICATED HEREIN. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $14.05 charged by Operator in the community referenced above for the period April 1, 1996 through March 31, 1997, IS REASONABLE TO THE EXTENT INDICATED HEREIN. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $16.05 charged by Operator in the community referenced above for the period beginning April 1, 1997 through March 31, 1998, IS REASONABLE TO THE EXTENT INDICATED HEREIN 13. 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 CPST rates charged by Operator in the community referenced above, IS DENIED. 14. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator take into account our FCC Form 1240 adjustments when calculating its maximum permitted rate and performing the true-up calculation on its next FCC Form 1240. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau