******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) CUID Nos. MD0059 (Annapolis) ) TCI Cablevision of Annapolis ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ) ) ORDER Adopted: April 9, 1997 Released: April 11, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a complaint about the rates charged by the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator has attempted to justify its CPST rates through benchmark justifications on FCC Forms 393, 1200 and 1210. 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 a rate to be unreasonable, it shall determine the correct rate and any refund liability. 3. A valid complaint was filed with the Commission on December 6, 1993 against the CPST rate Operator was charging in the above referenced community. The filing of a complete and timely complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rates. The Operator has the burden of demonstrating that its CPST prices are reasonable. 4. Operators with complete and timely CPST complaints filed against them prior to May 15, 1994 must demonstrate that their CPST rates were in compliance with the Commission's initial rules from the time the complaint was filed through May 14, 1994, and that the CPST rates were in compliance with the revised rules from May 15, 1994 forward. Operators attempting to justify CPST rates for the period prior to May 15, 1994 through a benchmark showing must complete and file FCC Form 393. To justify rates for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200 series. Operators are permitted to make changes to their rates on a quarterly basis using FCC Form 1210. Operators may alternatively 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. 5. Upon review of Operator's FCC Form 393, we found that Operator charged in excess of its calculated maximum permitted rate ("MPR"). Operator's FCC Form 393 reflects a MPR of $10.73 for its CPST. Operator's actual CPST rate in effect was $11.29. Accordingly, in reviewing Operator's FCC Form 393, we recalculated the Inflation Adjustment Factor in Part II, Worksheet 1, Lines 122-127, on the basis of the most accurate data currently available for the date for which Operator filed. On Line 122 we adjusted the GNP-PI factor to 126.5 and on Line 124, we adjusted the time period to 15 months. These adjustments lowered the Inflation Adjustment Factor on Line 127 to 1.034 rather than Operator's 1.043. This adjustment resulted in a revised MPR of $10.59 versus Operator's MPR of $10.73. Thus, we find Operator's actual CPST rate of $11.29 for the period December 6, 1993 through May 14, 1994 to be unreasonable. 6. Operator justified a CPST MPR of $10.37 on its FCC Form 1200. While we revised Operator's FCC Form 1200 to reflect the corrected MPR from its FCC Form 393 filing, this had no effect on Operator's CPST MPR calculation on the FCC Form 1200. Nevertheless, we find that Operator's actual CPST charge for the period May 15, 1994 through March 31, 1995 was $11.29. Therefore, we find Operator's CPST charge for the period May 15, 1994 through March 31, 1995 to be unreasonable. 7. Upon review of Operator's FCC Form 1210 for the period April 1, 1994 through March 31, 1995, we have found no apparent errors in Operator's calculation of its MPR of $12.10. Thus, Operator has justified a MPR of $12.10 beginning April 1, 1995. 8. 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 $11.29, charged by Operator in the franchise area referenced above during the period December 6, 1993 through March 31, 1995, IS UNREASONABLE TO THE EXTENT INDICATED HEREIN. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator may charge a maximum permitted rate not to exceed $12.10 for the period beginning April 1, 1995 to the present. 10. 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 community referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $10.59 per month (plus franchise fees), plus interest to the date of the refund, for the period December 6, 1993 through May 14, 1994. 11. 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 community referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $10.37 per month (plus franchise fees), plus interest to the date of the refund, for the period May 15, 1994 through March 31, 1995. 12. 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 community referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $12.10 per month (plus franchise fees), plus interest to the date of the refund, for the period April 1, 1995 to the present. 13. IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to CPST subscribers for the stated periods, 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. 14. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the referenced complaint IS GRANTED TO THE EXTENT DISCUSSED HEREIN. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau