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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 ) ) TCI Cablevision of Georgia, Inc. ) CUID No. GA0035 ) (City of Moultrie) ) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increases ) ORDER Adopted: April 22, 1997 Released: April 29, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a complaint regarding the rates charged by the above referenced operator ("Operator") for its cable programming services tier ("CPST") in the above- referenced community. Operator has attempted to justify its CPST rates through benchmark showings on FCC Forms 1200, 1210, and 1240. This Order addresses the reasonableness of Operator's CPST rates and we conclude that Operator's CPST rates beginning February 7, 1995, the date of the first valid complaint, are unreasonable. 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. Operators may justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation, by filing FCC Form 1210. FCC Form 1210 must be filed at least 30 days before new 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 the CPST rate. 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 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. Upon review of Operator's FCC Forms 1200, 1210, and 1240, we find that Operator has incorrectly calculated its maximum permitted rates beginning July 14, 1994. An FCC Form 1200 was filed with the Commission on September 6, 1996 to justify CPST rates in effect as of July 14, 1994. In this form, Operator calculated a maximum permitted rate of $10.00. Operator has reported 10 non-broadcast channels on its basic service tier ("BST"), however, the channel line-up card dated March 31, 1994 reflects 9 non-broadcast channels. We have therefore adjusted Module C, Line C2, to reflect 9 channels on the basic service tier. This adjustment decreases Operator's FCC Form 1200 maximum permitted rate to $9.92. 5. Operator also filed two FCC Forms 1210 to justify its rates. The first attempts to justify Operator's CPST rates effective July 1, 1994. We adjusted Line A1 of this filing to agree with the corrected maximum permitted rate that we calculated on the FCC Form 1200 filing. As a result of this adjustment, Operator's claimed maximum permitted rate of $10.36 on its FCC Form 1210, effective July 1, 1994, was corrected to $10.28. 6. Operator's second FCC Form 1210 filing attempts to justify Operator's CPST rates effective April 1, 1995. We adjusted Line A1 of this filing to reflect the corrected maximum permitted rate we calculated on Operator's first FCC Form 1210 filing. As a result of this adjustment, Operator's claimed maximum permitted rate of $11.19, effective April 1, 1995, was corrected to $11.10. 7. Operator filed an FCC Form 1240 to justify its CPST rates for the period June 1, 1996 to the present. Line A1 of this filing has been adjusted to reflect the correct maximum permitted rate calculated in Operator's second FCC Form 1210 which resulted in a maximum permitted rate of $12.90, effective June 1, 1996. 8. Operator was charging a CPST rate of $10.67 from February 7, 1995, the complaint date, to April 30, 1995. Based on Operator's corrected filings, Operator was authorized a rate of only $10.28 from the date of the complaint through March 31, 1995. Beginning April 1, 1995, Operator was authorized a rate of $11.10. Accordingly, Operator's CPST charge of $10.67 was not justified from February 7, 1995 through March 31, 1995. It was justified from April 1, 1995 through April 30, 1995. On May 1, 1995 Operator increased its CPST charge to $11.19. Based on the corrected filings, Operator was authorized a charge of only $11.10 from April 1, 1995 through May 31, 1996. Operator's charge therefore was not justified from May 1, 1995 through May 31, 1996. Finally, Operator increased its CPST charge to $13.05 on June 1, 1996. It justified a rate of only $12.90 on that date. Therefore Operator's charge of $13.05 is not justified from June 1, 1996 to the present. 9. According, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the rates charged by Operator in the above-referenced community from February 7, 1995 through March 31, 1995 ARE UNREASONABLE. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the rates charged by Operator in the above-referenced community from May 1, 1995 to the present ARE UNREASONABLE. 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 above-referenced community that portion of the amount paid in excess of the maximum permitted CPST rate of $10.28 per month (plus franchise fees), plus interest to the date of the refund, for the period from February 7, 1995 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 above-referenced community that portion of the amount paid in excess of the maximum permitted CPST rate of $11.10 per month (plus franchise fees), plus interest to the date of the refund, for the period from May 1, 1995 through May 31, 1996. 13. 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 above-referenced community that portion of the amount paid in excess of the maximum permitted CPST rate of $12.90 per month (plus franchise fees), plus interest to the date of the refund, for the period from June 1, 1996 to the day before Operator implements the maximum permitted rate of $12.90. 14. 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 above- referenced community from February 7, 1995, to the present IS GRANTED TO THE EXTENT DISCUSSED HEREIN. 15. 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. 16. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 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 it next FCC Form 1240. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau