******************************************************** 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. CT0153 (Ashford) ) CT0154 (Brooklyn) ) CT0155 (Canterbury) Charter Communications ) CT0156 (Chaplin) ) CT0157 (Columbia) ) CT0158 (Coventry) ) CT0159 (Eastford) ) CT0160 (Hampton) ) CT0161 (Lebanon) ) CT0162 (Mansfield) ) CT0163 (Pomfret) ) CT0164 (Scotland) Complaints Regarding ) CT0165 (Thompson) Cable Programming Services Tier Rates ) CT0166 (Windham) ) CT0167 (Willington) ) CT0168 (Woodstock) ORDER Adopted: April 22, 1997 Released: April 28, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider complaints about the rates charged by the above-referenced operator ("Operator") for its cable programming services tiers ("CPSTs") in the communities referenced above. Operator has attempted to justify its CPST rates through benchmark justifications on FCC Form 1200, multiple FCC Form 1210s and FCC Form 1240. We have already issued a separate order in which we found that Operator's rates in effect prior to May 15, 1994 were unreasonable ("Prior Order"). Accordingly, this Order addresses only the reasonableness of Operator's CPST rates in effect after May 14, 1994. 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. 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. Upon review of Operator's FCC Form 1200, multiple FCC Form 1210s, and FCC Form 1240 for the period May 15, 1994 through June 30, 1997, we find that Operator has correctly calculated its maximum permitted rates ("MPRs") for its two CPSTs but has charged in excess of its MPRs beginning May 15, 1994. 5. Upon review of Operator's FCC Form 1200, we agree that Operator's MPRs of $9.33 for CPST (A) and $3.48 for CPST (B) are reasonable. However, Operator's actual CPST rates in effect from May 15, 1994 through July 14, 1994 were $9.41 for CPST (A) and $4.39 for CPST (B). Therefore, we find Operator's actual CPST rates for the period May 15, 1994 through July 14, 1994 to be unreasonable. Operator has elected to take advantage of the refund liability deferral period in accordance with the Commission's Rules. Consequently, Operator does not incur refund liability for charging in excess of the MPRs calculated on its FCC Form 1200 until July 15, 1994. In our Prior Order, however, we found that Operator's CPST rates were in excess of the corrected MPRs of $9.19 for CPST (A) and $4.29 for CPST (B). Consequently, Operator is liable for refunds for charging CPST rates greater than $9.19 for CPST (A) and $4.29 for CPST (B) during the period of May 15, 1994 through July 14, 1994. 6. Upon review of Operator's FCC Form 1210 covering the period April 1, 1994 through June 30, 1994, we find that Operator charged in excess of its MPR for CPST (B) for the period from July 15, 1994 through September 30, 1994. Operator's MPR for CPST (B) was $3.53 and Operator charged $3.54. Therefore, we find Operator's actual CPST (B) rate of $3.54 for the period July 15, 1994 through September 30, 1994 to be unreasonable. We find that Operator did not exceed its MPR for the CPST (A) for this period. 7. Upon review of Operator's FCC Form 1210 covering the period July 1, 1994 through September 30, 1994, we find that Operator did not exceed its MPR for either CPST for the period October 1, 1994 through December 20, 1994. However, Operator charged in excess of its MPRs for both CPSTs for the period December 21, 1994 through December 31, 1994. Operator's MPRs for this period were $9.51 for its CPST (A) and $3.59 for its CPST (B). Operator's actual rates were $9.70 for its CPST (A) and $3.77 for its CPST (B). Therefore, we find Operator's actual CPST (A) rate of $9.70 and CPST (B) rate of $3.77 for the period December 21, 1994 through December 31, 1994 to be unreasonable. Operator's FCC Form 1210, covering the period of October 1, 1994 through December 31, 1994, however, justified a CPST (A) rate of $9.70 and CPST (B) rate of $3.77 effective January 1, 1995. Consequently, Operator's CPST(A) and CPST(B) rates were justified effective January 1, 1995. 8. Furthermore, upon review of Operator's FCC Form 1210s covering the period January 1, 1995 through December 31, 1995 for CPST rates effective from April 1, 1995 through July 31, 1996, and FCC Form 1240 for CPST rates effective August 1, 1996 through June 30, 1997, we find that Operator has not exceeded its MPRs for its CPSTs for these periods. 9. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST (A) rate of $9.41 and the CPST (B) rate of $4.39, charged by Operator in the franchise areas referenced above during the period May 15, 1994 through July 14, 1994, 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 CPST (B) rate of $3.54, charged by Operator in the franchise areas referenced above during the period July 15, 1994 through September 30, 1994, IS UNREASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST (A) rate of $9.70 and the CPST (B) rate of $3.77, charged by Operator in the franchise areas referenced above during the period December 21, 1994 through December 31, 1994, ARE UNREASONABLE. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST (A) charged by Operator in the franchise areas referenced above during the period July 15, 1994 through September 30, 1994 and the CPST (A) rates and the CPST (B) rates charged by Operator in the franchise areas referenced above during the periods October 1, 1994 through December 20, 1994 and January 1, 1995 to the present ARE REASONABLE. 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 community referenced above that portion of the amount paid in excess of the maximum permitted CPST (A) rate of $9.19 and the maximum permitted CPST (B) rate of $4.29 per month (plus franchise fees), plus interest to the date of the refund, for the period May 15, 1994 through July 14, 1994. 14. 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 (B) rate of $3.53 per month (plus franchise fees), plus interest to the date of the refund, for the period July 15, 1994 through September 30, 1994. 15. 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 (A) rate of $9.51 and the maximum permitted CPST (B) rate of $3.59 per month (plus franchise fees), plus interest to the date of the refund, for the period December 21, 1994 through December 31, 1994. 16. 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. 17. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the referenced complaints ARE GRANTED TO THE EXTENT DISCUSSED HEREIN. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau