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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 ) CUID No. GA0023 (Hazelhurst) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increases ) ORDER Adopted: May 3, 1997 Released: May 6, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the rate increases of the above referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator has chosen to justify its CPST rates through benchmark showings on FCC Form 393, FCC Form 1200, and FCC Form 1210. This Order addresses the reasonableness of Operator's rates for the period September 1, 1993 to the present. We conclude, for the reasons discussed below, that the rates charged by Operator are unreasonable. 2. The Communications Act authorizes the Federal Communications Commission ("Commission") to review the CPST rates of cable systems not subject to effective competition to ensure that rates charged are not unreasonable. The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act") required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. If the Commission finds the rate to be unreasonable, it shall determine the correct rate and any refund liability. 3. The Commission's original rate regulations became effective on September 1, 1993. The Commission revised its rate regulations effective May 15, 1994. Cable operators with valid CPST complaints filed prior to May 15, 1994 must demonstrate that their CPST rates complied with the Commission's initial rules from the time the complaint was filed through May 14, 1994. Their rates must also comply with the revised rules from May 15, 1994 forward. Cable operators attempting to justify their rates for the period prior to May 15, 1994 using a benchmark showing must complete and file FCC Form 393. Operators must use the FCC Form 1200 series to justify their rates for the period beginning May 15, 1994 using a benchmark showing. Cable operators may file a FCC Form 1210 to justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation. The Operator must file FCC Form 1210, at least 30 days before new rates are scheduled to go into effect, where the Commission has found the cable programming service rate to be unreasonable less than one year prior to the filing, or where there is a pending complaint against the CPST rate. 4. The first valid complaint for this community was filed with the Commission on January 24, 1994. Upon review of Operator's FCC Forms 393, 1200, and 1210 we find that Operator has incorrectly calculated its maximum permitted rates beginning September 1, 1993. It is therefore appropriate to make adjustments to Operator's calculations beginning with its FCC Form 393. 5. In its FCC Form 393 dated July 5, 1995, Operator calculated a maximum permitted rate for the CPST of $10.34. However, Operator charged an actual CPST rate of $10.74 until July 14, 1994. Our review has resulted in the calculation of a maximum permitted rate of $10.22. This has resulted in an overcharge of $0.52. We have therefore found that the rates charged by the Operator are unreasonable. 6. Upon review of operator's FCC Form 393, an adjustment was made to the benchmark channel rate (Part 2, Line 220). Our review, while agreeing with the Operator's assessment of a total of 31 channels and 23 satellite channels, revealed a benchmark channel rate of 0.704 rather than 0.706 as reported by the Operator. Because of this revision, the inflation adjustment factor was recalculated. In making this recalculation we used the most accurate data currently available for inflation adjustments. On July 29, 1994, the Department of Commerce released corrected inflation data including Gross National Product Price Index ("GNP-PI") figures of 122.3 for the third quarter of 1992 and 126.5 for the fourth quarter of 1993. Using these GNP-PI figures, we calculate 1.037 as the Inflation Adjustment Factor through January 1994, the base date Operator should have used in justifying its rates. Therefore, we have adjusted Operator's filing to reflect this factor. As a result, the maximum permitted rate of $10.34 calculated by Operator has been reduced to $10.22. 7. Operator filed an FCC Form 1200, dated July 19, 1995, with the Commission to justify CPST rates in effect after May 14, 1994. Operator has calculated a maximum permitted rate of $9.07. However, it continued to charge an actual rate of $10.74 until June 30, 1995. We adjusted Module A, Line 6, to reflect an amount of $10.22, the maximum permitted rate calculated in the FCC Form 393. We have made no other adjustments and agree with the maximum permitted rate of $9.07. We conclude that Operator was overcharging in the amount of $1.67 and therefore find the rate of $10.74 to be unjustified for the period from May 15, 1994 to March 31, 1995. 8. Operator's FCC Form 1210 was filed on September 19, 1996 for the period from April 1, 1994 to March 31, 1995 to justify a maximum permitted rate of $9.94, effective April 1, 1995. We have revised Operator's maximum permitted rate to $9.93 due to rounding. At this time Operator was charging an actual rate of $10.74. On July 1, 1995, Operator increased its CPST rate to $11.49. Operator, however, filed no forms with the Commission to justify this rate increase. Consequently, Operator has not only failed to justify its July 1, 1995 CPST rate, it is also in violation of the Commission's requirement that operators provide the Commission at least 30 days notice of a proposed rate change when there is a pending complaint. 9. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the above referenced community from January 24, 1994 to the present 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 complaint against the CPST rates charged by Operator in the above referenced community from January 24, 1994 to the present IS GRANTED TO THE EXTENT DISCUSSED HEREIN. 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 $10.22 per month (plus franchise fees), plus interest to the date of the refund, for the period from January 24, 1994 to May 14, 1994. 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 $9.07 per month (plus franchise fees), plus interest to the date of the refund, for the period from May 15, 1994 to March 31, 1995. 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 $9.93 per month (plus franchise fees), plus interest to the date of the refund, for the period from April 1, 1995 to the day before Operator implements the maximum permitted CPST rate of $9.93. 14. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.0321, that Operator in the above-referenced community, shall revise the calculation of its maximum permitted CPST rates in its next FCC Form 1210 filing in accordance with this Order. 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. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau