WPCɆ 2MB%RK<3|X Times New RomanTimes New Roman BoldP\  P6Q9XP#"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+99999999S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNRtoc 2toc 2;` hp x (#` !(#B` !(#B` hp x (#toc 3toc 3<` hp x (#` !(# ` !(# ` hp x (#toc 4toc 4=` hp x (# !(#  !(# ` hp x (#toc 5toc 5>` hp x (#h!(# h!(# ` hp x (#2\?DU@vbWAWBYtoc 6toc 6?` hp x (#!(#!(#` hp x (#toc 7toc 7@ toc 8toc 8A` hp x (#!(#!(#` hp x (#toc 9toc 9B` hp x (#!(#B!(#B` hp x (#2cCF\Dd^E`Fvbindex 1index 1C` hp x (#` !(# ` !(# ` hp x (#index 2index 2D` hp x (#` !(#B` !(#B` hp x (#toatoaE` hp x (#!(# !(# ` hp x (#captioncaptionF 2qGlHcHrcI" &dJoHq_Equation Caption_Equation CaptionG endnote referenceendnote referenceH MACDocumentuI      X` hp x (#%'0*,.8135@8:<     #:}D4P XP# T I. A. 1. a.(1)(a) i) a)T,0*ÍÍ,*Í ., US!!!! ! #:}D4P XP#T 1. 1. 1. a.(1)(a) i) a)T     X` hp x (#%'0*,.8135@8:<     #:}D4P XP# ,0*ÍÍ,*Í ., US!!!! ! #:}D4P XP#FootnoteuJÍč2{KqK4tKvKx"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""abovereferenced community filed an FCC Form 329 ("Complaint") with the Commission on  xFebruary 11, 1997. The LFA has certified that it has complied with the Interim Rules. Filed  xalong with LFA's Complaint were Operator's rate justifications on FCC Form 1235 and FCC Form 1240. x  X - ` Rx7.` ` Upon review of Operator's FCC Form 1200 and FCC Form 1210, filed June 6,  x.1995, we find that Operator has incorrectly calculated its maximum permitted rate ("MPR") and  X - xthat it has charged in excess of its corrected MPR beginning May 15, 1994. 18 yOO- xԍ We have not received a deferral of refund liability request from the Operator. Consequently, Operator's refund liability for its CPST rates not justified on its FCC Form 1200 filings begins on May 15, 1994.  We have adjusted  x/the monthly charge per tier in Module A, Line A6(b) in Operator's FCC Form 1200 to reflect  xLinstructions given in our Prior Order. Operator was ordered to revise its FCC Form 1200 filings  x for the period beginning May 15, 1994 and to reduce the monthly charge on its CPST (Line  xkA6(b)) as of March 31, 1994 to $8.57 per month (plus franchise fees). Because Operator has  x.failed to make this adjustment, we have changed the amount on Line A6(b) from $9.16 to $8.57  x(plus franchise fees). We have also adjusted Module C, Line C2(a), regarding the number of  x regulated nonbroadcast channels per tier. Operator asserts that of its 21 basic service tier  x("BST") and 17 CPST channels, 6 BST and 17 CPST channels are regulated nonbroadcast  xchannels. Our review of the channelline up has revealed 5 nonbroadcast channels on the BST  xand 17 nonbroadcast channels on the CPST. These adjustments have resulted in an MPR of  X- x$8.33.  18 yO- xԍ Information regarding the specific adjustments made to Operator's filings can be found in the public file for  xCUID No. CA0180, which is available in the Cable Services Bureau's public reference room, or through the  xCommission's copy contractor, International Transcription Services (ITS), 1919 M Street N.W., Washington, DC, 20554, or by calling ITS at (202) 857-3800.  Operator calculated an MPR of $8.40 and was actually charging a CPST rate of $9.83.  xzConsequently, we find that the CPST rate for in effect from May 14, 1994 through March 31, 1995 is unreasonable.   x8. Operator's FCC Form 1210, covering the period March 31, 1994 to March 31, 1995,  xzwas filed to justify its CPST rate of $9.16 in effect on April 1, 1995. Upon review of this FCC  xForm 1210, we have made adjustments. We adjusted Module A, Line A1 to reflect revisions  x\made in the FCC Form 1200. The transition rate on Line A1 has been changed from $8.40 to  xM$8.33 for the CPST. Further, we have disallowed until April 1, 1995 the adjustments claimed"7 ,N(N(ZZ"  xlin Operator's FCC Form 1210 filing covering the period from March 31, 1994 to March 31,  X- x.1995."18 {Ob- xԍ On FCC Form 1210, operators must use calendar year quarters when adjusting rates. See 47 C.F.R Section  x76.922(d)(1). In applying this rule, the Commission does not allow changes to be included in rates until the period  xreported in FCC Form 1210 has ended. Accordingly, Operator was not eligible to apply the adjustments until April 1, 1995. Operator has also claimed, and we have accepted, a 5.21% inflation adjustment for the  X- xperiod from April 1, 1995 to March 31, 1996.18 yO5- xԍ Because Operator had taken a 3% adjustment in its FCC Form 1200 filing, it was not technically entitled to  xitake the 3% adjustment again by applying the 5.21% adjustment. However, because Operator applied the 5.21%  xxadjustment based on its good faith reliance on Commission Instructions, we have allowed the full 5.21% inflation  {O - xadjustment for the period from April 1, 1995 to March 31, 1996. See Ninth Order On Reconsideration in MM  {OW - x-Docket No. 92266, FCC 9543 (released, February 6, 1995); See also Public Notices: Question and Answers on Cable Television Rate Regulation, dated March 8, 1995 and July 25, 1995.  These adjustments have resulted in an MPR of  x!$9.07 effective April 1, 1995. Operator was actually charging $9.16. Consistent with the  X- xCommission's rules, we corrected Operator's 5.21% inflation adjustment effective April 1, 1996.$. 18 yO- xԍ The Commission's rules require the removal of Operator's excess 3% inflation adjustment in the next rate  {OK- xadjustment after November 9, 1995 or by April 1, 1996, whichever is earlier. Consequently, effective April 1, 1996,  {O- xwe have eliminated this excess.  See Cable Rate Adjustments For Inflation Applied To Transition Rates, 11 FCC Rcd. 1151 (1995).   xNThis has resulted in an MPR of $8.94 from April 1, 1996 through May 31, 1996. Operator  xycontinued to charge $9.16. Based on these adjustments, we find that Operator's CPST rates for the period April 1, 1995 through May 31, 1996 are unreasonable.  X1- ` ~x9. ` ` Upon review of Operator's FCC Form 1240, which was filed to justify rates from  x.June 1, 1996 forward, we have adjusted Module A, Line A1(b) to reflect the MPR calculated in  x=the previous FCC Form 1210. We have adjusted Line A1(b) from $9.05 to $8.85. We have also  xadjusted current external costs reported in Module D, Line D2(b). Current external costs were not  x/carried forward from the previous FCC Form 1210 and so we have changed Line D2(b) from  x$4.44 to $4.46. Further, we note that Operator has included franchise fees in its CPST charge  xon all of its rate cards. In removing the franchise fee, we find that Operator was charging $9.16.  xKWe have determined that the monthly rate for the trueup period on "Worksheet 8 TrueUp Rate  xCharged" was $9.14. We have adjusted the rate accordingly and find that Operator has justified  xan MPR of $10.48. Effective June 1, 1996, Operator was charging a CPST rate of $10.29. Consequently, we find Operator's CPST rate justified effective June 1, 1996.  X- ` x10.` ` Operator's rate increase in the upgraded segments of its system reflects not only  xthe annual increase as reported on FCC Form 1240, but also the recovery of costs for its network  xKupgrade as reflected on FCC Form 1235. We first address clarifications sought by the franchising  xauthority concerning FCC Form 1235 issues regarding inclusion of excess capacity in the rate  xybase and minimal technical standards. The LFA believes that Operator is upgrading its system  xfrom 550 MHz to 750 MHz and is concerned regarding the allocation of costs beyond 550 MHz.  xjIt is our understanding that the upgrade is from 330 MHz to 750 MHz. The LFA states that the",N(N(ZZ"  xinstructions to FCC Form 1235 set forth the minimal technical standards for an upgrade as  xrequiring bandwidth to be increased to at least 550 MHz with upgrade capability to 750 MHz,  xand no more than 1,500 homes per node. Operator reported 161 to 2,774 homes per node with  xan average of 1,227 homes per node. Consequently, the LFA contends that Operator has failed to meet the minimum technical standards.  Xv- ` x11.` ` We agree with the LFA that the FCC Form 1235 presents "minimum technical  X_- x-specifications" and that Operator has failed to meet those specifications. _18 yO- x[ԍ Operator amended its FCC Form 1235 on May 6, 1997 and indicated that the upgrade did not meet the  xminimum technical specifications described in the form. The instructions to FCC Form 1235 require that the upgrade  xinclude "an increase in usable bandwidth to at least 550 MHz with upgrade capability to 750 MHz, fiber to the node or beyond, and no more than 1,500 homes per node . . . ." FCC Form 1235 Instructions at p. 1. But we also note that  xif the Operator does not meet the minimum technical specifications, FCC Form 1235 allows the  x<operator to attach "a brief description of the upgrade and how the upgrade will be significant and  X - xiwill benefit subscribers of rateregulated cable services."M 18 yO{-ԍ FCC Form 1235, Instructions at p. 5.M In its response to the LFA's concerns,  xOperator contends that it meets the significant upgrade test under the FCC Form 1235's  xalternative qualification standard because the upgrade adds 18 new services to its CPST.  xOperator also states that the upgrade will provide, in addition to increased channel capacity,  xenhanced picture and sound quality along with improved system reliability. In addition, the  X - x|upgrade will permit Operator to provide twoway capability on its system.u @18 yO- xԍ Complaint, Exhibit G: "Glendale City Council Briefing, Update of Marcus Service Improvements" at p. 3.  xOperator's FCC Form 1235 and its May 6, 1997 amendment indicate that Operator plans to provide twoway  xcapability to all of its subscribers in the second half of 1998. Operator acknowledges that while the densities  x-proposed, by using nodes which pass more than 2000 homes or multiple dwelling units, "could have an affect on  xupstream services such as high speed data, [Operator] expects penetration rates for this type of product, when offered  xin 1998, to be low enough that contention for return bandwidth will not be an issue. At the time penetration of high  xJspeed data services in the larger nodes increases to a point where contention is an issue, [Operator states that it has]  xsufficient fiber resources at each plant node and will subdivide the nodes for acceptable performance of the return plant." Operator May 6, 1997 Amendment at 2.u Upon an  xexamination of Operator's submissions and discussions with Operator's technical staff, we have  x.determined that the system will be capable of the described performance. Operator states that  xthe upgraded system will give it "a platform in the future to deliver services such as home  xbanking, video conferencing, Internet connections, and other more advanced technologies."  xOperator further states that "the equivalent of 33 additional channels have been set aside for such  xKuses" and for digital compression, which will eventually allow Operator to "put ten times as many  X- xzcable channels on [its] cable system."18 yO#-ԍ Complaint, Exhibit G: "Glendale City Council Briefing, Update of Marcus Service Improvements" at p. 3. We conclude that Operator is engaged in a system upgrade having benefits that are consistent with our requirements. ",N(N(ZZ"Ԍ X- ` x12.` ` We have reviewed Operator's cost allocations and determined that the costs  X- xOperator is seeking to recover on the CPST are properly allocable to the BST and CPST.18 yOb- xԍ Consistent with FCC Form 1235, Operator has elected to recover the total Monthly Network Upgrade Addon  {O*-through the CPST rate. See Operator's FCC Form 1235, Part III, Lines 4 and 5.  X-Consequently, we accept Operator's FCC Form 1235. "18 yO- xwԍ These findings are based solely on the representations of Operator. Should information come to our attention  xYthat these representations were materially inaccurate, we reserve the right to take appropriate action. This Order is  xnot to be construed as a finding that we have accepted as correct any specific entry, explanation or argument made by any party to this proceeding not specifically addressed herein.  X- ` x13.` ` Upon review of Operator's FCC Form 1235, we have calculated an MPR of $2.84,  X- x\$0.01 less than Operator's calculated MPR of $2.85 due to rounding.  18 yOH - xYԍ After removing the franchise fees from Operator's reported rate of $3.00, we find that Operator was charging  xa rate of $2.86 for the system upgrade. This reflects an overcharge of $0.02. However, Operator's CPST rate  xincrease for upgraded segments of its system, beginning August 1, 1996, combined the rates on its FCC Forms 1240 and 1235.  When the FCC Form  x>1240 MPR of $10.48 is combined with the FCC Form 1235 MPR of $2.84, the combined MPR  x/is $13.32. Operator was actually charging a combined rate of $13.15. We conclude that the  xCPST rate of $13.15 is reasonable in each segment of the system that it is charged as the system upgrade progresses.  X - ` x14.` ` Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's  xrules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the abovereferenced community from May 15, 1994 to May 31, 1996 ARE UNREASONABLE.  X - ` 4x15.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's  xrules, 47 C.F.R.  0.321, that the CPST rates charged by Operator, in the segments of its system serving the abovereferenced community from June 1, 1996 to the present ARE REASONABLE.  XK- ` x16.` ` IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's  x[rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the community referenced  xabove that portion of the amount paid in excess of the maximum permitted CPST rate of $8.33  xjper month (plus franchise fees), plus interest to the date of the refund, for the period from May 15, 1994 to March 31, 1995.  X- ` x17.` ` IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's  x[rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the community referenced  xabove that portion of the amount paid in excess of the maximum permitted CPST rate of $9.07  xper month (plus franchise fees), plus interest to the date of the refund, for the period from April 1, 1995 to March 31, 1996. "N ,N(N(ZZ"Ԍ X- ` x18.` ` IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's  x[rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the community referenced  xabove that portion of the amount paid in excess of the maximum permitted CPST rate of $8.94  xper month (plus franchise fees), plus interest to the date of the refund, for the period from April 1, 1996 to May 31, 1996.  Xv- ` x19.` ` IT IS FURTHER ORDERED, that Operator shall promptly determine the  xyovercharges to CPST subscribers for the stated periods, and shall within 30 days of the release  xof this Order, file a report with the Chief, Cable Services Bureau, stating the cumulative refund  xamount so determined (including franchise fees and interest), describing the calculation thereof,  xand describing its plan to implement the refund within 60 days of Commission approval of the plan.  X - ` 4x20.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's  xkrules, 47 C.F.R.  0.321, that Operator revise the calculations of its maximum permitted CPST rates in its next FCC Form 1240 filing in accordance with this order.  Xy- ` 4x21.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's  xrules, 47 C.F.R. 0.321, that the referenced complaints ARE GRANTED TO THE EXTENT DISCUSSED HEREIN. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@Meredith J. Jones x` `  hh@Chief, Cable Services Bureau#Xj\  P6G;9XP#