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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 of Hawaii, Inc. ) CUID No. HI0003 (Hawaii Kai) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ) ORDER Adopted: May 16, 1997 Released: May 20, 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 Form 393, FCC Form 1200 and multiple FCC Form 1210s. 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 February 28, 1994 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 rates 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 their 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 find both Operator's calculated maximum permitted rate ("MPR") of $14.09 and its actual rate of $14.09, effective February 28, 1994 through May 14, 1994, to be reasonable. 6. Upon review of Operator's FCC Form 1200, we find Operator's MPR of $12.66 to be reasonable. However, Operator's actual CPST rate in effect from May 15, 1994 through June 30, 1994 was $14.09. Because Operator's actual CPST rate exceeded its MPR, we find Operator's actual CPST rate of $14.09, effective May 15, 1994 through June 30, 1994, to be unreasonable. 7. Upon review of Operator's FCC Form 1210 for the period April 1, 1994 through June 30, 1994, we find Operator's MPR of $12.82 to be reasonable. Because Operator's actual CPST rate of $12.82 effective July 1, 1994 through July 31, 1995 does not exceed its MPR, we find Operator's actual CPST rate of $12.82 effective July 1, 1994 through July 31, 1995 to be reasonable. 8. Upon review of Operator's FCC Form 1210 for the period July 1, 1994 through December 31, 1994, we find Operator's MPR of $13.45 to be reasonable. Because Operator's actual CPST rate of $13.45 effective August 1, 1995 through March 31, 1996 does not exceed its MPR, we find Operator's actual CPST rate of $13.45 effective August 1, 1995 through March 31, 1996 to be reasonable. 9. Upon review of Operator's FCC Form 1210 for the period January 1, 1995 through March 31, 1996, we find Operator's MPR of $13.59 to be reasonable. Operator has therefore justified a MPR of $13.59 beginning April 1, 1996. 10. 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 $14.09, charged by Operator in the franchise area referenced above effective February 28, 1994 through May 14, 1994, IS REASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $14.09, charged by Operator in the franchise area referenced above effective May 15, 1994 through June 30, 1994, IS 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 rate of $12.82, charged by Operator in the franchise area referenced above effective July 1, 1994 through July 31, 1995, IS REASONABLE. 13. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $13.45, charged by Operator in the franchise area referenced above effective August 1, 1995 through March 31, 1996, IS REASONABLE. 14. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's maximum permitted rate of $13.59, in the franchise area referenced above, beginning April 1, 1996, IS REASONABLE. 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 rate of $12.66 per month (plus franchise fees), plus interest to the date of the refund, for the period May 15, 1994 through June 30, 1994. 16. 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 $13.59 per month (plus franchise fees), plus interest to the date of the refund, for the period beginning April 1, 1996. 17. 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. 18. 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