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A. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)#XP\  P6Q+XP#"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd4l@Document 1Document 11` hp x (#X` hp x (#X` hp x (#` hp x (#Technical 5Technical 52` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 6Technical 63` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 2Technical 24 2F5l|A6$A7l D8$xDTechnical 3Technical 35 Technical 4Technical 46` hp x (#X` hp x (# X` hp x (#` hp x (#Technical 1Technical 17 Technical 7Technical 78` hp x (#X` hp x (# X` hp x (#` hp x (#2LO9$F:H;K<.MTechnical 8Technical 89` hp x (#X` hp x (# X` hp x (#` hp x (#toc 1toc 1:` hp x (#!(#B!(#B` hp x (#toc 2toc 2;` hp x (#` !(#B` !(#B` hp x (#toc 3toc 3<` hp x (#` !(# ` !(# ` hp x (#2NV=~O>Q?S@vUtoc 4toc 4=` hp x (# !(#  !(# ` hp x (#toc 5toc 5>` hp x (#h!(# h!(# ` hp x (#toc 6toc 6?` hp x (#!(#!(#` hp x (#toc 7toc 7@ 2^AVBXCZD\toc 8toc 8A` hp x (#!(#!(#` hp x (#toc 9toc 9B` hp x (#!(#B!(#B` hp x (#index 1index 1C` hp x (#` !(# ` !(# ` hp x (#index 2index 2D` hp x (#` !(#B` !(#B` hp x (#2bE*_FvHaGlaHr*btoatoaE` hp x (#!(# !(# ` hp x (#captioncaptionF _Equation Caption_Equation CaptionG endnote referenceendnote referenceH 2dIbJ}McKcLRdhead1 #I'd#2p}wC@ #a1Paragraph R!1. a. i. 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(1) (a) (i) 1) a)D )DDDFrfQq "i~'^09]SS999S]+9+/SSSSSSSSSS99]]]Sxnxxng?Snxgx]nxxxxn9/9aS9S]I]I9S]/9]/]S]]I?9]SxSSIC%CW9+Wa999+999999S9]/xSxSxSxSxSxxInInInInI>/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d"""  X- ximplementing the new legislation ("Interim Rules"),} {Oy- xԍ See Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 11 FCC Rcd 5937 (1996). require that  xcomplaints against the CPST rates be filed with the Commission by a local franchising authority  X-("LFA") that has received more than one subscriber complaint."} {O-ԍ See Communications Act, Section 623(c), as amended, 47 U.S.C. Section 543(c) (1996).  X- ` x3.` ` A valid subscriber complaint was filed with the Commission on February 7, 1996.  xSubsequently, the LFA for the franchise area referenced above filed a complaint with the  xCommission on April 15, 1997. The LFA verified that it received more than one subscriber  xcomplaint for the franchise area and that the first valid complaint was received by the LFA on  xJanuary 6, 1997. The filing of a complete and timely complaint triggers an obligation upon the  X1- xcable operator to file a justification of its CPST rates.?1} yO-ԍ 47 C.F.R. 76.956.? The Operator has the burden of  X -demonstrating that the CPST rates complained about are reasonable.3  D} {O-ԍ Id.3  X - ` x4.` ` To justify rates for the period beginning May 15, 1994 through a benchmark  X - xshowing, operators must use the FCC Form 1200 series.? } yO\-ԍ 47 C.F.R. 76.922.? Operators may justify adjustments to  xtheir rates on an annual basis using FCC Form 1240 to reflect reasonably certain and quantifiable  xchanges in external costs, inflation, and the number of regulated channels that are projected for  X- x=the twelve months following the rate change.3 f } {O-ԍ  Id.3 Any incurred cost that is not projected may be  Xy-accrued with interest and added to rates at a later time.3 y } {O"-ԍ  Id.3 x  XK- ` x5.` ` Upon review of Operator's FCC Form 1240 for the projected period January 1,  x1996 through December 31, 1996, we find Operator's calculated maximum permitted rate  x("MPR") of $12.87 to be reasonable. Because Operator's actual CPST rate of $12.58 for the  xyprojected period does not exceed its MPR of $12.87 for the projected period, we find Operator's  X-actual CPST rate of $12.58, effective January 1, 1996 to be reasonable.  } 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.  "r ,-(-(ZZ"Ԍ X- ` = x6.` ` Upon review of Operator's FCC Form 1240 for the projected period January 1,  X- x1997 through December 31, 1997, we find that Operator has not correctly calculated its MPR. } yOb- xԍ Information regarding the specific adjustments made to Operator's filings can be found in the public file for  xCUID No. WI0438, 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) 8573800.  xxIn particular, Operator made trueup adjustments through to the effective date of the rate increase.  xThis is incorrect. The annual adjustment afforded by FCC Form 1240 allows operators to project  x= changes in external costs, inflation, and the number of regulated channels. This structure avoids  x\the delay some operators experienced in recouping costs through multiple rate adjustments  xthroughout the year. Because projections will not reflect the costs that actually occur, the  xCommission provided, as part of the annual adjustment, a "trueup" to correct projected cost  xjchanges with the actual cost changes. However, the Commission has noted that, as FCC Form  x1240 must be filed 90 days before an increase is to take effect, the period for the trueup will not  X - xcoincide with the previous year's projections.^ } {O{- xԍ See In the Matter of Implementation of Sections of the Cable Television Consumer Protection and Competition  {OE- xAct of 1992: Rate Regulation, MM Docket No. 92266, Thirteenth Order on Reconsideration ("Thirteenth  {O-Reconsideration Order"), 11 FCC Rcd 388, 420 at n.151 (1995). The trueup data is intended to indicate real, not  X -projected data.3 } {O-ԍ Id.3 This policy is reflected in the instructions accompanying FCC Form 1240.d h } {O-ԍ See FCC Form 1240 Instructions, "Timing" at pp. 34.d  X - ` nx7.` ` Based on this instruction and considering evidence in the filing,z } yO- xЍ Operator, for instance, did not reflect in its trueup the inflation factor for the second quarter of 1996 released  {OH- xYby the Commission in November 1996. See Public Notice, "Inflation Adjustment Figures for Cable Operators Using  xFCC Forms 1210 and 1240 Now Available", DA 961986 (November 27, 1996). Had this been available to Operator  xat the time of filing, Operator would have been required to include the factor released (2.22%) for all months after  xMarch 1996 and for its projection period. Instead, Operator used the previous factor (2.39%) for all inflation  xadjustments and projections. It is evident, therefore, that Operator did not have November 1996 data available at the time it completed its FCC Form 1240.  reasonable time  xfor closing accounts and completing forms, we have adjusted Operator's trueup period from 12  xmonths to 9 months. This adjustment required that we refresh Operator's inflation factors to 2.22  x.for the second quarter of 1996 and to 2.21 for the third quarter of 1996 and adjust Worksheet 1  Xy- xMaccordingly.y<} {Of"- xԍ See 47 C.F.R. 76.922(b)(9)(iii) (if a cable operator fails to justify its rates, rates must be adjusted in accordance with the most accurate data available at the time of analysis). As a result, the trueup inflation factor in Module C, Line C1 for the 9 month  xperiod was corrected to 1.0171 instead of the 1.0239 used by the Operator for a 12 month period.  xWe have adjusted Module E, and have corrected the number of months on Line E2 to 9 months  x[and Line E3 to 3 months. We have also adjusted the inflation segment in Module F, Line F5 to"4,-(-(ZZ*"  xreflect the corrections made to Line C1. This has resulted in a corresponding adjustment to Line F9 (MPR for TrueUp Period 1).   X- ` x8.` ` The reduction in the length of the trueup period also results in a reduction in Line  xH2 (Revenue From MPR for Period 1). This results in a corresponding reduction in Line I8  x(TrueUp Segment for the Projected Period). In total, our adjustments to Operator's FCC Form  x1240 resulted in a revised MPR for the projected period of $14.37 rather than Operator's MPR  xfor the projected period of $14.69 (Line I9). Because Operator's actual CPST rate of $14.30 is  xzless than the revised MPR of $14.37, we find Operator's actual CPST rate of $14.30, effective January 1, 1997, to be reasonable.  X - ` }x9.` ` To the extent that external costs from the three months disallowed from Operator's  X - xtrueup periodT } yOe -ԍ As found on Operator's Worksheets 7 and 8.T have been averaged into the rates charged in the nine months allowed in  xKOperator's trueup period, and have not been removed by our adjustments, we will order Operator  xto make a monthbymonth accounting of such external costs. Such accounting shall allow a  xcomparison of the actual external costs for the permitted ninemonth trueup period with the  xrecovery of external costs afforded by the external cost segment for that period as calculated on  xLWorksheet 7. We will order the removal of any overrecovery, plus interest, identified thereby  xin Operator's next FCC Form 1240 filed with the Commission. Any such overrecovery of  xLexternal costs shall be added to the amount otherwise reportable on Line H1 of Operator's next  X4-FCC Form 1240 rate calculation.  X- ` x10.` ` Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's  x rules, 47 C.F.R.  0.321, that the CPST rate of $12.58 charged by Operator in the community referenced above, effective January 1, 1996 through December 31, 1996 IS REASONABLE.  X- ` 4x11.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's  x rules, 47 C.F.R.  0.321, that the CPST rate of $14.30 charged by Operator in the community referenced above, effective January 1, 1997, IS REASONABLE.  XN- ` 4x12.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's  xrules, 47 C.F.R.  0.321, that Operator revise the calculation of its maximum permitted CPST  x0rate in its next FCC Form 1240 filing in accordance with our findings in this order and, in  xaddition, that Operator attach to its next FCC Form 1240 filing a monthbymonth accounting of  xits external costs from Operator's ninemonth trueup period as found on Operator's Worksheets,  xand that Operator adjust its rates in its next FCC Form 1240 filing for any overrecovery of external costs, plus interest, identified thereby. "!X,-(-(ZZ "Ԍ X- ` 4 x13.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's  xrules, 47 C.F.R.  0.321, that the complaints against the CPST rates charged by Operator in the community referenced above, ARE DENIED. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhElizabeth W. Beaty  X1-x` `  hhChief, Financial Analysis and Compliance Division(#(#Xx` `  hhCable Services Bureau