WPCw 2MB RK<3|j-#XP\  P6Q9XP#"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdTimes New RomanTimes New Roman BoldTimes New Roman Italic}P2g% ZXTimes New RomanTimes New Roman BoldP\  P6Q XP#HP4M (PCL) (Additional); Local PrintHL4MPCAD.PRSXj\  P6G;\"Y}XP|D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxd7jC:,9Xj\  P6G;XP7nC:,|Xn4  pG;Xy.X80,X\  P6G;Py.\80,T\4  pG;2: < K3|jTimes New RomanTimes New Roman BoldTimes New Roman Italic"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDddddddP?7Rtoc 3toc 3<` hp x (#` !(# ` !(# ` hp x (#toc 4toc 4=` hp x (# !(#  !(# ` hp x (#toc 5toc 5>` hp x (#h!(# h!(# ` hp x (#toc 6toc 6?` hp x (#!(#!(#` hp x (#2W[@vTATBWC9Ytoc 7toc 7@ toc 8toc 8A` hp x (#!(#!(#` hp x (#toc 9toc 9B` hp x (#!(#B!(#B` hp x (#index 1index 1C` hp x (#` !(# ` !(# ` hp x (#2`D[E]Fv_Gl;`index 2index 2D` hp x (#` !(#B` !(#B` hp x (#toatoaE` hp x (#!(# !(# ` hp x (#captioncaptionF _Equation Caption_Equation CaptionG 2bHr`IKaJ}aKGbendnote referenceendnote referenceH head1 #I'd#2p}wC@ #a1Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfJ$ a2Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfK/` ` ` 2eLcMcN2dOda3Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfL:` ` `  a4Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfME` ` `  a5Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfNP  ` ` ` hhh a6Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfO[   2kPeQfKJgKia7Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfPf  a8Paragraph R!1. a. i. (1) (a) (i) 1) a)D )DDDFrfQq "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+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN/>/>/>/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+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN1995.  X-ԍ#X\  P6G;P# See Social Contract for Time Warner, 11 FCC Rcd 2788 (1996).#Xj\  P6G;9XP#Ѻ We have also issued an Order in which we found that Operator's CPST rate increase  Xh- x]effective January 1, 1996 was not unreasonable.hy  X-ԍ #X\  P6G;P#In the Matter of Time Warner Entertainment d/b/a Oceanic Cablevision, 11 FCC Rcd 8607 (1996). Accordingly, this Order addresses the reasonableness of the Operator's CPST rate of $15.11 effective January 1, 1997.  X#- ` x2. ` ` The Communications Act#*  X-ԍ#X\  P6G;P# Section 623(c) of the Communications Act of 1934, as amended, 47 U.S.C. Section 543(c)(3) (1996).#Xj\  P6G;9XP# authorizes the Federal Communications Commission  xy("Commission") to review the CPST rates of cable systems not subject to effective competition  xxto ensure that rates charged are not unreasonable. If the Commission finds the rate unreasonable,  X- xit shall determine the correct rate and any refund liability.t  Xj$-ԍ #X\  P6G;P#See 47 C.F.R. Section 76.957.t The Telecommunications Act of 1996  X- xz("1996 Act")  X'-Ѝ#X\  P6G;P# Pub. L. No. 104104, 110 Stat. 56 (1996). and our rules implementing the new legislation ("Interim Rules"),=  X- xЍ#X\  P6G;P# See Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 11 FCC Rcd  yOy-5937 (1996).#Xj\  P6G;9XP# require that"A,))ZZ="  xycomplaints against the CPST rates be filed with the Commission by a franchising authority that  xhas received subscriber complaints. A franchising authority may not file a CPST rate complaint  xZunless, within 90 days after such increase becomes effective, it receives more than one subscriber complaint.  X- ` x3. ` ` The Commission's original rate regulations took effect on September 1, 1993.Ay X -ԍ #X\  P6G;P#Order in MM Docket No. 92266, Implementation of Sections of the Cable Consumer Protection and Competition Act of 1992: Rate Regulation, FCC 93372, 58 Fed. Reg. 41042 (Aug. 2, 1993).  Xv- x-The Commission revised its rate regulations effective May 15, 1994.[{vy X -ԍ #X\  P6G;P#47 C.F.R. Section 76.922(b); see also Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed Rulemaking, MM Docket No. 92266, FCC 9438, 9 FCC Rcd 4119, 4190 (1994)  {O-("Second Order on Reconsideration").[ Cable operators may justify  xadjustments to their rates on an annual basis using FCC Form 1240 to reflect reasonably certain  xand quantifiable changes in external costs, inflation, and the number of regulated channels that  X1- xare projected for the twelve months following the rate change. {1y X- xЍ#X\  P6G;P# See 47 C.F.R. Section 76.960; see In the Matter of Implementation of Sections of the Cable Television  xConsumer Protection and Competition Act of 1992: Rate Regulation, MM Docket No. 92266, Thirteenth Order on  {O-Reconsideration, ("Thirteenth Reconsideration Order") 11 FCC Rcd 388, 391 (1995).#Xj\  P6G;9XP# Any incurred cost that is not  X - x<projected may be accrued with interest and added to rates at a later time.  @ y X -Ѝ#X\  P6G;P# See Thirteenth Reconsideration Order at 392.#Xj\  P6G;9XP#Ѵ If actual and projected  x.costs are different during the rate year a "trueup" mechanism is available to correct estimated  X -costs with actual cost changes.Z y X-ԍ #X\  P6G;P# Id.Z   X - ` x4. ` ` On March 25, 1997, the local franchising authority ("LFA"), filed a complaint  X - xagainst the Operator's January 1, 1997 CPST rate increase.  y X-ԍ#X\  P6G;P# The LFA received its first subscriber complaint against the Operator's CPST rate increase on January 6,  yO-1997.#Xj\  P6G;9XP# The LFA has certified that it has  X- xcomplied with the Interim Rules. y X\"-Ѝ#X\  P6G;P# See LFA FCC Form 329 Complaint, dated March 18, 1997. Operator submitted FCC Form 1240 for the community set  Xy-forth above to justify the rate increase that went into effect on January 1, 1997.syy X$- xЍ #X\  P6G;P# In a letter dated March 12, 1997, Operator submitted its FCC Form 1240 and channel line up information  X%-to the LFA to justify its January 1, 1997 CPST rate increase. #Xj\  P6G;9XP# #X\  P6G;P#s "bf,-(-(ZZ"Ԍ X- ` x5. ` ` Upon review of Operator's FCC Form 1240, we find that Operator incorrectly  X- xcalculated its maximum permitted rate ("MPR").Ay Xb-ԍ #X\  P6G;P#This finding is based solely on the representations of Operator. Should information come to our attention that these representations were materially inaccurate, we reserve the right to take appropriate action. This Order is not 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. In particular, Operator made trueup  xadjustments through to the effective date of the rate increase. This is incorrect. The annual  xadjustment afforded by FCC Form 1240 allows operators to project changes in external costs,  xinflation, and the number of regulated channels. This structure avoids the delay some operators  xexperienced in recouping costs through multiple rate adjustments throughout the year. Because  xprojections will not reflect the costs that actually occur, the Commission provided, as part of the  xyannual adjustment, a "trueup" to correct projected cost changes with the actual cost changes.  xHowever, the Commission has noted that, as FCC Form 1240 must be filed 90 days before an  xincrease is to take effect, the period for the trueup will not coincide with the previous year's  X - xLprojections. y X-ԍ #X\  P6G;P#Thirteenth Reconsideration Order, 11 FCC Rcd 388, 420 fn 151 (1995). The trueup data is intended to indicate real, not projected data.Z y XM-ԍ #X\  P6G;P# Id.Z This policy is  X -reflected in the instructions accompanying FCC Form 1240. 3y X-ԍ  #X\  P6G;P#See FCC Form 1240 Instructions for Timing at 34.  X - ` nx6. ` ` Based on this instruction and considering evidence in the filing,8 y Xl-ԍ #X\  P6G;P#Operator, for instance, did not reflect in its trueup the inflation factor for the second quarter of 1996  {OU-released by the Commission in November 1996. See Public Notice, "Inflation Adjustment Figures for Cable Operators Using FCC Form 1210 and 1240 Now Available," DA 961986, (November 27, 1996). Had this been available to Operator at time of filing, Operator would have been required to include the factor released (2.22%) for all months after March 1996 and for its projection period. Instead, Operator used the previous factor (2.39%) for all inflation adjustments and projections. It is evident, therefore, that Operator did not have November 1996 data available at the time it completed its FCC Form 1240.8 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  xaccordingly. 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  xreflect the corrections made in Line C1. This has resulted in a corresponding adjustment on Line F9 (MPR for TrueUp Period 1).  X- ` x7. ` ` 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"I,-(-(ZZq"  x(TrueUp Segment for the Projected Period). In total, our adjustments to Operator's FCC Form  X- x\1240 result in a corrected MPR for the Projected Period of $14.96 (Line I9).Ay Xb-ԍ#X\  P6G;P# Information regarding the specific adjustments made to Operator's FCC Form 1240 filing can be found in the public file for the community referenced above which is available in the Cable Services Bureau's public reference room, or through the Commission's copy contractor, International Transcription Services (ITS), 1919  yO-M Street, N.W., Washington, DC 20554, or by calling ITS at (202) 8573800.#Xj\  P6G;9XP# Consequently,  xOperator has failed to justify its January 1, 1997 rate of $15.11. To the extent that external costs  X- xyfrom the three months disallowed from Operator's trueup period{y X= -ԍ #X\  P6G;P#As found on Operator's Worksheets 7 and 8.{ have been averaged into the  xrates charged in the nine months allowed in Operator's trueup period, and have not been  x.removed by our adjustments, we will order Operator to make a monthbymonth accounting of  xsuch external costs. Such accounting shall allow a comparison of the actual external costs for  x\the permitted ninemonth trueup period with the recovery of external costs afforded by the  x=external cost segment for that period as calculated on Worksheet 7. We will order the removal  xof any overrecovery, plus interest, identified thereby in Operator's next FCC Form 1240 filed  x.with the Commission. Any such overrecovery of external costs shall be added to the amount otherwise reportable on Line H1 of Operator's next FCC Form 1240 rate calculation.  X - ` x8. ` ` Accordingly, IT IS ORDERED, pursuant to Section 0.32l of the Commission's  xrules, 47 C.F.R. Section 0.321 that Operator's CPST rate of $15.11, effective January 1, 1997, in the community set forth above, IS UNREASONABLE.  Xy- ` x9.` ` IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's  xrules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in the franchise area  xreferenced above that portion of the amount paid in excess of the maximum permitted CPST rate  xof $14.96 per month (plus franchise fees), plus interest to the date of the refund, for the period  xLJanuary 6, 1997 through the day before Operator implements the maximum permitted CPST rate of $14.96.  X- x  X- `  x10.` ` 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.  XN-  X7- ` x11. ` ` IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules,  x?47 C.F.R. Section 0.321, that the complaint referenced herein against the rate charged by Operator in the community set forth above IS GRANTED. ",-(-(ZZ"  X- ` 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. 5"JU xx x x 5 x` `  hh@FEDERAL COMMUNICATIONS COMMISSION  "JU  x` `  hh@Meredith J. Jones  X -x` `  hh@Chief, Cable Services Bureauxx