******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) ) Cencom Cable Television, Inc. ) CUID Nos. NC0024 (Lenoir) ) NC0148 (Lenoir) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: June 9, 1997 Released: June 11, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider complaints about the rates of 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 Forms 1200 and 1210. We have already issued a separate order in which we found that Operator's rates in effect before May 15, 1994 were unreasonable ("Prior Order"). Accordingly, this Order addresses the reasonableness of Operator's CPST rate in effect from May 15, 1994 to present. 2. Under the Communications Act, the Commission is authorized to review CPST rates of cable systems not subject to effective competition to ensure that rates charged are not unreasonable. If the Commission finds rates to be unreasonable, it shall determine correct rates and any refund liability. 3. The Commission's original rate regulations took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. Generally, to justify their rates for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200 series. Cable operators may also justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation, by filing FCC Form 1210. FCC Form 1210 must be filed at least 30 days before new rates are scheduled to go into effect where the Commission has found the CPST rate to be unreasonable less than one year prior to the filing, or where there is a pending complaint against the CPST rate. 4. In a letter dated June 13, 1994, Operator advised the Commission that it had elected, as provided in the Commission's rules, to take advantage of the refund liability deferral period from May 15, 1994 through July 14, 1994 for any overcharges resulting from the calculation of a new maximum permitted rate ("MPR") on the FCC Form 1200. Accordingly, the Operator's adjusted FCC Form 393 MPR, determined by our Prior Order, governs the CPST rate during the period from May 15, 1994 through July 14, 1994. The liability period for any CPST overcharges by Operator associated with its FCC Form 1200 filing did not begin to run until July 15, 1994. Because Operator's actual CPST rate of $16.32, effective May 15, 1994 through July 14, 1994, was greater than the MPR of $16.02 determined in our Prior Order, we find that Operator's CPST rate for the period of May 15, 1994 through July 14, 1994 is unreasonable. 5. We stated in our Prior Order that the findings in that review "do not in any way prejudice the reasonableness of the prices for CPS services after May 14, 1994." Consequently, the rates beginning May 15, 1994 are subject to Commission review and are addressed in this Order. Upon review of Operator's FCC Form 1200 and multiple FCC Forms 1210, we find that Operator charged in excess of its calculated MPR, as discussed in the paragraphs below. 6. Our review indicates that Operator did not reduce the starting rate on its FCC Form 1200 to reflect the MPR of $16.02 that we calculated on its FCC Form 393 in the Prior Order. Accordingly, we adjusted Operator's FCC Form 1200, Module A, Line A6 to reflect a starting MPR of $16.02, which results in an MPR of $15.28 for FCC Form 1200. Operator simultaneously filed, with this FCC Form 1200 filing, its first FCC Form 1210 filing for the period April 1, 1994 to June 30, 1994. Operator's FCC Form 1210 and our review confirms an MPR of $15.43. Because Operator's actual CPST rate of $16.32 is greater than the CPST MPR of $15.43 justified on its FCC Form 1210, we find that Operator's CPST rate effective July 15, 1994 through September 31, 1994 is unreasonable. 7. Upon review of Operator's FCC Form 1210 for the period July 1, 1994 to September 30, 1994, we have found that Operator used the incorrect inflation adjustment factor of 1.024. Accordingly, we have adjusted Operator's FCC Form 1210, Module E, Line E5 to reflect the correct inflation factor of 1.0215 resulting in a corrected CPST MPR of $15.65, effective October 1, 1994 through December 31, 1994. During this period Operator continued to charge $16.32 for its CPST. Consequently, we find that Operator's CPST rate effective October 1, 1994 through December 31, 1994 is unreasonable. 8. Upon review of Operator's FCC Forms 1210 for the period October 1, 1994 through December 31, 1994 and January 1, 1995 through March 31, 1995, Operator has demonstrated that its CPST rate does not exceed its MPR. Therefore, we find that Operator's CPST rate of $16.06, effective January 1, 1995 through September 31, 1995 is justified and reasonable. 9. Upon review of Operator's FCC Form 1210 for the period April 1, 1995 to September 30, 1995, Operator's has demonstrated that its CPST rate does not exceed its MPR. Therefore, we find that Operator's CPST rate of $16.17 effective October 1, 1995 is justified and reasonable. 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 $16.32 charged by Operator in the franchise area referenced in the caption during the period from May 15, 1994 to December 31, 1994, IS UNREASONABLE. 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 $16.06 charged by Operator in the franchise area referenced in the caption during the period from January 1, 1995 to September 30, 1995, IS NOT 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 $16.17 charged by Operator in the franchise area referenced in the caption beginning October 1, 1995 IS NOT UNREASONABLE. 13. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaints referenced herein in the franchise area referenced in the caption, ARE GRANTED TO THE EXTEND INDICATED HEREIN. 14. 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 franchise area referenced in the caption that portion of the amount paid in excess of the maximum permitted CPST rate of $16.02 per month (plus franchise fee) during the period from May 15, 1994 through July 14, 1994. 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 franchise area referenced in the caption that portion of the amount paid in excess of the maximum permitted CPST rate of $15.43 per month (plus franchise fee) during the period from July 15, 1994 through September 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 franchise area referenced in the caption that portion of the amount paid in excess of the maximum permitted CPST rate of $15.65 per month (plus franchise fee), plus interest to the date of the refund, for the period from October 1, 1994 through December 31, 1994. 17. 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 franchise area referenced in the caption that portion of the amount paid in excess of the maximum permitted CPST rate of $16.17 per month (plus franchise fee), plus interest to the date of the refund, beginning October 1, 1995. 18. 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 amounts so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of the Commission approval of the plan. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau