WPC 2MBVRKZ3|X7jC:,8Xj\  P6G;XP"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$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdHP4Si (Additional); Rm. 907_1; LPT2HPLA4SAD.PRSXj\  P6G;\! EXP2> K Z3|X"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+99999999S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d"" ]?(_toc 3toc 3<` hp x (#` !(# ` !(# ` hp x (#toc 4toc 4=` hp x (# !(#  !(# ` hp x (#toc 5toc 5>` hp x (#h!(# h!(# ` hp x (#toc 6toc 6?` hp x (#!(#!(#` hp x (#2Hh@vxaAaB dC*ftoc 7toc 7@ toc 8toc 8A` hp x (#!(#!(#` hp x (#toc 9toc 9B` hp x (#!(#B!(#B` hp x (#index 1index 1C` hp x (#` !(# ` !(# ` hp x (#2mDzhEjFvlGl,mindex 2index 2D` hp x (#` !(#B` !(#B` hp x (#toatoaE` hp x (#!(# !(# ` hp x (#captioncaptionF _Equation Caption_Equation CaptionG 2FqHrmIvNormalf$ Xx  @ Headerg2hiM\FootnotehÍ/y.X80,IX\  P6G;P7jC:,+Xj\  P6G;XP7nC:,Xn4  pG;Xy.\80, {\4  pG;W!@(#,9h@\  P6G;hPH5!,,5\  P6G;,P\{,W80,%W*f9 xr G;X\5hC:,%Xh*f9 xr G;XX` yO- X   )^} X-w #Xj\  P6G;+XP# Federal Communications Commission`)(# DA 971261 ă  yxdddy )Պv3 Before the Federal Communications Commission  yO} Washington, D.C. 20554 ă  X -#Xj\  P6G;+XP#In the Matter ofR#Xj\  P6G;+XP#)  X -R) FALCON CABLEVISIONR) R) Appeal of Local Rate OrderR) Of the City of Thousand Oaks, CaliforniaR) R)  XQ -  MEMORANDUM OPINION AND ORDER TP  X# -X` hp x (#%'0*,.8135@8:"_ {O%-ԍId. at para. 12.>  X- ",N(N(ZZ"  X-II. STANDARD OF REVIEW ă  X- ` x6.` ` Under our rules, rate orders adopted by local franchising authorities may be  X- xappealed to the Commission.> _ yO4-ԍ47 C.F.R.  76.944.> In ruling on appeals of local rate orders, the Commission will not  X- x-conduct a de novo review, but instead will sustain the franchising authority's decision so long as  X- xthere is a reasonable basis for that decision. X_ {O- xiԍSee Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992:  {Ob - xRate Regulation, MM Docket No. 92266 ("Rate Regulation"), Report and Order and Further Notice of Proposed  {O, - xRulemaking, 8 FCC Rcd 5631, 5731 (1993) ("Rate Order"); Implementation of Sections of the Cable Television  {O - x: Consumer Protection and Competition Act of 1992: Rate Regulation and BuyThrough Prohibition, MM Docket Nos. 92266 and 92262, Third Order on Reconsideration, 9 FCC Rcd 4316, 4346. The Commission will reverse a franchising  xauthority's decision only if it determines that the franchising authority acted unreasonably in  Xa- xapplying the Commission's rules in rendering its local rate order.L a_ {O"-ԍRate Order, 8 FCC Rcd at 5732.L If the Commission reverses  xa franchising authority's decision, it will not substitute its own decision but instead will remand  xthe issue to the franchising authority with instructions to resolve the case in a manner that is  X -consistent with the Commission's decision on appeal.1  _ {Oo-ԍId.1  X - AIII. BACKGROUND ă  X - ` x7.` ` On May 3, 1993, the Commission released its order ("Rate Order")< 4 _ {O-ԍSupra note 10.< establishing  x{rules to implement the cable television rate regulation provisions of the Cable Television  X- x{Consumer Protection and Competition Act of 1992. _ yO -ԍPub. L. No. 102385, 106 Stat. 1460 (codified as amended in scattered sections of 47 U.S.C.). In the Rate Order, the Commission  xdetermined that a benchmark approach should serve as the primary method for regulating  x<equipment and installations and basic and cable programming service tier rates. The Commission  xalso concluded that because the benchmark methodology might not produce fully compensatory  xyrates in all cases, it was appropriate to permit operators, as an alternative, to justify rates based  X#- xon costs, using individual costofservice showings.#V _ {O*"-ԍRate Order, 8 FCC Rcd at 579495; see 47 C.F.R.  76.922(b)(1), (c)(1), (i). The costofservice approach was intended  xto be used only if an operator believed that the maximum rate permitted under the benchmark  xformula would not enable the operator to recover costs reasonably incurred in providing rate X- xregulated cable services.D_ {Ow&-ԍRate Order at 579495.D FCC Form 1220 is used by operators to justify the need for rates that"z,N(N(ZZ"  X- xexceed the otherwise applicable benchmark rates.$_ {Oy- xiԍSee Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992:  {OC- xRate Regulation and Adoption of a Uniform Accounting System for Provision of Regulated Cable Service, MM  yO - xxDocket No. 93215 and CS Docket No. 9428,  Report and Order and Further Notice of Proposed Rulemaking, 9 FCC Rcd 4527, 4544 n.59 (1994). The rates that are justified through the Form  X-1220 become the MPRs.:_ {ON-ԍId. at 4533.:  X- ` x8.` ` Thereafter, operators may justify rate increases based on the addition and deletion  X- xof channels, changes in certain external costs, and inflation by filing FCC Form 1210.rZF_ yO - xԍ47 C.F.R.  76.922(c)(1)(ii), (d). Operators may update their rates through the filing of a Form 1210 on a  {Oc - xquarterly basis. Id. Alternatively, operators may justify rate increases through Form 1240, which is filed on an annual basis. 47 C.F.R.  76.922(c)(1)(iii), (e). r Such  xkincreased rates will become effective 30 days after the operator submits the Form 1210 to its  x[local franchising authority, unless the local franchising authority acts within the 30day period  xby either rejecting the rate increase or issuing a tolling order stating that it requires more time  XH- xin which to complete its review.("Hh _ yOa- xKԍ47 C.F.R.  76.933(a). Certain rate increases or portions thereof are treated as "existing rate[s]," and their  xeffective date is not tolled during the local franchising authority review process. 47 C.F.R.  76.933(e) (governing  xincreased rates attributable to Commission regulatory fees or franchise fees). However, such rate increases are  {O-subject to refund and may be reduced pursuant to franchising authority review. Id. ( A franchising authority may toll the effective date of the rate  X1-increase for an additional 90 days.D1R _ yO4-ԍ47 C.F.R.  76.933(b)(1).D  X - ` x9.` ` The information requested in Form 1210 builds on information provided in earlier  xrate filings, including previously filed Form 1210s. To determine the updated MPR, which is  xycalculated in Modules J and K of the Form 1210, the operator must start with the MPR reported  X - xon its most recently filed Form 1210 or on its Form 1200 _ yOQ-ԍForm 1200 is used to justify initial rates based on the benchmark methodology. 47 C.F.R.  76.922(b)(3). or 1220 if it has not previously filed  X - xa Form 1210. r_ {O- xԍSee Instructions for FCC Form 1210, Updating Maximum Permitted Rates for Regulated Cable Services, at 8 (Instructions for Module A). The previously determined MPR is reported in Module A, line A2, of the 1210 ("Permitted Charge"). "y,N(N(ZZ"  X- IV. DISCUSSION ă  X- `  x10.` ` We will grant Falcon's appeal in part and deny it in part. We remand the local  xrate order with instructions for the City to recalculate Falcon's MPR based on the MPRs  X- xcalculated by the City in response to our Remand Order. The Form 1220 MPR should be entered  xon line A2 of the first Form 1210, and the MPR calculated on the first Form 1210 should be  xentered on line A2 of the second Form 1210. The resulting MPR calculated on the second Form 1210 should include the rate increase the City approved in its local rate order.  X3- ` x11.` ` The City's revision of Falcon's second Form 1210 MPR to incorporate the MPRs  x=it had found reasonable in its review of the Form 1220 and first Form 1210 cannot be sustained  xon appeal. The City issued its order on the second Form 1210 after its order on the Form 1220  x.had been remanded. The MPR set forth in the Form 1220 order therefore could not be used as  xthe basis for the City's calculation of the second Form 1210 MPR. Nor could the City have used  xFalcon's filed Form 1220 as the basis for calculating the MPR on the second Form 1210 because  X -the Remand Order upheld the City's Form 1220 rulings in certain respects.  X}- ` `x12.` ` Although we find here that the City erred in using its remanded Form 1220 rate  xto calculate the MPR on Falcon's second Form 1210, Falcon also erred when it filed its second  xForm 1210 by using its own Form 1220 rate as the base rate. When Falcon submitted its second  xForm 1210, we had not yet ruled on the City's Form 1220 order, and the order was not subject  x<to a stay. Falcon should have used the Cityordered Form 1220 rate as the base rate in its second Form 1210 filing.  X- ` x13.` ` In addition, because the Remand Order upheld the City's Form 1220 order in  xycertain respects and dismissed Falcon's request for a stay of the City's Form 1220 order, Falcon  xLcould not lawfully continue to charge rates that were based on its filed Form 1220. Our rulings  X- xon each of the Form 1220 issues were clear and unambiguous.uL_ yO- xxԍThe Commission denied Falcon's appeal of the City's Form 1220 order with respect to all except two issues.  xThese two issues were remanded to the City. The first remanded issue concerned the City's valuation of intangible  {O- xassets. The Remand Order rejected the City's valuation, discussed a previously approved valuation methodology,  {Ol- xand directed the City to reconsider its valuation in light of the prior approval of a specific methodology. Remand  {O6- xOrder, 11 FCC Rcd at 1051517. The second remanded issue concerned the City's holding that Falcon was required  {O- xto reset its equipment and installation rates when it implemented its Form 1220 basic service rates. The Remand  {O- xOrder granted Falcon's appeal of this issue and held that it was not required to submit its equipment and installation  {O -rates for the City's review until December 31, 1994. Id. at 10522. u Falcon could have and should  xhave recalculated and resubmitted its Form 1220 and Form 1210 rates, and it should have  ximplemented the revised rates, subject to the City's right to review them, without waiting for the City to issue an order on remand.  X&- ` x14.` ` The record in this proceeding does not indicate whether the City has issued an  X- xorder in response to our Remand Order. If the City has done so, then Falcon must recalculate,  X- x[refile and implement its Form 1210 rates to reflect the City's rulings in response to the Remand",N(N(ZZ"  X- xOrder. If the City has not yet done so, then Falcon should recalculate and refile its Form 1220  xand Form 1210 rates, and implement its revised Form 1210 rates, to reflect the rulings in the  X- xRemand Order without waiting for the City to issue an order on remand. The City shall have  x=the right to review Falcon's filings in accordance with the Commission's rules. Falcon may not charge rates in excess of the rates supported by its revised filings.  Xz- `  x15.` ` Our recent issuance of the Falcon Effective Competition Order does not abrogate  x/the City's jurisdiction to respond to this Order. The rate filing and part of the rateeffective  x<period at issue in this proceeding predate our finding of effective competition. However, the City  xmay not prescribe rates after March 5, 1997, the date on which Falcon filed its effective  xcompetition petition, and Falcon shall not be liable for refunds related to rates charged after that date.  X -6 V. ORDERING CLAUSES ă  X - ` "x16.` ` Accordingly, IT IS ORDERED , that Falcon Cablevision's appeal of the November  X- xl19, 1996 rate order of the City of Thousand Oaks, California, is GRANTED to the extent  X-discussed herein and DENIED to the extent discussed herein.  XQ- ` x17.` ` IT IS FURTHER ORDERED that the foregoing order is REMANDED to the City for resolution in accordance with the terms of this Memorandum Opinion and Order.  X - ` x18.` ` IT IS FURTHER ORDERED that Falcon Cablevision's appeal of the October  X-1, 1996 rate order of the City of Thousand Oaks, California, is DISMISSED AS MOOT .  X- ` x19.` ` IT IS FURTHER ORDERED that within 60 days of the date of this Order ,  X- xFalcon is directed to revise and refile its rate forms with the City and, subject to the City's right  xto review the filings, implement revised rates to reflect the rulings discussed herein and in the  X-Remand Order or in the City's order in response to the Remand Order if it has issued one.  XV- ` ox20.` ` This action is taken by the Chief, Cable Services Bureau, pursuant to authority  X?-delegated by Section 0.321 of the Commission's rules.=?_ yO-ԍ47 C.F.R.  0.321.= x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@Meredith J. Jones x` `  hh@Chief, Cable Services Bureau