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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554


    In the Matter of)
     )
     Falcon Cablevision)CUID No.  GA0052 (Cedartown)
                    )     
                      )
          Complaint Regarding )
        Cable Programming Services Tier Rates)

                              ORDER

         Adopted:  July 11, 1997 Released:  July 16, 1997    

By the Chief, Cable Services Bureau:

      1.In this Order we consider a complaint against the November 1, 1996 rate increase that the
above-captioned operator ("Operator") implemented for its cable programming services tier ("CPST") and
an additional outlet fee in the community set forth above.  Operator has attempted to justify its CPST rate
increases through benchmark showings on FCC Forms 1210 and 1240.  We have already issued an order
which resolved a complaint filed against Operator's April 1, 1996 CPST rate increase ("Prior Order"). 
Accordingly, this Order addresses the reasonableness of  Operator's CPST rate increase and additional outlet
fee effective November 1, 1996.

      2.The Communications Act authorizes the Federal Communications Commission
("Commission") 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 the rate unreasonable, it shall determine the
correct rate and any refund liability.  The Telecommunications Act of 1996 ("1996 Act") and our rules
implementing the new legislation ("Interim Rules"), require that complaints against CPST rates be filed with
the Commission by a local franchising authority ("LFA") that has received subscriber complaints.  A
franchising authority may not file a CPST rate complaint unless, within 90 days after such increase becomes
effective, it receives more than one subscriber complaint.
                                                               
      3.The Commission's original rate regulations took effect on September 1, 1993.  The
Commission revised its rate regulations effective May 15, 1994.  Cable operators attempting to justify rates
for the period beginning May 15, 1994 through a benchmark showing 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.Cable operators may 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.  If actual and projected costs are
different during the rate year a "true-up" mechanism is available to correct estimated costs with actual cost
changes.  

      5.On April 25, 1997, the LFA filed a complaint against Operator's November 1, 1996 CPST rate
increase and additional outlet charge.  In its complaint, the LFA asserts that it has received more than one
subscriber complaint against Operator's CPST rate increase, thereby triggering the Commission's jurisdiction
to review this complaint.  The valid complaint from the LFA triggers an obligation on behalf of the cable
operator to file a justification of its CPST rates with the LFA.  Thus, in this case, Operator is required to
justify the increase in its CPST rate which is the subject of the LFA's complaint.  We note that Operator
provides services on two CPSTs, CPST-1 and CPST-2, hereinafter referred to as "SATPAC."  Operator
submitted FCC Forms 1210 and 1240 to justify the SATPAC additional outlet chargeand the CPST rate
increase that went into effect on November 1, 1996.    
     
      6.In the Prior Order, we found that Operator's SATPAC programming constituted a regulated
tier and that Operator's April 1, 1996 rate increase for the tier was unreasonable.  In June, 1997, pursuant
to the Prior Order, Operator provided refunds to subscribers of the SATPAC tier and reduced the SATPAC
rate to $5.15.  Consequently, we find that the LFA's complaint against Operator's November 1, 1996
SATPAC rate of $7.71 is moot because Operator has reduced the rate to $5.15 as required by the Prior Order. 
       

      7.The LFA's complaint also covers Operator's increase for the SATPAC additional outlet
charge.  Under Section 76.923(a) of the Commission's rules, all equipment used to receive the basic
service tier ("BST") is subject to rate regulation, regardless of whether such equipment is used to receive
other tiers of regulated programming and/or unregulated service.  Such equipment-related charges are
subject to regulation by LFAs.  According to Operator, subscribers obtain both BST and CPST programming
on the outlet for which Operator imposes an additional outlet charge.  Therefore, the LFA's complaint does
not trigger our jurisdiction to regulate the SATPAC additional outlet charge imposed by Operator.  However,
the LFA has jurisdiction to determine the reasonableness of Operator's SATPAC additional outlet charge for
the SATPAC tier. 

      8.Upon review of Operator's amended FCC Form 1210 for the period January 1, 1995 to March
31, 1996, we find that Operator has correctly calculated its maximum permitted rate ("MPR") for CPST-1
and CPST-2 SATPAC, effective April 1, 1996.  Upon review of Operator's amended FCC Form 1240 for
the projected period October 1, 1996 to September 30, 1997, Operator's actual CPST-1 rate of $6.78 exceeds
the MPR of $6.43 that Operator calculated.  Because Operator has failed to justify its CPST-1 rate of $6.78,
we have adjusted Operator's FCC Form 1240.  Specifically, we have refreshed Operator's inflation factor to
2.22 percent and adjusted Module C, Line C1 and Worksheet 1 accordingly.  In total, our adjustments to
Operator's FCC Form 1240 result in a reduction of the MPR for CPST-1 for the Projected Period to $6.40
(Line I9).  Consequently, we find that Operator has failed to demonstrate that its November 1, 1996 CPST-1
rate of $6.78 was not unreasonable.

      9.  Accordingly, IT IS ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R.
Section 0.321, that Operator's CPST-1 rate of $6.78, effective November 1, 1996, in the community set forth
above, IS UNREASONABLE.

      10.IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R.
Section 0.321 that the complaint referenced herein against the Operator's CPST-2 SATPAC rate of $7.71,
effective November 1, 1996, in the community set forth above, IS DISMISSED.

      11.IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R.
Section 0.321 that the complaint referenced herein against the Operator's additional outlet charge for CPST-2
SATPAC, effective November 1, 1996, in the community set forth above, IS DISMISSED.

      12.IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R.
Section 0.321, that the complaint referenced herein against the CPST-1 rate of $6.78, effective November
1, 1996, in the community set forth above, IS GRANTED.

      13.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-1 rate of $6.40 per month (plus franchise fee) plus
interest during the period from November 1, 1996  to the day before Operator reduces its CPST rate to $6.40.

      14.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. 
      
      15.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.
 0.321, that Operator take into account our FCC Form 1240 adjustments when calculating its maximum
permitted rate and performing the true-up calculation on its next FCC Form 1240.

     FEDERAL COMMUNICATIONS COMMISSION 



     Meredith J. Jones
     Chief, Cable Services Bureau