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


In the Matter of                )
                                )
  Comcast Cablevision of Paducah, Inc.)CUID No.  KY0189 (City of Paducah)
                                )
                                )
Complaint Regarding             )
Cable Programming Services Tier Rates)


                                  ORDER

         Adopted:  July 18, 1997 Released:  July 24, 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") in the
community set forth above.  Operator has attempted to justify its CPST rate increase through a benchmark
showing on FCC Form 1240.  We have already issued a separate order ("Prior Order") which found that
Operator's CPST rate from May 15, 1994 to December 31, 1995 was not unreasonable.  Accordingly, this
Order addresses the reasonableness of the Operator's CPST rate of $17.53, 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"), requires that complaints against CPST rates be filed
with the Commission by a franchising authority 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.  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.  

      4.On April 29, 1997, the local franchising authority ("LFA") filed its complaint against
Operator's November 1, 1996 CPST rate increase.  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. 
Operator submitted FCC Form 1240 for the community set forth above to justify its CPST rate increase. 


      5.The LFA contends that Operator incorrectly calculated its inflation factor, the average
monthly true-up inflation factor on Worksheet 1, and the CAPS adjustment for the addition of channels to
its programming in its FCC Form 1240 filing.  The LFA further contends that in the Prior Order, we
incorrectly allowed Operator to recover excess inflation.  The LFA also requests that we rescind the waiver
which allows Operator, in its August 1, 1996 initial filing of FCC Form 1240, to calculate an inflation
adjustment factor of 2.61% instead of the inflation factor of  2.39% subsequently released by the
Commission.   Operator contends that it used the correct inflation adjustment factor for the relevant time
period on its FCC Form 1240 and that it calculated Worksheet 1 correctly. 

      6.The LFA did not file a petition for reconsideration or an application for review of the Prior
Order or the Waiver Letter.  Because the LFA is now attempting to raise issues in this proceeding that it
failed to properly place before the Commission in accordance with the Commission's Rules, we will not
consider the LFA's request to review Operator's filings associated with the Prior Order in this proceeding. 
We will, however, consider the LFA's contention regarding Operator's adjustments for the addition of new
channels in our review of Operator's FCC Forms below.  
   
      7.In order to justify the rate of $15.80, used on Line A1 of its FCC Form 1240, for the
projected period November 1, 1996 to October 31, 1997, Operator argues that the Prior Order approved
Operator's FCC Form 1210, covering the period October 1, 1995 to December 31, 1995.  This FCC Form
1210, as filed by Operator, attempts to justify a maximum permitted rate ("MPR") of $15.80.  Because the
Prior Order denied all complaints against Operator regarding its CPST covering the period May 15, 1994
through December 31, 1995, Operator argues that the Prior Order approved the FCC Form 1210 covering
the period October 1, 1995 to December 31, 1995 and, consequently, the MPR of $15.80.  The LFA opposes
Operator's argument that the MPR calculated by Operator on its FCC Form 1210, for the period October 1,
1995 to December 31, 1995, should be the starting rate on Operator's FCC Form 1240, Line A1. 

      8.Operator has misinterpreted the Prior Order.  When an operator files an FCC Form 1210,
the operator is utilizing the quarterly rate adjustment method detailed in Section 76.922(d) of the
Commission's rules. According to Section 76.922(d), the operator cannot adjust its rates in accordance with
its FCC Form 1210 until the close of the calendar quarter(s) for which the FCC Form 1210 is being filed. 
Because the FCC Form 1210 filed by Operator in the community referenced above covers the period October
1, 1995 to December 31, 1995, the earliest Operator could adjust its rates pursuant to the FCC Form 1210
was January 1, 1996.  The Prior Order only addressed "the reasonableness of Operator's rates starting May
15, 1994 through December 31, 1995."  Therefore, the Prior Order did not address Operator's March 1,
1996 CPST rate increase, for which Operator filed the FCC Form 1210 in question, and made no findings
regarding Operator's FCC Form 1210 for the period October 1, 1995 to December 31, 1995. 
     
      9.Our review of Operator's FCC Form 1210 for the period October 1, 1995 to December 31,
1995 indicates that Operator has miscalculated its MPR.   We adjusted Operator's starting rates on Lines
A1 and A2 to reflect the correct transition rate and permitted charge, respectively, from the Prior FCC Form
1210.  In addition, we eliminated all of Operator's programming costs on Module C, Lines C6 through C13
because Operator already recovered these costs in its prior FCC Form 1210, dated April 21, 1995, filed on
December 4, 1995.  We also corrected the previous number of channels per regulated tier reported on Line
E1 to 11 for the basic service tier and 25 for the CPST which resulted in a decrease from 8 to 1 on Line E4
(Total Increase in Channels).  In addition, we disallowed Operator's current per channel adjustment per tier
on Line F10 because Operator already recovered this adjustment in its prior FCC Form 1210 for the period
April 1, 1995 to September 30, 1995.  We also reduced Operator's inflation adjustment factor on Line I5 and
Line J5 to 1.0296.  Based on our adjustments, we calculated a revised MPR of $14.77, effective January 1,
1996.

      10.Our review of Operator's FCC Form 1240 to justify its CPST rate of $17.53, effective
November 1, 1996, indicates that Operator has miscalculated its MPR.  We have corrected Operator's starting
rate on Line A1 to reflect the MPR of $14.77 from Operator's revised FCC Form 1210.  As a result of our
adjustment to line A1, we have calculated a corrected MPR for the Projected Period of $16.61 (Line I9). 
Thus, Operator has failed to demonstrate that its November 1, 1996 rate of $17.53 is not unreasonable.  

      11.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 rate of $17.53, effective November 1, 1996, in the community
set forth above, IS UNREASONABLE.

      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 rate increase charged by Operator 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 rate of $16.61 per month (plus franchise fee)
plus interest during the period from November 1, 1996  to the day before Operator reduces its CPST rate to
$16.61.

     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