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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 ) ) Comcast Cablevision of Danbury, Inc.)CUID Nos.City of Danbury (CT0076) )City of Bethel (CT0085) )City of Ridgefield (CT0113) ) Complaints Regarding ) Cable Programming Services Tier ) Rate Increases ) ORDER Adopted: July 29, 1997Released: July 30, 1997 By the Chief, Cable Services Bureau: 1.In this Order we consider complaints concerning the rates of the above-captioned operator ("Operator") for its cable programming services tier ("CPST") in the communities referenced above. Operator's response includes rate justifications filed on FCC Forms 1200, 1210, and 1240. We have already issued an order ("Comcast Resolution") which resolved complaints against Operator's rates for the period September 1, 1993 through July 14, 1994. Accordingly, this Order addresses the reasonableness of Operator's CPST rates beginning July 15, 1994. 2.Under the Communications Act, the Federal Communications Commission ("Commission") is authorized to review the CPST rates of cable systems not subject to effective competition to ensure that rates charged are not unreasonable. The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), and our rules implementing the 1992 Cable Act, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The filing of a valid complaint under the 1992 Cable Act triggered an obligation on behalf of the cable operator to file a justification of its CPST rates. 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. An LFA may not file a CPST rate complaint unless it receives more than one subscriber complaint within 90 days after such increase becomes effective. Under both the 1992 Cable Act and the 1996 Act, if the Commission finds the rate to be unreasonable, it shall determine the correct rate 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. Operators must use the FCC Form 1200 series to justify their rates for the period beginning May 15, 1994 using a benchmark showing. 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 cable programming service rate to be unreasonable less than one year prior to the filing, or where there is a pending complaint against the CPST rate. Operators may alternatively 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. 4.On June 21, 1995, Operator filed a response to a complaint filed on March 24, 1995 against its rates in the Danbury, Connecticut franchise area referenced above (CUID No. CT0076). Operator requested that the Commission dismiss the complaint on the grounds that the complaint challenges the reasonableness of a Value Pak rate charged by Operator in the above-referenced franchise area. To support its request, Operator referred to a previous Commission decision in which the Commission determined that the Value Pak offered by Comcast Cablevision of Tallahassee, Inc. should be treated as a New Product Tier ("NPT"). In that decision, the Commission held that Operator's creation of the NPT was not an evasion of Commission rules. Even though Operator had removed channels from a regulated tier, Operator was not required to retier because the number of channels removed was small. Operator was allowed to treat its Value Pak offering as an NPT under the Commission's rate regulations. We agree that in this instance Operator's Value Pak is substantially similar to the Value Pak offering in Tallahassee, Florida and should be treated as an NPT. We find, however, that the complaint concerns not only an increase in Value Pak charges, but an increase in CPST charges as well. The Commission therefore has jurisdiction over this complaint regarding CPST charges. For this reason, we deny Operator's request to dismiss the complaint. 5.On May 20, 1997, pursuant to the 1996 Act, the LFA filed complaints with the Commission against Operator's December 1, 1996 CPST rate increase from $12.02 to $13.80 in the above-referenced communities. The LFA certified that it has received more than one subscriber complaint for each of the communities and that it has complied with the Interim Rules. 6.To justify CPST rates in effect from July 15, 1994 to September 9, 1994, Operator filed an FCC Form 1200 on October 20, 1994. Upon review of the FCC Form 1200, we revised Module A, Line A6, to agree with the maximum permitted rate ("MPR") of $10.01 justified in Operator's revised FCC Form 393. We also adjusted Operator's full reduction rate (Module G, Lines G5 and G6) on its FCC Form 1200 to reflect September 30, 1992 equipment revenue and franchise fee figures reported in the revised FCC Form 393. Specifically, we changed Line G5 from $134,487.00 to $129,678.00, and Line G6 from $37,656.97 to $46,638.00. These adjustments caused a reduction in Operator's MPR from $9.47 to $9.31. Therefore, we find that Operator's CPST rate of $9.47, effective July 15, 1994, is unreasonable. 7.Upon review of Operator's first FCC Form 1210 filed for the period April 1, 1994 to September 30, 1994, to justify a CPST rate of $9.90, effective November 19, 1994 through February 28, 1995, we adjusted Module A, Line A2 from $9.47 to $9.31 to agree with the MPR reflected in the revised FCC Form 1200. This change resulted in an MPR of $9.75. Operator was actually charging $9.90. Thus, we find that Operator's CPST rate of $9.90, effective November 19, 1994, is unreasonable. 8.Upon review of Operator's second FCC Form 1210 filed for the period October 1, 1994 to December 31, 1994, to justify a CPST rate of $10.78, effective March 1, 1995, we adjusted Module A, Line A2 from $9.90 to $9.75 to agree with the MPR revised in the prior FCC Form 1210. This change resulted in a CPST MPR of $10.60. Operator was actually charging $10.78. Thus, we find that Operator's CPST rate, effective March 1, 1995, is unreasonable. 9.Upon review of Operator's third FCC Form 1210, filed October 10, 1995, for the period January 1, 1995 to September 30, 1995, to justify Operator's continuing CPST rate of $10.78, we adjusted Module A, Line A2 from $10.78 to $10.60 to agree with the revised MPR in the prior FCC Form 1210. This change resulted in a CPST MPR of $10.84, less than Operator's MPR of $11.03. Because Operator continued to charge $10.78, however, we find that Operator's CPST rate, effective October 1, 1995, is not unreasonable. 10.Upon review of Operator's fourth FCC Form 1210, filed for the period October 1, 1995 to December 31, 1995, to justify a CPST rate of $11.82, effective February 1, 1996, we adjusted Module A, Line A2 to reflect the previous MPR of $10.84 brought forward from the prior FCC Form 1210. Our adjustments to Operator's fourth FCC Form 1210 resulted in an MPR for the CPST of $11.63. Operator, however, actually was charging a CPST rate of $11.82. Thus, we find that Operator's CPST rate of $11.82, effective February 1, 1996, is unreasonable. 11.Upon review of Operator's fifth FCC Form 1210, submitted for the period January 1, 1996 to June 30, 1996, to justify a CPST rate of $12.02, effective August 1, 1996, we adjusted Module A, Line A1 to reflect the correct Transition Rate of $10.34 and Module A, Line A2 to reflect the Permitted Charge of $11.63 brought forward from the prior FCC Form 1210. These adjustments resulted in an MPR for the CPST of $11.82. Because Operator's actual CPST rate exceeded the MPR, we find Operator's CPST rate of $12.02, effective August 1, 1996, to be unreasonable. 12.Upon review of Operator's FCC Form 1240, for the projected period December 1, 1996 to November 30, 1997, we adjusted Module A, Line A1 to reflect the corrected MPR of $11.82 brought forward from Operator's fifth FCC Form 1210. We changed Module C, Lines C1 through C3, to reflect the correct Inflation Factor For True-Up Periods 1 and 2 of 1.0037 and 1.0049, respectively, and the Current FCC Inflation Factor of 1.0183. On Line H1 of Module H, we inserted the correct figure of $833,676.75 for Operator's Revenue From Period 1. On Line H2, we changed the Revenue from the MPR for Period 1 to the correct number of $914,695.45. We also changed Line H6, Revenue from MPR for Period 2 Eligible for Interest, to the correct figure of $1,256,528.88. These corrections produced a revised MPR for the CPST of $13.33. Because this MPR is less than Operator's actual CPST rate of $13.80, effective December 1, 1996, we find Operator's CPST rate to be unreasonable. 13.Accordingly, IT IS ORDERED, pursuant to Section 623(a)(2)(A) and (B) of the Communications Act of 1934, as amended, 47 U.S.C. Section 543(a)(2)(A) and (B), that the June 21, 1995 request to dismiss IS DENIED. 14.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the above-referenced complaints ARE GRANTED TO THE EXTENT INDICATED HEREIN. 15.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the communities referenced above, from July 15, 1994 through November 18, 1994, ARE UNREASONABLE. 16.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the communities referenced above, from November 19, 1994 through February 28, 1995, ARE UNREASONABLE. 17.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the communities referenced above, from March 1, 1995 through September 30, 1995, ARE UNREASONABLE. 18.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the communities referenced above, from October 1, 1995 through January 31, 1996, ARE NOT UNREASONABLE. 19.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the communities referenced above, from February 1, 1996 through July 31, 1996, ARE UNREASONABLE. 20.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the communities referenced above, from August 1, 1996 through November 30, 1996, ARE UNREASONABLE. 21.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the communities referenced above, from December 1, 1996 through the present, ARE UNREASONABLE. 22.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 communities referenced above that portion of the amount paid in excess of the CPST rate of $9.31 per month (plus franchise fees), plus interest to the date of the refund, for the period from July 15, 1994 through November 18, 1994. 23.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 communities referenced above that portion of the amount paid in excess of the CPST rate of $9.75 per month (plus franchise fees), plus interest to the date of the refund, for the period from November 19, 1994 through February 28, 1995. 24.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 communities referenced above that portion of the amount paid in excess of the CPST rate of $10.60 per month (plus franchise fees), plus interest to the date of the refund, for the period from March 1, 1995 through September 30, 1995. 25.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 communities referenced above that portion of the amount paid in excess of the CPST rate of $11.63 per month (plus franchise fees), plus interest to the date of the refund, for the period from February 1, 1996 through July 31, 1996. 26.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 communities referenced above that portion of the amount paid in excess of the CPST rate of $11.82 per month (plus franchise fees), plus interest to the date of the refund, for the period from August 1, 1996 through November 30, 1996. 27.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 communities referenced above that portion of the amount paid in excess of the CPST rate of $13.33 per month (plus franchise fees), plus interest to the date of the refund, for the period from December 1, 1996 through the day before Operator implements the CPST rate of $13.33. 28.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 amount so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau