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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 ) ) MediaOne, Inc. of Atlanta ) )CUID No. GA0018 (City of Atlanta) ) Complaints Regarding ) Cable Programming Services Tier ) Rate Increases ) ORDER Adopted: August 12, 1997Released: August 15, 1997 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1.In this Order we consider complaints against rate increases of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. We have already issued two orders resolving complaints against Operator's CPST rates, the first for the period September 1, 1993 through May 14, 1994 and the second for the period May 15, 1994 to September 30, 1995. Accordingly, this order addresses the reasonableness of Operator's CPST rates beginning October 1, 1995. 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. 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. If the Commission finds the rate 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. Cable operators must use the FCC Form 1200 series to justify their rates through a benchmark showing for the period beginning May 15, 1994. 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. The "true-up" mechanism requires operators to decrease their rates or alternatively permits them to increase their rates to make an adjustment for over or under estimations of these cost changes. 4.On January 22, 1996, we received valid subscriber complaints filed against a CPST rate increase from $13.66 to $15.00 instituted by Operator on December 1, 1995. In addition, on June 10, 1997, the LFA filed a complaint against Operator's January 1, 1997 CPST rate increase from $15.00 to $16.30. The LFA certified that it has complied with the Interim Rules and that it has received more than one valid subscriber complaint. The LFA verified that it received its first valid subscriber complaint on January 7, 1997. Along with its complaint, the LFA filed an FCC Form 1240 that had been submitted by the Operator. The filing of a complete and timely LFA complaint triggers an obligation upon Operator to file a justification of its CPST rates. The Operator has the burden of demonstrating that the CPST rates at issue are reasonable. 5.To justify its CPST rate beginning October 1, 1995, Operator filed an FCC Form 1210 covering the period October 1, 1994 to September 30, 1995. Upon review of this FCC Form 1210, we find that Operator has justified a maximum permitted rate ("MPR") of $15.00, effective October 1, 1995. 6.To justify its CPST rates for the projected period January 1, 1997 to December 31, 1997, Operator filed an FCC Form 1240. Upon review of Operator's FCC Form 1240, we corrected Line D3, Current Caps Method Segment, from $0.40 to $0.47. This adjustment required that, on Worksheet 1, we refresh Operator's inflation factors to 2.21 percent for Months 8 through 10 and to 1.83 percent for Months 11 through 13. As a result, we corrected the true-up inflation factors on Line C1 from 1.0226 to 1.0220 and on Line C2 from 1.0019 to 1.0015. We also changed the Current FCC Inflation Factor on Line C3 from 1.0239 to 1.0183. These changes necessitated a modification of Line F4 (True-Up Period 1 Rate Eligible for Inflation) from $10.7699 to $10.6999. As a result, we had to correct Line F5 (Inflation Segment for True-Up Period 1) from $0.2437 to $0.2349, and also Line F9 (MPR for True-Up Period 1) from $15.6150 to $15.5362. In addition, we had to correct Module E to reflect the fact that Operator used a 13-month true- up period consisting of 12 months in the first part and one month in the second part. The changes in Module E resulted in several changes to Module H. These adjustments resulted in an MPR of $16.30 for Operator's projected period, rather than the MPR of $16.36 listed on Line I9 of Operator's FCC Form 1240. Because Operator actually was charging a CPST rate of $16.30, we find that Operator's CPST rate is not unreasonable. 7.Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rates for the period September 30, 1995 through December 31, 1996, in the community referenced above, ARE NOT UNREASONABLE. 8.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $16.30, effective January 1, 1997, in the community referenced above, IS NOT UNREASONABLE. 9.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 MPR and performing the true-up calculation on its next FCC Form 1240. 10.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 against the CPST rates charged by Operator in the franchise area referenced in the caption ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION Margaret M. Egler Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau