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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 ) ) Falcon Cablevision ) CUID No. CA1459 (City of Calabasas) ) ) Complaint Regarding ) Cable Programming Services Tier Rates) ORDER Adopted: September 3, 1997 Released: September 8, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a complaint about the rates of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator has attempted to justify its rates through a benchmark showing on FCC Form 393. 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 Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), in effect at the time the complaint was filed, requires the Commission to review CPST rates upon the filing of a valid complaint by a subscriber or local franchise authority ("LFA"). 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 revised its rate regulations effective May 15, 1994. Cable operators with valid CPST complaints filed prior to May 15, 1994 must demonstrate that their CPST rates complied with the Commission's initial rules from the time the complaint was filed through May 14, 1994. Their rates must also comply with the revised rules from May 15, 1994 forward. Cable operators attempting to justify their rates for the period beginning May 15, 1994 by a benchmark showing must use the FCC Form 1200 series. 4. On August 26, 1994, Operator filed a Motion to Dismiss the complaint dated December 16, 1993. In its motion, Operator requests that the Commission dismiss the complaint for a number of reasons. First, Operator asserts that it did not receive the complaint from the complainant and was not aware of the complaint until it found a copy in the Commission's files. Second, Operator urges the Commission to find the complaint deficient on the ground that the complainant failed to indicate the proper rates of his CPST in question number 8. Third, Operator indicates that the complainant incorrectly answered question number 9 on FCC Form 329 because he failed to identify the programming service for which the complaint was filed. Operator's assertions do not persuade us that the complaint is invalid or should be dismissed. The complainant certified on FCC Form 329 that it mailed a copy to Operator on December 12, 1993. Although Operator asserts that it did not receive a copy of the complaint at that time, under our rules service is complete upon mailing. We will therefore consider December 12, 1993 as the date of service, but we will not consider imposing penalties on Operator for failing to respond to the complaint in a timely manner. Further, because the rates listed in answer number 8 and on the attached bill indicate that the complainant received the CPST and because the complainant's response to question number 9 referenced an attachment that includes channels contained on the CPST, we find it reasonable to conclude that the complainant objected to the CPST rate and that he believed that rate was unreasonable. We therefore find the complaint dated December 16, 1993 valid and deny Operator's Motion to Dismiss. 5. On September 6, 1996, Operator filed its FCC Form 393 to justify CPST rates effective October 1, 1993. Upon review of Operator's FCC Form 393, we find that Operator has not correctly calculated its maximum permitted rate ("MPR") beginning October 1, 1993. Specifically, Operator uses the incorrect number of months on Line 125 of its FCC Form 393. We, therefore, adjust that Line to reflect 12 as the correct number of months. 6. Because of this error, we find that Operator has failed to demonstrate that its rate for the CPST was not unreasonable. We will therefore set a price for this tier, incorporating the adjustment discussed above. In doing so, we must also recalculate the Inflation Adjustment Factor in Form 393, Part II, Worksheet 1. On its FCC Form 393, Operator apparently calculated the Inflation Adjustment Factor using data it relied on when it set its $4.69 CPST rate. If, based on this data, FCC Form 393 indicated that Operator's rates were reasonable, then Operator would have successfully justified its prices under paragraph 94 of the Third Order on Reconsideration. However, Operator has not shown that its rates were reasonable, so we must recalculate the Inflation Adjustment Factor on the basis of the most accurate data currently available for the date that Operator timely filed FCC Form 393. On July 29, 1994, the U.S. Department of Commerce released corrected inflation data including Gross National Product Price Index ("GNP-PI") figures of 122.3 for the third quarter of 1992 and 125.7 for the third quarter of 1993. Using these GNP-PI figures, we calculate an Inflation Adjustment Factor of 1.030. 7. Upon review of the record herein, we conclude that Operator's showing fails to support the maximum permitted rate for its CPST of $4.69 for the period from October 1, 1993 to the present. 8. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate charged by Operator in the community referenced above, effective October 1, 1993, IS UNREASONABLE. 9. 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 $4.66 per month (plus franchise fees), plus interest to the date of the refund, for the period from December 16, 1993 to the present. 10. 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. 11. IT IS FURTHER ORDERED, pursuant to Section 76.922(b)(4)(C) of the Commission's rules, 47 C.F.R.  76.922(b)(4)(C), that Operator shall, within 30 days of the release of this Order, file its Form 1200 filings with respect to the community referenced above, for the period beginning May 15, 1994, with the monthly charge per tier as of March 31, 1994 for Tier 2 (Line A6b) to equal the revised MPR of $4.66. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the Motion to Dismiss the complaint filed against the CPST rates charged by Operator in the community referenced above, IS DENIED. 13. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the complaint filed with the Commission against the CPST rates charged by Operator, in the community referenced above, IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau