******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) CUID Nos. AL0366 (Tuscaloosa) ) AL0039 (Albertville) Charter Communications III, L.P. ) AL0044 (Boaz) ) Small System Filing to Support ) Cable Programming Services Tier Rates) ORDER Adopted: September 5, 1997 Released: September 10, 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. On December 12, 1995, Operator filed an amended FCC Form 1230, seeking to justify its CPST rate through the simplified small system cost of service procedures pursuant to the Federal Communications Commission's ("Commission") Sixth Report and Order and Eleventh Order on Reconsideration ("Small Systems Order"). Operator has also filed a Motion to Dismiss, Request for Confidential Treatment of Submitted Materials, Supplemental Motion to Dismiss, Request for Confidential Treatment of Documents and Information, and Motion to Terminate Proceedings. In this Order, we grant Operator's request for small system relief under the Small Systems Order and, based on our review of Operator's FCC Form 1230 filing, deny the pending CPST complaints and find the CPST rate to be not unreasonable. Because we are granting Operator's request for small system relief, we will dismiss Operator's motions and requests as moot. 2. Under the Communications Act, the 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 in effect at the time the complaints were filed, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rates. Under the Commission's rules, an operator may attempt to justify its CPST rate through a benchmark showing, a cost of service showing, or a small system cost of service showing. In any case, the operator has the burden of demonstrating that its rate is not unreasonable. If the Commission finds a 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. In a further effort to offer small cable companies administrative relief from rate regulation, the Commission amended the definition of small cable companies and small systems and introduced a simplified form of small system rate relief in the Small Systems Order. Operators attempting to justify their rates through small system relief must file FCC Form 1230. FCC Form 1230 requires that the Operator Selected Per Subscriber Monthly Programming Rate Per Channel (FCC Form 1230, Line A11) not exceed the Per Subscriber, Per Channel Monthly Programming Costs (FCC Form 1230, Line A6). If the maximum rate established on FCC Form 1230 does not exceed $1.24 per channel, the rate shall be presumed reasonable. Cable systems serving 15,000 or fewer subscribers, and owned by a company having 400,000 or fewer subscribers, may elect to use the small system rate mechanism found in FCC Form 1230 in lieu of other Commission rate processes, provided the Commission has not reached a final resolution on the rate complaints filed against the system. In the present case, although Operator had filed FCC Form 1220 with the Commission, prior to filing FCC Form 1230, no final resolution of the FCC Form 1220 had been reached. Consequently, we will consider only Operator's FCC Form 1230. 4. On September 27, 1995, Operator filed FCC Form 1230 for the communities referenced above seeking to justify its CPST rate through the simplified small system cost of service procedures under the Commission's Small Systems Order. On December 8, 1995, Operator submitted responses to the Cable Services Bureau's November 8, 1995 Request for Information demonstrating that Operator qualified as a small system based upon the subscriber counts, as represented by Operator in its responses, of each system and the total subscriber count of the company. Then on December 12, 1995, Operator filed an amended FCC Form 1230. Pursuant to Section 76.934 of the Commission's rules, "the size of a system or company shall be determined by reference to its size as of the date the system files with its franchising authority or the Commission the documentation necessary to qualify for the relief sought or, at the option of the company, by reference to system or company size as of the effective date [of these rules]." The Small Systems Order provides that: A system's initial and continued eligibility for this new form of relief shall be determined in the same manner as any other relief now available to them. Thus, if a system qualifies for relief under this approach as of the effective date of this order or as of the date it files Form 1230, it shall remain eligible for so long as it serves 15,000 or fewer subscribers, regardless of whether it, or the cable operator that owns the system, is subsequently acquired by a company that exceeds the 400,000 subscriber limit, or if its current operator subsequently exceeds 400,000 subscribers due to the normal growth of its systems. When a system that has established rates in accordance with Form 1230 exceeds 15,000 subscribers, the system may maintain its then existing rates. However, any further adjustments shall not reflect increases in external costs, inflation or channel additions until the system has re-established initial permitted rates in accordance with our benchmark or cost-of-service rules. Small Systems Order at  73. 5. We find that at the time Operator filed its amended FCC Form 1230 Operator was a company with fewer than 400,000 total subscribers and that the systems in question each served fewer than 15,000 subscribers, thereby making them eligible for small system relief. Further, Operator's filings show that its actual rate per channel for regulated cable service (FCC Form 1230, Line A11) does not exceed its per subscriber, per channel monthly programming costs (FCC Form 1230, Line A6) and the Maximum Permitted Rate per channel (FCC Form 1230, Line A10) does not exceed $1.24. We, therefore, find that Operator's monthly CPST rates of $15.48 in CUID Nos. AL0039 and AL0044, and $16.38 in CUID No. AL0366, effective December 12, 1995, are not unreasonable. 6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that Operator's request for small system relief IS GRANTED. 7. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rates of $15.48 in CUID Nos. AL0039 and AL0044, and $16.38 in CUID No. AL0366, effective December 12, 1995, charged by Operator ARE JUSTIFIED. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the complaints against the monthly CPST rates charged by Operator during the period under review in the communities referenced above ARE DENIED. 9. IT IS FURTHER ORDERED that Operator's Motion to Dismiss, Request for Confidential Treatment of Submitted Materials, Supplemental Motion to Dismiss, Request for Confidential Treatment of Documents and Information, and Motion to Terminate Proceedings, ARE DISMISSED AS MOOT. 10. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau