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

In the Matter of                     )
                                     )
Marcus Cable Partners, L.P.          )
                                     )     CUID No. WI0386 (Village of Denmark)
                                     )    
Complaint Regarding a                )
Cable Programming Services Tier      )
Rate Increase                        )

                                   ORDER

        Adopted:  September 23, 1997         Released:  September 26, 1997

By the Chief, Cable Services Bureau:

  1.    In this Order we consider a complaint against the rates of the above-referenced operator
("Operator") for its cable programming services tier ("CPST") in the community referenced above. 
Operator's response includes benchmark justifications filed on FCC Forms 1200, 1210, and 1240.  This
Order addresses the reasonableness of Operator's rates beginning May 15, 1994.

  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"), 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.  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.  Cable
operators with valid CPST complaints filed against them prior to May 15, 1994 must demonstrate that 
their CPST rates were in compliance with the Commission's initial rules from the time the complaint was
filed through May 14, 1994, and that their rates were in compliance with the revised rules from May 15,
1994 forward.  Cable operators attempting to justify their rates for the period prior to May 15, 1994 using
a benchmark showing must complete and file FCC Form 393.  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.

  4.    The Commission received a complaint against Operator's CPST rate on November 15,
1993.  On December 10, 1993, Operator filed with the Commission a motion to dismiss the complaint
based on two grounds.  First, Operator argued that because its cable television system in the above-
referenced community served fewer than 1,000 subscribers of basic cable television service, it was not
currently subject to basic service tier or CPST rate regulation.  Second, Operator argued that the complaint
was defective under 47 C.F.R.  76.951 because it lacked the name and address of the franchising
authority and did not indicate the current or previous monthly rate for the CPST.

  5.    Operator is correct in that on August 10, 1993, the Commission issued a temporary stay
of its rate regulation rules for cable systems with 1,000 or fewer subscribers.  The Commission
terminated that stay, however, as of May 15, 1994.  Operator's CPST rates, consequently, are subject
to the Commission's rate regulation rules beginning May 15, 1994.  Operator's assertions regarding defects
in the complaint do not persuade us that the complaint is invalid or should be dismissed.  In general, we
will find valid any complaint that states a claim on which relief can be granted and provides adequate
information to allow us to process the complaint despite minor flaws or inaccuracies.  We believe that
this approach best implements the mandate of the 1992 Cable Act.  In this case, the complaining party
and the franchising authority were one and the same; and the complaining party included its name and
address on the complaint.  The complaint also included the current monthly CPST rate, and Operator
provided its prior rate with its FCC Form 1200 filing.  We thus had the information necessary to process
the complaint.  Consequently, we deny Operator's motion to dismiss and evaluate Operator's CPST rates
beginning May 15, 1994.

  6.    Upon review of Operator's FCC Form 1200, we find Operator's maximum permitted rate
("MPR") of $12.76 to be reasonable.  Because Operator's actual CPST rate was $13.00, however, we find
Operator's CPST rate to be unreasonable for the period May 15, 1994 through June 30, 1994.  However,
Operator elected to take advantage of the refund liability deferral period in accordance with the
Commission's Rules.  Accordingly, Operator does not incur refund liability for charging in excess of the
MPR calculated on its FCC Form 1200 for the period May 15, 1994 through July 14, 1994.

  7.    Upon review of Operator's first FCC Form 1210, for the period April 1, 1994 to June 30,
1994, we find that Operator's MPR of $12.98 was not unreasonable.  Because Operator's actual CPST rate
was $13.00, however, we find Operator's CPST rate of $13.00, effective July 1, 1994 through September
30, 1994, to be unreasonable.

  8.    Upon review of Operator's second FCC Form 1210, for the period July 1, 1994 to
September 30, 1994, we find that Operator's MPR of $13.15 was not unreasonable.  As a result, we find
that Operator's actual CPST rate of $ 12.98, effective October 1, 1994 through November 30, 1994, was
not unreasonable.

  9.    Upon review of Operator's third FCC Form 1210, for the period October 1, 1994 to
December 31, 1994, we find that Operator's MPR of $13.36 was not unreasonable.  As a result, we find
that Operator's actual CPST rate of $13.15, effective December 1, 1994 through February 28, 1995, and
its actual CPST rate of $13.36, effective March 1, 1995 through September 30, 1995, were not
unreasonable.

  10.   Upon review of Operator's fourth FCC Form 1210, for the period January 1, 1995 to June
30, 1995, we find that Operator prematurely claimed inflation.  Operator is not permitted to claim inflation
until after September 30, 1995 for the period of Operator's fourth FCC Form 1210.  Accordingly, we
changed Lines I5 (Inflation Adjustment Factor) and J5 (Inflation Adjustment Factor) each from 1.03 to
1.  The adjustments to Operator's fourth FCC Form 1210 have reduced Operator's MPR from $13.61 to
$13.31.  Because Operator's actual CPST rate was $13.61, effective October 1, 1995 through May 31,
1996, we find that Operator's CPST rate was unreasonable.

  11.   Upon review of Operator's first FCC Form 1240, for the projected period June 1, 1996
to May 31, 1997, we have adjusted Line A1 (Current MPR) to $13.31 to correspond with our revision of
Operator's MPR on its fourth FCC Form 1210.  We find that on Worksheet 1, Operator used an inflation
factor of 2.96 percent for each of the eight months of its true-up period, from July 1, 1995 to February
28, 1996.  However, the latest inflation factor for the true-up period available to Operator at the time of
filing (April 30, 1996) was 2.22 percent.  For this reason, we have modified Worksheet 1 to reflect an
inflation factor of 2.22 percent.  This modification normally would have reduced the Inflation Factor For
True-Up Period 1 (Line 113, Worksheet 1, and Line C1) from 1.0197 to 1.0148.  However, because
Operator was unable to take inflation for the period July 1994 through June 1995 on its fourth FCC Form
1210, we are allowing Operator this inflation on its first FCC Form 1240.  As a result, we have increased
Line C1 (Inflation Factor For True-Up Period 1) from 1.0197 to 1.0448.  We have reduced Line C3
(Current FCC Inflation Factor) from 1.0296 to 1.0222.  In addition, we have adjusted Line D2 (Current
External Costs Segment) from $3.40 to $3.39 to correspond with Line D9 (Current External Costs Per
Subscriber) on Operator's fourth FCC Form 1210, as revised.  These adjustments in total have reduced
Operator's MPR from $14.59 to $14.45.  Because Operator's actual CPST rate, effective June 1, 1996
through May 31, 1997, was $14.59, we find that Operator's CPST rate was unreasonable.

  12.   Upon review of Operator's second FCC Form 1240, for the projected period June 1, 1997
to May 31, 1998, we have adjusted Line A1 (Current Maximum Permitted Rate) to $14.45 to agree with
the revised MPR from Operator's first FCC Form 1240.  We have also adjusted Lines D6 (Current True-
Up Segment) from $0.23 to $0.21 and D7 (Current Inflation Segment) from $0.31 to $0.23 to correspond
respectively with Lines I8 (True-Up Segment For Projected Period) and I5 (Inflation Segment For
Projected Period) of Operator's first FCC Form 1240, as revised.  In addition, we find that Operator made
true-up adjustments through to the effective date of the rate increase.  This is incorrect.  The annual
adjustment afforded by FCC Form 1240 allows operators to project changes in external costs, inflation,
and the number of regulated channels.  This structure avoids the delay some operators experienced in
recouping costs through multiple rate adjustments throughout the year.  Because projections will not
reflect the costs that actually occur, the Commission provided, as part of the annual adjustment, a "true-
up" to correct projected cost changes with the actual cost changes.  However, the Commission has noted
that, as FCC Form 1240 must be filed 90 days before an increase is to take effect, the period for the true-
up will not coincide with the previous year's projections.  The true-up data is intended to indicate real,
not projected data.  This policy is reflected in the instructions accompanying FCC Form 1240.
  13.   Based on this instruction and considering evidence in the filing and reasonable time for
closing accounts and completing forms, we have adjusted the true-up period in Operator's second FCC
Form 1240 from 15 months to 12 months.  This adjustment has required that we refresh Operator's
inflation factors to 1.83 percent for the fourth quarter of 1996 and the first two months of 1997 and adjust
Worksheet 1 accordingly.  As a result, we have corrected the Inflation Factor For True-Up Period 1 (Line
C1) for the 12-month period to 1.0206 instead of the 1.0221 used by the Operator; and we have
eliminated the Inflation Factor For True-Up Period 2, Line C2.  We have adjusted Line C3 (Current FCC
Inflation Factor) to reflect the latest inflation factor of 1.0183.  Accordingly, we have corrected the
number of months on Line E2 from 15 to 12 months and on Line E4 from 3 months to none.  We have
also adjusted the inflation segment in Module F, Line F5 to reflect the corrections made in Line C1.  This
change has resulted in a corresponding adjustment on Line F9 (MPR for True-Up Period 1).

  14.   The reduction in the length of the true-up period in Operator's second FCC Form 1240
has also resulted in a reduction in Line H2 (Revenue From MPR for Period 1).  This reduction has
resulted in a corresponding reduction in Line I8 (True-Up Segment for the Projected Period).  In
accordance with these changes, we have also modified Line F8 (True-Up Segment For True-Up Period
1) from $0.2332 to $0.2101.  In total, our adjustments to Operator's second FCC Form 1240 result in an
MPR for the Projected Period (Line I9) of $16.15, rather than Operator's MPR for the Projected Period
of $16.73.  Because Operator's actual CPST rate of $16.95, beginning June 1, 1997, exceeds its revised
MPR of $16.15 for the projected period, we find Operator's actual CPST rate to be unreasonable.

  15.   To the extent that external costs from the three months disallowed from Operator's true-up
period have been averaged into the rates charged in the twelve months allowed in Operator's true-up
period, and have not been removed by our adjustments, we will order Operator to make a month-by-month
accounting of such external costs.  Such accounting shall allow a comparison of the actual external costs
for the permitted twelve-month true-up period with the recovery of external costs afforded by the external
cost segment for that period as calculated on Worksheet 7.  We will order Operator to incorporate this
accounting report into its refund plan and refund any over-recovery, plus interest, to subscribers.  We will
also order Operator to submit an FCC Form 1240 for the projected period June 1, 1997 to May 31, 1998
which incorporates our revisions and the adjustments described above.

  16.   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) and (B), that Operator's December
10, 1993 motion to dismiss IS DENIED.

  17.   IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that the complaint referenced herein against the CPST rate charged by Operator in the
franchise area referenced in the caption IS GRANTED.
  18.   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 $13.00, effective July 15, 1994 through September 30, 1994,
in the community referenced above, IS UNREASONABLE.

  19.   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 $12.98, effective October 1, 1994 through November 30,
1994, in the community referenced above, IS NOT UNREASONABLE.

  20.   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 $13.15, effective December 1, 1994 through February 28,
1995, in the community referenced above, IS NOT UNREASONABLE.

  21.   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 $13.36, effective March 1, 1995 through September 30, 1995,
in the community referenced above, IS NOT UNREASONABLE.

  22.   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 $13.61, effective October 1, 1995 through May 31, 1996,
in the community referenced above, IS UNREASONABLE.

  23.   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 $14.59, effective June 1, 1996 through May 31, 1997, in the
community referenced above, IS UNREASONABLE.

  24.   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 $16.95, effective June 1, 1997, in the community referenced
above, IS UNREASONABLE.

  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 community referenced above that portion
of the amount paid in excess of the CPST rate of $12.98 per month (plus franchise fees), plus interest to
the date of the refund, for the period July 15, 1994 through September 30, 1994.

  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 community referenced above that portion
of the amount paid in excess of the CPST rate of $13.31 per month (plus franchise fees), plus interest to
the date of the refund, for the period October 1, 1995 through May 31, 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 community referenced above that portion
of the amount paid in excess of the CPST rate of $14.45 per month (plus franchise fees), plus interest to
the date of the refund, for the period June 1, 1996 through May 31, 1997.

  28.   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 CPST rate of $16.15 per month (plus franchise fees), plus interest to
the date of the refund, for the period June 1, 1997 through the day before Operator implements the CPST
rate of $16.15.

  29.   IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that Operator shall conduct a month-by-month accounting of its external costs from
Operator's twelve-month true-up period in its second FCC Form 1240, as found on Operator's Worksheets,
and that Operator shall file, within 30 days of the release of this Order, a report detailing the over-
recovery of external costs, plus interest, with the Chief, Cable Services Bureau.

  30.   IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that Operator shall promptly determine the overcharges to CPST subscribers for the stated
periods, including any over-recovery as detailed in its accounting report, and shall file, within 30 days of
the release of this Order, 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.

  31.   IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that Operator shall revise its FCC Form 1240 for the projected period June 1, 1997
through May 31, 1998 incorporating the changes detailed in this order and shall file such amended FCC
Form 1240 with the Chief, Cable Services Bureau within 30 days of the release of this Order.

        FEDERAL COMMUNICATIONS COMMISSION 



        Meredith J. Jones
        Chief, Cable Services Bureau