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(1) (a) (i) 1) a)D )DDDFrfL$ yO- X   ^} S- #Xj\  P6G;+XP# #&a\  P6G; 0&P#Federal Communications Commission`}(#DA 9 7 2067 # Xj\  P6G;+XP#у  yxdddy v3 #X\  P6G;IP#Before the Federal Communications Commission  yO} Washington, D.C. 20554#X\  P6G;IP#у  yOX-  S -#&a\  P6G; 0&P#X` hp x (#%'0*,.8135@8:demonstrate that its CPST rates could not be justified under the Benchmark methodology. Operator  xsubsequently filed FCC Form 1220 filings dated July 14, 1994 to justify its CPST rates in the three  xcommunities referenced above. All three filings contain essentially the same systemlevel data, and the  xchannel lineups and rates charged for each community are similar. Therefore, we reviewed the costofservice filings for the communities referenced above concurrently.  S- ` Bx8.` ` On November 13, 1995, Operator filed FCC Form 1230 requesting small cable system  xstatus. Because Operator is affiliated with Lenfest York, Inc. and Susquehanna Cable Company, it is not  S-eligible for small system status under the Commission's rules.Hze. yO-ԍ 47 C.F.R.  76.934 (1996). H  SH - ` x9.` ` Upon review of Operator's FCC Form 1220, we find that Operator has not correctly  xjcalculated its maximum permitted rate ("MPR"). We adjusted the maximum permitted rate calculated by  xOperator as follows: Operator allocated common costs to its tiers primarily on a weighted channel basis,  xi.e. a ratio of the number of tier channels times tier subscribers to total channels times total subscribers.  xWe find that this method causes a biased allocation of common costs to regulated service tiers, and  xkoverlooks the cost causative relationship between plant usage and the number of channels supported.  xMoreover, we affirmed our rejection of weighted channels as an appropriate allocation methodology in  S0- x.the Final Cost Rules at paragraph 123."0 e. {O- xԍ See In the Matter of Implementation of Sections of the Cable Television Consumer Protection and  x[Competition Act of 1992: Rate Regulation and Adoption of a Uniform Accounting System for Provision of  xRegulated Cable Service, Second Report and Order, First Order on Reconsideration, and Further Notice of Proposed Rulemaking, MM Docket No. 93215 and CS Docket No. 9428, FCC 95502 (1996).  Consequently, we redistributed Operator's common costs on a channel ratio basis.  S- ` $x10.` ` Operator's income tax allowance calculations were based on an assumption of minimal  xinterest expenses. However, Operator applied statutory Federal and State tax rates when calculating its  x0income tax allowance and, to be consistent, should have recorded normalized interest expenses as  S@- xdescribed in paragraph 104 of the Final Cost Rules.5@ e. {O -ԍ Id. 5 Consequently, we revised Operator's claimed  xincome tax allowances to account for normalized interest expenses and our adjustments to tier revenue requirements.  S- ` x11.` ` As a result of these adjustments, we determined that Operator's MPR for its CPST is  x$10.57 effective September 1, 1993. Because Operator's actual CPST rate of $11.28 is more than its MPR,  SP-we find Operator's actual CPST rate of $11.28 to be unreasonable."P ,_(_(II"Ԍ S- `  9#mH x`12.` ` Upon review of the record herein, and having incorporated the adjustments discussed  xabove, we conclude that Operator has failed to justify the rates it was charging during the periods in  xjquestion. Operator's showings justify the maximum reasonable CPST rates shown on Appendix B (plus  xfranchise fee) for the period from th`e filing of the earliest complaint in each franchise area (as set forth in Appendix A) to September 30, 1994. x  S- ` x13.` ` Upon review of Operator's FCC Form 1210 covering the period July 1, 1994 to September  x30, 1994, we found that Operator has not correctly calculated its MPR. We adjusted Line A2 so that it  xagreed with the adjusted MPR of the prior FCC Form 1220. This resulted in a new MPR, effective  S- xOctober 1, 1994, of $11.11 versus $12.13 claimed by Operator. e. yO - xԍ Information regarding the specific adjustments made to Operator's filings can be found in the public file for  xKCUID Nos. ME0055, ME0057, ME0083 which is available in the Cable Services Bureau's public reference room,  xKor through the Commission's copy contractor, International Transcription Services (ITS), 1919 M Street N.W., Washington, DC, 20554, or by calling ITS at (202) 857-3800. Because Operator's actual rate of $11.69  xjis more than its revised MPR of $11.11, we find Operator's CPST rate for the period October 1, 1994 to  SH -the present, to be unreasonable. H e. yO- xJԍ This finding is based solely on the representations of Operator and the modifications described herein. Should  xinformation come to our attention that these representations were materially inaccurate, we reserve the right to take  xappropriate action. This Order is not to be construed as a finding that we have accepted as correct any specific entry, explanation or argument made by any party to this proceeding not specifically addressed herein.  S - ` x14.` ` Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47  xC.F.R.  0.321, that Operator's rate of $11.28 in the communities referenced above, effective September 1, 1993 through September 30, 1994, IS UNREASONABLE. x  SX- ` x15.` ` Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47  xC.F.R.  0.321, that Operator's rate of $11.69 in the communities referenced above, which went into effect October 1, 1994 through the present, IS UNREASONABLE.  S- ` #x16.` ` IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's Rules, 47  xjC.F.R.  76.961, that Operator shall refund to subscribers in the communities shown in Appendix B that  x[portion of the amounts paid for cable programming service for the period from the filing of the first valid  S@- xLcomplaint in each community (as set forth on Appendix A)@e. yOx- xԍ Our jurisdiction to order a refund dates from the earliest date a valid complaint is filed with the Commission. 47 C.F.R.  76.961(b). to September 30, 1994 which exceeded the  xMPR of $10.57 for each community set forth in Appendix B (plus franchise fee) per month, plus interest to the date of the refund.  S- ` #x17.` ` IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's Rules, 47  xjC.F.R.  76.961, that Operator shall refund to subscribers in the communities shown in Appendix B that  xportion of the amounts paid for cable programming service for the period from October 1, 1994 to the  xday before Operator implements the maximum permitted CPST rate of $11.11 for each community set forth in Appendix B (plus franchise fee) per month, plus interest to the date of the refund. 9#mH   9#mH " ,_(_(II."Ԍ S- ` x18.` ` IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to  xCPST subscribers for the stated periods, and shall within 30 days of the release of this Order, file a report  xkwith the Chief, Cable Services Bureau, stating the cumulative refund amount so determined (including  xfranchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan.  S8- x  S- ` x19.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47  S- xC.F.R.  0.321, that the complaints referred to in Appendix A, ARE GRANTED TO THE EXTENT INDICATED HEREIN. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau " ,_(_(II/ "  S- 1 Appendix A ă  S-CUID No.` `  Date First Complaint@h  S`-x` `  Filed with FCC@hpp  S-ME0055` `  December 17, 1993  S-ME0057` `  December 20, 1993  SH -ME0083` `  November 15, 1993 " ,))II "  S-1 Appendix B ă  S-CUID No.` `  Actual Ratehh@Maximum Permitted Rate  xx  S`-x` `  hh@September 1, 1993 through     S8-x` `  hh@September 30, 199422  S-ME0055` `  $11.28hh$10.57@hpp22  S-ME0057` `  $11.28hh$10.57@hpp22  SH -ME0083` `  $11.28hh$10.57@hpp22  S -x` `  Actual Ratehh@Maximum Permitted Rate x` `  hh@October 1, 1994 to the present SX- x` `  hh@hpp22    S0-ME0055` `  $11.69hh$11.11  S-ME0057` `  $11.69hh$11.11  S-ME0083` `  $11.69hh$11.11