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S:-  22.` ` Under the Communications Act,|:*  {O$-ԍ Communications Act, Section 623(c), as amended, 47 U.S.C. 543(c) (1996).| 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.  S-  The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"),U  yOF'-ԍ Pub. L. No. 102385, 106 Stat. 1460 (1992).U and our   yrules in effect at the time the complaints were filed, required the Commission to review CPST rates upon   zthe filing of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation on"L ,))II"  S-  behalf of the cable operator to file a justification of its CPST rates.Co yOh-ԍ 47 C.F.R. Section 76.956.C 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  S-  \its rate is not unreasonable.RXo yO-ԍ 47 C.F.R. Sections 76.956(b) and 76.934.R If the Commission finds a rate to be unreasonable, it shall determine the  S`-  =correct rate and any refund liability.`o {O-ԍ  See Section 76.957 of the Commission's Rules, 47 C.F.R. Section 76.957. The Telecommunications Act of 1996 ("1996 Act")S`zo yOz -ԍ Pub. L. No. 104104, 110 Stat. 56 (1996).S and our rules  S8-  implementing the new legislation, 8 o {O - xԍ See Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 11 FCC Rcd 5937 (1996). requires that complaints against the CPST rates be filed with the   =Commission by a franchising authority that has received subscriber complaints. A franchising authority   may not file a CPST complaint unless, within 90 days after such increase becomes effective, it receives more than one subscriber complaint.  Sp-  3.` ` The Commission's original rate regulations took effect on September 1, 1993. pd o yOt- x.ԍ Order in MM Docket No. 92266, Implementation of Sections of the Cable Consumer Protection and Competition Act of 1992: Rate Regulation, FCC 93372, 58 Fed. Reg. 41042 (Aug. 2, 1993). The  SH -  Commission subsequently revised its rate regulations effective May 15, 1994.1 ZH o {O- xԍ 47 C.F.R. Section 76.922 (b). See also Second Order on Reconsideration, Fourth Report and Order, and Fifth  xjNotice of Proposed Rulemaking, MM Docket No. 92266, 9 FCC Rcd 4119, 4190 (1994) ("Second Order on Reconsideration").1 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   yin the Small Systems Order. Operators attempting to justify their rates through small system relief must  S -  /file FCC Form 1230.  o yO&- xԍ The FCC Form 1230 is a onepage form "on which the system inserts its expense, rate base, rate of return, channel count and subscriber count figures and then calculates its rate of return." Small Systems Order at  64. 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  SX-  kMonthly Programming Costs (FCC Form 1230, Line A6).e X6o {O.!-ԍ See Instructions for Line A11, FCC Form 1230, page 3.e If the maximum rate established on FCC  S0-  Form 1230 does not exceed $1.24 per channel, the rate shall be presumed reasonable.W0o {O#-ԍ See 47 C.F.R. Section 76.934(h) (1996) W Cable systems   yserving 15,000 or fewer subscribers, and owned by a company having 400,000 or fewer subscribers, may   elect to use the small system rate mechanism found in FCC Form 1230 in lieu of other Commission rate   processes, provided the Commission has not reached a final resolution on the rate complaints filed against"Z,_(_(II"  S-  .the system.Io yOh-ԍ Small Systems Order at  75.I In the present case, although Operator had filed FCC Form 393, prior to filing FCC Form   1230, no final resolution of the FCC Form 393 had been reached. Consequently, we will consider only Operator's FCC Form 1230.  S`-  4.` ` On November 9, 1995 Operator filed FCC Form 1230 for the community referenced above   jseeking to justify its CPST rate through the simplified small system cost of service procedures under the   Commission's Small Systems Order. On September 5, 1997, Operator filed a letter with the Commission   certifying that the system for the community referenced above is eligible for the rate treatment reserved  S-  for small systems.$Xo {O -  [ԍ See Letter from Steven J. Horvitz, Esq., Cole, Raywid & Braverman, L.L.P., to William P. Agee, Esq.,  {O -  wFederal Communications Commission, dated September 5, 1997. See also Letter from Steven J. Horvitz, Esq., Cole,   Raywid & Braverman, L.L.P., to William P. Agee, Esq., Federal Communications Commission dated September 17, 1997. Operator's letter states that on the effective date of the Small Systems Order,   Operator's system serving the community referenced above had approximately 2,066 subscribers and that   the entities legally affiliated with Operator, for purposes of small system rate relief, served approximately  SH -  208,700 subscribers.3H Do {O,-ԍ Id.3 Operator's certification letter also states that, as of September 5, 1997, Operator's  S -  >system serving the community referenced above has approximately 2,098 subscribers.3 o {O-ԍ  Id.3 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  S -  to system or company size as of the effective date [of these rules]."| h o {O-ԍ 47 C.F.R. Section 76.934(a). See also Small Systems Order at  38.| The Small Systems Order provides that:   #X` ` A system's initial and continued eligibility for this new form of relief shall be  S- determined in the same manner as any other relief now available to them.d o {Oz-ԍ Small Systems Order at  73 citing  38.d Thus, if a  S- Bsystem qualifies for relief under this approach as of the effective date of this orderCZ o yO- x<ԍ The Small Systems Order was released on June 5, 1995, and became effective upon approval by the Office  {O - xof Management and Budget on August 21, 1995. See Federal Communications Commission Public Notice, DA 951848 (August 22, 1995).C or  as of the date it files Form 1230, it shall remain eligible for so long as it serves 15,000  2or 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  S- oits systems.3o {O>'-ԍ Id.3 When a system that has established rates in accordance with Form 1230"@,_(_(IIC"  `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  2additions until the system has reestablished initial permitted rates in accordance with our  S-benchmark or costofservice rules.o {O- xԍ Such a system may file a petition for special relief seeking continued treatment as a small system. See Small Systems Order at  73 citing  36.  Small Systems Order at  73.  S-  5.` ` In addition, the Small Systems Order provides that "[o]nce the operator has established   rates at a level permitted by Form 1230, it may increase rates thereafter at its discretion until it reaches  S-  Lthe maximum level permitted by the form, subject only to the 30 days' notice requirement."J"o yOZ -ԍ Small Systems Order at  69. J The Small   Systems Order explains that "[a]s long as the actual rate does not exceed the maximum permitted rate, the   =operator may adjust its actual rate as and when it desires, subject to the notice requirement. In addition,  S -at any time an operator may adjust its maximum permitted rate simply by filing a new Form 1230."3 o {Or-ԍ Id.3  S -  %6.` ` We find that as of the effective date of the Small Systems Order, August 21, 1995,   Operator was a company with fewer than 400,000 total subscribers and that the system in question served   >fewer than 15,000 subscribers, thereby making it 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 rate of $15.63 effective November 9, 1995, and monthly  S-CPST rate of $17.88, effective June 1, 1997, are not unreasonable. Do yO-  ԍ These findings are based solely on the representations of the operator. Should information come to our   attention that these representations were materially inaccurate, we reserve the right to take appropriate 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.  Sh-  7.` ` 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.  S-  8.` ` 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 rate of $15.63 effective November 9, 1995, and monthly   =CPST rate of $17.88, effective June 1, 1997, charged by Operator in the community referenced above IS JUSTIFIED."x, ,_(_(II"Ԍ S-  9.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47   yC.F.R. Section 0.321, that the complaints against the monthly CPST rate charged by Operator during the period under review in the community referenced above ARE DENIED.  S`-  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.  ` `  hh,FEDERAL COMMUNICATIONS COMMISSION ` `  hh,Elizabeth W. Beaty ` `  hh,Chief, Financial Analysis and Compliance Division ` `  hh,Cable Services Bureau  X -#Xj\  P6G;+XP#