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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 ) ) ) Cablevision Systems Corporation ) CUID No. NY0188 (Southhold) ) Complaint Regarding ) Cable Programming Services Tier Rate ) ORDER Adopted: November 18, 1997 Released: November 21, 1997 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the March 1, 1997 rate increase of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. On March 1, 1997, Operator increased its CPST rate to $17.52 in the above-referenced community. Consequently, this Order addresses the reasonableness of Operator's CPST rate of $17.52, effective March 1, 1997. 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. If the Commission finds a rate to be unreasonable, it shall determine the correct rate and any refund liability. The Telecommunications Act of 1996 ("1996 Act") and our rules implementing the new legislation ("Interim Rules"), require that complaints against the CPST rates be filed with the Commission by a local franchising authority ("LFA") that has received more than one subscriber complaint. 3. The LFA for the franchise referenced above filed a complaint with the Commission on August 28, 1997. The LFA verified that it received more than one subscriber complaint for the community referenced above and that the first complaint was received by the LFA on March 25, 1997. The filing of a complete and timely LFA complaint triggers an obligation upon the cable operator to file a justification of its CPST rates. The Operator has the burden of demonstrating that the CPST rates complained about are reasonable. 4. To justify rates for the period beginning May 15, 1994 through a benchmark or cost of service showing, operators must use the FCC Form 1200 series. Cable operators may file an FCC Form 1210 to justify rate increases based on the addition and deletion of channels, changes in certain external costs and inflation. In addition, Operators must file FCC Form 1210 with the Commission within thirty days of the date of service of the complaint regarding the new rate. 5. Upon review of Operator's FCC Form 1200 we found no apparent errors in Operator's calculation of its maximum permitted rate ("MPR") of $13.62. Upon review of Operator's FCC Form 1210 covering the period April 1, 1994 to September 30, 1994, we found no apparent errors in Operator's calculation of its MPR of $13.86. Upon review of Operator's FCC Form 1210 covering the period October 1, 1994 to March 31, 1995, we found no apparent errors in Operator's calculation of its MPR of $15.02. Upon review of Operator's FCC Form 1210 covering the period October 1, 1995 to December 31, 1995, we found no apparent errors in Operator's calculation of its MPR of $15.58. Upon review of Operator's FCC Form 1210 covering the period January 1, 1996 to September 30, 1996, we found no apparent errors in Operator's calculation of its MPR of $16.47. 6. Upon review of Operator's FCC Form 1210 covering the period October 1, 1996 to March 31, 1997, we find that Operator has justified an increase in its MPR from $16.47 to $17.71. We note, however, that Operator implemented its rate increase on March 1, 1997; whereas, the period of its FCC Form 1210 extends until March 31, 1997. Because the FCC's quarterly rate justification is based upon actual changes in expenses, Operator is not permitted to take a rate increase justified by an FCC Form 1210 until after the close of the period covered by the form. Consequently, Operator was not entitled to increase its rates until April 1, 1997. Because Operator's actual CPST rate in the community referenced above, for the period beginning March 1, 1997, is $17.52, we find that Operator's CPST rate for the period March 1, 1997 through March 31, 1997 is unreasonable. Operator's refund liability, however, does not begin until the date of the first subscriber complaint filed with the LFA. Because the first subscriber complaint in the community referenced above was filed with the LFA on March 25, 1997, we determine that the total overcharge per subscriber is de minimis. Therefore, it would not serve the public interest to order a refund. We find further that Operator's CPST rate for the period beginning April 1, 1997 is not unreasonable. 7. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate for the period March 1, 1997 through March 31, 1997 in the community referenced above, IS UNREASONABLE. 8. 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 for the period beginning April 1, 1997 in the community referenced above, IS NOT UNREASONABLE. 9. 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, IS GRANTED TO THE EXTENT INDICATED HEREIN. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau