WPC 2MBERKZ3|X X-#XP\  P6Q9XP#"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+99999999S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNRtoc 2toc 2;` hp x (#` !(#B` !(#B` hp x (#toc 3toc 3<` hp x (#` !(# ` !(# ` hp x (#toc 4toc 4=` hp x (# !(#  !(# ` hp x (#toc 5toc 5>` hp x (#h!(# h!(# ` hp x (#2\?MU@vkWAWBYtoc 6toc 6?` hp x (#!(#!(#` hp x (#toc 7toc 7@ toc 8toc 8A` hp x (#!(#!(#` hp x (#toc 9toc 9B` hp x (#!(#B!(#B` hp x (#2cCO\Dm^E`Fvbindex 1index 1C` hp x (#` !(# ` !(# ` hp x (#index 2index 2D` hp x (#` !(#B` !(#B` hp x (#toatoaE` hp x (#!(# !(# ` hp x (#captioncaptionF 2hGlQcHrcK/dKzf_Equation Caption_Equation CaptionG endnote referenceendnote referenceH "i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""subscribers the difference between the actual rate paid per month and the newly calculated maximum permitted rate, plus the applicable franchise fee and interest to the date of refund.  X -T  " ,N(N(ZZ["  X-  IV. APPLICATION FOR REVIEW ĐTP  X- ` x8.` ` In its Application for Review, Cencom alleges that the Bureau Order is defective  xfor several reasons: incorrectly computing the inflation adjustment factor; failing to allow  xkCencom offsets between the basic and CPS tiers; failing to provide sufficient information to  xexplain the Bureau's calculations; allowing for retroactive ratemaking by preserving the  xCommission's right to deal with any material inaccuracies discovered in Cencom's information  xyin the future; and requiring a revised FCC Form 1200 filing. We find that the number of months  xCencom used to compute the inflation adjustment was less than Cencom could have claimed and  xaccordingly adjust the Bureau's inflation calculation, which used the Cencom count, with the  xjnumber of months Cencom was entitled to claim. As a result of this recalculation, we conclude  xthat the maximum permitted rate should have been $14.24 for the period before us and that  xCencom must make appropriate refunds. We are denying Cencom's application for review in all other respects.  X -#Xj\  P6G;9XP# A. Inflation Adjustment  X{- ` Ax9.  ` ` Cencom alleges that the Bureau improperly adjusted its rate for inflation by using  x\July 29, 1994 GNPPI data that was not available to Cencom at the time of its filing. Cencom  XM- xmaintains that using this adjusted data in the Bureau Order impermissibly imposed an inflation  X8- xfactor retroactively. Cencom also contends that use of refreshed inflation data is inconsistent with  xLImplementation of Sections of the Cable Television Consumer Protection and Competition Act  X - x of 1992: Rate Regulation, MM Docket No. 92266, Third Order on Reconsideration ("Third  X- xOrder on Reconsideration") at paragraph 94,I yOn-ԍ 9 FCC Rcd 4316, 434950 (1994).I the instructions to FCC Form 393, and  X- xexplanations in Bureau Questions and Answers, X yO- xԍ Cencom cites Public Notice, Cable Television Rate Regulation: Questions and Answers Relating to FCC  xForm 393 at 4 (Mass Med. Bur. released July 30, 1993) ("July 30, 1993 Public Notice"); Public Notice, Questions  xand Answers on Completion of FCC Form 393 and Associated Filing Requirements (Mass Med. Bur. released Nov. 10, 1993) ("Nov. 10, 1993 Public Notice"). all of which require that rates be calculated with  xthe most current data at the time of the operator's filing. Cencom further contends that the  xjBureau's use of refreshed inflation data is inconsistent with the Commission's stated intent not  xto penalize cable operators for good faith efforts to restructure rates. Cencom complains that the  xBureau's policy holds an operator's refund liability at the mercy of everchanging GNPPI statistics, creating an unstable regulatory environment.  X?- ` #x10. ` ` Cencom further asserts that the Commission's authority to order refunds in these  xcircumstances is bounded by the principles codified in 47 U.S.C.  204(a)(1), which provides that"(@,N(N(ZZ\"  X- xthe Commission has no power to alter filed rates absent compliance with suspension procedures.  yOy- xԍ This section provides that when the Commission engages in an investigation of a common carrier's filing of  xa new or revised rate, the new or revised rate must be suspended during the investigation; or, if the investigation  xcannot be completed within five months, the new or revised rate may, following suspension, become effective subject to an accounting order and subsequent revision.  X- xIn support, Cencom cites Illinois Bell Telephone Co. v. FCCO yOJ-ԍ 966 F.2d 1478, 1481 (D.C. Cir. 1992).O for the proposition that the  xCommission's authority to order refunds follows the exercise of the suspension process of Section  x204(a)(1). Cencom maintains that this subsection is intended to ensure that the Commission  X- xabides by the "filed rate" doctrine@ yO - xԍ The filed rate doctrine "forbids a regulated entity to charge rates for its services other than those properly filed  {O_ - xwwith the appropriate regulatory authority." Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571, 577 (1981); see also  {O) - x[Oxy USA, Inc. v. FERC, 64 F.3d 679, 699 (D.C. Cir. 1995) (the filed rate doctrine, based on longestablished  {O - xprinciples of regulatory law, ensures that "the rate of the carrier duly filed is the only lawful charge," Louisville &  {O-Nashville R.R. v. Maxwell, 237 U.S. 94, 97 (1915)). and that, when it engages in ratemaking, it applies rates  X- xprospectively and does not engage in retroactive ratemaking.\  yO8- xjԍ The retroactive ratemaking doctrine, a corollary of the "filed rate" doctrine, prohibits an agency from  {O- xxauthorizing or requiring a utility to adjust current rates to make up for past errors in projections. See, e.g., Town  {O-of Norwood, Mass. v. Federal Energy Regulatory Commission, 53 F.3d 377, 381 (D.C. Cir. 1995). Here, according to Cencom, the  xCommission departs from the strictures of Section 204(a)(1) by insisting that cable operators  xZcalculate rates based on the GNPPI data available in November 1993, not suspending rates based  xon this data, but nevertheless requiring cable operators to change these rates based upon newer data.  X - ` ox11. ` ` Contrary to Cencom's argument, determining an operator's initial regulated rate  xmas accurately as possible is neither unlawful nor contrary to Commission policy. The  xCommission is charged with protecting subscribers from paying unreasonable CPST rates, while  xalso providing system operators with a fair return. Accurate information, including accurate  xinflation information, is central to setting an initial regulated rate that meets the standard. Thus,  xthe Commission requires that data used in setting a rate be refreshed with the most current data  X{- xjavailable when an operator's rates become regulated and are justified.{ {OH- x,ԍ See Third Order on Reconsideration, 9 FCC Rcd at 434950; FCC Form 393 at 11 Instruction for Line 122 xGNPPI (Current) (Aug. 1993). The Bureau has explained the requirement to use current data in Cable Operators'  x-Rate Justification Filings, Sections 76.945, 76.946 of the Commission's Rules, 9 FCC Rcd 7752, 775455  3(8)  {O!- x(Cab. Serv. Bur. 1994) ("Rate Filings"); Nov. 10, 1993 Public Notice, Answer to Question No. 6, (in filing rate  x,justifications, operators must refresh data used in initial rates with most current information as of the date of initial regulation); July 30, 1993 Public Notice, Answer to Question 10. Because final inflation  xdata for the period addressed in rate justifications may not be available when a justification is  xfiled, the Commission directs operators to estimate inflation by using the most recently available  xinflation data published on an interim basis in the Commerce "Survey of Current Business" at"6,N(N(ZZ*"  X- x.Table 7.3, Line 5.~ {Oy-ԍ See FCC Form 393 at 11 Instruction for Line 122GNPPI (Current) (Aug. 1993).~ The Bureau practice when reviewing rate justifications is to verify that the  xoperator has used this inflation data. The Bureau also determines whether the other information  xin the rate justification is correct, and on the basis of the inflation and other information in the  xform, including any corrections, whether the operator's rate meets the statutory requirement that  x-the rate not be unreasonable. The Bureau does not find a rate unreasonable solely because more  x=accurate inflation data has become available by the time it makes its review. This would churn  xrates, causing significant administrative expenses to operators and confusion to subscribers.  xHowever, if a rate is unreasonable on its face or has to be adjusted for reasons other than the  xavailability of a more accurate inflation figure, e.g., because the operator failed to provide correct  xinformation in its rate justification or failed to complete its rate justification form correctly, the  xBureau recalculates the maximum permitted rate using the most accurate inflation information  X - xnavailable, rather than earlier estimates. Z {O- x<ԍ See Public Notice, Cable Services Bureau Announces Policy Regarding Inflation Adjustment on FCC Form  x-393, DA 95999 at 2 (Cab. Serv. Bur. May 2, 1995). The Bureau gave operators the opportunity to review and  xcorrect errors in their benchmark rate filings. Operators who had not previously correctly calculated the inflation  xKadjustment factor were directed to use the accurate factors through June 30, 1994. Public Notice, Cable Services  xhBureau Announces Optional Procedures with Respect to Pending PreMay 15 Benchmark Cases, DA 941556 at 34 (Dec. 29, 1994). The Public Notice listed the inflation adjustment factors through June 30, 1994. This practice is consistent with 47 C.F.R. 76.922(b)(9)(iii), which provides:  ` XxX` ` [I]f the rates charged by a cable operator are not justified by an  ` analysis based on the data available at the time it initially adjusted  ` its rates, the cable operator must adjust its rates in accordance with the most accurate data available at the time of the analysis. x`  XK- ` x12. ` ` Determining the most accurate maximum permitted rate possible when rate  xZadjustment is needed is not inconsistent with the instruction that operators use the best available  x>information when filing rate forms. Moreover, where review indicates that an adjustment is  xrequired, it would be unfair to operators and subscribers alike not to use the most recent and  xZaccurate figures applicable to that period, even though those figures may not have been available  x\to the cable operator at the time of its filing. In some instances, such an adjustment may be  xadvantageous to cable subscribers and, in others, to the operator. In all instances, however, the  xyrequired adjustment will more accurately ensure that the rates being charged to subscribers are  xin fact not unreasonable. When inflation is refreshed, neither consumers nor the operator are  x>harmed, because consumers pay only for the inflation experienced by the operator, and the  xLoperator recovers the full cost of the inflation it experienced. Since future rate adjustments are  xjcomputed from the initial regulated rates, refreshing results in more accurate rates both initially  xZand in the future. Furthermore, because "refreshing" inflation data should ordinarily involve only  x<a onetime adjustment, and because the Commission does not update an operator's rate each time  x-new inflation figures are released, this policy does not create an unstable regulatory environment" ,N(N(ZZ="  X-as Cencom alleges. yOy- xwԍ The Commission's concern with accurate rates extends beyond setting initial rates. Operators may adjust their  xrates using FCC Form 1210 to reflect changes in inflation and external costs occurring since the last rate adjustment.  xAlthough operators may recover cost increases at their option, the Commission specifically requires that decreases  x[in external costs be reflected in rates. Any filing to reflect increases in external costs or the annual inflation  xadjustment must also reflect any decreases in external costs that have occurred over the same period. Annual  xinflation adjustments are to be based on the final GNPPI index published by Commerce rather than the quarterly  {O)- xKinterim indexes used of necessity when rate regulation began. See Second Order on Reconsideration, 9 FCC Rcd  xat 420204 & n.235; Implementation of Sections of the Cable Television Consumer Protection and Competition Act  xof 1992, Rate Regulation, First Order on Reconsideration, Second Report and Order, and Third Notice of Proposed  {O - xRulemaking, 9 FCC Rcd 1164, 1235  123 (1993); Rate Order, 8 FCC Rcd at 5783  24041; Instructions for FCC Form 1210 Updating Maximum Permitted Rates for Regulated Cable Services at 2 (May 1995).  X- ` x13. ` ` We also disagree that following this practice is inconsistent with the Commission's  X- xstated intention in the Third Order on Reconsideration not to penalize cable operators for good  X- xMfaith efforts to restructure rates. The Third Order on Reconsideration provides that, when  xdifferent rates are dictated by data used in initial ratesetting than by data current at the time the  x.operator files an FCC Form 393, and the data used in the initial ratesetting was accurate at the  xtime, cable operators will not be required to change their rates simply because of intervening  xchanges in the facts or data upon which the ratesetting was based, although they will be required  X5- xto adjust for the disparity when making future rate adjustments. 5,  {O- xԍ Third Order on Reconsideration, 9 FCC Rcd at 434950  94; see Public Notice, Questions and Answers on Cable Television Rate Regulation at 4 A5 (Cab. Serv. Bur. June 1, 1994). One of the possible changes  x<noted by the Commission was that tentative inflation adjustments used in setting the rate initially  X - xzcould have become definite in the intervening time._!  {O>-ԍ Third Order on Reconsideration at 4349  93._ The Third Order on Reconsideration  xemphasizes that, when current rates are not justified by analysis using the old data, cable  X -operators must adjust their rates based on data that has been refreshed with current information.D"  {O-ԍ Id. at 4350  94.D  X - ` x14. ` ` In this case, Cencom has not demonstrated that its initial CPST rate was ever  X- xjustified. It argues only that it changed its rate in good faith. As explained in the Bureau Order,  xyin its Form 393 Cencom overstated the number of months for which it would have been entitled  Xj- xto an inflation adjustment when it set its rates,#j {O!-ԍ 10 FCC Rcd at 10039  5.b. See Cencom FCC Form 393 Line 124 (dated June 20, 1994). which would affect the overall rate calculation.  xMIts amended FCC Form 393 dated June 20, 1994 and filed June 23, 1994 shows that its actual  xrate exceeded its maximum permitted rate, using the inflation rate it advocates for the overstated  xnumber of months it claimed. The amended FCC Form 393 also reduces the CPST channel count  xOfor the initial date of regulation from that shown in the forms dated November 11 and"<#,N(N(ZZ"  X- x!December14, 1993,$" {Oy- xJԍ Compare Cencom's Nov. 11, 1993 and Dec. 14, 1993 FCC Forms 393 Line 102 (21 channels) with Cencom's  xwJune 20, 1994 FCC Form 393 Line 102 (20 channels). The Dec. 14, 1993 form was filed Dec. 27, 1993 in response  xto the first valid complaint filed against Cencom. The Nov. 11, 1993 form was filed Nov. 15, 1993, apparently in response to an invalid complaint. a correction which also affects the maximum permitted rate. Thus,  X- xCencom's rate justification does not fall within the limited exception provided in the Third Order  X-on Reconsideration.  X- ` x15. ` ` Finally, we reject Cencom's arguments that the Bureau's action constitutes  xyretroactive ratemaking, violates the filed rate doctrine, or is subject to the principles set forth in  Xz- xSection 204(a)(1) of the Communications Act.%Zz {O - xԍ 47 U.S.C.  204(a)(1). See also HR 4850 Committee Report (Rpt 102628) at 83: "It is not the Committee's  xKintention to replicate Title II regulation. The FCC should create a formula that is uncomplicated to implement, administer, and enforce, and should avoid creating a cable equivalent of a common carrier 'cost allocation manual.'" Section 204 applies only to common carriers,  x[not to cable operators, and the filed rate doctrine was developed by the courts in that common  xcarrier context. Neither the filed rate doctrine, the prohibition against retroactive ratemaking,  xnor the principles underlying Section 204(a)(1) are applicable here. Moreover, Section 623  x]clearly sets out the regulatory structure for cable operators. Under Section 623(c) of the  xCommunications Act, an operator's rate justification filing is subject to review and approval and  xis, therefore, only provisional. In fact, cable rates are not filed with the Commission. The  xCommission's review is invoked only when a complaint is filed. The statute authorizes the  xCommission to determine if a rate is not unreasonable. It authorizes the Commission not only  xto reduce rates prospectively but to make retroactive adjustments to the date of the filing of the  X-complaint if the Commission determines the rate was unreasonable.& yO- xԍ Communications Act  623(c)(1)(C), 47 U.S.C.  543(c)(1)(C), as amended by 1992 Cable Act  3, 106 Stat.  {O-1468. See 47 C.F.R. 961(b).  Xf- ` Ax16. ` ` Unlike cases where impermissible retroactive ratemaking or a violation of the filed  xyrate doctrine was found, a rate for CPST filed by a cable operator on its FCC Form 393 does not  xbecome final until it has been reviewed and approved after a timely complaint has been filed.  X!- xCorrecting a rate that is only provisional does not constitute retroactive ratemaking,v'Z!.  {O- xԍ  See, e.g., Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, 79697 (D.C. Cir. 1990) (prohibition  xagainst retroactive ratemaking does not apply where the parties have been placed on notice that the rates they will be paying are provisional and are subject to retroactive adjustment).v nor violate  X - x]the filed rate doctrine.(Z P  {O #- xԍ See, e.g., Natural Gas Clearinghouse v. FERC, 965 F.2d 1066, 1075 (D.C. Cir. 1992) ("The filed rate doctrine  xsimply does not extend to cases in which buyers are on adequate notice that resolution of some specific issue may cause a later adjustment to the rate being collected at the time of service.").  The relevant statutory provision is Section 623. Unlike Section  xO204(a)(1) of the Communications Act, Section 623 does not provide that the filed rate  xautomatically becomes effective after a stated period of time if no agency intervention occurs  xeither suspending or preventing the filed rate from going into effect. Instead, Section 623 gives" r(,N(N(ZZ"  xthe Commission broad discretion to establish procedures to review rates and make retroactive  xyadjustments. We do not believe that Congress precluded the Commission from using the most  xrecent and accurate data available where adjustment, as determined by the Commission, is  xnecessary to ensure the reasonableness of the operator's cable program service rates. In doing  x{so, we ensure the accuracy of any retroactive adjustment, as well as of the rates charged prospectively to subscribers. For these reasons, we reject Cencom's arguments.  X_- ` x17. ` ` Cencom also challenges the Bureau Order for using an inflation adjustment period  xof 12 months from September 1992 to the date Cencom was required to file its FCC Form 393.  xAlthough Cencom complains that the Bureau erred in failing to allow Cencom to calculate  xinflation data through November rather than through September 1993, the Bureau properly relied  X - x=on Cencom's claim to an inflation period of twelve, not fourteen, months in its FCC Form 393.g)  {O~ -ԍ See Cencom FCC Form 393 Line 124 (dated June 20, 1994).g  xKThe Commission's task is to determine whether a complainedof rate is unreasonable, not whether  xan operator is or will be charging the highest permitted rate. Therefore, the Bureau does not  ximpose on an operator a longer period of inflation than it claims. Cencom is correct, however,  xthat it was entitled to apply the inflation factor to the number of full months from September 30,  x1992 until it was required to file its response to the complaint triggering Commission jurisdiction  X{-over its CPST,n*{Z {O-ԍ See FCC Form 393 at 11, Instructions for Line 124 (Aug. 1993).n which was fourteen months. We will make that adjustment here.  XM- ` x18. ` ` Cencom also alleges error in the Bureau's failure to use a precise inflation  xadjustment factor by failing to carry out its calculation to four decimal places, a point mooted by  xthe recalculation of the inflation factor herein to include the fourteen month inflation adjustment  X- xperiod. The inflation adjustment factor derived herein, 1.0320 , has been calculated to full  xprecision and takes into consideration both the July 29, 1994 GNPPI statistics and the fourteen  xmonth inflation adjustment period. With this recalculated inflation adjustment factor, the  X- xymaximum permitted rate is $14.24.+ yO`- xԍ A copy of the staff spreadsheet showing these recalculations is being made available in the Bureau Public Reference Room. Because the actual rate charged by Cencom was $14.69 per  xmonth, the amount of the refund to subscribers is the difference between the actual monthly rate  xLof $14.69 and the maximum permitted monthly rate of $14.24, or $0.45 per subscriber per month, plus franchise fees and interest.  XP- B. Offsets Between Tiers  X"- ` x19. ` ` Cencom argues that if the Commission upholds the Bureau's adjustments to its rate  xKcalculations, then it should be allowed to offset any refund due to the CPST overcharges against  xCencom's BST undercharges. Cencom claims entitlement to an offset because it miscounted the  xnumber of CPST channels, an error it corrected in its amended FCC Form 393 filed June 24,  x1994. It asserts that failure to allow an offsetting adjustment would violate the Commission's" D+,N(N(ZZ"  xpolicy of ensuring that operators are not required to reduce rates beyond the maximum reduction  x-that is determined under the benchmark approach. In support of its argument that offsets should  X- xbe allowed between different tiers of service, Cencom cites the Third Order on Reconsideration,E, yOK-ԍ 9 FCC Rcd at 4353  104.E  xywhich allows operators to offset between the basic service rate and equipment charges. It also  xrefers to Section 76.942 of the Commission's Rules, which it maintains, provides for "balancing"  X- x=refunds or the "offsetting" it is requesting. Finally, Cencom contends that the decision in TCI  Xx- xKCablevision of North Central Kentucky ("TCI Cablevision")P-xX yO -ԍ 10 FCC Rcd 926 (Cab. Serv. Bur. 1994).P removed any doubt on the issue of  x[refund balancing by reiterating that operators could calculate refunds by comparing aggregate  x<"actual" revenue with the aggregate "permitted" revenue, i.e., that overcharges must be balanced  x-against undercharges. Cencom believes that the Commission should clarify here, before a refund  xplan is submitted, that it is entitled to calculate its refund liability by claiming credit for any past undercharges. x  X - ` #x20. ` ` If both basic and CPST rates were within the Commission's jurisdiction, we might  x[consider intertier offsets when ordering refunds for overcharges on CPST where less than the  xmaximum permitted rate has been charged on the BST. However, the Communications Act sets  xup a dual regulatory structure for cable services, giving local franchising authorities jurisdiction  x>to regulate BST and associated equipment rates, and giving the Commission jurisdiction to  Xf- xregulate CPST rates upon the filing of a valid complaint..f yO- xԍ Communications Act  623, 47 U.S.C.  543. Rates for equipment used exclusively for CPST are also within  {O-the Commission's jurisdiction. See 47 C.F.R  76.950. While the Commission has prescribed  XO- xjstandards and procedures for local rate regulation/OB yOB-ԍ Communications Act  623(b)(1), (3), 47 U.S.C.  543(b)(1), (3); 47 C.F.R  76.922, 76.923. and is authorized to consider appeals from  X8- xlocal rate orders,08 yO-ԍ Communications Act  623(b)(5)(B), 47 U.S.C.  543(b)(5)(B); 47 C.F.R  76.944. the Commission generally is not otherwise involved in local rate regulationC18b  yOK- xԍ Only if the franchising authority's certification is denied or revoked or if a franchising authority asks the  xYCommission to assume jurisdiction because it can not meet Commission certification standards, can the Commission  xdirectly regulate basic service and associated equipment rates until the franchising authority becomes qualified. 47  xC.F.R.  76.913. The Commission has not assumed such jurisdiction to date. The Commission's files reflect that  xthe Commission has received 123 requests from local franchising authorities representing 203 communities for  {O3!-assistance in reviewing cost of service filings. See Third Order on Reconsideration, 9 FCC Rcd at 433839. C  xiand is not in a position to evaluate offsets between tiers as a matter of routine. Absent an appeal,  xLit may be uninformed about local matters potentially affecting the BST rates. Its processes are  x[not coordinated with local rate review processes. In short, allowing intertier offsets under the  x.current statutory scheme would create practical problems in determining the correct BST rates  xfor offset purposes, further burdening the administrative processes of cable rate regulation, and would be discordant with the dual regulatory structure Congress envisioned. " 1,N(N(ZZp"Ԍ X- ` &ԙx21. ` ` In the limited context of global resolutions of rate complaints for all or a  xsubstantial number of a company's cable systems, the Commission has allowed intertier offsets  x.when determining refund liability. But, it has done so only after reviewing rates for BSTs, and  xywhere both individual complainants and local franchising authorities were able to participate in  xthe rate resolution through comments on the proposal. We have learned from this process that  xthere often are considerations affecting rates at the local level that are not apparent from the face  xof the rate form filed to justify CPST rates and to which the Commission is not normally privy. The special circumstances applicable to the rate resolutions are not present here.  X1- ` x22. ` ` The rule and legal precedents cited by Cencom address offsets within the BST but  X - xdo not support intertier offsets. Section 76.942 of the Commission's Rules and the Third Order  X - xon Reconsideration direct local franchising authorities to base refunds on the amount by which  xaggregate actual revenues exceed aggregate permitted revenues for BST service and equipment  X - xrates under their regulatory jurisdiction.2"  yOR- xԍ This provision was intended to address the problem of refund computations where basic service rates and  x.associated equipment charges had been bundled but the maximum permitted rates were to be calculated on an  xunbundled basis. However, the Commission provided that franchising authorities should allow rate aggregation  {O-whether or not rates had been bundled. Third Order on Reconsideration, 9 FCC Rcd at 4353. TCI Cablevision directed a local franchising authority  X - xjto calculate refunds consistent with  76.942 and the Third Order on Reconsideration.3$  {O'- xԍ TCI Cablevision is cited as authority in Cox Cable of San Diego, Inc., 10 FCC Rcd 10050, 10052 n.15 (Cab.  xServ. Bur. 1995) (local franchising authority directed to compute intratier offsets). There the Bureau also denied  xwa request for intertier offsets, noting "that none of our decisions to date have allowed for any type of refund offsets  {O-between tiers." Id. at 10053 n.19. None  xKof the authorities cited by Cencom provides for aggregating revenues for services and equipment  x=costs that are subject to review by different regulatory jurisdictions. Indeed, Cencom's refund  X- xoffset request is inconsistent with the Commission's conclusion in the Rate Order that cable  xoperators should not balance low BST rates with CPST rates that exceed the maximum permitted  XU- xrate for the tier.4 U {O- xԍ Rate Order at 575960 (1993). The Commission's concern was twofold: (1) that programming might be  xmoved from the BST to tiers where the cable operator could receive relatively higher prices; and (2) that mandated  xseparate rate levels would increase both the burdens on cable operators and regulators and the complexity of their  {O-decision making. See 47 C.F.R.  76.922(a) (tier neutral pricing structure required).   xMore recently, the Commission proposed to allow some flexibility in pricing cable service tiers by allowing  xKany operator who had set initial or adjusted rates in accordance with existing regulations to decrease its BST rate  xand offset the lost revenue with a corresponding increase in CPST rates. To facilitate review of the offsets and  xunderlying BST rates by local franchising authorities or CPST rates by the Commission, operators would maintain  xrecords of what their maximum permitted rates would be if computed without the offsets. BST rates would be  xcapped at the offset amount, and operators justifying CPST rates would be required to show the offset amounts and  {O@$- xdemonstrate that the offsets would be revenue neutral. See Implementation of Sections of the Cable Television  xConsumer Protection and Competition Act of 1992: Rate Regulation, MM Docket No. 92266, and Cable Pricing  xFlexibility, CS Docket No. 96157, Memorandum Opinion and Order and Notice of Proposed Rulemaking, 11 FCC Rcd 9517, 952327 (1996). Cencom is seeking to accomplish through refunds what it was prohibited from  xdoing when setting its rates, without demonstrating any special circumstances that would justify"> $4,N(N(ZZ" such treatment in this case. We deny Cencom's request.  X- C. Sufficiency of Information  X- ` x23. ` ` Cencom contends that the Bureau Order is defective in that it fails to provide an  xadequate description of the rate calculations the Bureau made in reaching its conclusions. The  xiAdministrative Procedure Act and established case law make clear, Cencom asserts, that agencies  Xa- xmust at a minimum provide a reasoned analysis of their decisions.T5a {O-ԍ See Application for Review at 1213.T Cencom maintains that the order should be invalidated on this basis.  X - ` %x24. ` ` We disagree. We conclude that the Bureau Order did provide a sufficient  X - x<explanation of the bases for the Bureau's actions.6 Z yO- xԍ Indeed, Cencom's application for review, which sets forth with particularity the bases upon which it believes  xthe Bureau erred in its adjustments, appears to belie Cencom's contention on this point. However, on review we note  {O- xa typographic error in  5.c of Bureau Order, 10 FCC Rcd at 10039, which referred to the inflation figure for the  xthird quarter of 1992 as 122.3 rather than 122.5, the number used by Cencom and the Bureau at FCC Form 393 Line  {O4-123, and specified as the number in Rate Filings, 9 FCC Rcd at 7755. It provides an explanation of the adjustments  X - xmade by the Bureau that produced the refund calculation, adequately discussing Cencom's use  xof inconsistent inflation data and the Bureau's application of the appropriate inflation adjustment  X - xfactor and the resulting impact on the rate calculation. We note that the Bureau makes available  xto the public, in the Bureau's Public Reference Room, staff spreadsheets showing recalculations  xof FCC Form 393 filings. By showing the elements of how the Bureau evaluates a complaint,  xthese spreadsheets help to reduce cost and increase efficiency for both cable operators and the  x]Bureau. In this case, revised spreadsheets of Cencom's FCC Form 393 filings were made  xavailable in the Bureau's Public Reference Room and are part of the record of this proceeding. We accordingly deny Cencom's application for review on this issue.  X - D. Reservation of Powers  X- ` x25. ` ` Cencom challenges the Bureau's reservation of the right to revisit its FCC Form  X- x393 filings should new information come to light. Specifically, it objects to Footnote 15 of the  X-Bureau Order, which states:  ` XxX` ` This finding is based solely on the representations of Operator and  Xk- ` the modifications described herein. Should information come to  ` our attention that these representations were materially inaccurate,  ` we reserve the right to take appropriate action. This Order is not  ` sto be construed as a finding that we have accepted as correct any  ` 7specific entry, explanation or argument made by any party to this" 6,N(N(ZZ="  X-proceeding not specifically addressed herein.W7 {Oy-ԍ Bureau Order, 10 FCC Rcd at 10040 n.15.Wx`  xiCencom argues that the Commission is unconstitutionally reserving for itself the power to engage  xin retroactive ratemaking since "the Commission is clearly contemplating revising the CPST rate  xfound justified for the period September 1, 1993, to May 14, 1994, if the FCC Form 393 proves  X-materially inaccurate."Q8Z {O-ԍ See Application for Review at 18.Q  X_- ` %x26. ` ` We do not agree that the reservation expressed by the Bureau violates the  XH- xKprohibition against retroactive ratemaking or is otherwise inappropriate or unjustified.9H {O - xԍ Cf. 47 C.F.R.  32.25, which provides for the correction of prior period errors in a telephone company's books of account. No issue of retroactive ratemaking is raised by such corrections. Footnote  X1- x15 states that the Bureau's finding is based on the representations of Cencom and that if the  x.representations are inaccurate, appropriate action can be taken by the Bureau. This provision  x.preserves the Commission's flexibility to act where material misrepresentations are made by an  xoperator in its submissions. This is an appropriate safeguard to protect the rights and interests of the cable subscribing public.  X - ` x27. ` ` The final provision in the Bureau's footnote states that the order should not be  xNconstrued as a finding that the Commission has accepted as correct "any specific entry,  xexplanation, or argument" not specifically addressed in the order. As we have noted, the  x<retroactive ratemaking strictures apply only if the Commission revises a previously approved rate  xand impermissibly applies that revised rate retroactively, a circumstance not present in cable rate  xyregulation. The provision advises an operator that the figures and information supplied by the  xoperator in its rate filing for a particular period of time, and any adjustments made thereto, relate  xonly to that filing and not to future rate filings by an operator unless stated otherwise by the  X- xCommission. It conveys to an operator that inaccurate information provided in connection with  xits FCC Form 393 will not be considered binding upon the Commission in other rate proceedings,  xe.g., an FCC Form 1200 proceeding involving post May 14, 1994 rates or an FCC Form 393  xproceeding involving an adjacent community served by an operator. We see no reason to delete  X-or otherwise alter the language of the footnote in the Bureau Order.  Xg- E. 1200 Filings  X9- ` x28. ` ` Cencom contends that the Bureau Order requiring it to recompute its FCC Form  xM1200 rates by entering the new FCC Form 393 rate into the FCC Form 1200 and to implement  x>any revised rate within 30 days is arbitrary and will cause confusion to the subscribers and  X- xirreparable harm to Cencom, particularly since the Bureau Order is on appeal. In addition,  xCencom maintains that the Commission has now ruled that FCC Form 1200 cases are separate  xfrom FCC Form 393 cases and that there is no basis for resolving any FCC Form 1200 issue in" F9,N(N(ZZ"  X- xan FCC Form 393 case.  Cencom therefore requests that the Commission suspend or remove the  X- xclause in the Bureau Order that required Cencom to revise its FCC Form 1200 filing for the period beginning May 15, 1994.  X- ` x29. ` ` We shall require Cencom to submit a revised FCC Form 1200 to reflect the  xadjustments indicated herein. We conclude after analyzing Cencom's FCC Form 393 and making  xappropriate adjustments that the maximum permitted rate is $14.24, not the higher rates either  xKactually charged by Cencom or shown on its FCC Form 393. Although the only issues addressed  xjin this proceeding concern FCC Form 393, and FCC Forms 393 and 1200 cover different periods  xof time, an incorrect rate in FCC Form 393 can require changes in FCC Form 1200. The CPST  xmaximum permitted rate is carried through from the FCC Form 393, Part I, to the FCC Form  x1200, Module A, line A6. An inaccurate rate in line A6 can affect the ultimate maximum  x\permitted rate determined from FCC Form 1200. This, in turn, affects the rate calculations in  xFCC Forms 1210 and 1240. Because an error in FCC Form 1200 could result in excessive rates  xcharged to subscribers after the period governed by FCC Form 393, we do not believe that  xisubmission of a revised rate on FCC Form 1200 to reflect these adjustments should, absent a stay,  X- xbe unnecessarily delayed. For these reasons, we hereby direct Cencom, pursuant to Section  X}- x76.922(b) of the Commission's rulesC:} yO-ԍ 47 C.F.R.  76.922(b).C to submit a revised FCC Form 1200 form that reflects the  Xf-adjustments required herein.j;ZfX {Oo- xԍ In Second Order on Reconsideration, 9 FCC Rcd at 4179  128 & n.170 (1994), the Commission was clear  x;that, as initial rates are adjudicated, the Form 1200 may have to be refiled to conform to the rate that the regulator  yO-ultimately decides is reasonable.j  X8-xQ  IV. CONCLUSION AND ORDERING CLAUSES ă  X - ` x30. ` ` Accordingly, IT IS ORDERED, pursuant to Section 1.115 of the Commission's  xRules, 47 C.F.R.  1.115, that the Application for Review of Cencom seeking reversal of Cencom  xCable Income Partners II, L.P., Memorandum Opinion and Order, 10 FCC Rcd. 10038 (Cab. Serv. Bur. 1995), IS GRANTED to the extent indicated herein and otherwise DENIED.  X- ` x31.` ` IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's  xRules, 47 C.F.R.  76.961, that Cencom shall refund to subscribers in Jasper, Texas, CUID No.  xTX0061, that portion of the amounts paid for cable programming service for the period  xcommencing with the date of the filing of the first valid complaint on November 16, 1993, and  xjending May 14, 1994, which exceeded the maximum permitted rate of $14.24 (plus franchise fee) per month and was thus unreasonable, plus interest to the date of the refund.  X- ` x32. ` ` IT IS FURTHER ORDERED that Cencom shall within 30 days of the release of  x this Order file a report with the Chief, Cable Services Bureau, stating the cumulative refund  xamount so determined (including franchise fees and interest), describing the calculation thereof,  xand describing its plan to implement the refund within 60 days of Commission approval"!z;,N(N(ZZ " thereof.T  X- ` ox33. ` ` IT IS FURTHER ORDERED, pursuant to Section 76.922(b) of the Commission's  xzrules, 47 C.F.R.  76.922(b), that Cencom shall, within 30 days of release of this Order, revise  xits FCC Form 1200 filing with respect to Jasper, Texas, CUID No. TX0061, for the period  xbeginning May 15, 1994, to reduce the monthly charge for its cable programming service tier by $0.45 per subscriber per month (plus franchise fee).  XH- ` Bx34. ` ` IT IS FURTHER ORDERED that Cencom shall place into effect, within 30 days  xafter its submission of the revised FCC Form 1200 filing required above, a rate that reflects the reduction in the CPST rate determined in this Order.  X - ` x35. ` ` We reserve the right to make adjustments to Cencom's prices for the period after  X -May 14, 1994, upon completion of our review of Cencom's FCC Form 1200 rate filings.(#(#X x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhWilliam F. Caton  X4-x` `  hhActing Secretary#Xw PE37XP#  X-#Xj\  P6G;9XP#";,N(N(ZZu"  X- CONCURRING STATEMENT `JOF COMMISSIONER JAMES H. QUELLO  Xv-Re: xCencom Cable Income Partners II, L.P.,  X_-xCUID No. TX0061 (Jasper,TX)  XH-    0xI am issuing this statement to address my concern regarding one aspect of our decision  xin this case. It has been the Bureau's practice to "refresh" the figures used for inflation  x adjustment with more recent information when the Bureau determines that a rate is in error.  x/Varying inflation figures evolve for the same time period because revisions are made to the  x<figures as more refined information becomes available. As our Order states, the Bureau's practice  xof adjusting inflation figures with the most recent information ensures that the corrected rate  x reflects the most accurate information. My concern goes to those circumstances where an  xoperator, having made a good faith and diligent effort to comply with the newly implemented rate  xregulations, makes an error in calculation or a simple mistake in filling out the form. The  xBureau's practice in these circumstances could subject a cable operator to additional liability  xdisproportionate to the error made because the inflation numbers are refreshed. Our decision  X-today should not foreclose our ability to examine these circumstances.#Xj\  P6G;9XP#