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After reviewing an operator's FCC Forms 1200  x{and 1240, along with any additional information, the franchising authority may either approve the  xoperator's requested rate increase, or it may issue a written decision explaining the factors it considered  S`-in denying the increase.`Z {OZ- xKԍ47 CFR  76.936; see, Century Cable of Southern California, 11 FCC Rcd 501 (1995); Ultracom of Marple, 10 FCC Rcd 6640 (1995).  S- IV.XxSUMMARY OF THE PLEADINGS (#  S-x A.` ` 1996 Appeal (#`  Sp- ` x6.` ` On March 1, 1996 TCI completed Form 1240 to establish a maximum permitted rate of  SH - x$11.3035 per subscriber per month and submitted it for review by Iowa City.H  yO- xԍIowa City's Review & Analysis of FCC Form 1240, p. 1 (June 17, 1996) (attachment 2 in Appeal) ("City Review"); Comment on the Appeal at 3. The City returned the  xfiling with adjustments, two of which TCI now appeals. The review process included two requests for  S - xadditional information.U  yO-ԍComment on the Appeal at 4; City Review at 4.U TCI responded by submitting a revised Form 1240 on June 7, 1996 that resulted  S -in a new rate of $11.1987 per subscriber per month.n  yO -ԍCity Review at 1, 4; Comment on the Appeal at 2; 1996 Resolution at 1.n  S -XxX` ` 1.X Inflation Figures (#  S0- ` x7.` ` TCI argues that the City erred in requiring the use of a lower inflation figure.K0,  yO-ԍ1996 Appeal at 1, 1997 Appeal at 1.K Citing  S- xCommission regulations and our Vacaville decision, TCI argues that an operator only needs to use the  xinflation factor available when it completes its initial filing, not whatever figure has become available by  S- xthe time the franchise authority reviews the rate.  {O-ԍ1996 Appeal at 1; TCI Cablevision of Vacaville, 11 FCC Rcd 11876 (1996) ("Vacaville"). When TCI first filed its Form 1240, it used a  xpreliminary Commerce Department figure of 2.61%, but by the time TCI submitted its revised Form 1240,  Sj- xthe Commerce Department released a lower, 2.22% figure.9jN  yOX"-ԍ1996 Appeal at 3.9 TCI argues that the Commission has already  SB- xMruled on the use of exactly the same figures at issue in this case.MB {O$-ԍVacaville, 11 FCC Rcd at 11876.M In Vacaville, the operator used the  S- xpreliminary 2.61% inflation factor when it filed its Form 1240.1p {O,'-ԍId.1 During its review, the local franchise",`(`(88"  S- xauthority (LFA) replaced it with the subsequently released 2.22% factor.1 {Oh-ԍId.1 The Commission ruled for the  xoperator because the company "calculated its 2.61% figure based on preliminary information from the  S- xKDepartment of Commerce before we ultimately adopted the 2.22% figure."9Z yO-ԍ1996 Appeal at 2.9 TCI asserts that the approach  S- xin Vacaville is the same approach it used, and even takes the defense one step further.1 {O-ԍId.1 The operator  xargues that it actually had the right to use a higher, 2.96% inflation figure, but "voluntarily concluded that  S:-the best approach was to use the preliminary update."6:| yOV -ԍId at 3.6  S- ` x8.` ` Iowa City states that TCI produced no record of the 2.61% figure and, even so, had the  S- xtime and opportunity to use the 2.22% factor.Y  yOn-ԍComment on the Appeal at 3; 1996 Resolution at 5.Y While acknowledging that the lower figure was not  xavailable when TCI first submitted its Form 1240, the City notes it was available when TCI later corrected  Sr- xa "material error" in its original submission through its revisions.Er yO-ԍComment on the Appeal at 34.E Iowa City argues that TCI should have  SJ -taken the opportunity to refresh its rate calculation.YJ ,  yO-ԍComment on the Appeal at 4; 1996 Resolution at 5.Y  S -Xx X` ` 2.X Cable Relocation (#  S - ` x9.` ` TCI states that because Iowa City required it to relocate cable as part of a municipal road  xproject, the City incorrectly disallowed TCI's recovery of the $8,000 value of that work as an external  SZ- x\cost.K Z  yO-ԍ1996 Appeal at 4; 1997 Appeal at 3.K TCI cites the Thirteenth Order on Reconsideration to support its position: "[W]e will permit  xoperators to pass through to subscribers the cost of meeting franchise requirements that they remove aerial  S - xfacilities and place them underground."! L  {O-ԍ1996 Appeal at 4, citing, Thirteenth Recon., 11 FCC Rcd at 441; see also, 47 CFR  76.925(a)(5). TCI points to an Iowa City ordinance providing that a franchisee  S- x"shall ... relocate in other public place any property of the Grantee when required by the City."" yOb!-ԍIowa City Code, Title 12, Chapter 4,  12448(C) (enacted as Iowa City Ordinance No. 953700). Because  xLthe City required TCI to relocate its cable, TCI argues, the associated expenses "are precisely the sort of  S- xcosts allowable as an 'external' pass through."9#n yO$-ԍ1996 Appeal at 4.9 TCI states that it only seeks recovery for that part of the  xrelocation occurring inside city limits, and thus within the franchise agreement's purview: "the $8,000 at"l#,`(`(88"  S-issue is attributable entirely to work performed ... inside the city limits."9$ yOh-ԍ1996 Appeal at 5.9  S- ` #x10.` ` Iowa City responds by arguing that TCI failed to itemize its $8,000 cost, by pointing out  S- xinconsistencies in TCI's arguments, and by challenging the operator's interpretation of the law.Y%X yO-ԍComment on the Appeal at 5; 1996 Resolution at 1.Y In its  S`- x1996 Resolution regarding TCI's Form 1240, the City stated, "there is no provision in the Franchise  S8- xAgreement nor in the City's ordinances which would authorize the inclusion of [the relocation] costs."=&8 yO -ԍ1996 Resolution at 5.=  S- x-In its Comment on the Appeal, Iowa City chooses not to reassert that argument.E'x yO( -ԍComment on the Appeal at 56.E Instead, the City argues  xthat not only has TCI "provided inadequate justification for these costs," but the operator initially  S- xattributed the $8,000 to relocations both inside and outside city limits, while, in its appeal, TCI has  S- xassigned the costs to work completed "entirely" inside city limits.1( {O@-ԍId.1 Iowa City questions why the  xgeographic area of the work differs between the initial Form 1240 filing and the appeal, yet the cost  SH -remains the same.1)H  {O-ԍId.1  S - ` Qx11.` ` In addition to questioning TCI's facts, Iowa City challenges TCI's interpretation of the  S - xlaw.7* ,  {O-ԍId. at 6.7 The City argues it only required TCI to "accommodate" the road project and did not ask it to move  S - xjcable underground.1+  {O-ԍId.1 This is the key, Iowa City argues, because the Commission limits passthroughs to  S - xcases where an LFA demands underground relocation of cables that are on poles.1, P  {Op-ԍId.1 The City indicates that,  XxBy [TCI's] own admission, 1,547 feet of the 1,699 feet of cable that was disturbed... was  "aerial cable [that] had to be restrung," not moved underground. With respect to the 152  feet of cable that TCI states was "buried underground," there is no indication that this  S-cable was previously in the air.1- {O#-ԍId.1   x=Iowa City concludes, "This activity does not amount to a 'franchise requirement' that TCI 'remove aerial  S- xfacilities and place them underground' as contemplated by the Thirteenth Order on Reconsideration."S.t {O,'-ԍThirteenth Recon., 11 FCC Rcd at 441.S ".,`(`(88"  S-The City states that TCI has no legal right to recover its outlays as external costs.1/ {Oh-ԍId.1  S-Xx B.X` ` 1997 Appeal (#`  S`- ` x12.` ` In TCI's 1997 appeal the operator objects to the City's decision that the basic service tier  S8- xrate is overstated by four cents per month per subscriber.908Z yO2-ԍ1997 Appeal at 1.9 TCI based its 19971998 basic service tier  S- x(BST) rate on the higher maximum permitted rate it defends in its 1996 appeal.11 {O -ԍId.1 The City rejected this  xkrate for the same reasons it rejected the 1996 maximum proposed rate TCI uses the wrong inflation  S- x\figure and improperly included the cable relocations as external costs.O2| yO -ԍ1997 Resolution at 1; 1997 Appeal at 1.O Similarly, TCI challenges the  S-decision using exactly the same arguments that it did in the 1996 Appeal. Iowa City filed no opposition.  SH - III.XxDISCUSSION (#  S -` hp x (#%` hp x (#%Xx A.X` ` Inflation Adjustment (#`  S - ` }x13.` ` TCI should have updated its Form 1240 with the 2.22% inflation figure when it responded  S - x.to Iowa City's request for additional information."3(  {O,- xԍSee, Cencom Cable Income Partners, 12 FCC Rcd. 7948, 79537957 (1997) ("Cencom"), aff'd, Cencom Cable  {O- xIncome Partners, FCC 97374 (released Oct. 14, 1997), appeal filed, Charter Communications, Inc. v. FCC, 5th Cir.  {O- xNo. 9760745 (Nov. 13, 1997), mot. to withdraw filed (Feb. 3, 1998); see also, Bresnan Communications Company,  {O-DA 97-2033, p.1 (1997) ("Bresnan")." When an operator revises its Form 1240 for a reason  x.other than the availability of more accurate inflation figures, it must also take the opportunity to refresh  S0-its rate calculations.140  {O-ԍId.1  S- ` x14.` ` Although TCI supports its arguments by citing the Commission's Vacaville decision, the  S- x.circumstances are significantly different.M5  {O-ԍVacaville, 11 FCC Rcd at 11876.M In Vacaville, unlike here, the operator made no supplemental  xfilings and therefore did not have the opportunity to refresh its calculations with a more recent inflation  Sl- xnumber.,6l  yO,#-ԍId. , The Commission's Cencom decision is more relevant.A7l yO$-ԍ12 FCC Rcd. at 79537957.A In Cencom, the operator applied for  xreview of an Order in which the Bureau found that the operator had not justified its CPST rate. In  xrecalculating the operator's maximum permitted rate, the Bureau corrected errors in the operator's inflation  xcalculation and "refreshed" the inflation figure with the most recent data. The Commission affirmed the"@7,`(`(88R"  x0Bureau's decision, explaining that when a rate is unreasonable on its face or when an operator has  S- xcommitted an error in justifying its rates, the Bureau is correct in using the most accurate inflation figure.:8 {O@-ԍId. at 7954.:  xyWhen the inflation figure is refreshed, neither consumers nor the operator are harmed, because consumers  xpay only for the inflation experienced by the operator and the operator recovers the full cost of the  S`- x]inflation it experienced.19`Z {OZ-ԍId.1 Refreshing inflation figures in this circumstance is fully consistent with  S8-Commission precedent.?:8 {O -ԍId. at 79527955.?  S- ` x15.` ` According to Iowa City, TCI committed a material error in justifying its rates. This  xprompted two Iowa City requests for additional information, to which TCI responded with supplemental  S- xfilings.C;~ yO-ԍComment on the Appeal at 4.C Because the filings occurred after the Commerce department had released the final 2.22%  x=inflation figure for the period, TCI should have taken the opportunity to refresh its inflation calculation.  SH -Consistent with the Cencom decision, we agree with the City and deny this aspect of TCI's Appeal.S<H  yO-ԍ1996 Resolution at 1; 1997 Resolution at 1.S  S -Xx B.X` ` External Costs (#`  S - ` x16.` ` Iowa City, pursuant to a city ordinance, required TCI to accommodate a road project by  S - xmoving portions of its cable.;=  yO-ԍ1996 Appeal at 45.; The Commission allows cable companies to pass on the costs of certain  xjfranchise requirements to their subscribers. This includes "the costs of removing cable from utility poles  xMand placing the same cable underground," but only when the operator is not already in the process of  S - xupgrading its system.> .  {O- xԍThirteenth Recon., 11 FCC Rcd at 441. In the Thirteenth Recon., the Commission created the annual rate  xadjustment option and, among other things, added to the list of recoverable external costs. The recovery of cable  xrelocations from poles to underground was one of these additions. The Commission wrote: "we will permit operators  xYto pass through to subscribers the cost of meeting franchise requirements that they remove aerial facilities and place them underground." This is codified in 47 CFR  76.925(a)(5). On the record before us, TCI's relocations do not fit all the conditions imposed upon this right to recover.  S- ` 3x17.` ` The regulation provides that, as long as the LFA does not require burial, the LFA may  Sj- xrequire an operator to move its cable while denying the operator external cost treatment.A?j yO#-ԍ47 CFR  76.925(a)(5).A The City only  xrequired TCI to "accommodate" the road project, and did not specifically demand removal of the cable  S- xfrom poles to underground.C@p yO*'-ԍComment on the Appeal at 6.C More significantly, TCI itself states that it buried only 152 feet of the 1,699"@,`(`(88q"  S- xkfeet of relocated cable; it "restrung" the rest.1A {Oh-ԍId.1 Our regulation only requires external cost recovery for  S- xcosts of buried, not restrung, cable.ABZ yO-ԍ47 CFR  76.925(a)(5).A At best, TCI could only recover the costs of the 152 feet of buried  xcable. Notably, the regulation also requires that the cable moved underground must have first been on  S- xya pole,1C {O-ԍId.1 and, as the City points out, TCI has not stated whether the 152 buried feet was previously on a  S`-pole or was simply new cable.CD`| yO| -ԍComment on the Appeal at 6.C  S- ` #x18.` ` TCI has the burden of demonstrating that the City's decision was not reasonable.>E  yO -ԍ47 CFR  76.937(a).> It has  x[not demonstrated that the City specifically required cable relocation underground, it did not explain why  xLit deserves cost recovery for the 1,547 feet of cable that was not buried underground, and it did not state  xwhether the 152 feet of buried cable was relocated from poles. TCI did not sufficiently explain why its  xcosts were $8,000 both when it described the relocations as occurring inside and outside city limits and,  xlater, when it said the work was done entirely within city limits. On the record before us, TCI has not  xmet its burden of demonstrating that Iowa City's decision to deny recovery of the cable relocation costs  S - xzwas inconsistent with Commission rules.FF  {O4-ԍSee, 47 CFR  76.944.F We believe Iowa City reasonably refused to allow TCI to  S -recover its cable relocation costs as external costs.1G .  {O-ԍId.1  S -  S -V. XxORDERING CLAUSES (#  S0-x19.` ` IT IS ORDERED that TCI's appeals are DENIED .  S- ` x20.` ` This action is taken by the Deputy Chief, Cable Services Bureau, pursuant to authority delegated by the Commission's rules in 47 C.F.R.  0.321. XxX` ` X XXhhX@FEDERAL COMMUNICATIONS COMMISSION(# XxX` ` X XXhhX@John E. Logan(# XxX` ` X XXhhX@Deputy Chief, Cable Services Bureau