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Operator has attempted to justify its CPST rate increase through a  xbenchmark showing on FCC Forms 1240. We have already issued two orders resolving earlier complaints  xagainst Operator's rates. In the first order ("First Order"), we resolved complaints against Operator's rates  Sp- xfor the period September 1, 1993 through September 15, 1995.p  {O- xԍ See In the Matter of TCI Communications, Inc., Final Resolution of Cable Programming Service Rate Complaints, 11 FCC Rcd 14696 (1996). In the second order ("Second Order"),  SH- xLwe found that Operator's June 1, 1996 CPST rate increase was not unreasonable.H"  {O - xԍ See In the Matter of TCI of Illinois, d/b/a Telenois, Inc., 11 FCC Rcd 12724 (1996). Operator has filed a timely Petition for Reconsideration of our Second Order on November 4, 1996. This Order addresses Operator's CPST rate effective June 1, 1997.  S- ` x2.` ` The Communications Act|  {O!-ԍ Section 623(c) of the Communications Act of 1934, as amended, 47 U.S.C. Section 543(c) (1996). authorizes the Federal Communications Commission  x("Commission") to review the CPST rates of cable systems not subject to effective competition to ensure  xjthat rates charged are not unreasonable. If the Commission finds the rate unreasonable, it shall determine  SX- xthe correct rate and any refund liability.MX  {O&-ԍ See 47 C.F.R. Section 76.957.M The Telecommunications Act of 1996 ("1996 Act"),^X  yO'-Ѝ Pub. L. No. 104104, 110 Stat. 56 (1996). ^ and our"X0 ,**88"  S- xrules,E) {Oh- xЍ See Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 11 FCC Rcd 5937 (1996). require that complaints against the CPST rates be filed with the Commission by a franchising  xauthority that has received subscriber complaints. A franchising authority may not file a CPST rate  x!complaint unless, within 90 days after such increase becomes effective, it receives more than one subscriber complaint.  S8- ` x3.` ` Cable operators attempting to justify their rates for the period beginning May 15, 1994  S- xusing a benchmark showing must complete and file the FCC Form 1200 series.L\"E) {O - xԍ 47 C.F.R. Section 76.922(b)(6); see Second Order on Reconsideration, supra at 4183, paras. 135138; supra  {O - xat 4190, n.136; see also Public Notice "Questions and Answers on Cable Television Rate Regulation" (April 26, 1994).L Cable operators may also  xzjustify rate increases based on the addition and deletion of channels, changes in certain external costs,  S- x>and inflation, by filing FCC Form 1210.FFE) yO-ԍ 47 C.F.R. Section 76.922(d).F FCC Form 1210 must be filed at least 30 days before new  xLrates are scheduled to go into effect where the Commission has found the cable programming service rate  xkto be unreasonable less than one year prior to the filing, or where there is a pending complaint against  SH - xthe CPST rate.U H E) yO-ԍ 47 C.F.R. Sections 76.960 and 76.958.U Cable operators may justify adjustments to their rates on an annual basis using FCC Form  xk1240 to reflect reasonably certain and quantifiable changes in external costs, inflation, and the number  S - x[of regulated channels that are projected for the twelve months following the rate change. \ f E) {O- xЍ See 47 C.F.R. Section 76.960; see In the Matter of Implementation of Sections of the Cable Television  xConsumer Protection and Competition Act of 1992: Rate Regulation, MM Docket No. 92266, Thirteenth Order  {O-on Reconsideration, ("Thirteenth Reconsideration Order") 11 FCC Rcd 388, 391 (1995). Any incurred  S - xcost that is not projected may be accrued with interest and added to rates at a later time.f E) {O-Ѝ See Thirteenth Reconsideration Order at 392.f If actual and  xprojected costs are different during the rate year a "trueup" mechanism is available to correct estimated  S -costs with actual cost changes.3 E) {O<-ԍ Id.3  S0- ` Qx4.` ` In the Second Order, we found that Operator had not correctly calculated its maximum  xpermitted rate ("MPR") for its CPST, effective June 1, 1996. We concluded that, in order to arrive at a  x<proper MPR, adjustments would be necessary. On Attachment 5 of Operator's FCC Form 1240, Operator  xcalculated an inflation adjustment factor to adjust for inflation for the period July 1, 1994 through June30,  x1995 and for excess inflation previously included in rates. Because Operator used an incorrect inflation  xadjustment factor on Attachment 5 which increased the Inflation Factor for TrueUp Period 1 reported on Line C1, we corrected the inflation factor reported on Line C1.  S- ` x5.` ` In its Petition, Operator states that it should not have included Attachment 5 with the FCC  xForm 1240 filed at the Commission because Attachment 5 is designed to show the inflation adjustment  xappropriate for its basic service tier rate ("BST"). Operator contends that it calculated its inflation" ,p(p(88"  xjadjustment factor on Line C1 correctly pursuant to the terms of the First Order and without utilizing the  xinflation on Attachment 5. Consequently, Operator contends that it should be permitted to use its  xcalculated inflation factor of 1.0258 on Line C1 of its FCC Form 1240 for the projected period June 1, 1996 to May 31, 1997.  S8- ` x6.` ` Upon review of Operator's Petition, we find that Operator has demonstrated that  xAttachment 5 of its FCC Form 1240 for the projected period June 1, 1996 to May 31, 1997 relates to the  xBST rather than the CPST and that it correctly included the inflation factor of 1.0258 on Line C1 of its  xFCC Form 1240 for the projected period June 1, 1996 to May 31, 1997. Consequently, we will grant  S- xOperator's Petition for Reconsideration and allow Operator to use the inflation factor of 1.0258 on Line C1 of its FCC Form 1240 for the projected period June 1, 1996 to May 31, 1997.  S - ` x7.` ` On August 4, 1997, the local franchising authority ("LFA") filed its complaint against  S - xOperator's June 1, 1997 CPST rate increase. E) yO` -ԍ The first subscriber complaint concerning the CPST rate increase was received by the LFA on June 2, 1997. In its complaint, the LFA asserts that it has received more  xthan one subscriber complaint against Operator's CPST rate increase, thereby triggering the Commission's  x.jurisdiction to review this complaint. The valid complaint from the LFA triggers an obligation on behalf  S - xyof the cable operator to file a justification of its CPST rates with the LFA.C XE) yOx-ԍ 47 C.F.R Section 76.1402.C Thus, in this case, Operator  x\is required to justify the increase in its CPST rate which is the subject of the LFA's complaint. In its  xresponse to the complaint, Operator asserts that its CPST rate increase is justified by the FCC Form 1240  S-filed along with the LFA's complaint.E) yO- xYԍ In a letter dated July 25, 1997, Operator submitted to the LFA its FCC Form 1240 for the period June 1, 1997 to May 31, 1998 to justify its June 1, 1997 CPST rate.  S- ` x8.` ` On February 22, 1996, the Commission issued an order granting Operator a waiver (the  x"Waiver Order") of certain rate adjustment requirements in its initial filing of the Commission's annual  Sh- x.rate adjustment form (FCC Form 1240).h@E) {OH- xԍ See Annual Rate Adjustment System for Cable Service Rates, Request for Waiver of Requirements Contained in the Thirteenth Order on Reconsideration, (DA 96220, released February 22, 1996). Specifically, the Waiver Order allowed Operator, in its initial  xFCC Form 1240 filings, to include estimated changes in costs, inflation, channels and subscriber  xinformation attributable to the period between the last date for which actual cost data was available and  xthe effective date of the new rates. In the Waiver Order, Operator was instructed to include in its initial  x0FCC Form 1240 filing certain calculations, such calculations to be performed on FCC Form 1240  x.(primarily in Module G), or off FCC Form 1240, in an alternative showing done pursuant to the Waiver  Sx- xOrder's "General Guidelines."ExE) yO"-ԍ Waiver Order at Appendix A.E Operator chose to use an alternative showing pursuant to the "General Guidelines" rather than perform its calculations directly on FCC Form 1240.  S- ` 2x9.` ` On October 25, 1996, Operator wrote to the Commission requesting review and approval  S- x\of a modified FCC Form 1240 to justify rates for the projected period from June 1, 1997 to May 31,"* ,p(p(88L"  S- xk1998.E) {Oh- x;ԍ See Letter from Angela Montoya, TCI Communications, Inc., to Alex Byron, Cable Services Bureau, Federal Communications Commission, dated October 25, 1996. On January 9, 1997 we consented to the Operator's use of the form for such period in lieu of  S-filings on the Commission's standard FCC Form 1240."E) {O- xԍ See Letter from Meredith Jones, Chief, Cable Services Bureau, Federal Communications Commission to Angela Montoya, TCI Communications, Inc., Dated January 9, 1997.  S- ` x10.` ` To justify its CPST rate, effective June 1, 1997, Operator submitted two FCC Forms 1240,  x.the first for the projected period June 1, 1996 to May 31, 1997 ("First Form 1240"), and the second for  x=the projected period June 1, 1997 to May 31, 1998 ("Second Form 1240"). Operator's First Form 1240  xused Operator's alternative showing, calculated pursuant to the Waiver Order. Operator's Second Form  x1240 followed the format set forth in Operator's October 25, 1996 letter. On reviewing the submitted  x[forms, we determined that neither of the submitted forms produced identical results to filings that would  xhave been made on the Commission's standard FCC Form 1240. Therefore, we ordered Operator to file  xthe relevant FCC Forms 1240, and all supporting documentation, to support the monthly CPST rate of  SH -$16.68 implemented by Operator on June 1, 1997, in the community referenced above.H |E) {Od-ԍ  See In the Matter of TCI of Illinois d/b/a Telenois, Inc., DA 972301 (Released October 31, 1997).  S - ` _x11.` ` Accordingly, on November 24, 1997, Operator submitted new standard FCC Forms 1240,  xfor the projected periods June 1, 1996 to May 31, 1997, and June 1, 1997 to May 31, 1998, which  xperformed the Waiver Order's calculations directly on the standard FCC Forms 1240 as well as the  S - xcalculations described in Operator's October 25, 1996 letter.J E) yO.- xZԍ Operator submitted these forms but also stated that it "continues to believe that these additional forms are  xnot required or necessary as [Operator used] the FCC approved waiver in filing the Form 1240 for this system."  xLetter from Angela Bricmont, Director of Regulatory Compliance, TCI Communications, Inc., to Margaret Egler,  xAssistant Chief, Financial Analysis and Compliance Division, Cable Services Bureau, Federal Communications Commission dated November 24, 1997.J Review of both FCC Forms 1240 is  xnecessary to calculate the appropriate maximum permitted rate, and refund liability, for the period  xbeginning June 1, 1997. Operator also submitted a refund plan which calculated the amount of refunds  xjowed to subscribers in the community referenced above for the duration of the one year projected period ending May 31, 1998.  S- ` x12.` ` Upon review of Operator's new FCC Form 1240, for the projected period June 1, 1996  xto May 31, 1997, we find that Operator has correctly calculated its maximum permitted rate ("MPR") of  x$15.70. Upon review of Operator's new FCC Form 1240, for the projected period June 1, 1997 to  x=May31, 1998, we find that Operator has correctly calculated its MPR of $16.04. However, Operator's  x!actual CPST rate, effective June 1, 1997, is $16.68. Operator has submitted a refund plan which  x=calculates, with interest, the total amount of overcharges that will be collected from CPST subscribers in  S- xthe community referenced above from June 2, 1997 (the date of the first subscriber complaint) E) {O$-ԍ See Section 623(c)(1)(C) of the Communications Act, 47 U.S.C Section 543(c)(1)(C) (1996). to  Sx- xyMay31, 1998.wxP E) {Oh'-ԍ See Section 76.961 of the Commission's Rules, 47 C.F.R. Section 76.961.w Upon review of Operator's refund plan, we find that Operator has correctly calculated,"x,p(p(88"  xwith interest, the amount of overcharges that will be received from subscribers during the projected period  S- xLending May 31, 1998. These calculations result in a total refund amount of $8.08, per CPST subscriber,  xincluding interest. We will order Operator to pay the refund amount of $8.08 to each current CPST  S- xsubscriber within 60 days of the release of this order.}E) {O-ԍ See Section 76.961(c) of the Commission's rules, 47 C.F.R. Section 76.961(c).} We will also order that any rate Operator charges  xon and after June 1, 1998 shall be premised on Operator's use of (1) the standard FCC Form 1240 for rate  xcalculation purposes and (2) $16.04 as Operator's Current Maximum Permitted Rate as called for on Line  xA1 of its FCC Form 1240 filing for the projected period beginning June 1, 1998. Contingent upon  xOperator's refund payment to its subscribers, we have determined that Operator's total CPST rate  xcollections in the community referenced above, for the projected period June 1, 1997 to May 31, 1998, will be reasonable.  SH - ` Ax13.` ` Accordingly, IT IS ORDERED, pursuant to Section 76.961 of the Commission's rules, 47  xC.F.R. Section 76.961, that Operator shall refund to CPST subscribers in the franchise area referenced above the amount of $8.08 within 60 days of the release of this Order.  S - ` x14.` ` IT IS FURTHER ORDERED, pursuant to Section 76.962 of the Commission's rules, 47  xC.F.R. Section 76.962, that Operator, within 90 days of the release of this Order, shall file with the Chief,  xCable Services Bureau, a certification of its compliance with the refund requirements of this Order, and a certification of its intent to comply with all other aspects of this Order.  S- ` x15.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47  x{C.F.R. Section 0.321, that Operator shall use (1) the standard FCC Form 1240 for rate calculation  xpurposes and (2) $16.04 as Operator's Current Maximum Permitted Rate as called for on Line A1 of its FCC Form 1240 filing for the projected period beginning June 1, 1998.  S- `  H x16.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47  xC.F.R. Section 0.321, that the complaint referenced herein against the rates charged by Operator in the community set forth above IS GRANTED.  Sx- ` x17.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321 that the Prior Order IS VACATED.  S-x18.` ` IT IS FURTHER ORDERED Operator's Petition for Reconsideration IS GRANTED. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION H x` `  hh@John E. Logan x` `  hh@Deputy Chief, Cable Services Bureau