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S- III. POSITIONS OF THE PARTIES  S@-x A. TCI's contentions  S- ` Ax5.` ` TCI states that Fredericksburg's consultant found that TCI's rate calculations in its Forms  x01205 and 1240 contain no errors and comply with the Commission's regulations. TCI argues that  xLFredericksburg, therefore, was obligated to adopt an order approving TCI's proposed rate increases both  xfor the BST and for equipment charges. Fredericksburg approved only the equipment charges. TCI cites  SP- xthe Bureau's prior decision in TCI of Southeast Mississippi? P g  yO%-ԍ10 FCC Rcd 8728 (1995).? and asserts that quality of service concerns  S*- x]are not to be considered in administering rate regulation." TCI contends that Fredericksburg must"* ,p(p(88"  S- xadminister its local rate regulations consistent with the Commission's overall regulatory scheme.D g  yOh-ԍ47 C.F.R.  76.910(b)(1).D TCI  xconcludes that the Commission cannot countenance Fredericksburg's disregard for the principles of rate regulation.  S-  S`-x B. $+t   $+t  Fredericksburg's contentions  S- ` x6.` ` In response, Fredericksburg states that it approved TCI's equipment charges, but that its  xdenial of TCI's rates proposed in Form 1240 should be upheld because the denial was premised on the  xjfact that TCI's "overall level of cable service is poor and has not significantly improved." Fredericksburg  xreferences service complaints from two of its residents, adding that "it has a greater responsibility than  x[to merely check the arithmetic of the cable operator." Fredericksburg maintains that, unlike the situation  SH - x=in TCI of Southeast Mississippi, it has denied TCI's requested rate increase, rather than requiring that the  xzsystem reduce its rates based upon TCI's inferior signal quality and the revenue produced by sales on  X - xcertain cable channels. #Xj\  P6G;ynXP#Fredericksburg contends that subscribers receive neither a quality product  S - xL $+t #&a\  P6G;u&P# $+t nor adequate service from TCI and concludes that "TCI's rates, given the current state of service quality,  S -are not reasonable."  #Xj\  P6G;ynXP#   S - $+t #&a\  P6G;u&P# $+t   Sk-x C. Discussion x  S- ` x7.` ` We agree with TCI. Fredericksburg must follow the Commission's rate regulations when  S- xreviewing an operator's rate filing. "Xg  {O- x-ԍIn TCI of Southeast Mississippi, the local franchising authority was specifically prohibited from considering  xisuch things as a system's unsatisfactory signal quality on its BST or any additional revenue that was brought into  xJthe system through carriage of revenue producing signals on that tier in determining the system's BST rate. 10 FCC Rcd at 873031. If a local franchising authority ("LFA") does not dispute the bases  xfor the figures presented in a cable operator's rate forms and has not discovered any mathematical errors  xin the forms, the LFA should approve the operator's rates as derived from those forms. If the LFA rejects  xan operator's proposed rates, it must issue a written decision affirmatively demonstrating why the rates  SS- x]are unreasonable.hSBg  {O5-ԍ47 C.F.R.  76.936; Rate Order, 8 FCC Rcd at 57155716.h The LFA may address other, nonrate concerns through our rules on technical  S+- xstandards,P+g  {O-ԍSee 47 C.F.R.  76.601630.P our rules on customer service obligations,9+g  yOY-ԍ47 C.F.R. 76.309.9 the LFA's own cable regulations, and the franchise agreement.  S-  S- ` x8.` ` The LFA may not arbitrarily reduce BST rates below permitted rate levels or deny a  xjustified increase of the permitted rate in an effort to address quality of service issues. Fredericksburg  xmust adhere to the Commission's rules in reviewing TCI's rates. We find that Fredericksburg acted  xunreasonably in denying TCI's requested rate increase. Consequently, we remand this issue to Fredericksburg so that it can reconsider its ruling in a manner consistent with our findings. $+t   $+t   S- #Xg\  PA %tXP## Xw PE37 |XP## Xj\  P6G;ynXP#  #&a\  P6G;u&P#" ,p(p(88"Ԍ S- IV. ORDERING CLAUSES  S- ` A x9.` ` Accordingly, IT IS ORDERED that the appeal filed by TCI Cablevision of Texas, Inc.  S- x- IS GRANTED and the appeal of the local order IS REMANDED to the City of Fredericksburg, Texas for proceedings consistent with the terms of this Order.  S8-  S- ` }x10.` ` IT IS FURTHER ORDERED that the request for emergency stay of Fredericksburg's  S-rate order filed by TCI Cablevision of Texas, Inc. IS DISMISSED as moot.  S- ` Bx11.` ` This action is taken by the Acting Chief, Cable Services Bureau, pursuant to authority delegated by  0.321 of the Commission's Rules. 47 C.F.R.  0.321. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@John E. Logan  S0-x` `  hh@Acting Chief, Cable Services Bureauxx 0(#(#X