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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 ) ) CUID No. CA0334 (City of Poway) Cox Communications San Diego, Inc. ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: April 10, 1998 Released: April 14, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the rates charged by the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. We have already issued an order in which we resolved all the complaints filed through June 30, 1995 against Operator's CPST rates ("Resolution"). This Order addresses only the reasonableness of Operator's November 15, 1997 CPST rate change. 2. Under the Communications Act, the Federal Communications Commission ("Commission") is authorized 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 area referenced above filed a complaint with the Commission on January 28, 1998, against Operator's November 15, 1997 CPST rate change from $18.45 to $17.95. The LFA verified that it received more than one subscriber complaint. 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 showing, operators must use the FCC Form 1200 series. Operators are permitted to make changes to their rates on a quarterly basis using FCC Form 1210. Operators may justify adjustments to their rates on an annual basis using FCC Form 1240 to reflect reasonably certain and quantifiable changes in external costs, inflation, and the number of regulated channels that are projected for the twelve months following the rate change. Any incurred cost that is not projected may be accrued with interest and added to rates at a later time. 5. The Resolution approved a maximum permitted rate ("MPR") of $18.57 for the CPST in the community referenced above. Upon review of Operator's FCC Form 1210 for the period April 1, 1995 through September 30, 1995, which updates Operator's approved MPR of $18.57, we find Operator's calculated MPR of $19.48 to be reasonable. 6. Upon review of Operator's FCC Form 1240 for the projected period November 1, 1996 through October 31, 1997, we adjusted Operator's Line 113 on Worksheet 1 in accordance with FCC Form 1240 Instructions. This resulted in an adjustment to Line C3 (Inflation Factor for True-Up Period 1) and required that we adjust Operator's inflation factor at Line C5 (Current FCC Inflation Factor) to 1.0183. Our adjustments resulted in a revised MPR for the projected period of $19.87 rather than Operator's calculated MPR for the projected period of $20.02. 7. Upon review of Operator's FCC Form 1240 for the projected period November 1, 1997 through October 31, 1998, we adjusted Operator's Line A1 to $19.87 to reflect the revised MPR from its prior FCC Form 1240. We adjusted Operator's Line C3 (Inflation Factor for True-Up Period 1) to 1.0213 and we adjusted Operator's Line C5 (Current FCC Inflation Factor) to 1.0143 to reflect the most accurate inflation data available. Our adjustments resulted in a revised MPR for the projected period of $22.54 rather than Operator's calculated MPR for the projected period of $22.72. Because Operator's actual CPST rate of $17.95 does not exceed its revised MPR, we find Operator's actual CPST rate of $17.95 to be reasonable, effective November 15, 1997. 8. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $17.95, charged by Operator in the franchise area referenced above, effective November 15, 1997 through the present, IS REASONABLE. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator take into account our FCC Form 1240 adjustment when calculating its maximum permitted rate and performing the true-up calculation on its next FCC Form 1240. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the referenced complaint IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau