******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) ) Comcast Cablevision of ) CUID No. PA1250 (Cheltenham Twp.) Willow Grove, Inc.) ) Complaints Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: April 27, 1998 Released: April 29, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider complaints against the rates the above-referenced operator ("Operator") was charging for its cable programming services tier ("CPST") in the community referenced above. We have already issued an order in which we found Operator's CPST rates to be reasonable through May 14, 1994. Accordingly, this Order addresses only the reasonableness of Operator's CPST rates from May 15, 1994 through the present. 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 February 3, 1998, against Operator's November 1, 1997 CPST rate increase from $17.00 to $19.10. The LFA verified that it received more than one subscriber complaint and that the first complaints for each community were received by the LFA on November 5, 1997. 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 alternatively 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. Operator filed FCC Form 1200 and multiple FCC Form 1210s and FCC Form 1240s to justify its CPST rates. In response to a request made by Commission staff, Operator filed amended FCC Form 1240s for the projected periods November 1, 1996 through October 31, 1997 and November 1, 1997 through October 31, 1998 on March 31, 1998. Upon review of Operator's FCC Form 1200 and FCC Form 1210s, along with Operator's FCC Form 1240 for the projected period November 1, 1996 through October 31, 1997, we find Operator's actual CPST rates for the period May 15, 1994 through October 31, 1997 to be reasonable. 6. Upon review of Operator's amended FCC Form 1240 for the projected period November 1, 1997 through October 31, 1998, we find that Operator did not use the most current inflation factor available when it signed and filed this FCC Form 1240. Consequently, we adjusted the Inflation Factors on Operator's Worksheet 1 to reflect the most accurate inflation data currently available. This resulted in an adjustment to Operator's Line C1 (Inflation Factor for True-Up Period 1) to 1.0206. We also adjusted Operator's Line C3 (Current FCC Inflation Factor) to 1.0143. These adjustments reduced Operator's maximum permitted rate ("MPR"), effective November 1, 1997, to $20.47. Because Operator's actual rate, effective November 1, 1997, is less than its MPR, we find Operator's actual CPST rate of $19.10, effective November 1, 1997, to be reasonable. 7. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the CPST rates charged by Operator in the community referenced above, effective May 15, 1994 through October 31, 1997, ARE REASONABLE. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the CPST rate of $19.10, charged by Operator in the community referenced above, effective November 1, 1997, 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 adjustments 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 complaints ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau