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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 ) ) Comcast Cablevision of Arkansas ) CUID No. AR0063 (Jacksonville) . ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: June 15, 1998 Released: June 17, 1998 By the Acting Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the rates the above-referenced operator ("Operator") was charging for its cable programming services tier ("CPST") in the community referenced above. This Order addresses only the reasonableness of Operator's November 1, 1997 CPST rate increase. 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 March 24, 1998, against Operator's November 1, 1997 CPST rate increase from $16.60 to $18.59, Operator's Value Pak rate increase from $2.40 to $3.30 and Operator's Cableguard from $0.36 to $0.54. The LFA verified that it received more than one subscriber complaint for the franchise area and that the first complaint was 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. The LFA has challenged the rate increase to Operator's Value Pak tier. We have previously determined that Operator's Value Pak services created as a result of a la carte packaging and containing a small number of channels may be treated as a New Product Tier ("NPT") not subject to regulation. We find that in this instance Operator's Value Pak is similar to other Value Pak offerings not subject to regulation created by Operator. Consequently, we will not address Operator's Value Pak rate. 6. The LFA has challenged the rate increase to Operator's Cableguard, which is an optional maintenance program for subscribers' inside wiring. The LFA, however, has jurisdiction over equipment and installation charges. Consequently, we find that the price of Operator's Cableguard is not subject to our jurisdiction. 7. Operator filed FCC Form 1240 for the projected period November 1, 1997 through October 31, 1998 to justify its CPST rates. Upon review of Operator's FCC Form 1240, we find Operator has not correctly calculated its maximum permitted rate ("MPR"). We find that Operator has failed to use the most current FCC Inflation Factor available at the time Operator signed its FCC Form 1240. Therefore, we reduced Line C5 (Current FCC Inflation Factor) to 1.03357. This revision reduced Operator's MPR from $18.70 to $18.52 for the projected period November 1, 1997 through October 31, 1998. Because Operator's actual CPST rate, effective November 1, 1997, is $18.59, we find that Operator's actual CPST rate, effective November 1, 1997, is unreasonable. 8. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the CPST rate of $18.59 charged by Operator in the community referenced above, effective November 1, 1997 through the present, IS UNREASONABLE. 9. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $18.52 per month (plus franchise fees), plus interest to the date of the refund, for the period November 5, 1997, the date of the first subscriber complaint, through the day before Operator implements the maximum permitted CPST rate of $18.52. 10. IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to CPST subscribers for the stated periods, and shall within 30 days of the release of this Order, file a report with the Chief, Cable Services Bureau, stating the cumulative refund amount so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. 11. 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. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the complaint referenced herein against the rates charged by Operator in the community set forth above IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Acting Chief, Cable Services Bureau