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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 Cable Investors, Inc. ) CUID No. MI0996 (Pontiac) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: June 24, 1998 Released: June 26, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the November 1, 1997 rate increase of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. We have already resolved all previous complaints filed against Operator's CPST rates. 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 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 April 3, 1998 against Operator's November 1, 1997 CPST rate increase from $12.43 to $13.66. The LFA verified that it received more than one subscriber complaint for the franchise area and that the first valid complaint was received by the LFA on November 3, 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. In its complaint, the LFA also questions Operator's rate increase for its ValuePak service from $2.01 to $3.60. In Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, MM Docket Nos. 92-266 and 93-215, Sixth Order on Reconsideration, Fifth Report and Order, and Seventh Notice of Proposed Rulemaking ("Going Forward Order"), the Commission established criteria for the creation of New Product Tiers ("NPTs"), which cannot include channels taken from regulated tiers. The Commission concluded, however, that cable operators could treat packages of channels in existence at the time of the Going Forward Order as NPTs, so long as such packages involved only a small number of migrated channels. Upon review, we find that Operator's ValuePak tier is a NPT under our Going Forward Order and therefore not currently subject to rate regulation. 5. To justify rates for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200 series. 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. 6. Upon review of Operator's FCC Form 1240 for the projected period November 1, 1997 through October 31, 1998, we find that Operator has not correctly calculated its maximum permitted rate ("MPR"). Although Operator attempted to comply with the Annual Rate Adjustment System for Cable Service Rates ("Waiver Order"), Operator failed to follow the instructions as required by the Waiver Order. We recalculated Operator's FCC Form 1240 to comply with the Waiver Order. Despite our adjustments, we find Operator's actual CPST rate of $13.66, 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. 0.321, that the CPST rate of $13.66, charged by Operator in the franchise area referenced above, effective November 1, 1997, IS REASONABLE. 8. 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. 9. 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