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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 ) ) MediaOne ) CUID No. CA1175 (Los Angeles County) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: June 25, 1998 Released: July 1, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the January 1, 1998 rate increases of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") and Expanded Tier ("ET") in the community referenced above. On August 1, 1995, the Federal Communications Commission ("Commission") adopted an order approving a Social Contract entered into between Operator and the Commission which resolved all previous complaints filed against Operator's CPST rates ("Social Contract"). This Order addresses only the reasonableness of Operator's January 1, 1998 CPST and ET rate increases, consistent with the terms of the Social Contract. 2. Under the Communications Act, the 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 15, 1998 against Operator's January 1, 1998 CPST rate increase from $12.26 to $14.48 and ET rate increase from $4.16 to $4.29. 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 January 15, 1998. 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, 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. There are no official forms available for use to implement the one-time changes in rates as required by the Social Contract. The Commission, seeking to simplify the implementation of the Social Contract, found that the rate form proposed by Operator ("SC Rate Form") to implement the rate restructuring under the Social Contract, was consistent with the methodologies of the Commission's Forms 1200 and 1210 and greatly simplified the review of the restructured rates under the Social Contract. Therefore, pursuant to the terms of the Social Contract, the Commission permitted Operator to file an SC Rate Form to establish its CPS tier rates. 5. Upon review of Operator's SC Rate Form, setting an initial maximum permitted rate ("MPR") in accordance with the Social Contract, and Operator's FCC Form 1210, covering the period from the SC Rate Form through December 31, 1996, and Operator's FCC Form 1210, covering the period from January 1, 1997 through December 31, 1997, we find Operator's actual CPST rate of $14.48, effective January 1, 1998, to be reasonable. We find Operator's ET rate of $4.29, effective January 1, 1998, to be in compliance with the Social Contract. 6. 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 $14.48 (including franchise fees), charged by Operator in the community referenced above, effective January 1, 1998, IS REASONABLE. 7. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the ET rate of $4.29 (including franchise fees), charged by Operator in the community referenced above, effective January 1, 1998, IS 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 complaint against Operator's January 1, 1998 CPST and ET rate increases, in the community referenced above, IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau