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(1) (a) (i) 1) a)D )DDDFrfQq 2?xKoK^qKs Ku"i~'^ %,77\V%%%7>%7777777777>>>0eOIIOD>OO%*ODaOO>OI>DOOgOOD%%37%07070%777V7777%*77O77055;%;3%%%%%%%%%%%7O0O0O0O0O0aHI0D0D0D0D0%%%%O7O7O7O7O7O7O7O7O7O7O0O7O6O7O7O7>7O0O0O0I0I0I;I0OED0D0D0D0O7O7O7O;O7O;O7%%7%%%7M>;;O7DD,D%D%DO7AO7O7O7O7aOI%I%I%>*>*>*>;D.DD3O7O7O7O7O7O7gOO;D0D0D0O7D%O7>*D%O7E77%%WMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN(BB(37%07777j7#TT7!#TT7T!%%007n&&Bn77lCTn(nBB(A\\>>n%07\n!"IIIITTenn7TnB@;7>lBBn7"i~'^"(22TN"""28"2222222222888,\HBBH>8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""M\\>>>\}0>03\\\\\\\\\\>>}}}\rryrr>Qygyrr\grrggF3FM\>\\Q\Q3\\33Q3\\\\FF3\QyQQFI3Ic>0cM>>>0>>>>>>\>\3r\r\r\r\r\yyQrQrQrQrQ>3>3>3>3y\\\\\\\\\gQr\\\\gQ\r\r\r\r\yQyQycyQnrQrQrQrQ\\\c\c\>3>\>>>\\ccyQg3gBg>g;g3y\jy\y\\\yrFrFrF\F\F\FccgBg3gM\\\\\\ygcgFgFgF\g>y\\Fg>g\n0\\=(=WddddddddddddddddddddddddddddddddddddddddNBnnB_\F\\\\\\3;\7;\7>>gg\??n\\pBnnBb\\>g\7"yyyy\njc\}nn\2;UqxZxK,\wTimes New RomanTimes New Roman BoldTimes New Roman ItalicCG TimesCG Times Italicey.X80,X\  P6G;Pf7jC:,9Xj\  P6G;XPg2a=5,&a\  P6G;&Ph2e=5,&e4  pG;&iP:% ,J:\  P6G;JPjH5!,i,5\  P6G;,P\{,W80,%0W*f9 xr G;XddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`L"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd><q*"xxxxWWxxxWWkkxxx z2 {O(-ԍSee Appeal at 2.> TCI xO further asserts that the City's refund order, which was issued in June, 1995, improperly requires TCIO"! ,**88U#"  xto issue subscriber refunds in its July, 1995 billing. TCIO maintains that Commission rules provide that operators should receive at least 60 days to comply with a local rate order.  S- ` Qx4.` ` In opposition, the City asserts that the Commission's rules require a cable operator to  x{automatically decrease programming rates if, after the required annual review of external costs, the  S8- x.operator finds that it has experienced a decrease in those costs.C8 {O-ԍSee Opposition at 3. C With regard to the City's order to issue  xsubscriber refunds in TCIO's July bills, the City asserts that 30 days is sufficient time within which to  xcomply with its refund order. Further, the City states that it would have given TCIO more time to  ximplement the refund order if TCIO would have made known its concerns regarding the time necessary  S-for compliance prior to adoption of the final rate order.7" {OZ -ԍId. at 4.7  SH - I II.xBACKGROUND  S -  S - ` x5.` ` Under our rules, rate orders made by local franchising authorities may be appealed to the  S - xCommission.  Y$-#Xw PE37XP##Xw PE37XP#э#X\  P6G;P#47 C.F.R.  76.944.#Xw PE37XP# In ruling on appeals of local rate orders, the Commission will not conduct a de novo  xreview, but instead will sustain the franchising authority's decision as long as a reasonable basis for that  S - xydecision exists.{ e Y- xy#Xw PE37XP#э#X\  P6G;P#Rate Order, 8 FCC Rcd at 5731; see also Implementation of Sections of the Cable Television Consumer  x: Protection and Competition Act of 1992: Rate Regulation, BuyThrough Prohibition, Third Order on Reconsideration,  {O8-MM Docket 92266, 9 FCC Rcd 4316, 4346 (1994) ("Third Reconsideration Order").#Xw PE37XP# The Commission will reverse a franchising authority's rate decision only if it determines  SZ- xthat the franchising authority acted unreasonably in applying the Commission's rules.Z  Y-#Xw PE37XP#э#X\  P6G;P#Id.#Xw PE37XP#Ѧ If the Commission  x=reverses a franchising authority's decision, it will not substitute its own decision but instead will remand  xKthe issue to the franchising authority with instructions to resolve the case consistent with the Commission's  S-decision on appeal. Y  Y-#Xw PE37XP#э#X\  P6G;P#Rate Order, 8 FCC Rcd at 5732; Third Reconsideration Order, 9 FCC Rcd at 4346.#Xw PE37XP#  S-  S- ` 3 x 6 .` ` A cable operator uses FCC Form 1210 to justify adjustments in the rates the operator  Sj- x]previously computed on FCC Form 1200 or on a previously filed Form 1210. j  {O"- xxԍSee Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed Rulemaking  {O"-in MM Docket No. 92266, FCC 9438, 9 FCC Rcd 4119 (1994) ("Second Reconsideration Order"). A cable operator  xcalculates its initial maximum permitted rates on Form 1200, which are the higher of the operator's  S- x/provisional rates and its full reduction rates. An operator may file a Form 1210 to adjust its rates to"f ,`(`(88b"  S- xreflect changes in external costs, channel additions and deletions, and inflation. \ {Oh- xԍOperators are permitted to adjust their full reduction rates as well as their provisional rates for inflation. See  {M2- xjImplementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate  {O-Regulation, Ninth Order on Reconsideration, MM Docket No. 92266, 10 FCC Rcd 5198 (1995). External costs include  xthe following categories: state and local taxes specifically applicable to the provision of cable television  xservice; franchise fees; costs of complying with franchise requirements; retransmission consent fees and  xcopyright fees incurred for the carriage of broadcast signals; other programming costs; and, Commission  S`- xregulatory fees.D ` yO-ԍ47 C.F.R.  76.922(f)(1).D An operator may file for changes in external costs for the period beginning at the end  xof the last quarter for which an adjustment was previously made through the end of the quarter that has  S- xjmost recently closed preceding the filing of the Form 1210.I | yO, -ԍ47 C.F.R.  76.922(d)(3)(iii).I An operator may file a Form 1210 as often  xjas quarterly, but must file in the quarter following a decrease in costs due to channel deletions and within  S- xya year following a decrease in other costs.  yOl- x.ԍ47 C.F.R.  76.922(d)(3)(i), (ii). Inflation may only be recovered for the nonexternal portion of the operator's rates on an annual basis. 47 C.F.R.  76.922(d)(2). An operator must file for a rate increase within a year of any  S-changes in external costs or inflation in order to recover those costs in its rates.Gd  yO-ԍ47 C.F.R.  76.922(d)(3)(i).G  Sp-  SH - IV .xDISCUSSION  S - x  S -x A.` ` Rate Decrease Under Form 1210  S - ` x7.` ` TCIO argues that Section 76.933(a) of our rules requires a local franchising authority to  xapprove all programming and equipment rate adjustments prior to their implementation by a cable  SX- xoperator.KX  {O-ԍSee 47 C.F.R.  76.933(a).K TCIO further argues that the Commission's rules regarding franchising authority approval  S0- xof rate adjustments do not differentiate between rate increases and rate decreases.@0  {OV-ԍSee Appeal at 23.@ Each adjustment must  xreceive prior approval before subscribers may be charged the adjusted rate. Thus, TCIO asserts that the  xCity cannot order refunds on a retroactive basis because that would have the effect of permitting automatic rate adjustments without the benefit of the City's prior approval.  Sh- ` ~x8.` ` The City asserts that, contrary to TCIO's arguments, the Commission's rules are quite  S@- xlspecific regarding automatic adjustment of service rates to reflect a rate decrease. The City makes  xreference to Section 76.922(d)(3)(i) of our rules governing rate adjustments pursuant to Form 1210. In  xthat rule section, we state that "a system must adjust its rates annually to reflect any decreases in external  S- xcosts that have not previously been accounted for in the system's rates."M yO&-ԍ47 C.F.R.  76.922(d)(3)(i).M The City states that TCIO  xsubmitted its Form 1210 on January 25, 1995 and an amended Form 1210 on February 9, 1995 which",`(`(88"  S- xshowed that TCIO's external costs had decreased for the annual period ending December 31, 1994.B {Oh-ԍSee Opposition at 3.B The  xCity further states that on February 28, 1995, TCIO filed a request for a rate increase which the City  xcontinued to review. The City argues that, although it approved TCIO's basic service rate of $9.75 as  xestablished on Form 1200, the City was justified in ordering refunds based upon the adjusted rate of $9.70  xthat was established in TCIO's yearend filing on Form 1210. Further, the City argues that, in light of  xTCIO's request for a rate increase, the City was reasonable in limiting its refund order to the first quarter of 1995 rather than delaying the decision until such time as it rules on TCIO's request for a rate increase.  S- ` $x9.` ` We agree with the City. Neither the Communications Act nor the Commission's rules  xrequire advance franchising authority approval of rate decreases for systems using the quarterly rate  xadjustment method. Section 623(b)(7) of the Communications Act requires advance notice to a franchising  SH - xauthority only of any increase in the proposed price for the BST.AH Z yOB -ԍ47 U.S.C.  543(b)(7).A Section 76.933(a) of the Commission's  xrules, which governs franchising authority review of BST rates under the quarterly rate adjustment method  xused by TCIO, provides an opportunity for advance franchising authority review of rate increases but  S - x=does require the same procedures for rate decreases.  {OZ- xiԍ47 C.F.R.  76.933(a). See 47 C.F.R  76.932 (operators must give subscribers advance notice of BST price increases). The Commission's rules do provide that a system  x>using the quarterly rate adjustment method "must adjust its rates annually to reflect any decreases in  S - x.external costs that have not previously been accounted for in the system's rates." D yOd- xԍ47 C.F.R.  76.922(d)(3)(i). A system must also adjust its rates to reflect channel deletions in the calendar year quarter after the deletions are made. 47 C.F.R.  76.922(d)(3)(ii); FCC Form 1210, Instructions at 2 (May 1995). The instructions for  SX- xFCC Form 1210, which is used to compute external cost changes, instruct the operator that, "if you  xexperience a decrease in external cost that is not later reflected in another rate filing, you must submit this  S- x[Form and reduce your rate no later than one year after the decrease occurred."I yOD-ԍFCC Form 1210, Instructions at 2.I When TCIO computed  xits rates on the basis of the decrease in its external costs, it should have decreased its rates accordingly,  xwithout waiting for advance approval of the decrease from the franchising authority. The City was not  xunreasonable in ordering refunds for the quarter between TCIO's recomputation of its external costs on  xForm 1210 and TCIO's subsequentlyfiled Form 1210 proposing a future rate increase. Accordingly, we  S@-deny TCIO's appeal on this issue.hh  S-x B. ` ` Refund Timetable  S- ` x10.` ` TCIO insists that the City should have given it at least 60 days to issue subscriber refunds  Sx- x=under the terms of the local order.x,  yOD$- xxԍIn its local order, the City required TCIO to provide it with a report, 30 days prior to the July 1995 billing, detailing the calculation of its refund liability. In support of its position, TCIO makes reference to Times Mirror  SR- xin which we stated that a local franchising authority should give a cable operator sufficient time within"R ,`(`(88"  S-which to comply with a rate order. {Oh-ԍSee Times Mirror Cable Television of Springfield, Inc., 10 FCC Rcd 2340, 234142 (1995) ("Times Mirror"). The City responds that 30 days is sufficient to comply with its order.  S- ` x11.` ` Our rules do not explicitly require franchising authorities to provide cable operators with  S- x[60 days to comply with local rate orders. In Times Mirror, we note that, regarding rate orders issued by  x=the Commission, we would allow 60 days for compliance. With regard to the timing of compliance with  xlocal rate orders, we have stated that cable systems must give 30 days written notice to subscribers and  S- xto local franchising authorities before implementing any rate or service change.Z Y -#Xw PE37XP#э#X\  P6G;P#See 47 C.F.R. 76.964(a).#Xw PE37XP#ѻ We have further stated  S-in a Public Notice that  2Xxin specifying an effective date [for its local order], a franchising authority should take into  consideration the amount of time necessary to prepare and send out notices and bills  SL -reflecting a rate change, giving due regard to the impact of cycle billing, if applicable.5L  Y- x#Xw PE37XP#э#X\  P6G;P#See Public Notice, Questions and Answers on Cable Television Rate Regulation, Question 3 (May 18,  yO-1994).#Xw PE37XP#5   S - xThe clarifying information contained in the Public Notice was based upon the same rationale we used in  xconcluding that cable operators should have 60 days to implement a Cable Services Bureau order requiring  S - x{refunds with regard to rates charged for the cable programming service tier. In the Rate Order, the Commission explained that  S`- XxX` ` x`  Xxa 60day time period to implement remedial measures will better accommodate standard  S- obilling cycles than the 30day period we proposed in the Notice, thus preventing undue  S-burdens on operators without adversely affecting subscribers.L {O-ԍRate Order, 8 FCC Rcd at 5867.L   xThus, we find that, while a franchising authority has discretion to specify a reasonable time period for  xycompliance with its rate order, the time specified must be sufficient to allow preparation and distribution  xof notices and bills and must accommodate the time demands of cycle billing, if any. The Commission  S"- xfound in the Rate Order that a reasonable time period was at least 60 days. We have no reason to  xbelieve that implementation of a local order sh ould be any less timeconsuming than the implementation  xLof a Commission order. Accordingly, we grant TCIO's appeal regarding the time needed for compliance with a local rate order.  S\-  $C "\,`(`(88"  S- $C V.xORDERING CLAUSES  S- ` x12.` ` Accordingly, IT IS ORDERED that the appeal of the local order, with regard to TCIO's  S-refund liability for decreases in external costs, IS DENIED .  S8- ` ^x13.` ` IT IS FURTHER ORDERED that the appeal of the local order, with regard to the timing  S-of compliance with the City's refund order, IS GRANTED .  S- ` Bx14.` ` This action is taken by the Acting Chief, Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhJohn E. Logan x` `  hhActing Chief, Cable Services Bureau