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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 ) CUID No. IN0114 (St. Joseph) Indiana, L.P. ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: June 25, 1998 Released: July 1, 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 April 20, 1998, against Operator's November 1, 1997 CPST rate increase from $14.89 to $17.91. 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 18, 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 1240, for the projected period November 1, 1997 through October 31, 1998, to justify its CPST rate beginning November 1, 1997. Upon review, we find that Operator did not correctly calculate its maximum permitted rate ("MPR"). Specifically, we find that Operator failed to use the most current FCC Inflation Factors available at the time Operator dated its FCC Form 1240. Therefore, we revised Line C3 (Current FCC Inflation Factor) to 1.0143. This revisions reduced Operator's MPR to $16.94 for the projected period January 1, 1998 to December 31, 1998. Because Operator's actual CPST rate, effective January 1, 1998, is $17.91, we find Operator's actual CPST rate, effective November 1, 1997, to be unreasonable. 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 $17.91 charged by Operator in the community referenced above, effective November 1, 1997 to the present, IS UNREASONABLE. 7. 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 $16.94 per month (plus franchise fees), plus interest to the date of the refund, for the period November 18, 1997, the date of the first subscriber complaint, through the day before Operator implements the maximum permitted CPST rate of $16.94. 8. 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. 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. 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