******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) ) Cable TV Fund 14-A, Ltd, d/b/a Jones ) CUID Nos. MN0430 (Wright) Intercable, Inc. ) MN0451 (Big Lake) ) MN0452 (Cokato) Complaints Regarding ) MN0453 (Dassel) Cable Programming Services Tier Rates) MN0454 (Delano) ) MN0456 (Maple Lake) ) MN0458 (Rockford) ) MN0459 Watertown) ) MN0468 (Buffalo) ) MN0469 (Monticello) ORDER Adopted: August 10, 1998 Released: August 12, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider complaints against the rates the above-captioned operator ("Operator") was charging for its cable programming services tier ("CPST") in the communities referenced above beginning February 1, 1995. Operator's response includes benchmark justifications filed on FCC Forms 1210, 1220 and 1240. This Order addresses the reasonableness of Operator's rates beginning February 1, 1995. 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. The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), and our rules in effect at the time the complaints were filed, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rates. If the Commission finds the rate to be unreasonable, it shall determine the correct rate and any refund liability. 3. The Commission's original rate regulations took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. Cable operators with valid CPST complaints filed against them prior to May 15, 1994 must demonstrate that their CPST rates were in compliance with the Commission's initial rules from the time the complaint was filed through May 14, 1994, and that their rates were in compliance with the revised rules from May 15, 1994 forward. Cable operators attempting to justify their rates for the period prior to May 15, 1994 using a benchmark showing must complete and file FCC Form 393. Operators must use the FCC Form 1200 series to justify their rates for the period beginning May 15, 1994 using a benchmark showing. Cable operators may also justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation, by filing FCC Form 1210. FCC Form 1210 must be filed at least 30 days before new rates are scheduled to go into effect where the Commission has found the cable programming service rate to be unreasonable less than one year prior to the filing, or where there is a pending complaint against the CPST rate. 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. 4. In reviewing Operator's FCC Form 1220, we evaluated its cost of service showing to determine whether the Operator should be permitted to recover its investments and expenses as filed. Where a certain rate base or expense element was not justified under our rules, such cost was disallowed in whole or in part. Where a reported cost was disallowed, we have made appropriate adjustments. Even with our adjustments and disallowances, however, we find that Operator has justified a maximum permitted rate ("MPR") of $15.13, effective May 15, 1994. 5. Upon review of Operator's FCC Form 1210, covering the period April 1, 1994 through December 31, 1994, we adjusted line A2 (Permitted Charge) to correspond to the MPR from Operator's FCC Form 1220. These adjustments reduced the CPST MPR from $17.27 to $16.13. Because Operator's actual CPST rate of $10.20, effective February 1, 1995, does not exceeds its revised MPR, we find it to be reasonable. Upon review of Operator's second FCC Form 1210 for the period January 1, 1995 through December 31, 1995, we adjusted line A2 (Permitted Charge) to correspond to the prior revised FCC Form 1210. This adjustment reduced the CPST MPR from $18.32 to $17.15. Because Operator's actual CPST rate of $10.71, effective January 1, 1996, does not exceed its revised MPR, we find it to be reasonable. 6. Upon review of Operator's FCC Form 1240 for the projected period January 1, 1997 through December 31, 1997, we adjusted line A1 (Current Maximum Permitted Rate) to correspond to the MPR from Operator's prior revised FCC Form 1210. We also adjusted Line C3 (Inflation Factor for True-Up Period 1) to 1.0246 and Line C5 (Current FCC Inflation Factor) to 1.0270. These adjustments reduced the Operator's MPR from $23.98 to $22.02. Because Operator's actual CPST rate of $11.21, effective January 1, 1997, does not exceed its revised MPR, we find it to be reasonable. Upon review of Operator's FCC Form 1240, for the projected period January 1, 1998 to December 31, 1998, we adjusted line A1 to $22.0196 to correspond to the revised FCC Form 1240. We also adjusted Line C3 to 1.0206 and Line C5 to 1.0114. We also adjusted Line D6 (Current True-up Segment) and Line D7 (Current Inflation Segment) to correspond to the revised FCC Form 1240. These adjustments reduced the MPR from $21.43 to $19.77. Because Operator's actual CPST rate of $12.10, effective January 1, 1998, does not exceed its revised MPR, we find it 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 monthly CPST rates charged by Operator in the communities referenced above, from February 1, 1995 through December 31, 1997, ARE REASONABLE. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the monthly CPST rate of $12.10 charged by Operator in the communities referenced above, effective January 1, 1998, IS REASONABLE. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaints referenced herein against the CPST rates charged by Operator in the communities referenced above ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau