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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 ) CUID No. FL0549 (Milton) ) FL0728 (Santa Rosa) Mediacom Southeast LLC ) ) Small System Filing to Support ) Cable Programming Services Tier Rates) ORDER Adopted: August 24, 1998 Released: August 27, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint concerning the rate of the above-captioned operator ("Operator") for its cable programming services tier ("CPST") in the communities referenced above. In response to the complaint, Operator filed FCC Form 1230, seeking to justify its CPST rates through the simplified small system cost of service procedures pursuant to the Federal Communications Commission's ("Commission") Sixth Report and Order and Eleventh Order on Reconsideration ("Small Systems Order"). In this Order, we grant Operator's request for small system relief under the Small Systems Order and, based on our review of Operator's FCC Form 1230 filing along with corresponding documentation, we deny the pending CPST complaint and find the CPST rates to be reasonable. 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. The Telecommunications Act of 1996 ("1996 Act") and our rules implementing the legislation ("Interim Rules"), require that a complaint against the CPST rate be filed with the Commission by a local franchising authority ("LFA") that has received more than one subscriber complaint. 3. The LFA for the communities referenced above filed a complaint with the Commission on June 6, 1998 against Operator's March 1, 1998 CPST rate of $19.65. The LFA verified that it received more than one subscriber complaint and that the first valid complaint for each of the communities referenced above was received by the LFA on March 4, 1998. The filing of a complete and timely 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. If the Commission finds a rate to be unreasonable, it shall determine the correct rate and any refund liability. 4. The Commission's original rate regulations took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. In a further effort to offer small cable companies administrative relief from rate regulation, the Commission amended the definition of small cable companies and small systems and introduced a simplified form of small system rate relief in the Small Systems Order. Operators attempting to justify their rates through small system relief must file FCC Form 1230. FCC Form 1230 requires that the Operator Selected Per Subscriber Monthly Programming Rate Per Channel (FCC Form 1230, Line A11) not exceed the Per Subscriber, Per Channel Monthly Programming Costs (FCC Form 1230, Line A6). Cable systems serving 15,000 or fewer subscribers, and owned by a company having 400,000 or fewer subscribers, may elect to use the small system rate mechanism found in FCC Form 1230 in lieu of other Commission rate processes, provided the Commission has not reached a final resolution on the rate complaints filed against the system. 5. Operator filed FCC Form 1230 for the communities referenced above seeking to justify its CPST rates through the simplified small system cost of service procedures under the Commission's Small Systems Order. Pursuant to Section 76.934 of the Commission's rules, "the size of a system or company shall be determined by reference to its size as of the date the system files with its franchising authority or the Commission the documentation necessary to qualify for the relief sought or, at the option of the company, by reference to system or company size as of the effective date [of these rules]." The Small Systems Order provides that: A system's initial and continued eligibility for this new form of relief shall be determined in the same manner as any other relief now available to them. Thus, if a system qualifies for relief under this approach as of the effective date of this order or as of the date it files Form 1230, it shall remain eligible for so long as it serves 15,000 or fewer subscribers, regardless of whether it, or the cable operator that owns the system, is subsequently acquired by a company that exceeds the 400,000 subscriber limit, or if its current operator subsequently exceeds 400,000 subscribers due to the normal growth of its systems. When a system that has established rates in accordance with Form 1230 exceeds 15,000 subscribers, the system may maintain its then existing rates. However, any further adjustments shall not reflect increases in external costs, inflation or channel additions until the system has re- established initial permitted rates in accordance with our benchmark or cost-of-service rules. Small Systems Order at  73. 6. We find that the Operator is a company with fewer than 400,000 total subscribers and that the systems in question currently serve fewer than 15,000 subscribers each, thereby making them eligible for small system relief. Upon review of Operator's FCC Form 1230, we find that Line A11 does not exceed Line A6. Therefore, we find that Operator's actual CPST rate of $19.65, in each of the communities referenced above, is reasonable. 7. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that Operator's request for small system relief IS GRANTED. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the actual CPST rate of $19.65 charged by Operator in the communities referenced above IS JUSTIFIED. 9. 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 the monthly CPST rate charged by Operator during the period under review in the communities referenced above IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau