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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 ) ) Suburban Cable TV Company, Inc. ) CUID No. PA2684 (Upper Makefield Township) ) ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: September 1, 1998 Released: September 4, 1998 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the rate the above-referenced operator ("Operator") was charging for its cable programming services tier ("CPST") in the community referenced above. We have already released a rate order concerning Operator's CPST rate increase effective April 1, 1997. Consequently, this Order addresses only Operator's February 1, 1998 rate increase. 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 franchise area referenced above filed a complaint with the Commission on June 24, 1998 against Operator's February 1, 1998 CPST rate increase from $15.55 to $18.45. 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 March 17, 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. Operators may justify 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. Upon review of Operator's amended FCC Form 1240 for the projected period April 1, 1998 through March 31, 1999, we find that Operator has not correctly calculated its maximum permitted rate ("MPR"). On Operator's FCC Form 1240, we find that Operator has failed to use the most current FCC Inflation Factors available at the time Operator dated its FCC Form 1240. Therefore, we revised Worksheet 1 (True-Up Period Inflation) which adjusted Line C3 (Inflation Factor for True-Up Period 1) to 1.0193. We also revised Line C5 (Current FCC Inflation Factor) to 1.0114. These revisions reduced Operator's MPR to $18.34 for the projected period April 1, 1998 through March 31, 1999. Because Operator's actual CPST rate, effective February 1, 1998, is $18.45, we find Operator's actual CPST rates, effective February 1, 1998, to be unreasonable. 6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $18.45, charged by Operator in the franchise area referenced above, effective February 1, 1998, 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 areas referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $18.34 per month (plus franchise fees), plus interest to the date of the refund, for the period March 17, 1998, the date of the first subscriber complaint, through the day before Operator implements the maximum permitted CPST rate of $18.34 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 communities set forth above IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Deputy Chief, Cable Services Bureau