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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554
                                 
In the Matter of                   )
                              )
Cablevision of New Jersey               )    CUID Nos. NJ0145 (Bergenfield Borough)
                              )              NJ0207 (New Milford)
                              )              NJ0210 (Cresskill Borough)
                              )              NJ0211 (Dumont Borough)
                              )              NJ0217 (Tenafly Borough)
                              )              NJ0259 (Fairlawn Borough)
Complaints Regarding                    )              NJ0260 (Oradell Borough)
Cable Programming Services Tier Rates   )              NJ0293 (Demarest Borough)     
                              )              NJ0374 (Closter Borough)
                              )              NJ0375 (Emerson Borough)
                              )              NJ0420 (River Vale Township)
                              )              NJ0425 (Old Tappan Borough)
                              )              NJ0426 (Woodcliff Lake Borough)
                              )              NJ0448 (Harrington Park Borough)
                              )              NJ0449 (Norwood Borough)
                              )              NJ0450 (Northvale Borough)
                              )              NJ0451 (Haworth Borough)
                              )              NJ0584 (Saddle River Borough)
                              )              NJ0585 (Rockleigh Borough)

                                
                             ORDER

     Adopted:  September 3, 1998        Released:  September 8, 1998  

By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau:

     1.   In this Order we consider a complaint against the February 1, 1998 rate increase that the
above-captioned operator ("Operator") implemented for its cable programming services tier ("CPST") in the
communities set forth above. We have already issued orders which resolved complaints filed against Operator. 
 Operator has attempted to justify its CPST rate increase through a benchmark showing on FCC Forms 1210,
1240 and 1235.  Accordingly, this Order addresses the reasonableness of Operator's CPST rate increase,
effective February 1, 1998.
     
     2.   The Communications Act authorizes the Commission 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 the rate 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 subscriber complaints.  An LFA may not file a CPST rate complaint
unless, within 90 days after such increase becomes effective, it receives more than one subscriber complaint.

     3.    To justify rates for the period beginning May 15, 1994, 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 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.      

     4.   FCC Form 1235 is an abbreviated cost of service filing used in cases of network upgrades. 
It allows cable operators to justify rate increases related to significant capital expenditures used to improve
rate-regulated services.  This option is extended only in cases of significant upgrades requiring added capital
investment, such as bandwidth capacity and conversion to fiber optics, and for system rebuilds.  Normal
improvements and expansions of service will remain subject to the usual rate adjustments allowed by filings
of FCC Forms 1210, 1220 and 1240.  Cable operators that incur increases in operating costs associated with
a significant network upgrade will be permitted to charge additional rates as justified by their FCC Form 1235
filing.                                 

     5.   On June 16, 1998, the LFA filed a complaint regarding the  February 1, 1998 increase in
Operator's regular CPST rate in the communities referenced above from $15.01 to $21.54 and Operator's
Senior Citizen rate increase from $13.01 to $19.54.  The Senior Citizen rate is governed by the LFA and does
not trigger the Commission's jurisdiction.  Therefore, we will only consider the regular CPST complaint.  
In its complaint, the LFA asserts that it has received more than one subscriber complaint against Operator's
CPST rate increase and verified that the first complaint was received on February  2, 1998, thereby triggering
the Commission's jurisdiction to review the complaint.  The valid complaint from the LFA triggers an
obligation by the cable operator to file a justification of its CPST rates with the LFA.  Thus, in this case,
Operator is required to justify the increase in its CPST rate which is the subject of the LFA's complaint.  

     6.   Operator's February 1, 1998 rate increase reflects not only the increase as reported on FCC
Form 1240, but also recovery of costs for its network upgrade as reflected on FCC Form 1235.  Operator
initially filed its FCC Form 1235 on April 11, 1997 and selected the pre-approval option.  On December  24,
1997, Operator submitted a revised FCC Form 1235.  Operator also chose to allocate its Monthly Network
Upgrade Add-on (Section III, Lines 4 and 5) to both its basic service tier ("BST") and its CPST rates.  Such
an election is consistent with the FCC Form 1235 instructions.  

     7.    Upon review of Operator's FCC Form 1210 for the period October 1, 1996 to March 31,
1997, we find that Operator correctly calculated its maximum permitted rate ("MPR").   Upon review of
Operator's FCC Form 1240 for the projected period January 1, 1998 to December 31, 1998, we find that
Operator did not correctly calculate its MPR.  We adjusted Line A1 (Current Maximum Permitted Rate) to
$15.01 from $17.25 to conform with Line K9 (Maximum Permitted Rate) from the prior FCC Form 1210. 
Therefore, we revised Worksheet 1 (True-Up Period Inflation) which adjusted Line C3 (Inflation Factor for
True-Up Period 1) to 1.0056.  We also revised Line C4 (Inflation Factor for True-Up Period 2) to 1.0060 and
Line C5 (Current FCC Inflation Factor) to 1.0114.  We also revised Line D2 (Current External Costs Segment)
to $3.8044 to conform with Line D9 (Current Ext. Costs per Subscriber) from the prior FCC Form 1210.  We
adjusted Line D3 (Current Caps Method Segment) to $0.54 from $1.54 to conform with the prior FCC Form
1210.  We adjusted Line 201 (Worksheet 2 - Caps Method True-Up, Tier 2) to $0.54 to conform with the
prior FCC Form 1210.  We also adjusted Line 201 (Worksheet 2 - Caps Method Projected Period, Tier 2) to
$0.54.  This adjusted Line I1 (Caps Method Segment for Projected Period) to $0.54.  These revisions reduced
Operator's  MPR to $17.79 from Operator's MPR of $18.66, for the projected period January 1, 1998 to
December 31, 1998. 

     8.    Upon review of Operator's revised FCC Form 1235, we approve a CPST MPR of $4.34. 
This results in a revised combined CPST MPR of $22.13 rather than Operator's combined CPST MPR of
$23.00.  Because Operator's actual CPST rate, effective February 1, 1998, is $21.54, we find Operator's actual
CPST rate, effective February  1, 1998, to be reasonable. 

     9.   Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that Operator's CPST rate of $21.54 effective February 1, 1998 in the communities set forth
above, IS REASONABLE.

     10.  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.
     

     11.       IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.
 0.321, that the complaint referenced herein IS DENIED.


                              FEDERAL COMMUNICATIONS COMMISSION 



                              Margaret M. Egler
                              Acting Chief, Financial Analysis and Compliance Division
                              Cable Services Bureau