******************************************************** 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 ) ) ) TCI Communications, Inc., d/b/a ) CUID No. MI0393 (Grand Rapids Township) TCI Cablevision of Western Michigan, Inc.) ) Complaint Regarding ) Cable Programming Services Tier Rates) ORDER Adopted: September 15, 1998 Released: September 18, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the June 1, 1998 rate increase of the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. We have already resolved all complaints filed from September 1, 1993 through September 15, 1995 against Operator's CPST rates. We have also released a rate order concerning Operator's CPST rate increase effective June 1, 1997. Consequently, this Order addresses only the reasonableness of Operator's June 1, 1998 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 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 June 30, 1998 against Operator's June 1, 1998 CPST rate increase from $13.22 to $14.45 The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on June 2, 1998. 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. In its complaint, the LFA requests that the Commission review Operator's charges for equipment related to the CPST for CUID MI0393. Operator responds that additional equipment is not required to receive the CPST. Under Section 76.923(a) of the Commission's rules, all equipment used to receive the basic service tier ("BST") is subject to rate regulation, regardless of whether such equipment is used to receive other tiers of regulated programming and/or unregulated service. Such equipment related charges are subject to regulation by the LFA. According to Operator, subscribers use the same equipment to receive both BST and CPST programming. Therefore, the LFA's complaint does not trigger our jurisdiction to regulate Operator's equipment charges. However, the LFA has jurisdiction to determine the reasonableness of Operator's equipment rates. 5. 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. 6. Upon review of Operator's FCC Form 1240, for the projected period June 1, 1998 to May 31, 1999, we find that Operator's CPST rate of $14.45, effective June 1, 1998, 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 the CPST rate of $14.45 charged by Operator in the community referenced above, effective June 1, 1998, IS REASONABLE. 8. 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 Operator's June 1, 1998 CPST rate increase, in the community referenced above, IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau