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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 ) ) Marcus Cable ) CUID No. WI0032 (Park Falls) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: September 29, 1998 Released: October 1, 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. This Order addresses only Operator's June 1, 1998 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. 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 July 14, 1998 against Operator's June 1, 1998 CPST rate increase from $19.64 to $22.02. 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 June 3, 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 FCC Form 1240 for the projected period June 1, 1998 through May 31, 1999, we adjusted Operator's entries at Line D3 (Current CAPS Method Segment) and Line 201 (Total CAPS Adjustment) of Worksheet 2 (CAPS Method Projected Period) in accordance with the FCC Form 1240 Instructions for operators not subject to regulation. We also adjusted Operator's entry at Line 202, column 4 (Operator's Cap for Channels Added) from $0.40 to $0.00, which adjusted Operator's Line I1 (CAPS Method Segment for Projected Period). Operator may not claim a $0.20 per channel adjustment for channels added in 1998. These adjustments required that we refresh Operator's inflation factor at Line C5 (Current FCC Inflation Factor) to 1.0114. Our adjustments resulted in a revised maximum permitted ("MPR") of $21.61, effective June 1, 1998. Because Operator's actual CPST rate of $22.02, effective June 1, 1998, exceeds its revised MPR, we find Operator's actual CPST rate of $22.02 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 $22.02, charged by Operator in the community referenced above, effective June 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 area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $21.61 per month (plus franchise fees), plus interest to the date of the refund, for the period, beginning June 3, 1998 (the date of the first subscriber complaint), through the day before Operator implements the maximum permitted CPST rate of $21.61. 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 CPST rate charged by Operator in the community referenced above IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau