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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 ) ) CoxCom, Inc. ) CUID No. VA0150 (Roanoke) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: November 6, 1998 Released: November 12, 1998 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the March 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 previous complaints filed against Operator's CPST rates. Accordingly, this Order addresses only Operator's March 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. 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 August 19, 1998 against Operator's March 1, 1998 CPST rate increase from $18.85 to $19.95 and basic service tier rate increase from $9.25 to $9.72. The basic service tier rate is governed by the LFA and does not trigger the Commission's jurisdiction. Therefore, we will only consider the complaint against the CPST rate. 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 13, 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 March 1, 1998 through February 28, 1999, we find that Operator has not correctly calculated its MPR. We adjusted Line 805 of Operator's FCC Form 1240 to $ $17.95, to conform with Operator's actual CPST rate based on Operator's rate card. Therefore, we also revised Worksheet 1 (True-Up Period Inflation) which adjusted Line C3 (Inflation Factor for True-Up Period 1) to 1.0190. We also revised Line C5 (Current FCC Inflation Factor) to 1.0114. We also adjusted Line D6 (Current True-Up Segment), Line D7 (Current Inflation Segment), and Line F8 (True-Up Segment for True-Up Period 1) on Operator's FCC Form 1240 to conform to the prior revised FCC Form 1240. These revisions reduced Operator's MPR to $18.72 for the projected period March 1, 1998 to February 28, 1999. Because Operator's actual CPST rate, effective March 1, 1998, is $18.89, we find Operator's actual CPST rate, effective March 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 $18.89, charged by Operator in the franchise area referenced above, effective March 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 $18.72 per month (plus franchise fees), plus interest to the date of the refund, for the period March 13, 1998, the date of the first subscriber complaint, through the day before Operator implements the maximum permitted CPST rate of $18.72 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. 0.321, that the complaint referenced herein against the CPST rate charged by Operator in the community referenced above IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Margaret M. Egler Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau