******************************************************** 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 ) ) Suburban Cable TV Company, Inc. ) CUID No. PA1248 (Ridley) ) 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 April 1, 1998 rate increase of the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator has attempted to justify its CPST rate through a benchmark justification on FCC Form 1240. We have already issued separate orders in which we denied previous complaints against Operator's CPST rates. Accordingly, this Order addresses only the reasonableness of Operator's April 1, 1998 CPST 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. 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 the 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 September 2, 1998 against the April 1, 1998 CPST rate increase from $16.05 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 April 17, 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. To justify rates for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200 series. Operators may justify adjustments to 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 April 1, 1998 through March 31, 1999, we find that Operator has not correctly calculated its maximum permitted rate ("MPR"). We adjusted Line F8 (True-Up Segment for True-Up Period 1) to $0.4819 to conform with the Operator's previous revised FCC Form 1240. We also adjusted Line C5 (Current FCC Inflation Factor) to 1.0082. These adjustments reduced Operator's MPR to $18.98 rather than $19.81 for the projected period April 1, 1998 through March 31, 1999. Because Operator's actual CPST rate, effective April 1, 1998, is $18.45, we find Operator's actual CPST rate, effective April 1, 1998, to be reasonable. 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 beginning April 1, 1997, IS REASONABLE. 7. 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. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint against Operator's April 1, 1998 CPST rate increase in the franchise area referenced above IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Margaret M. Egler Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau