******************************************************** 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 ) ) MediaOne of Southern New England, Inc.) CUID No. MA0082 (Lowell) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: November 30, 1998 Released: December 3, 1998 By the Acting 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. On August 1, 1995, the Federal Communications Commission ("Commission") adopted an order approving a Social Contract entered into between Operator and the Commission ("Social Contract"). On April 23, 1997, we released an Order in which we found Operator's October 1, 1996 CPST rate increase to be reasonable ("Prior Order"). This Order addresses only the reasonableness of Operator's June 1, 1998 CPST rate increase, consistent with the terms of the Social Contract. 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 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 30, 1998 against Operator's June 1, 1998 CPST rate increase from $16.46 to $20.03. The LFA also complained about the increase in the Senior rate for CPST service from $15.46 to $18.75. 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 16, 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, 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. There are no official forms available for use to implement the one-time changes in rates as required by the Social Contract. The Commission, seeking to simplify the implementation of the Social Contract, found that the rate form proposed by Operator ("SC Rate Form") to implement the rate restructuring under the Social Contract, was consistent with the methodologies of the Commission's Forms 1200 and 1210 and greatly simplified the review of the restructured rates under the Social Contract. Therefore, pursuant to the terms of the Social Contract, the Commission permitted Operator to file an SC Rate Form to establish its CPS tier rates. 5. In our Prior Order, we reviewed Operator's SC Rate Form (setting an initial maximum permitted rate ("MPR") in accordance with the Social Contract) and found that Operator justified an MPR of $12.25. Upon review of Operator's FCC Form 1210, covering the period from the July 1, 1996 through March 31, 1997 (which updated Operator's initial MPR), and Operator's FCC Form 1210 covering the period from April 1, 1997 through March 31, 1998, we find Operator's actual CPST rate of $20.03 and actual Senior CPST rate of $18.75, effective June 1, 1998, to be reasonable. 6. 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 $20.03 and Senior CPST rate of $18.75, charged by Operator in the community referenced above, effective June 1, 1998, ARE REASONABLE. 7. 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 Margaret M. Egler Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau