Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Cable One, Inc. ) CUID No. AZ0022 (Gila) ) Complaint Regarding Cable Programming ) Services Tier Rate Increase ) ORDER Adopted: December 4, 1998 Released: December 8, 1998 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a complaint about the rates the above-captioned operator ("Operator") was charging for its cable programming service tier ("CPST") in the community referenced above. Operator has attempted to justify its CPST rates through benchmark justifications on FCC Form 1200, multiple FCC Form 1210s and FCC Form 1240. We have already issued a separate order in which we found Operator's rates in effect before May 15, 1994 to be reasonable. Accordingly, this Order addresses only the reasonableness of Operator's CPST rates in effect after May 14, 1994. 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. A valid complaint was filed on October 15, 1993 against Operator's September 1, 1993 CPST rate. 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. 3. To justify rates for the period beginning May 15, 1994 through a benchmark or cost of service showing, operators must use the FCC Form 1200 series. Cable operators may file an FCC Form 1210 to justify rate increases based on the addition and deletion of channels, changes in certain external costs and inflation. In addition, Operators must file an FCC Form 1210 at least 30 days before new rates are scheduled to go into effect, where there is a pending complaint against the CPST rate. Operators may alternatively 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. 4. Upon review of Operator's FCC Form 1200, we find Operator's actual CPST rates, effective May 15, 1994 through December 31, 1994, to be reasonable. Upon review of Operator's FCC Form 1210s, we adjusted Operator's first FCC Form 1210, covering the period July 1, 1994 through September 30, 1994 at Line B13 to $3.77 from $3.7387 to coincide with the external costs from Operator's FCC Form 1200, in accordance with the FCC Form 1210 Instructions. Our adjustment reduced Operator's maximum permitted rate ("MPR") to $11.82. Operator's actual CPST rate, effective January 1, 1995 through March 31, 1995, was $11.86. We find Operator's actual CPST rate of $11.86, effective January 1, 1995 through March 31, 1995, to be unreasonable. Because Operator justified an MPR of $12.37, effective April 1, 1995, we find Operator's actual CPST rate of $11.86, effective April 1, 1995 through May 31, 1995, to be reasonable. We made no additional adjustments to Operator's subsequent FCC Form 1210s, but our original adjustment affected the subsequent MPRs. Consequently, we find that Operator justified an MPR of $12.37, with an actual CPST rate of $12.40, effective June 1, 1995 through August 31, 1995, an MPR of $13.48, with an actual CPST rate of $13.51, effective September 1, 1995 through October 31, 1995, and an MPR of $13.76, with an actual CPST rate of $13.79, effective November 1, 1995 through May 31, 1996. Therefore, we find Operator's actual CPST rates, effective June 1, 1995 through May 31, 1996, to be unreasonable. However, we determine that the total overcharge per subscriber is de minimis, and it would not be in the public interest to order a refund. 5. Upon review of Operator's FCC Form 1240 for the projected period June 1, 1996 through May 31, 1997, we corrected Operator's Lines H1 (Revenue From Period 1) and H2 (Revenue From Maximum Permitted Rate for Period 1) to allow for the actual three month True-Up Period Operator had designated, rather than the five month True-Up Period that Operator had calculated. Despite this adjustment, we find Operator's actual CPST rate of $14.79, effective June 1, 1996, 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 rates charged by Operator in the community referenced above, effective May 15, 1994 through December 31, 1994, ARE REASONABLE. 7. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate charged by Operator in the community referenced above, effective January 1, 1995 through March 31, 1995, IS UNREASONABLE. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate charged by Operator in the community referenced above, effective April 1, 1995 through May 31, 1995, IS REASONABLE. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the community referenced above, effective June 1, 1995 through May 31, 1996, ARE UNREASONABLE. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate charged by Operator in the community referenced above, effective June 1, 1996 through January 31, 1997, IS REASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint against the CPST rates charged by Operator in the community referenced above, IS GRANTED TO THE EXTENT INDICATED HEREIN. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau