******************************************************** 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 ) CUID Nos. NJ0123 (Mount Olive) ) NJ0125 (Morristown) ) NJ0133 (Dover) ) NJ0139 (Wharton) Cablevision of Morris ) NJ0142 (Hopatcong) ) NJ0148 (East Hanover) ) NJ0149 (Morris Plains) ) NJ0150 (Morris) ) NJ0151 (Florham Park) ) NJ0159 (Denville) ) NJ0167 (Mt. Arlington) ) NJ0169 (Madison) ) NJ0170 (Hanover) Complaints Regarding ) NJ0175 (Rockaway) Cable Programming Services Tier Rates ) NJ0243 (Jefferson) ) NJ0270 (Randolph) ) NJ0317 (Montville) ORDER Adopted: January 11, 1999 Released: January 15, 1999 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider complaints against the July 1, 1998 rate increase of the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the communities referenced above. Numerous prior complaints against Operator's CPST rate increases have been resolved. Several unresolved complaints were filed with the Federal Communications Commission ("Commission") on the dates listed in the attached Appendix. In this Order we address the reasonableness of Operator's July 1, 1998 CPST rate increase and resolve or dismiss all other complaints against Operator's CPST rate increases in the communities referenced above. 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, beginning February 8, 1996, 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 areas referenced above filed complaints with the Commission on September 8, 1994 against Operator's July 14, 1994 CPST rate increase in the franchise areas listed in the attached Appendix. We dismiss these complaints because the complaints were not timely filed with the Commission. Section 623(c)(3) of the Communications Act requires that complaints be filed within "a reasonable period of time" following a change in rates. We determined that a "reasonable period of time" is forty-five days. In order to facilitate subscriber knowledge of the nature and extent of a rate increase and provide evidence of subscribership and the rate and service involved, we determined that we would compute the time period for filing a complaint from the date the complainant receives a bill from a cable operator that reflects the rate change. Section 76.953 of the Commission's rules, in effect at the time the complaints were filed, provides that complaints against CPST rate increases must be filed with the Commission within 45 days from that date. That provision does not apply to a complaint filed by a local franchising authority ("LFA") which does not receive a bill. The LFA must file a complaint within 45 days of the date the rate increase becomes effective. Based on our review of the record, we find that the complaints filed on September 8, 1994, and referenced in the attached Appendix, were not timely filed and we hereby dismiss those complaints. 4. Valid subscriber complaints were filed against Operator's April 1, 1995 CPST rate increase in two of the communities listed in the attached Appendix. The LFA for the franchise areas referenced above also filed complaints with the Commission on October 23, 1998 against Operator's July 1, 1998 CPST rate increase from $13.14 to $17.68. The LFA verified that it received more than one subscriber complaint for each franchise area and the first valid complaint for each franchise area was received by the LFA on the date listed in the attached Appendix. 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. 5. 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. 6. Upon review of Operator's FCC Form 1200, FCC Form 1210 covering the period April 1, 1994 through December 31, 1994, and FCC Form 1240s for the projected periods June 1, 1996 through May 31, 1997 and July 1, 1997 through June 30, 1998, we find that Operator has justified its actual CPST rates, effective July 14, 1994 through June 30, 1998. Upon review of Operator's FCC Form 1240 for the projected period July 1, 1998 through June 30, 1999, we find that Operator has justified its calculated maximum permitted rate ("MPR") of $17.86. Because Operator's actual CPST rate of $17.68, effective July 1, 1998, does not exceed its MPR, we find Operator's actual CPST rate of $17.68, effective July 1, 1998, to be reasonable. 7. 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 $15.19, charged by Operator in the community referenced above, effective April 1, 1995 through June 30, 1996, IS REASONABLE. 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 of $15.84, charged by Operator in the community referenced above, effective July 1, 1996 through June 30, 1997, 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 rate of $13.14, charged by Operator in the community referenced above, effective July 1, 1997 through June 30, 1998, IS REASONABLE. 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 of $17.68, charged by Operator in the community referenced above, effective July 1, 1998, 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 complaints, filed with the Commission on September 8, 1994 and referenced in Appendix A, ARE DISMISSED. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that all other complaints referenced herein against the CPST rates charged by Operator in the community referenced above ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION Margaret M. Egler Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau APPENDIX DATES FCC RECEIVED DATE LFA RECEIVED COMPLAINTS NOT FIRST VALID COMPLAINT CUID NO. COMMUNITY PREVIOUSLY RESOLVED UNDER THE 1996 ACT NJ0123 Mount Olive 8/14/98 NJ0125 Morristown 7/22/98 NJ0133 Dover 8/5/98 NJ0139 Wharton 7/29/98 NJ0142 Hopatcong 9/8/94* 9/3/98 NJ0148 East Hanover 8/5/98 NJ0149 Morris Plains 9/8/94* 7/10/98 NJ0150 Morris 9/8/94* 5/1/95 7/22/98 NJ0151 Florham Park 7/17/98 NJ0159 Denville 7/7/98 NJ0167 Mt. Arlington 9/8/94* 8/6/98 NJ0169 Madison 9/8/94* 5/8/95 7/28/98 NJ0170 Hanover 9/8/94* 7/8/98 NJ0175 Rockaway 7/9/98 NJ0243 Jefferson 7/24/98 NJ0270 Randolph 7/7/98 NJ0317 Montville 9/8/94* 7/8/98 *Complaints dismissed by this Order.