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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of                        )
                                   )
Bresnan Communications Company               )    CUID No. MI0247 (Ishpeming)   
                                   )
                                   )             
Complaints Regarding                         )
Cable Programming Services Tier Rate         )            
 

                             ORDER

     Adopted:  January 13, 1999                   Released:  January 15, 1999  

By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau:

     1.   In this Order we consider complaints concerning the rates of the above-captioned operator
("Operator") for its cable programming services tier ("CPST") in the community referenced above.  Operator's
response includes benchmark justifications filed on FCC Forms 1200, 1210, 1235 and 1240.  We have already
issued a separate order ("Prior Order") in which we found that Operator's rates for the period September 1,
1993 through May 14 1994 were reasonable.  This Order addresses the reasonableness of Operator's rates for
the period beginning July 15, 1994, as justified on Operator's FCC Forms 1200, 1210, 1235 and 1240.

     2.   The Communications Act authorizes the Federal Communications Commission
("Commission") to review the CPST rates of cable systems not subject to effective competition to ensure that
rates charged are not unreasonable.  The Cable Television Consumer Protection and Competition Act of 1992
("1992 Cable Act") required the Commission to review CPST rates upon the filing of a valid complaint by a
subscriber.  If the Commission finds rates to be unreasonable, it shall determine correct rates and any refund
liability.

     3.   The Commission's original rate regulations became effective on September 1, 1993.  The
Commission revised its rate regulations effective May 15, 1994.  Operators must use the FCC Form 1200
series to justify their rates for the period beginning May 15, 1994 through a benchmark showing.  Operators
are permitted to make changes to their rates on a quarterly basis using FCC Form 1210.  Operators may adjust
their rates on an annual basis using FCC Form 1240.  Additionally, an Operator may file an FCC Form 1235
(Abbreviated Cost of Service Filing for Cable Network Upgrades).  The FCC Form 1235 allows cable
operators to justify rate increases related to significant capital expenditures used to improve rate-regulated
services.  This option is extended only in cases of significant upgrades requiring added capital investment, such
as bandwidth capacity and conversion to fiber optics, and for system rebuilds.  Normal improvements and
expansions of service remain subject to the usual rate adjustments allowed by filing FCC Form 1210's, 1220's
and 1240's.  Cable operators that incur increases in operating costs associated with a significant network
upgrade will be permitted to charge additional rates as justified by their FCC Form 1235 filing.   
     
     4.   Upon review of Operator's FCC Forms 1200, 1210 and 1240, we find the Operator has
justified its CPST rates effective July 15, 1994 to March 31, 1997.  Upon review of Operator's FCC Form
1235, we find that Operator allocated net upgrade rate base and expense costs based on a weighted average
of the channel ratios before and after the upgrade.  We revised operator's allocations based on post-upgrade
channel ratios because post-upgrade tier charges align with those ratios.  We also revised Operator's tier
income tax allowance based on a 34 percent Federal tax rate, the maximum applied to United States
corporations.  These adjustments reduced Operator's maximum permitted rate ("MPR") on its FCC Form 1235
to $2.54.  The revised FCC Form 1235 MPR, when added to the MPR of $14.79 from Operator's second FCC
Form 1240, produces a combined MPR of $17.33.  Therefore, we find that Operator's actual CPST rate of
$16.90, effective April 1, 1998, is reasonable.     

     5.   Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47
C.F.R.  0.321, that the monthly CPST rates charged by Operator in the community referenced above, from
July 15, 1994 to March 31, 1997, ARE REASONABLE.

     6.   IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47
C.F.R.  0.321, that the monthly CPST rate of $16.90, effective April 1, 1998, charged by Operator in the
community referenced above, IS REASONABLE.

     7.   IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.
 0.321, that the 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