******************************************************** 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 No. CA0249 (Malibu) Falcon Cablevision ) ) Complaints Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: January 26, 1999 Released: January 29, 1999 By the Assistant Chief, Consumer Protection and Competition Division, Cable Services Bureau: 1. In this Order we consider a complaint against the October 31, 1998 rate increase of the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Prior complaints against Operator's CPST rates were dismissed. This Order addresses only the reasonableness of Operator's October 31, 1998 CPST rate increase. 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. The Telecommunications Act of 1996 ("1996 Act") and our rules implementing the legislation ("Interim Rules"), require that a complaint against the CPST rate 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 December 21, 1998 against Operator's October 31, 1998 CPST rate increase from $7.47 to $9.57. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on November 2, 1998. 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. 4. Operators may justify 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. On January 14, 1999, in response to a request by the Cable Services Bureau staff, Operator filed a revised FCC Form 1240, for the projected period October 1, 1998 through September 30, 1999, with a calculated maximum permitted rate ("MPR") for its CPST of $9.17. Upon review of Operator's FCC Form 1240, for the projected period October 1, 1998 through September 30, 1999, we find that Operator has justified its MPR of $9.17. Because Operator's actual CPST rate of $9.57, effective October 31, 1998, exceeds its MPR of $9.17, we find Operator's actual CPST rate of $9.57, effective October 31, 1998, to be unreasonable. 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 $9.57, charged by Operator in the community referenced above, effective October 31, 1998, IS UNREASONABLE. 7. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $9.17, per month (plus franchise fees), plus interest to the date of the refund, for the period from November 2, 1998 (the date of the first valid complaint) through the day before Operator implements the maximum permitted CPST rate of $9.17. 8. IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to CPST subscribers for the stated periods, and shall within 30 days of the release of this Order, file a report with the Chief, Cable Services Bureau, stating the cumulative refund amount so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that the complaint referenced herein against the CPST rate charged by Operator in the community referenced above IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Patrick A. Boateng, Assistant Chief Consumer Protection and Competition Division Cable Services Bureau