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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. FL0375 (Dade County) Adelphia Cable Partners, L.P. ) d/b/a Adelphia Cable Communications ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: January 27, 1999 Released: February 1, 1999 By the Assistant Chief, Consumer Protection and Competition Division, Cable Services Bureau: 1. In this Order we consider a complaint against the June 1, 1998 rate increase by the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. We have already issued orders in which we resolved prior complaints filed against Operator's CPST rates. This Order addresses only the reasonableness of Operator's June 1, 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. 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 the 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 November 5, 1998, against Operator's June 1, 1998 CPST rate increase from $15.60 to $18.30. 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 3, 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. If the Commission finds a rate to be unreasonable, it shall determine the correct rate and any refund liability. 4. To justify rates for the period beginning May 15, 1994 through a benchmark showing, 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. Operators may 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. 5. Upon review of Operator's FCC Form 1240 for the projected period June 1, 1998 through May 31, 1999, we find that Operator did not correctly calculate its maximum permitted rate ("MPR"). Because Operator did not submit Worksheet 4 (Residual, True-Up Period), we reconstructed Worksheet 4 using Operator's current and previous FCC Form 1240s. This resulted in a calculation of $0.30 for Line 408 (Average Period 1 Per Channel Residual). We also adjusted Worksheet 5 (Channel Movement and Deletion True-Up Period, Tier 2) Line 501 (Previous Period) to $0.0 based on Operator's previous filings. We revised Line 502, Column 1 to $1.50 to reflect our adjustment to Worksheet 4. We also revised Line C5 (Current FCC Inflation Factor) to 1.0082. Our adjustments resulted in a revised maximum permitted rate ("MPR") of $22.88 for the projected period rather than Operator's calculated MPR for the projected period of $23.14. Because Operator's actual CPST rate of $18.30, effective June 1, 1998, does not exceed its revised MPR, we find Operator's actual CPST rate of $18.30, 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.  0.321, that the CPST rate of $18.30, charged by Operator in the franchise area referenced above, effective June 1, 1998, IS REASONABLE. 7. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator take into account our FCC Form 1240 adjustments when calculating its maximum permitted rate and performing the true-up calculation on its next FCC Form 1240. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the referenced complaint IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Patrick A. Boateng Assistant Chief Consumer Protection and Competition Division Cable Services Bureau