******************************************************** 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. MA0039 (Barnstable) ) MediaOne of Massachusetts, Inc. ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: February 16, 1999 Released: February 18, 1999 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the July 1, 1998 rate change of the above- referenced operator ("Operator") for its cable programming services tier 1 ("CPST-1") and cable programming services tier 2 ("CPST-2") in the community referenced above. We have previously resolved all prior complaints filed against Operator's CPST rates in the above-referenced community ("Prior Order"). On August 1, 1995, the Federal Communications Commission ("Commission") adopted an order approving a Social Contract entered into between Operator and the Commission ("Social Contract"). This Order addresses only the reasonableness of Operator's July 1, 1998 CPST rate change, consistent with the terms of the Social Contract. 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 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 area referenced above filed a complaint with the Commission on December 28, 1998 against Operator's July 1, 1998 CPST-1 rate change from $18.21 to $16.70 and Operator's CPST-2 rate of $4.84. Operator's CPST-2 is a migrated product tier ("MPT"), created pursuant to the Social Contract. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on August 10, 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. 4. To justify rates for the period beginning May 15, 1994, 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. Operator may alternatively justify adjustments to their rates on an annual basis using FCC Form 1240 to reflect reasonable certain and quantifiable changes in external cost, 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 July 1, 1998 to June 30, 1999, we adjusted Line A1 (Current Maximum Permitted Rate) and Line D6 (Current True-Up Segment) to coincide with Operator's revised FCC Form 1240 approved by our Prior Order. We adjusted Line C5 (Current FCC Inflation Factor) to 1.01. We also revised Module F (Maximum Permitted Rate for True-Up Period 1) to account for Operator's change from a system filing to a community filing. Despite our adjustments, we find Operator's actual CPST-1 rate of $16.70 and CPST-2 rate of $4.84, effective July 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-1 rate of $16.70 and the CPST-2 rate of $4.84, charged by Operator in the community referenced above, effective July 1, 1998, ARE 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. Section 0.321, that the complaint against Operator's July 1, 1998 CPST rate change in the community referenced above, IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Patrick A. Boateng Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau