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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 ) ) InterMedia Partners ) CUID No. TN0082 (City of Murfreesboro) ) Petition for Reconsideration ) ORDER ON RECONSIDERATION Adopted: February 22, 1999 Released: February 25, 1999 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a petition for reconsideration ("Petition") of our Order, DA 98-35 ("Second Order"), filed with the Federal Communications Commission ("Commission") by the above- referenced operator ("Operator") on February 11, 1998. Our Second Order resolved all pending complaints against Operator's CPST rates in the above-referenced community and resolved a petition for reconsideration of our Order, DA 96-992 ("First Order"). On February 11, 1998, Operator also filed a Refund Plan based on our First and Second Orders. In this Order, we grant Operator's Petition in part, vacate our Second Order in part, affirm our Second Order in all other aspects, and approve Operator's Refund Plan as modified herein. 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. 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. 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. 3. To justify rates for the period beginning May 15, 1994, operators must use the FCC Form 1200 series. Operators attempting to justify their rates through a cost of service showing must complete and file FCC Form 1220. 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. 4. In our First Order, we reviewed Operator's FCC Form 1220 cost of service filing in accordance with the Second Report and Order, First Order on Reconsideration, and Further Notice of Proposed Rulemaking, MM Docket No. 93-215 and CS Docket No. 94-28 ("Final Cost Order"). In analyzing Operator's FCC Form 1220, we evaluated rate base and expense items to determine whether Operator should be permitted to recover those items. Where a certain rate base or expense element was not supported, was excessive, or was unrelated to providing regulated cable service, we disallowed such cost in whole or in part. In some cases, we found costs that were not allowable, and we made appropriate adjustments. In our Second Order, we affirmed our findings concerning Operator's FCC Form 1220. In its Petition, Operator raises substantially the same arguments that it raised in its petition for reconsideration of our First Order. In our Second Order, we thoroughly discussed these issues and the basis for our decision in the First Order. We decline to address these issues again. 5. In its Petition, Operator argues that it should be entitled to use an unclaimed inflation factor of 1.0296 in its FCC Form 1240 filing for the projected period September 1, 1996 through August 31, 1997. We agree. Upon review of Operator's revised FCC Form 1240s for the projected period September 1, 1996 through August 31, 1997 for its non-rebuild and rebuild areas, we find that Operator has justified its calculated maximum permitted rates ("MPRs") of $18.62 for the non-rebuild area, effective September 1, 1996 and $19.69 for the rebuild area, effective May 15, 1997. Because Operator's actual CPST rates of $15.29 for the non-rebuild area, effective September 1, 1996 and $19.61 for the rebuild area, effective May 15, 1997, do not exceed its revised MPRs, we find Operator's CPST rates to be reasonable, effective September 1, 1996. We do not address Operator's final argument regarding the effective date of refund liability because it is now moot. 6. Upon review of Operator's Refund Plan for the periods February 25, 1994 through January 14, 1995 and January 15, 1995 through August 31, 1996, we find that Operator failed to account for the various interest rates for 1994 through 1998. Therefore, we recalculated the total refund amount due from Operator to the CPST subscribers in the community referenced above with interest calculated through December 31, 1998. Our calculations result in a total refund liability of $125,119.85. We will order Operator to refund this amount plus franchise fees to its CPST subscribers within 60 days of the release of this order. 7. Accordingly, IT IS ORDERED, pursuant to Section 1.106 of the Commission's rules, 47 C.F.R. 1.106, that Operator's Petition for Reconsideration IS GRANTED IN PART TO THE EXTENT INDICATED HEREIN. 8. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. 0.321, that In the Matter of Intermedia Partners, DA 98-35, 13 FCC Rcd 10180, IS VACATED IN PART TO THE EXTENT INDICATED HEREIN AND AFFIRMED IN ALL OTHER ASPECTS. 9. IT IS FURTHER ORDERED, that Operator's Refund Plan IS APPROVED, provided Operator modifies its Refund Plan to the extent indicated herein, and IT IS ORDERED, pursuant to Section 76.962 of the Commission's Rules, 47 C.F.R. 76.962, that Operator implement its modified refund plan within 60 days of the release of this Order. 10. IT IS FURTHER ORDERED, pursuant to section 76.962 of the Commission's Rules, 47 C.F.R. 76.962, that Operator file a certificate of compliance with the Chief, Cable Services Bureau, within 90 days of the release of this Order, certifying its compliance with this Order. 11. This action is taken pursuant to Section 0.321 of the Commission's Rules, 47 C.F.R. 0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau APPENDIX TIME PERIOD PRINCIPAL INTEREST TOTAL February 25, 1994 - January 14, 1995 $23,859.35 $8,222.69 $32,082.12 January 15, 1995 - August 31, 1996 $74,676.10 $18,361.63 $93,037.73 $125,119.85