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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 ) ) MediaOne of Massachusetts, Inc. ) CUID No. MA0172 (Town of Andover) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: February 24, 1999 Released: March 3, 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 increase of the above- referenced operator ("Operator") for its cable programming services tiers 1 and 2 ("CPST-1" and "CPST-2") in the community referenced above. We have previously resolved all prior complaints against Operator's CPST rates in the community referenced above through March 31, 1997. 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-1 and CPST-2 rate increases, 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 increase from $14.27 to $17.35 and CPST-2 rate increase from $2.60 to $3.89. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on July 8, 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. 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. Upon review of Operator's FCC Form 1240, for the projected period July 1, 1997 through June 30, 1998, incorporating the one-time changes in rates as required by the Social Contract, we find Operator has justified its calculated maximum permitted rates ("MPRs") of $16.80 for its CPST-1 and $2.60 for its CPST-2. Upon review of Operator's FCC Form 1240, for the projected period July 1, 1998 through June 30, 1999, we adjusted Line 202, Column 4 of Operator's Worksheet 2 (CAPS Method Projected Period, Tier 2) to $0.00 rather than $1.00. However, because Operator is entitled to a $1.00 increase pursuant to the Social Contract, our adjustment did not affect Operator's MPRs. Therefore, we find Operator's actual CPST-1 rate of $17.35 and actual CPST-2 rate of $3.89, 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. Section 0.321, that the CPST-1 rate of $17.35 and the CPST-2 rate of $3.89, 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. Section 0.321, that the complaint against Operator's July 1, 1998 CPST rate increases in the community referenced above, IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Patrick A. Boateng Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau