******************************************************** 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. CA0456 (Santa Monica) Century Communications Corporation ) d/b/a Century S.W. Cable Television III ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: February 25, 1999 Released: March 5, 1999 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the August 1, 1998 rate increase of the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. We have already issued an order in which we resolved all prior complaints against Operator's CPST rates in the community referenced above ("Prior Order"). This Order addresses only the reasonableness of Operator's August 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 January 27, 1999, against Operator's August 1, 1998 CPST rate increase from $11.07 to $12.03. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on August 17, 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 August 1, 1997 through July 31, 1998, which updated Operator's CPST rate approved by our Prior Order, we find that Operator has justified its calculated maximum permitted rate ("MPR") of $11.71. Upon review of Operator's FCC Form 1240, for the projected period August 1, 1998 through July 31, 1999, we adjusted Operator's Line F2 (Markup Method Segment for True-Up Period 1) to $0.00 and Line I2 to $0.00. Operator is not entitled to claim an adjustment under the "markup method" for channels added in 1998. We adjusted the Inflation Factors at Worksheet 1 (True-Up Period Inflation) which adjusted Line C3 (Inflation Factor for True-Up Period 1) to 1.0136. We also revised Line C5 (Current FCC Inflation Factor) to 1.0100. Our adjustments resulted in a revised MPR of $12.57 for the projected period rather than Operator's calculated MPR for the projected period of $12.67. Because Operator's actual CPST rate of $12.03 does not exceed its revised MPR, we find Operator's actual CPST rate of $12.03, effective August 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 $12.03, charged by Operator in the community referenced above, effective August 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 MPR 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 Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau