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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 ) ) Marcus Cable Associates, L.P. ) CUID No. TX0632 (North Richland Hills) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: March 1, 1999 Released: March 10, 1999 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the September 1, 1998 rate increase of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the rebuild and non-rebuild areas of the community referenced above. This Order addresses only the reasonableness of Operator's September 1, 1998 CPST rate increase in its rebuild and non-rebuild areas. 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. 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. 3. 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 adjust their rates on an annual basis using FCC Form 1240. Additionally, an operator may file an FCC Form 1235 (Abbreviated Cost of Service Filing for Cable Network Upgrades). The FCC Form 1235 allows cable operators to justify rate increases related to significant capital expenditures used to improve rate-regulated services. This option is extended only in cases of significant upgrades requiring added capital investment, such as bandwidth capacity and conversion to fiber optics, and for system rebuilds. Normal improvements and expansions of service remain subject to the usual rate adjustments allowed by filing FCC Form 1210s, 1220s and 1240s. Cable operators that incur increases in operating costs associated with a significant network upgrade will be permitted to charge additional rates as justified by their FCC Form 1235 filing. 4. The LFA for the franchise area referenced above filed a complaint with the Commission on January 20, 1999 against Operator's September 1, 1998 CPST rate increase from $14.70 to $16.75 for the non- rebuild area and from $18.80 to $21.27 for the rebuild area in the community referenced above. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on September 3, 1998. 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. 5. Upon review of Operator's FCC Form 1240, for the projected period September 1, 1998 through August 31, 1999, we adjusted Line C5 (Current FCC Inflation Factor) from 1.0143 to 1.0100. Our adjustment resulted in a revised MPR of $16.71 for the projected period September 1, 1998 through August 31, 1999, for Operator's non-rebuild area. Because Operator's actual CPST rate of $16.75 for its non-rebuild area, effective September 1, 1998, exceeds its revised MPR of $16.71, we find Operator's actual CPST rate of $16.75, effective September 1, 1998, to be unreasonable. However, we determine that the total overcharge per subscriber is de minimis, and it would not be in the public interest to order a refund. 6. We have previously reviewed Operator's revised FCC Form 1235. We determined that Operator justified an MPR for its network upgrade add on in the amount of $8.10. When Operator's monthly network add on is combined with its FCC Form 1240 MPR of $16.71, Operator has justified an MPR of $24.81 for its CPST, effective September 1, 1998, for its rebuild area. Because Operator's actual CPST rate of $21.27 for its rebuild area, effective September 1, 1998, does not exceed its revised MPR of $24.81, we find Operator's actual CPST rate of $21.27, for its rebuild areas, effective September 1, 1998, to be reasonable. 7. 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 $16.75, charged by Operator in the non-rebuild area of the community referenced above, effective September 1, 1998, IS UNREASONABLE. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that the CPST rate of $21.27, charged by Operator in the rebuild area of the community referenced above, effective September 1, 1998, IS REASONABLE. 9. 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. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that the complaint against the CPST rate of $16.75, charged by Operator in the non-rebuild area of the community referenced above, effective September 1, 1998, IS GRANTED TO THE EXTENT INDICATED HEREIN. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that the complaint against the CPST rate of $21.27, charged by Operator in the rebuild area of the community referenced above, effective September 1, 1998, IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Patrick A. Boateng, Acting Chief Financial Analysis and Compliance Division Cable Services Bureau