Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) CUID No. PA1232 (Pleasant Hills) Rigpal Communications, Inc. ) d/b/a Adelphia Cable Communications ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) and ) Petition for Reconsideration ) ORDER ON RECONSIDERATION and RATE ORDER Adopted: March 10, 1999 Released: March 12, 1999 By the Deputy Chief, 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 previously resolved all prior complaints filed against Operator's CPST rates in the community referenced above ("Prior Order"). On May 18, 1998, Operator filed a petition for reconsideration of our Prior Order ("Petition"). This Order addresses Operator's Petition and 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 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 26, 1999 against Operator's August 1, 1998 CPST rate increase from $16.53 to $19.19. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on August 6, 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. If the Commission finds a rate to be unreasonable, it shall determine the correct rate and any refund liability. 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 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 their rate change. Any incurred cost that is not projected may be accrued with interest and added to rates at a later time. 5. In its Petition, Operator requested that we restore $0.49 on Worksheet 2 (Caps Method, True- Up Period) of its FCC Form 1240 for the projected period August 1, 1997 through July 31, 1998, which we revised in our Prior Order. Operator argues that our removal of $0.49 from Line 201 of Worksheet 2 was unnecessary because Operator had already attempted to remove the excess $0.49 on Line 202. Operator concludes that our adjustment resulted in a total reduction of $0.98, effectively disallowing $0.49 that Operator was entitled to claim for channels added under the Caps method. We agree that Operator is entitled to claim the $0.49. Therefore, we will grant Operator's Petition. 6. Upon review of Operator's revised FCC Form 1240 for the projected period August 1, 1997 through July 31, 1998, we find that Operator has correctly calculated its maximum permitted rate ("MPR") of $20.30. Upon review of Operator's FCC Form 1240 for the projected period August 1, 1998 through July 31, 1999, we adjusted Line 201, column 7 of Operator's Worksheet 2 (Caps Method, True-Up Period) to $1.41 to coincide with Line 213, column 7 of Worksheet 2 (Caps Method, True-Up Period) of Operator's prior revised FCC Form 1240, in accordance with the FCC Form 1240 Instructions. We also adjusted Line 201, column 7 of Operator's Worksheet 2 (Caps Method, Projected Period) to $1.93 to coincide with Line 213, column 7 of Operator's current FCC Form 1240 Worksheet 2 (Caps Method, True-Up Period). These adjustments reduced Operator's MPR from $23.57 to $23.53. Because Operator's actual CPST rate of $19.19 does not exceed its revised MPR of $23.53, we find Operator's actual CPST rate of $19.19, effective August 1, 1998, to be reasonable. 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 TO THE EXTENT INDICATED HEREIN. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that In the Matter of Rigpal Communications, Inc. d/b/a Adelphia Cable Communications, DA 98-721, 13 FCC Rcd 7362 (1998), IS VACATED TO THE EXTENT INDICATED HEREIN. 9. 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 $19.19, charged by Operator in the community referenced above, effective August 1, 1998, IS REASONABLE. 10. 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. 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 Operator's August 1, 1998 CPST rate increase in the community referenced above IS DENIED. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau