******************************************************** 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. LA0286 (New Orleans) ) Cox Cable Louisiana Metro System ) ) Complaint Regarding Cable Programming ) Services Tier Rate Increase ) ORDER Adopted: March 19, 1999 Released: March 23, 1999 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the August 15, 1998 rate increase by 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 filed against Operator's CPST rates ("Resolution"). This Order addresses only the reasonableness of Operator's August 15, 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 February 16, 1999 against Operator's August 15, 1998 CPST rate increase from $17.20 to $19.40. The LFA verified that it received more than one subscriber complaint. 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 through a benchmark or cost of service showing, operators must use the FCC Form 1200 series. Cable operators may file an FCC Form 1210 to justify rate increases based on the addition and deletion of channels, changes in certain external costs and inflation. In addition, Operators must file an FCC Form 1210 at least 30 days before new rates are scheduled to go into effect, where there is a pending complaint against the CPST rate. Operators may alternatively justify adjustments to 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. In response to the LFA's complaint, Operator filed the identical FCC Forms which we previously reviewed in a prior order ("Prior Order"). In our Prior Order, we made several adjustments to Operator's FCC Form 1240 for the projected period January 1, 1998 through December 31, 1998. However, our adjustments did not affect Operator's calculated maximum permitted rate ("MPR") of $22.73. Upon review of Operator's Mid-Year Channel Additions Supplement to its FCC Form 1240, we moved Operator's adjustment for mid-year channel additions from Line 4 to Line 2 based on Operator's supplemental filing. We found that Operator justified its mid-year channel increase in the amount of $0.44 which increased Operator's MPR to $23.17. Because Operator's actual CPST rate of $19.40, effective August 15, 1998, does not exceed its MPR of $23.17, which we approved in our Prior Order, we find Operator's actual CPST rate of $19.40, effective August 15, 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 $19.40, charged by Operator in the above-referenced community, effective August 15, 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 maximum permitted rate 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. Section 0.321, that the complaint referenced herein against the CPST rate charged by Operator in the community referenced above IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Patrick A. Boateng Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau