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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 ) ) CUID No. IN0114 (St. Joseph) Comcast Cablevision of Indiana, L.P. ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: April 26, 1999 Released: April 29, 1999 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the November 1, 1998 rate increase by 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 above-referenced community ("Prior Order"). This Order addresses only the reasonableness of Operator's November 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 March 3, 1999, against Operator's November 1, 1998 CPST rate increase from $17.10 to $17.70 for its non- rebuild area and from $17.10 to $18.00 for its rebuild area. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on November 2, 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 through a benchmark showing, 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 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. Upon review of Operator's FCC Form 1240s for its non-rebuild and rebuild areas, for the projected period November 1, 1998 through October 31, 1999, we made adjustments to conform Operator's filing with the revised FCC Form 1240 from our Prior Order. We also 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 reduced Operator's True-Up Period from August 1, 1997 through July 31, 1998 to November 1, 1997 through July 31, 1998. In our Prior Order, Operator was treated as an unregulated operator in accordance with Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, Thirteenth Order on Reconsideration, MM Docket No. 92-266 ("Thirteenth Reconsideration Order") and the FCC Form 1240 Instructions. Operator's True-Up Period in its current FCC Form 1240 cannot begin earlier than the beginning of Operator's projected period from the revised FCC From 1240 from our Prior Order. 6. We adjusted the Inflation Factors at Worksheet 1 (True-Up Period Inflation) which adjusted Line C3 (Inflation Factor for True-Up Period 1) to 1.0081. We also revised Line C5 (Current FCC Inflation Factor) to 1.0078. Our adjustments resulted in a revised maximum permitted rate ("MPR") of $17.61 for the non-rebuild area and $17.88 for the rebuild area for the projected period November 1, 1998 through October 31, 1999. Because Operator's actual CPST rates of $17.70 for the non-rebuild area and $18.00 for the rebuild area, effective November 1, 1998, exceed its revised MPRs, we find Operator's actual CPST rates to be unreasonable. 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 $17.70, charged by Operator in the non-rebuild area of the community referenced above, effective November 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 $18.00, charged by Operator in the rebuild area of the community referenced above, effective November 1, 1998, IS UNREASONABLE. 9. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rates of $17.61 for the non-rebuild area and $17.88 for the rebuild area of the community referenced above, per month (plus franchise fees), plus interest to the date of the refund, for the period beginning November 2, 1998 (the date of the first subscriber complaint) through the day before Operator implements the maximum permitted CPST rates of $17.61 for the non-rebuild area and $17.88 for the rebuild area. 10. IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to CPST subscribers for the stated periods, and shall within 30 days of the release of this Order, file a report with the Chief, Cable Services Bureau, stating the cumulative refund amount so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that the complaint referenced herein against the CPST rates charged by Operator in the community referenced above IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Patrick A. Boateng Acting Chief, Financial Analysis and Compliance Division Cable Services Bureau