Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) CUID No. NY0104 (Northern Manhattan) Time Warner Cable ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: June 7, 1999 Released: June 9, 1999 By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the February 1, 1999 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 February 1, 1999 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. 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. The LFA for the franchise area referenced above filed a complaint with the Commission on May 19, 1999, against Operator's February 1, 1999 CPST rate increase from $18.97 to $20.44. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on March 12, 1999. 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. 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. On November 30, 1995, we issued an Order approving a Social Contract which Operator entered into with the Commission ("Social Contract"). In our Prior Order, we allowed Operator to file bifurcated FCC Form 1240s. In these bifurcated forms, Operator calculates the $1.00 annual increase permitted by the Social Contract ("Social Contract Dollar") and its true-up on an FCC Form 1240 ("SCD Form 1240") separate from its annual FCC Form 1240 calculation of its maximum permitted rate ("MPR"). 6. Upon review of Operator's FCC Form 1240s for the projected period January 1, 1999 through December 31, 1999, we find Operator's actual CPST rate of $20.44, effective February 1, 1999, 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 $20.44, charged by Operator in the community referenced above, effective February 1, 1999, IS REASONABLE. 8. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. 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