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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 ) ) Prime Communications d/b/a ) CUID No. VA0108 (Arlington) Cable TV Arlington ) ) Complaints Regarding ) Cable Programming Services Tier Rates ) and ) Petition for Reconsideration ) ORDER ON RECONSIDERATION AND RATE ORDER Adopted: June 30, 1999 Released: July 6, 1999 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a petition for reconsideration ("Petition") of our Order, DA 95-959 ("Prior Order"), filed with the Federal Communications Commission ("Commission") by the above-referenced operator ("Operator") on June 1, 1995. Our Prior Order resolved all pending complaints against Operator's CPST rates in the above-referenced community through May 14, 1994, and found Operator's cable programming services tier ("CPST") rates to be unreasonable. On June 23, 1995, we granted Operator's petition for stay of our Prior Order. In our Prior Order, we stated that our findings "do not in any way prejudge the reasonableness of the price for CPS service after May 14, 1994 under our new rate regulations." In this Order we grant Operator's Petition, vacate our Prior Order and our stay and address the reasonableness of Operator's CPST rates in effect after May 14, 1994. 2. Under the Communications Act, the 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 Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), and our rules in effect at the time the complaints were filed, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation upon the cable operator to file a justification of its CPST rates. If the Commission finds the 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 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. In its Petition, Operator argues that at the time of the first valid complaint the cable system was owned by a limited partnership. Operator acknowledges that it may not have made this point clear in its filings. In our Prior Order, we treated Operator as a corporation and recalculated Operator's income tax entries. Upon review of Operator's Petition, we agree that Operator's tax entries should not have been based on its status as a corporation. Therefore, we will grant Operator's Petition. In light of our decision, our review of Operator's FCC Form 393 reveals that Operator's calculated maximum permitted rate ("MPR") of $13.83 is reasonable. However, Operator's actual CPST rate, effective October 25, 1993 through May 14, 1994, was $15.98, and we find that rate to be unreasonable. In its Petition, Operator states that it refunded to subscribers, retroactive to September 1, 1993, the difference between its calculated MPR of $13.83 and its actual rate of $15.98, with interest. Upon review, we find that Operator has correctly calculated and paid its refund liability and therefore we will not order Operator to pay any additional refunds for this period. 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 adjust their rates on an annual basis using FCC Form 1240. 5. Upon review of Operator's FCC Form 1200, we find Operator's calculated MPR of $13.11 to be reasonable. The Commission's rules provide for a refund liability deferral period, if timely requested by Operator, beginning May 15, 1994 and ending July 14, 1994, for any overcharges resulting from Operator's calculation of a new MPR on FCC Form 1200. Operator elected to defer refund liability pursuant to the Commission's rules. However, Operator will incur refund liability from May 15, 1994 through July 14, 1994 for any CPST rates charged above the FCC Form 393 MPR approved by the Commission. As noted above, we found that Operator had justified an MPR of $13.83. Because Operator's actual CPST rate of $15.98, effective May 15, 1994 through June 30, 1994, exceeds its MPR, we find Operator's actual CPST rate of $15.98, effective May 15, 1994 through June 30, 1994, to be unreasonable. However, Operator included this period in its refund to subscribers noted above. Therefore, we will not order Operator to pay any additional refunds for this period. We find Operator's actual CPST rate of $13.11, effective July 1, 1994 through December 31, 1994, to be reasonable. 6. Upon review of Operator's FCC Form 1210s covering the period from April 1, 1994 through September 30, 1995, we find Operator's actual CPST rates of $13.67, effective January 1, 1995 through January 31, 1995, $13.94, effective February 1, 1995 through October 31, 1995 and $14.22, effective November 1, 1995, 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. 8. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. 0.321, that In the Matter of SBC Media Ventures, DA 95-959, 10 FCC Rcd 9321 (1995) IS VACATED. 9. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. 0.321, that the stay granted to Operator in the Matter of Petitions for Stay, DA 95-1382, 10 FCC Rcd 12279 (1995) IS VACATED. 10. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that the CPST rate of $15.98, charged by Operator in the community referenced above, effective October 25, 1993 through June 30, 1994, IS UNREASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that the CPST rates, charged by Operator in the community referenced above, effective July 1, 1994 through October 31, 1995, ARE REASONABLE. 12. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that the CPST rate of $14.22, charged by Operator in the community referenced above, effective November 1, 1995, IS REASONABLE. 13. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that Operator's implemented refund plan IS ACCEPTED. 14. IT IS FURTHER ORDERED pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. 0.321, that the complaints filed against the CPST rates charged by Operator in the community referenced above, effective October 25, 1993 through June 30, 1994, ARE GRANTED. 15. IT IS FURTHER ORDERED pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. 0.321, that the complaints filed against the CPST rates charged by Operator in the community referenced above, effective July 1, 1994, ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau