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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 ) ) Cablevision of Boston, Inc. ) CUID No. MA0182 (Boston) ) Complaint Regarding ) Cable Programming Services Tier Rates ) and ) Petition for Reconsideration ) ORDER ON RECONSIDERATION and RATE ORDER Adopted: September 3, 1999 Released: September 9, 1999 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the January 1, 1999 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 October 23, 1998, Operator filed a petition for reconsideration of our Prior Order ("Petition") and a petition for stay of our Prior Order pending reconsideration. This Order addresses Operator's Petition, request for stay, and the reasonableness of Operator's January 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. 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 June 21, 1999 against Operator's January 1, 1999 CPST rate increase from $19.45 to $22.48 for its Optimum Tier. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on February 1, 1999. 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 justify their rates on an annual basis using FCC Form 1240 to reflect reasonably 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 our Prior Order, we made adjustments to Operator's FCC Form 1240 for the projected period January 1, 1998 through December 31, 1998. Our revisions reduced Operator's maximum permitted rate ("MPR") for its Metro Tier to $15.63 for the projected period January 1, 1998 through December 31, 1998, and we found Operator's actual CPST rate of $15.91 for its Metro Tier, effective January 1, 1998, to be unreasonable. Our revisions also reduced Operator's MPR for its Optimum Tier to $20.35 for the projected period January 1, 1998 through December 31, 1998. Despite our revisions, we found Operator's actual CPST rate of $19.32 for its Optimum Tier, effective January 1, 1998, to be reasonable. We ordered Operator to pay refunds for its Metro Tier only. 6. In its Petition, Operator argues it is subject to effective competition and exempt from rate regulation and, alternatively, that it should be allowed to offset CPST overcharges with CPST undercharges. We have previously allowed an operator to offset its CPST overcharges with its CPST undercharges within the same time period. Unlike inter-tier offsets between the CPST and the basic service tier ("BST"), which we have rejected, intra-tier offsets between two CPSTs do not require the Commission to review or monitor the BST. In this case, the subscribers to the Optimum Tier have the Metro Tier included in their package and it is appropriate to allow Operator to offset its CPST overcharges for its Metro Tier with the CPST undercharges for its Optimum Tier. Therefore, we will grant Operator's Petition in part, and we will not require Operator to pay refunds based on our Prior Order. Because our determination to allow offsets relieves Operator from its obligation to pay any refunds based on our Prior Order, we decline to address Operator's effective competition argument and we will dismiss Operator's petition for stay as moot. 7. Upon review of Operator's FCC Form 1240 for the projected period January 1, 1999 through December 31, 1999, we find Operator's actual CPST rate of $22.48 for its Optimum tier, effective January 1, 1999, to be reasonable. 8. 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. 9. 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 Cablevision of Boston, Inc., DA 98-1930, 13 FCC Rcd 19713 (1998), IS VACATED TO THE EXTENT INDICATED HEREIN. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's Petition for Stay is DISMISSED AS MOOT. 11. 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 $22.48 for the Optimum Tier, charged by Operator in the community referenced above, effective January 1, 1999, IS REASONABLE. 12. 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 January 1, 1999 CPST rate increase for the Optimum Tier in the community referenced above IS DENIED. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau