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CTEC will provide the refunds during the  xVfirst monthly billing cycle beginning 60 days after the effective date of the Resolution. If refunds are not  xpaid by the last day of that billing cycle, CTEC will adjust the refunds to reflect additional interest for the period from the last day of the billing cycle to the date on which the refund is paid.   6. The Resolution will find that CTEC New Jersey and CTEC New York's current actual and  x$maximum permitted rates for its CPST are reasonable as of January 31, 1998. CTEC New Jersey and  xZCTEC New York may increase rates for the CPST after January 31, 1998 in accordance with Commission  xRules. The Resolution allows CTEC New Jersey and CTEC New York to treat its Family Value Package as a new product tier in accordance with the Commission's Rules.  S ( ` 7.` ` In addition to the refunds, CTEC will withdraw all applications for review, petitions for  xreconsideration, petitions for special relief or petitions for stay of any Commission decisions, including  xBureau orders or any other appeals, pleadings or letters before the Commission or Bureau challenging  xrulings by the Bureau concerning CPST rates, including those challenging the Bureau's orders denying  xCTEC eligibility for small system relief. CTEC will not seek treatment as a small system operator so long as it is controlled by its current owners.  S(  IV.DISCUSSION  S(   8. As an initial matter, we find that the Commission has authority to approve the Resolution.  Sz( xBThe Communications Act of 1934 provides the Commission with wide discretion to resolve rate cases. z ' yO:(ԍ Communications Act of 1934, as amended, 47 U.S.C. 151, et seq. ("Communications Act").  x8Section 4(i) of the Communications Act authorizes the Commission to "perform any and all acts . . . not  S*( xinconsistent with [the] Act, as may be necessary in the execution of its functions."? *' yOz (ԍ 47 U.S.C. 154(i).? Section 4(j) provides  x\that the "Commission may conduct its proceedings in such manner as will best conduce to the proper  S( xVdispatch of business and to the ends of justice. . . ."?@' yO#(ԍ 47 U.S.C. 154(j).? Our action in this case is fully consistent with the  xR1992 Cable Act and with Congress' dual objectives of simplifying cable rate regulation and protecting  S( xconsumers.j' {O&(ԍ 47 U.S.C. 521(6); see also 47 U.S.C. 543(b)(2)(A).j We have concluded in other recent proceedings that the Commission has authority to"b ,`(`(88"  x~consider such resolutions and to determine, after appropriate review and consideration of comments, that  S(rates set forth in the resolutions are not unreasonable.(' {O@( xPԍ See Century Communications Corporation, FCC 97393 (released October 31, 1997) ("Century"); Adelphia  {O ( xFCommunications Corp., FCC 97151, 12 FCC Rcd 6344 (1997) ("Adelphia"); TCI Communications, Inc. FCC 96 {O( x2187, 11 FCC Rcd 14696 (1996) ("TCI"); see also Garden State Cablevision, L.P., FCC 96261, 11 FCC Rcd 7327  {O((1996) ("Garden State").  S( ` 9.` ` The Bureau has previously denied CTEC's requests for small system relief under the 1996  S`( xAct and the Small Systems Order.`' {O (ԍ See In the Matter of CTEC Cable System of Michigan, Inc., 11 FCC Rcd 6189 (1996).Ĕ CTEC argued in its appeals and in a petition for special relief that  xit was entitled to claim small system status and either be allowed to justify its rates using FCC Form 1230,  xthe simplified cost of service form, or not be regulated at all. If granted small system relief, CTEC  xwould be entitled to use the FCC Form 1230, which allows a per channel rate of $1.24, a substantially  S( xhigher rate than CTEC is currently allowed under the Commission Rules.{J' {O(ԍ See Section 76.934 of the Commission's Rules, 47 C.F.R. 76.934 (1997). { Because CTEC agreed to  x~withdraw its CTEC Michigan appeals along with its CTEC New Jersey and CTEC New York appeals,  Sr( xin settlement of its CTEC New Jersey and CTEC New York complaints, the Resolution forecloses CTEC from gaining status as a small system and using the higher rate.  S ( ` 10.` ` In addition to denying CTEC New Jersey's request for small system relief, the New  xtJersey Orders found that CTEC's second CPST, its Family Value Pak ("FVP"), was a regulated tier. In  S ( x8its Going Forward OrderZ ' yO&( xԍ Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate  xRegulation, MM Docket Nos. 92266 and 93215, Sixth Order on Reconsideration, Fifth Report and Order, and  {O(Seventh Notice of Proposed Rulemaking, 10 FCC Rcd 1226 (1995) ("Going Forward Order"). the Commission reconsidered its regulatory treatment of a la carte offerings.  xThe Commission determined that such packages are cable programming tiers within the meaning of  x4Section 3(1)(2) of the 1992 Cable Act and therefore are subject to general rate regulation rules. The  xCommission established criteria for the creation of New Product Tiers ("NPTs"), which cannot include  xchannels taken from regulated tiers. The Commission concluded, however, that cable operators may treat  x.existing packages as NPTs, so long as such packages involve only a small number of migrated channels.  xtWhen CTEC created the a la carte tier on the eve of regulation, it moved seven channels from regulated  xtiers. Although CTEC initially moved seven channels, two of those channels were removed from the  x.FVP by April 1, 1994 at the request of the programmers. The Commission has found generally that the  SD( xmovement of six channels or less to an a la carte tier constitutes a small number of channels.D ' {O ( xԍ See In the Matter of Falcon Cable TV, 10 FCC Rcd 998 (1994), (six channels not regulated); In the Matter  {O!( xdof Falcon Holding Group, Inc., 10 FCC Rcd 7267 (1995) (twosix channels not regulated); see also In the Matter  xof Falcon Cable TV, 10 FCC Rcd 1002 (1995) (seven channels regulated); In the Matter of: Multimedia  yO>#( xCablevision, Inc., 10 FCC Rcd 9866 (1995) (Seven channels regulated); In the Matter of: Vision Cable of Salisbury, Inc., 10 FCC Rcd 3914 (1995) (Seven channels regulated). It is just"D,`(`(888"  x`and fair to allow CTEC New Jersey to treat its FVP as a new product tier beginning April 1, 1994. The  S(Resolution will allow CTEC New Jersey to treat its FVP as an NPT under the Going Forward Order.=Z' {O@( x2ԍ Our decision is consistent with a similar determination by the State of New Jersey. See State of New Jersey  xJBoard of Public Utilities, Order Setting Initial Rates, Docket Nos. CR93110457 (August 17, 1994) and CR94060220 (July 13, 1995).=  S( ` 11.` ` The New Jersey Orders also found that CTEC New Jersey was not entitled to offset its  x`CPST overcharges against its basic service tier ("BST") undercharges. The Commission's jurisdiction to  S:( xregulate cable rates is generally limited to the review of CPST rates.:' {O ( xFԍ Communications Act, Section 623(c), as amended, 47 U.S.C. 543(c) (1996). See also 47 C.F.R. 76.922. The Commission addressed this  S( x2issue in Cencom Cable Income Partners ("Cencom").D' {O (ԍ In the Matter of Cencom Cable Income Partners II, L.P., 12 FCC Rcd 7948 (1997). In Cencom, the Commission determined that such  xintertier offsets are "inconsistent with the Commission's conclusion in the [Implementation of Sections  xjof the Consumer Protection and Competition Act of 1992, Rate Regulation, MM Docket 92266, Report  S( xand Order and Further Notice of Proposed Rulemaking@' yO(ԍ 8 FCC Rcd 5631 (1993).@] that cable operators should not balance low BST  St( xtrates with CPST rates that exceed the maximum permitted rate for the tier."Ttf ' {Oz(ԍ Cencom at 22 (footnote omitted).T Although the Commission  SL ( xdisallowed offsets across tiers in Cencom, it distinguished offsets in rate resolutions from offsets in  S& ( xindividual rate proceedings.& ' {O( xԍ Cencom at 21 ("In the limited context of global resolutions of rate complaints for all or a substantial number of a company's cable systems, the Commission has allowed intertier offsets when determining refund liability.") Unlike in this instance, in individual proceedings there are no procedures  xfor soliciting local franchising authority comment on proposed offsets and the resulting rates. In the  S (limited context of this Resolution, we are allowing intertier offsets.9 R ' yO( xԍ Offsets are also permitted between two CPST tiers, provided the tiers have approximately the same subscriber  {O(penetration.  See Century Southwest Cable Television II Los Angeles, 10 FCC Rcd 4335, 4337 19 (1995). 9  S ( ` L12.` ` Upon review of CTEC's rate justifications, the Bureau found that CTEC's maximum  xjpermitted rates for both its BST and CPST were reasonable. CTEC demonstrated that the BST rates it  x\charged in its New Jersey systems were, at times, lower than the maximum rates permitted under the  xVCommission's regulations. In the Resolution, CTEC's CPST overcharges (the potential refund amount)  xare reduced by the BST undercharges. Offsets have been computed on a system basis and only within  xthe period covered by each rate filing and have not been allowed across time periods. These offsets reduce CTEC's refund liability.  SF( ` 13.` ` The Bureau has not previously issued any orders resolving the outstanding complaints in  xthe three CTEC New York communities. The three communities are part of the same system and the C x$TEC New York methodology was similar to that used by CTEC New Jersey. The Resolution will also  S( xallow CTEC New York to treat its FVP as an NPT under the Going Forward Order.  As with CTEC  xNew Jersey, upon review of CTEC's rate justifications, the Bureau found that CTEC's maximum",`(`(88"  x(permitted rates for both its BST and CPST were reasonable. However, the Bureau also found that CTEC  xNew York was overcharging for its CPST while undercharging for its BST. The Bureau computed C x6TEC's refund liability with only a single regulated CPST and offset that liability with the BST undercharges.  S8( ` ~14.` ` Two written comments were received by the Commission, one from a local franchising  xauthority and one from a subscriber. CTEC filed Reply Comments on September 8, 1998. The State  S( xjof New Jersey Board of Public Utilities' Office of Cable Television' yOP( xHԍ The State of New Jersey Board of Public Utilities' Office of Cable Television is the local franchising authority for 31 of the 34 communities included in the Resolution. ("New Jersey") generally supported  xthe Resolution but requested an explanation of how CTEC's current rates could be found to be reasonable  x.even though CTEC was required to pay a refund of $5.00. In its Reply Comments, CTEC responded  xthat the refund liability was the result of an adjustment made by CTEC to a rate justification filing which  xsupported its 1995 basic service tier ("BST") rates, and which were reviewed by New Jersey. The nature  x8of our CPST rate review process requires that we review CPST rates in segments, comparing the actual  xCPST rate charged during a particular period of time against the maximum rate permitted by the  xCommission's Rules which corresponds to that time period. In this instance, as in many other rate review  xLcases, the CPST rate for a later period was justified by the operator's filings, whereas an earlier rate was  xlnot. CTEC's adjustment reduced the BST undercharges which could be used to offset its CPST overcharges for that time period.  S( ` 15.` ` The other comment was received from Anand Shah, a subscriber who complains that the  xsettlement amount of $5.00 is not adequate and would like an explanation of how we arrived at that  xfigure. Upon review of CTEC's rate justifications in accordance with the Commission's Rules, the  xjBureau found that CTEC's maximum permitted rates for both its BST and CPST were reasonable. For  xa period of time, CTEC was charging in excess of its maximum permitted rates for its CPST, but CTEC  xwas able to demonstrate that the BST rates it charged in its New Jersey systems were, at times, lower than  xthe maximum rates permitted under the Commission's regulations. In the Resolution, CTEC's CPST overcharges (the potential refund amount) are reduced by the BST undercharges.  S(   16. The courts have long recognized that regulatory agencies have broad discretion to choose  xamong ratemaking methods and procedures in ratemaking determinations, provided that the resulting rates  SP( xare within a range of reasonableness.&P ' {O( xԍ See Federal Power Comm'n v. Natural Gas Pipeline Co. of America, 315 U.S. 575, 58586 (1942); cf. FERC  {O( xxv. Pennzoil Producing Co., 439 U.S. 508, 517 (1979) (construing ratemaking standard under the Natural Gas Act);  {O( xPermian Basin Area Rate Cases, 390 U.S. 747, 797 (1968) (construing ratemaking standard under the Natural Gas Act and affirming aggregated ratemaking approach). The process of adjudicating each of the rate complaints  xindividually and litigating those rulings through the courts, a process likely to take several years, would  xBnot benefit subscribers, given that the Resolution provides for reasonable rates and refunds immediately.  xAdministrative agencies are not precluded from modifying their approach to particular issues when  xRcircumstances warrant such action. Agencies may depart from prior decisions so long as they have a",`(`(88"  S( xrational basis for doing so and explain their reasoning.$' {Oh( xԍ National Conservative Political Action Comm. v. Federal Election Comm'n, 626 F.2d 953, 959 (D.C. Cir.  xP1980) ("Agencies are under an obligation to follow their own regulations, procedures, and precedents, or provide a  {O( x"rational explanation for their departures"); Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (1970), cert.  {O( xdenied, 403 U.S. 923 (1971) ("An agency's view of what is in the public interest may change . . . . But an agency  xchanging its course must supply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored . . . ." (footnotes omitted)).$ We believe that the refunds required by the  xResolution strike an appropriate balance between maximizing the compensation due subscribers for past overcharges and minimizing delay and uncertainty in the payment of refunds.   l17. To the extent that adoption of the Resolution requires a waiver of any of our rules, we find  x\that such waiver will ensure the expeditious resolution of rate complaints while protecting consumers'  xstatutory interest in CPST rates that are not unreasonable. We recognize that our rules contemplate an  S( xadjudication of each CPST rate complaint pursuant to specific ratemaking standards.YF' {O (ԍ See 47 C.F.R. 76.922, 76.950963.Y We do not see any  xindication that Section 623(c)(1)(B)'s requirement that the Commission establish rate resolution procedures  xby regulation was intended by Congress to preclude the Commission from waiving those rate resolution  xprocedures in appropriate circumstances. Indeed, our rules expressly provide for the waiver of any  xjprovision of our rules for good cause shown. To the extent that we diverge from these rules by adopting  S ( xthis Resolution, we find good cause to waive these rules pursuant to Section 1.3 of our rules,  ' yO( xԍ Section 1.3 of the Commission's Rules provides: "Any provision of the rules may be waived by the Commission on its own motion . . . if good cause therefor is shown." 47 C.F.R 1.3. because  S ( xstrict compliance with our rules would not serve the public interest under the circumstances before us.!\ 0 ' {O( xԍ See Northeast Cellular Telephone Co., L.P. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) ("The FCC may  xexercise its discretion to waive a rule where particular facts would make strict compliance inconsistent with the  {OZ(public interest."); see also, WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969).  xWe find that a waiver furthers the purpose of the rules because the Resolution effectively achieves the  xfobjectives of the 1992 Cable Act by ensuring the expeditious resolution of all pending rate complaints  xregarding the affected systems while protecting consumers from unreasonable CPST rates through refunds.  xWe further observe that the Commission's authority to resolve cases in an analogous manner has been  S0(affirmed in other contexts."0T ' {O$( xjԍ See New York State Dep't of Law v. FCC, 984 F.2d 1209, 1220 (D.C. Cir. 1993) (consent decree settling enforcement action upheld).   18. Because CTEC intends to provide the refunds to affected customers as expeditiously as  xpossible, it may not be possible for CTEC to provide 30 days' notice of the refund as required.  xAccordingly, we believe that on a onetime basis, waiver of advance notification requirements, limited  xstrictly to providing for refunds, are appropriate in this case because prompt implementation will serve  xthe public interest and will allow refunds to be issued immediately. Accordingly, we will grant a onetime  xwaiver of the advance notice provisions of Sections 76.309(c)(3)(i)(B) and 76.964 of the Commission's  S( xjRules,Z#' yO>'(ԍ 47 C.F.R. 76.309(c)(3)(i)(B) and 76.964.Z in order to allow CTEC to implement the Resolution expeditiously. In addition, we believe that ">#,`(`(88"  xin the limited circumstances presented by this Resolution, state and local notice requirements would  S( x\frustrate our effort.l$' {O@(ԍ  See City of New York et al v. FCC, 486 U.S. 57 (1988).l Thus, to facilitate rapid resolution of the complaints, we will preempt any local  x.franchising agreement or any state or local law or regulation that requires CTEC to give 30 days' notice  xof rates and service changes to subscribers, strictly for the purpose of issuing a credit to subscribers. Our  xdecision in this regard, is provided on a onetime basis and only to the extent that CTEC is required to  S8(give advance notice for the purpose of issuing credits to subscribers as provided in the Resolution.%8Z' {O2( xZԍ See Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992,  {O( x`8 FCC Rcd 3652 (1993) (Preempting notice requirements); see also, Implementation of Sections of the Cable  xTelevision Consumer Protection and Competition Act of 1992, 9 FCC Rcd 4119, 4184 n. 182 (1994) (Preempting  xlocal and state requirements where application of the local and state provisions would serve to prevent a system from  yOV (bringing its rates into compliance with the new benchmark rules by the end of the refund deferral period).  S( V.CONCLUSION AND ORDERING CLAUSES  S( ` 19.` ` For the reasons discussed above, we conclude that it is in the public interest to adopt the Resolution.  S ( ` 820.` ` We further conclude that the actual CPST rates in the communities listed in Exhibits 1 and 2 as of January 31, 1998 are not unreasonable as of January 31, 1998.  S ( `  21.` ` ACCORDINGLY, FOR THE REASONS SET FORTH ABOVE, IT IS ORDERED that the Resolution attached to this Order IS ADOPTED.  S0( ` 22.` ` IT IS FURTHER ORDERED that all CPST rate complaints against CTEC in the  xcommunities listed in Exhibits 1 and 2 ARE GRANTED to the extent indicated herein, and DENIED in all other respects.  S( ` \23.` ` IT IS FURTHER ORDERED that all proceedings pending review before the Cable  xServices Bureau and the Commission with respect to rate complaints against the CPST rates of CTEC as referenced herein, ARE RESOLVED TO THE EXTENT INDICATED HEREIN.  S( ` ~24.` ` IT IS FURTHER ORDERED that any local franchising agreement or any state or local  xlaw or regulation that requires CTEC to give more than 30 days' notice of rates and service changes to  xsubscribers, strictly for the purpose of issuing a credit to subscribers in accordance with the Resolution, IS PREEMPTED.  S(( ` Z25.` ` IT IS FURTHER ORDERED that waivers of 47 C.F.R. 76.309(c)(3)(i)(B) and 76.964,  xrequiring 30 days' notice of a rate or service change, strictly for the purpose of issuing credits to subscribers, ARE GRANTED.  S( ` 26.` ` IT IS FURTHER ORDERED that a waiver of 47 C.F.R. 76.922 and 76.95076.963, to the extent individual adjudication of CPST rate complaints is required thereby, IS GRANTED. "8%,`(`(88$"Ԍ S( ` <27.` ` IT IS FURTHER ORDERED that the Cable Services Bureau IS DELEGATED authority to oversee implementation of this Resolution.  S(28.` ` IT IS FURTHER ORDERED that this Order is effective upon adoption.  ` `  ,hhhFEDERAL COMMUNICATIONS COMMISSION ` `  ,hhhMagalie Roman Salas ` `  ,hhhSecretary " %,`(`(88` "  S( 0I. TERMS OF RESOLUTION  S(I. Introduction ă  S`(  ,1.This Resolution finally resolves all cable programming services tier ( CPST) rate complaints  xpending as of January 31, 1998, against ComVideo Systems, Inc. and Home Link Communications of  xZPrinceton, L.P. (together, CTEC New Jersey), CTEC Cable Systems of New York, Inc. ("CTEC New  x$York") and all appeals filed by CTEC of CPST rate complaints pending as of January 31, 1998 against  xzCTEC New Jersey, CTEC New York and C-TEC Cable Systems of Michigan, Inc., Mercom, Inc.,  xLAllegan County Cablevision, River Raisin Cablevision, and Coldwater Cablevision (collectively, CTEC Michigan, and collectively with C-TEC New Jersey and CTEC New York, CTEC).  S ( lII. Background ă  S (  2.Complaints have been filed with the Federal Communications Commission ( Commission)  xpursuant to 47 C.F.R.  76.950, concerning the CPST rates charged by CTEC in the franchise areas listed in Exhibits 1 and 2. Rate justifications were filed in response to such complaints.  S0(  3.The Commissions Cable Services Bureau ( Bureau), under delegated authority, has reviewed  xCTECs rate justifications pursuant to the Cable Television Consumer Protection and Competition Act  xof 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992) ( 1992 Cable Act), and the Commissions cable  xrate regulations. As a result of that review, the Bureau has determined that certain refunds are owed to subscribers.  S@(  |4. CTEC and the Commission hereby resolve all of CTEC's CPST rate cases for the franchise  xareas listed in Exhibits 1 and 2, that were pending as of January 31, 1998, and filed under FCC Forms 393, 1200, 1210 and 1240, under the terms set forth below.  S(  S(III. Definitions ă  SP(  5.As used herein, the following definitions will apply. When used throughout this document, these definitions are capitalized.  S( ` (a)` ` Billing Cycle means the time period during which monthly bills are sent to subscribers, but in no event longer than 31 days.  S`( ` (b)` ` Buyer means a company not affiliated with CTEC Cable Systems of Michigan, Inc.,  xzMercom, Inc., River Raisin Cablevision, Allegan County Cablevision, Coldwater Cablevision, CTEC  xCable Systems of New York, Inc., Home Link Communications of Princeton, L.P. or ComVideo Systems, Inc., under the affiliation standard set forth in Section 76.501 of the Commission Rules.  S"( ` (c)` ` Commission Rules means all Commission rules currently in effect as of January 31,  x1998, as well as all subsequent clarifications, amendments, and additions thereto, including, but not limited  xto, changes initiated by the Commission or changes required by or made pursuant to changes in federal law. "% %,`(`(88(#"Ԍ S( ` B(d)` ` "Current Rates" means the CTEC New Jersey and CTEC New York CPST rates in effect as of January 31, 1998.  S( ` (e)` ` Effective Date means the date on which the Commission adopts the Resolution Order approving this Resolution.  S( ` n(f)` ` Eligible Subscribers means CPST subscribers of record to C-TECs New Jersey or New York cable franchises listed in Exhibits 1 and 2 as of the date bills are issued reflecting Refunds.  S((g)` ` Interest means the Internal Revenue Service rate of interest for tax underpayments.  SH ((h)` ` LFA means the local franchising authority entitled to regulate CPST rates.  S ( ` (i)` ` Maximum Permitted Rates means the maximum rates that may be charged for the CPST under the Commission Rules.  S ((j)` ` Refund means a credit on a subscribers bill.  S0( ` (k)` ` Resolution Order means a final order issued by the Commission regarding the terms of this Resolution.  S( 5IV. Terms  S(  Sh(  J6.CTEC accepts the jurisdiction of the Commission over it and the subject matter of these rate resolutions for purposes of the Resolution Order approving these terms.  S(  7.CTECs pending CPST rate cases for the franchise areas listed in Exhibits 1 and 2 filed under  xFCC Forms 393, 1200, 1210 and 1240 for the period through January 31, 1998, are finally resolved under  xthe terms provided herein, including any Applications for Review, Petitions for Reconsideration, Petitions for Stay or other appeals.  S((  @8.CTEC agrees that the terms contained in this Resolution are incorporated by reference in the  xResolution Order. CTEC and the Commission will each actively defend the Resolution Order against any  xappeal of, or other legal challenge to, the Resolution Order by any third party. CTEC and the Commission will reasonably cooperate in any such defense of these terms.  S`(  9.CTEC agrees that any violation of the Resolution Order approving these terms shall constitute  xa violation of a Commission order, entitling the Commission to exercise any rights and remedies attendant to the enforcement of a Commission order.  S!(  10. These terms are for purposes of settlement only, and do not constitute an admission by CTEC  xzof any violation of, or failure to conform to, the 1992 Cable Act, the Commission Rules, or any other  xapplicable law, rule, or policy. CTEC maintains that it has followed the letter and spirit of the  xCommissions cable rate regulations and the 1992 Cable Act in the rate justification filings, and that its CPST rates generally are within the maximum permitted levels. "% %,`(`(88(#"Ԍ S(  11.The Commission will not institute, on its own motion, any proceedings against CTEC based on  x`the information obtained during consideration of the Resolution. In addition, in the absence of additional  xfacts, any allegations and other circumstances involved in consideration of this Resolution will not be used against CTEC with respect to any future proceeding.  S8(  12.In consideration for the resolution of CTECs CPST rate cases for the franchise areas listed in  xExhibits 1 and 2, pending as of January 31, 1998, CTEC hereby agrees to the following terms, conditions  xzand procedures which will facilitate a fair and expeditious resolution of those matters in a manner that serves the public interest:  Sp( ` (a)` ` CTEC will issue Refunds to Eligible Subscribers in the amount of $5.00 per Eligible  xSubscriber for the New Jersey communities listed in Exhibit 1 and $3.30 per Eligible Subscriber for the  x*New York communities listed in Exhibit 2. Refunds will be reflected as a one-time credit on Eligible Subscribers' bills.  S ( `  (b)` ` CTEC will provide Refunds to Eligible Subscribers during the first monthly Billing Cycle  xbeginning 60 days after the Effective Date (the last day of which Billing Cycle shall be called the Refund  x`Date). If Refunds are not issued by the Refund Date, CTEC will adjust the Refunds to reflect Interest from the Refund Date to the day before the date on which the issuance of Refunds begins.  S( ` (c)` ` The Current Rates and Maximum Permitted Rates for the communities listed in Exhibits  x1 and 2 are deemed reasonable as of January 31, 1998. CTEC New Jersey and CTEC New York's Family Value Package will be treated as a new product tier as defined by the Commission Rules.  S@( ` (d)` ` CTEC New Jersey and CTEC New York may adjust rates for the CPST after January 31, 1998 in accordance with the Commission Rules.  S( ` F(e)` ` CTEC withdraws all Petitions for Reconsideration, Applications for Review, Petitions for  xSpecial Relief, or Petitions for Stay of any Bureau orders regarding the communities listed in Exhibits 1  xand 2 and the CTEC Michigan communities, and any other appeals, pleadings or letters before the  xCommission or the Bureau challenging rulings by the Bureau concerning CPST rates or challenging the  xBureaus orders denying C-TEC eligibility as a small system operator under the Commission Rules and the 1996 Telecommunications Act.  S( ` (f)` ` As of the Effective Date, any Bureau orders which concern CTEC New Jerseys CPST  x8rates through January 31, 1998, are vacated. This Resolution supersedes any such Bureau orders. Any Bureau orders which concern CTEC Michigan's CPST rates are not vacated by this Resolution.  S ( ` (g)` ` The terms of this Resolution will continue to apply to cable systems divested by CTEC  x`through a system sale or trade, except to the extent that the Buyer of a CTEC system qualifies for small  xoperator treatment under the Commissions Rules or the Telecommunications Act of 1996. During the  xtime that the CTEC Michigan communities are controlled by current owners, CTEC shall not seek to  x@qualify for treatment as a small system operator under current Commission Rules or the 1996   Telecommunications Act.   S%( ` n(h)` ` Except as provided in paragraph (j) hereof, these terms may not be terminated or modified  xwithout the mutual written agreement of CTEC and the Commission. The Commissions consent to any"& %,`(`(88#"  xsuch termination or modification shall be demonstrated by an order issued by the Bureau or, at the Commissions option, by the Commission itself.  S( ` ((i)` ` Notwithstanding the terms hereof, CTEC may avail itself of any applicable modifications  S`( xof any law or regulation governing the CPST rates charged in any CTEC franchise listed in Exhibits 1  xand 2, including the adoption by the Commission of any regulation governing rates as applied to the cable  xindustry generally. If C-TEC exercises this election, the terms contained herein shall be superseded upon  xthe effective date of such law or regulation, except that CTEC shall provide Refunds to Eligible  xSubscribers pursuant to the terms of this Resolution. Nothing herein shall restrict the ability of any C xjTEC system to adjust its rates in the event such rates are not regulated for any reason, including changes to the Communications Act of 1934, as amended, or the Commission Rules.  SH (  S (  13.The Resolution Order affirmatively states that any and all waivers of Commission Rules necessary  xto effectuate these terms are deemed to be granted. The Commission will not assert in any proceeding  xthat CTEC's compliance with the terms of the Resolution violates any Commission Rule or order, and,  xin any proceeding before the Commission brought by a third party, a showing by CTEC that it has  xfcomplied with these terms shall constitute a defense to any claim that CTEC's actions in meeting the  xVterms constitute a violation of any applicable Commission Rule or order. Notwithstanding the foregoing,  xnothing in this Resolution should be construed to preempt the authority of a local franchising authority  xto regulate the basic service tier and related equipment rates, consistent with the Commission's regulations  xand orders. This Resolution will not alter the effect of any future Commission order concerning commercial rate issues.  S(   Sh(  &14.If any provision, clause, or part of this Resolution is invalidated, the remainder of this Resolution  xpshall not be affected thereby and shall remain in effect; provided, however, that if such invalidation is  xpmaterial to this Resolution, CTEC and the Commission (or the Bureau) shall attempt in good faith to  x8reconstitute the Resolution in a form that is, to the maximum extent possible, consistent with the original intent of the Resolution.  Sx(  15.Nothing in this Resolution shall be deemed to affect any CTEC rate case other than the CPST  xrate cases resolved by this Resolution in the franchise areas referenced in Exhibits 1 and 2 and the appeals of CTEC Michigan rate cases. " %,`(`(88"  S(/EXHIBIT 1  S(C-TEC NEW JERSEYă  S(FRANCHISE NAME ,hCommunity Unit ID #ppXMPR 1/31/98  CPST Rate 1/31/98  S8(PRINCETON BOROUGHhhhNJ0481ppX $8.18  xx  $7.95  S(PRINCETON TWP ,hhhNJ0482ppX $8.18  xx  $7.95  S(HILLSBOROUGH  ,hhhNJ0463ppX $10.95  xx $10.93  S(LEBANON ` `  ,hhhNJ0491ppX $10.95  xx $10.93  Sp(CLINTON TWP ,hhhNJ0492ppX $10.95  xx $10.93  SH (READINGTON  ,hhhNJ0493ppX $10.95  xx $10.93  S (CLINTON TWP ,hhhNJ0494ppX $10.95  xx $10.93  S (LONG HILL TWP (Passaic)hhhNJ0495ppX $10.95  xx $10.93  S (BRANCHBURG  ,hhhNJ0504ppX $10.95  xx $10.93  S (BERNARDSVILLE  ,hhhNJ0505ppX $10.95  xx $10.93  S (FLEMINGTON  ,hhhNJ0506ppX $10.95  xx $10.93  SX(RARITAN ` `  ,hhhNJ0507ppX $10.95  xx $10.93  S0(CHATHAM` `  ,hhhNJ0509ppX $10.95  xx $10.93  S(FRANKLIN` `  ,hhhNJ0510ppX $10.95  xx $10.93  S(MENDHAM BOROUGHhhhNJ0546ppX $10.95  xx $10.93  S(PEAPACK-GLADSTONEhhhNJ0547ppX $10.95  xx $10.93  S(MENDHAM TWP ,hhhNJ0565ppX $10.95  xx $10.93  Sh(BEDMINSTER  ,hhhNJ0572ppX $10.95  xx $10.93  S@(CHESTER BOROUGHhhhNJ0573ppX $10.95  xx $10.93  S(CHESTER TWP ,hhhNJ0574ppX $10.95  xx $10.93  S(TEWKSBURY ,hhhNJ0575ppX $10.95  xx $10.93  S(MONTGOMERY ,hhhNJ0576ppX $10.95  xx $10.93  S(ROCKY HILL` `  ,hhhNJ0577ppX $10.95  xx $10.93  Sx(HARDING ` `  ,hhhNJ0583ppX $10.95  xx $10.93  SP(EAST AMWELL  ,hhhNJ0586ppX $10.95  xx $10.93  S((FRANKLIN ` `  ,hhhNJ0591ppX $10.95  xx $10.93  S(UNION TWP` `  ,hhhNJ0597ppX $10.95  xx $10.93  S(MILLSTONE ` `  ,hhhNJ0601ppX $10.95  xx $10.93  S(BETHLEHEM TWP ,hhhNJ0602ppX $10.95  xx $10.93  S(DELAWARE  ,hhhNJ0611ppX $10.95  xx $10.93  S`(FAR HILLS ` `  ,hhhNJ0616ppX $10.95  xx $10.93  S (" %,`(`(88x" /EXHIBIT 2  S(C-TEC NEW YORKă  S(FRANCHISE NAME ,hCommunity Unit ID #ppXMPR 1/31/98  CPST Rate 1/31/98  S(TOWN OF PAWLINGhhhNY 1054ppX $12.66  xx $12.65  S(TOWN OF CARMEL (Mahopac)hhNY 1099ppX $12.66  xx $12.65  S(TOWN OF BEEKMANhhhNY 1454ppX $12.66  xx $12.65 "%,`(`(88"  S(  Dissenting Statement of Commissioner Harold FurchtgottRoth  xIn the Matter of CTEC Corporation, Final Resolution of Cable Programming Service Rate  S8(Complaints   0For the reasons that follow, I must respectfully dissent from this Order adopting a "resolution" of cable programming service tier ("CPST") rate complaints against CTEC Corporation.  Sp(  First, I do not believe that the Commission possesses statutory authority to resolve CPST rate  x~complaints by way of this sort of negotiated global settlement. It is true, as the Commission has observed  x`in similar items, that section 4(i) of the Communications Act states that the Commission may "issue such  x\orders, not inconsistent with this Act, as may be necessary in the execution of its functions," and that  xsection 4(j) authorizes the Commission to "conduct its proceedings in such a manner as will best conduce to the proper dispatch of business and to the ends of justice." 47 U.S.C. sections 154(i)(j).   But the Communications Act includes another provision one that, unlike sections 4(i) and (j),  S2( xpspeaks directly to the proper processing of CPST complaints. Unfortunately, the Commission fails to  S ( xtfollow the dictates of this provision, which mandates that "the Commission shall, by regulation, establish  S( x. . . fair and expeditious procedures for the . . . resolution of complaints from any franchising authority  x. . . alleging that a rate for cable programming" is unreasonable. 47 U.S.C. section 623(c)(1)(B)(emphasis  xadded). The simple fact, however, is that there are no Commission regulations that even arguably provide  x2procedures for a negotiated settlement such as this; the requirements of this section therefore have not been met.  S(  Conversely, the regulations that the Commission has adopted to govern procedures for rate  xVcomplaints, which, like the statute itself, generally contemplate individualized adjudication of complaints,  S( xsee, e.g., id. section 623(c)(1)(A); 47 CFR section 76.957,%X' yO( xԍWhere the regulations permit collective treatment of complaints, they allow only consolidated responses by the  yO( xcable operator, and only when the complaints at issue involve "the identical rate or rate increase." 47 CFR section 76.956(d). Here, of course, many of the complaints arise out of different franchise areas. have clearly not been observed here. The  xCommission's noncompliance with these regulations raises its own separate set of potential legal problems.  S\( xSee generally Service v. Dulles, 354 U.S.363, 388 (1957) (administrative agencies must follow their own regulations).   FIn sum, given the existence of section 623, I simply do not understand how the use of this  S( xmechanism could comport with the Communications Act. Absent conformity with duly promulgated regulations providing for the use of this procedure, this resolution violates section 623.   The existence of section 623 also renders inapposite the caselaw often cited by the Commission  xin support of its position that these global settlements are proper. To be sure, courts have held that  xagencies generally possess broad discretion to choose between administrative processes. But none of those  xcases involve, as here, an agency's failure to conform with statutorilyprescribed limitations on that  S"( x\discretion. Cf. Heckler v. Chaney, 470 U.S. 821, 833 (1985) (presumption against unreviewability of  xagency nonenforcement decisions rebutted where "the substantive statute has provided guidelines for the"#,`(`(88 "  xagency to follow"). Indeed, the decisions typically cited by the Commission are expressly premised on the  S( xlack of any statutory language precluding the agency's choice of processes. See, e.g., In re Permian Rate  S( xBasin Area Rate Cases, 390 U.S. 747, 797 (1968) (stating, in affirming the Federal Power Commission's  xtwoprice rate structure for regulation of gas prices, that "[w]e find no objection under the Natural Gas  x:Act to this dual arrangement" and that "[n]othing in the purposes or history of the Act forbids the Commission to require different prices for different sales").   I understand the argument from utility for this sort of creative processing mechanism. If the  xCommission believes that rate "resolutions" are procedurally necessary, however, section 623 requires that  xwe establish them by regulation, with notice and comment. Pragmatic considerations are undeniably  x~important, but they cannot overcome the clear letter of the law. Our paramount duty is to implement the  SL ( xlaw as written by Congress and enacted by the President not based on our own conceptions of the most  S$ ( xefficient and effective way to proceed. See Chevron v. Natural Resources Defense Council, 467 U.S.  x 837, 84243 (1985) (where statutory language is clear, "that is the end of the matter," for the agency "must  S (give effect to the unambiguously expressed intent of Congress").  ' yO>( xԍA "good cause" waiver of our regulations cannot cure this problem. Although the Commission can waive  xcompliance with its rules, it cannot waive compliance with section 623. Pursuant to that statutory provision, any  xprocedures employed by the Commission as an alternative to adjudication under our rules, even if those rules are waived, must still be set out by regulation.   S (  VSecond, I do not believe that this Order satisfies the Commission's obligation under the  S`( x8Administrative Procedure Act to engage in reasoned decisionmaking. Cf. Koch Gateway Pipeline Co. v.  S:( xFERC, 136 F.3d 810, 814 (D.C. Cir. 1998)("reasoned decisionmaking" requires "a process demonstrating  S( xthe connection between the facts found and the choice made"). In this Order, there is no explanation as  xto how the Commission arrived at the refund amounts that it today mandates. There is no suggestion that  S( xany of the mandatory factors set out in the statute, see 47 USC section 623(c)(2)(A)(F), or the objective  S( xcriteria in our regulations, see 47 CFR section 76.922, for measuring the reasonableness of rates were  xeither considered or applied. Why do New York subscribers receive a refund of $3.30, whereas New  xJersey subscribers receive $5.00? Why do subscribers within a State, but in different franchise areas, receive an identical refund? Nothing in the Order accounts for the choice of the relevant dollar figures.   bRather, the Order simply asserts that certain rates were in excess of maximum permitted rates but  S( x4that the overcharges were offset by other, lower rates.' yO(ԍSpecifically, the Order provides: X(#   XUpon review of CTEC's rate justifications, the Bureau found that CTEC's maximum permitted rates for   both its BST and CPST were reasonable. CTEC demonstrated that the BST rates it charged in its New   Jersey systems were, at times, lower than the maximum rates permitted under the Commission's regulations.   ^In the Resolution, CTEC's CPST overcharges (the potential refund amount) are reduced by the BST   undercharges. Offsets have been computed on a system basis and only within the period covered by each rate filing and have not been allowed across time periods. These offsets reduce CTEC's refund liability. (#  {O%( xSupra at para. 12; see also id. at para. 15 (repeating the same in response to subscriber comment requesting explanation of how Commission arrived at $5.00 figure). This is not an explanation, just a conclusory  S( xstatement. The Order provides no explanation of the findings upon which the conclusion is supposedly  xtbased:why the maximum permitted rates were reasonable under the Commission's rules; the amount of"b,`(`(88"  xLthe overcharges (i.e., the "potential refund amount"); the period of time during which the overcharges  xoccurred; the amount of the basic service tier undercharges; the period of time during which the  S( xundercharges occurred; or the difference between the over and undercharges. The Order also states that  S( x~offsets were computed on a system basis. But there is no discussion of what the offsets for each system  xare and why, notwithstanding the asserted systembysystem computation, the refunds are uniform  S<( xthroughout States. In short, this Order does not provide a sufficiently reasoned or detailed explanation of the rate methodology employed by the Commission.   nThis lack of explanation as to methodology, as well as the uniformity of the refunds across  xfranchise areas, causes me to suspect that the number at which the Commission and the cable operator  xhave arrived has little do with actual rate analysis but more to do with simple horsetrading. And due to  xthis lack of explanation of the methodology or factors employed to calculate the refund, there is no way  xfor the local franchise authority or the subscriber who requested an explanation of the basis for the refunds  x$to know whether they have been given a fair deal or even what the terms of that deal are, much less for a court to review the rationality of the refund determination.  S (  DThird, I am deeply concerned that the actual complainants were not party to the negotiations that  xproduced this "resolution." As I have made clear in other contexts, I believe that it is most unseemly, if  S8( xtnot illegal, when regulated entities and regulators go behind closed doors to hammer out settlements. See,  S( xe.g., Third Order on Reconsideration, Revision of Universal Service Collection Amounts for 1998, FCC  xNo. 97411 (Dec. 16, 1997). I realize that the complainants are now being given a chance to comment  xon the final agreement reached by the Commission and the cable company, but this participation comes  xat the eleventh hour, after the essential terms of the resolution have already been finalized as between the company and the Commission.   rIt is true that the local franchising authorities and other complainants were not deprived of any  xparticipation they would have been afforded in a traditional cable rate adjudication. But that is not the  xHpoint: under a traditional proceeding, municipalities may not have been able to participate beyond the  S( xpoint of submitting their complaint, but neither would the cable operator have been able to participate  S( xbeyond the point of submitting their response. The problem is not that the complainants did not get  S`( xadditional participation per se but that the cable operator was afforded greater participation rights than they  S:( xwere. Whether or not this amounts to a violation of our ex parte rules, a process in which the heart of the  xnegotiations are conducted without the participation of the complainants themselves is just not a fair process.    :Finally, in the context of these rate resolutions, the Commission has often purported to bind even  xthose complaining parties who vigorously object to the terms of the resolution. It is a fundamental,  x$however, that settlements require the consent, whether on an optin or optout basis, of all the parties in  x~interest. If, in response to this order, franchising authorities or other complainants object to its terms and  xconditions, I have difficulty seeing how, as a matter of black letter settlement law, they could be bound by this "resolution."   I appreciate that these "resolutions" are efficient in that they dispose of large numbers of  xcomplaints in one fell swoop. The Commission saves itself a lot of timeconsuming work, and the cable  xHoperator saves itself a lot of regulatory headaches and uncertainty. But it is the municipalities and the  S &( x ratepayers they represent, who were not a party to the negotiations that produced this resolution, that seem  xto be getting the short end of this regulatory stick. However convenient global rate resolutions might be"&,`(`(88#"  xfor the Commission and for cable companies, they do not appear to be within the bounds of governing  S( xlaw. The policies of "finality" and "stability"C' {O@(čId. at para. 1.C cannot overcome the provisions of the Communications Act,  xBblackletter contract law, or the "reasoned decisionmaking" requirement of the Administrative Procedure Act. I therefore cannot sanction the use of this procedure or the resultant Order.  S8(` `  ,hhh***    |In closing, I observe that the administrative burdens that drove the Commission to employ this  xcreative but unlawful method of resolving consumer complaints are the sorry and inevitable byproduct  xof rate regulation itself. The better method for avoiding the administrative disaster that would be  xXoccasioned by individualized adjudication of these backlogged complaints is simply to abolish rate  xregulation. That is, in part, precisely what Congress wisely recognized when it mandated that CPST regulation cease after March 31, 1999. Fortunately, that time has now come.