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*****************************************************************Before the
               Federal Communications Commission
                     Washington, D.C. 20554



In the Matter of

Maryland Cable Partners, L.P.

v.

City of Bowie, Maryland

Application for Review Regarding a
Rate Order of the City of Bowie, Maryland
CUID No. MD0200


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CSB-A-0404






                        ORDER ON REVIEW

     Adopted:  June 15, 2000            Released:  June 23, 2000

By the Commission:

     I.   introduction
1.     The City of Bowie, Maryland ("Bowie") filed an Application for Review pursuant to Section
1.115 of the Commission's rules of the Memorandum Opinion and Order released March 18, 1998
("Bureau Order").  The Bureau Order reversed and remanded the City's local rate order because it
improperly applied statutory income tax rates to the cable operator's permitted rate of return.  More
particularly, the rate order refused to allow the cable operator to adjust its rate of return by "grossing up" for
income taxes, on the grounds that the rate of return should be adjusted only to account for taxes actually
paid. The cable operator filed an opposition to the application, and the City filed a reply.
     II.  discussion and analysis
3.     The facts, applicable law, arguments of the parties, and a detailed analysis of those matters are
set forth in the Bureau Order and need not be repeated here.  We find the analysis in the Bureau Order to
be fully consistent with this Commission's determination that cable operators should be able to recover
income taxes from subscribers by adjusting their permitted rate of return through a "grossing up"
calculation. The findings and conclusions of the Bureau Order that the City incorrectly demanded that the
cable operator calculate its permitted rate of return using actual tax experience is fully supported by
substantial evidence of record and fully consistent with precedent cited therein. Accordingly, we affirm the
Bureau Order's reversal and remand of the City's local rate order.
4.     To the extent that the City's appeal amounts to an attack on the Commission's determinations
in the Cost Order that cable operators should be able to recover income taxes from subscribers by adjusting
their permitted rate of return, that attack is more appropriately presented in a petition for rule making. 
Moreover, the City's appeal presents no facts or argument in support of the request to overrule the Bureau
Order that has not already been considered therein.
     V.   ordering clauses
6.     Accordingly, IT IS ORDERED that the Application for Review filed in the captioned matter
by the City of Bowie, Maryland IS DENIED.

                         FEDERAL COMMUNICATIONS COMMISSION

                         Magalie Roman Salas
                         Secretary