PUBLIC NOTICE FEDERAL COMMUNICATIONS COMMISSION 1919 M STREET, N.W. WASHINGTON, D.C. 20554 News media information 202/418-0500 Recorded listing of releases and texts 202/632-0002. DA 95-999 May 2, 1995 CABLE SERVICES BUREAU ANNOUNCES POLICY REGARDING INFLATION ADJUSTMENT ON FORM 393 Under the Commission's rules, cable operators who chose to justify their rates prior to May 15, 1994 using the benchmark methodology were required to use FCC Form 393. Part II, Worksheet 1 of Form 393 includes an adjustment for inflation between September 30, 1992 and the initial date of regulation. The instructions to Form 393 direct that the inflation adjustment be calculated using "the number of whole months from September 30, 1992 to the date you will submit this form." The Commission's rules generally require an operator to file a justification of its cable programming service (CPS) rates within 30 days after it is served with a complaint about those rates, unless the operator has been notified that the complaint was returned by the Commission. 47 C.F.R.  76.956(a). Thus, the latest date through which the inflation adjustment may be calculated is the end of the month preceding the 30th day after service of the earliest accepted complaint. By an order released July 27, 1993, the Commission extended the 30-day deadline for rate justifications in a limited class of cases. 58 Fed. Reg. 41,042 (Aug. 2, 1993). Specifically, in recognition of the tight schedule on which the Commission's rate regulations were adopted and became effective, the Commission extended the filing deadline until November 15, 1993 for complaints that were served on or before October 15, 1993. This extension was merely a procedural extension of time to file the Form 393, not permission to justify rate calculations that gave effect to events occurring after the date of the complaint, and the text of the order granting the extension made clear that the extension would not permit rate increases nor harm consumers. Thus, the extension order did not contemplate an increase in the permissible inflation adjustment; it merely extended the time for submitting a completed Form 393. Nonetheless, it is apparent that some operators interpreted the extension, combined with the Form 393 instruction quoted above, as permitting them to claim an inflation adjustment through October 1993 in all cases. As stated above, this interpretation is incorrect. However, operators could reasonably and in good faith have misunderstood the effect of the extension. Furthermore, in most cases the effect on the permitted rate of calculating the inflation adjustment through October rather than September 1993 will be very small. Therefore the Bureau will accept October 1993 as the ending date of the inflation adjustment for all operators that were required to file a rate justification on November 15, 1993. If the operator's inflation adjustment calculation through October 1993 was otherwise correct and it justified its rates using its inflation calculation, the operator's calculation will be accepted. If the operator made other errors in calculating the inflation adjustment or if it did not justify its rates, the Bureau will recalculate the inflation adjustment through October 1993 using data released by the U.S. Department of Commerce on July 29, 1994. In some past orders the Bureau has not permitted operators that were served with a complaint in September 1993 to calculate the inflation adjustment through October 1993. In such cases, the operator will be permitted to calculate its refund using inflation adjusted through October 1993 when its refund plan is considered. Any affected operator that has already filed a refund plan without raising this issue may amend its refund plan within 30 days of the date of this Public Notice. To the extent that the date through which the inflation adjustment is calculated may affect an operator's permitted rate under Form 1200, that impact will be considered when its Form 1200 filing is reviewed. Consistent with Section 76.922(b)(9) of the Commission's rules and paragraph 94 of the Third Order on Reconsideration, MM Docket Nos. 92-262 and 92-266, FCC 94-40, 9 FCC Rcd 4316 (1994), refunds or rate reductions are not ordered due solely to changes in inflation data between the time the operator completed Form 393 and the date of our analysis. Inflation data is updated in cases where a refund or rate reduction is otherwise necessary, or where an operator incorrectly calculated the inflation adjustment at the time it filed. However, refunds are not ordered where the amount of any refund per subscriber would be de minimis, as is often the case where the operator's only error is in calculating the inflation adjustment. For information regarding this Public Notice: Cable Service Bureau Contact, Eli Johnson at (202) 416-0800; News Media Contact, Morgan Broman at (202) 416-0852.