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.

Report No. CS 95-24         CABLE SERVICES ACTION            November 9, 1995


                   CABLE RATES ADJUSTMENT FOR INFLATION
                        APPLIED TO TRANSITION RATES
                                                                   DA 95-2295

                                     
     The Cable Services Bureau issued Public Notices on March 8, 1995 and July 25, 1995 to
address certain procedures for cable rates adjustments as prescribed by the Commission in the Ninth
Order on Reconsideration in MM Docket No. 92-266 ("Ninth Recon. Order")(FCC 95-43, adopted
February 3, 1995 and released February 6, 1995).  Question No. 2 in the March 8 Public Notice
was intended to provide guidance for the application of inflation to certain benchmark transition
rates for cable services determined in accordance with FCC Form 1200.  That Public Notice,
however, failed to consider inflation that operators received previously in the calculation of their
benchmark rates using the FCC prescribed methodology in the Form 1200.  The Public Notice of
July 25, 1995 was issued to modify Question No. 2 by taking into account the inflation built into
the Form 1200 benchmark formula.

     We stated in the March 8 Public Notice that Form 1200 benchmark rates did not receive any
inflation subsequent to September 30, 1992 and that consequently such rates were eligible to receive
an inflation adjustment up to 5.21% for the period from October 1, 1992 through June 30, 1994.  In
the July 25 Public Notice, however, we corrected that statement and pointed out that the Form 1200
rates were already adjusted by 3% for inflation from October 1, 1992 through September 30, 1993. 
Because the Form 1200 benchmark rates already had 3% inflation applied for the period October 1,
1992 through September 30, 1993, we stated that the Form 1200 benchmark rates were actually
eligible to receive no more than an addition 2.15% inflation adjustment, the inflation rate applicable
for the period from October 1, 1993 through June 30, 1994.  The 2.15% adjustment is subject to
further reduction based on the test set forth in the Ninth Recon. Order and explicated in the Public
Notice of July 25. 

     We understand at this time that in some instances operators applied inflation adjustments to
Form 1200 benchmark rates on the basis of the procedures set forth in the Public Notice of March 8
and put such rates into effect before we issued the correction of July 25.  Rates in such instances
may have been set too high.   Such rates should be corrected to remove any excess inflation applied

for the period October 1, 1992 through June 30, 1994.  To avoid the cost and confusion associated
with excessive rate changes, however, the correction must be reflected on the next filing of FCC
Form 1210 or 1240 filed after the issuance date of this Public Notice, but no later than March 31,
1996 in any event.  

News Media contact:  Morgan Broman (202) 416-0852; Cable Services Bureau contact:  Hugh
Boyle (202) 416-0800.


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