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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-02-TC-026
Marcus Cable Associates, LP )
) CUID No. TX0647 (Benbrook)
Petition for Reconsideration )
and Refund Plan )
Adopted: June 14, 2002 Released:
June 17, 2002
By the Chief, Enforcement Bureau:1
1. In this Order we consider a petition for
reconsideration ("Petition") of Order, DA 98-4222 ("Prior
Order"), concerning the rates charged by the above-referenced
operator ("Operator")3 for its cable programming services tier
("CPST") in the community referenced above. On April 3, 1998,
Operator filed a petition for reconsideration of our Prior Order
as well as an amended refund plan ("1998 Refund Plan"). In this
Order we deny the Petition, reject Operator's 1998 Refund Plan
and calculate Operator's refund liability.
2. Under the provisions of the Communications Act4 that
were in effect at the time the complaints were filed, the
Commission is authorized to review the CPST rates of cable
systems not subject to effective competition to ensure that rates
charged are not unreasonable. The Cable Television Consumer
Protection and Competition Act of 1992 ("1992 Cable Act")5 and
the Commission's rules required the Commission to review CPST
rates upon the filing of a valid complaint by a subscriber or
local franchising authority ("LFA"). The Telecommunications Act
of 1996 ("1996 Act"),6 and the Commission's rules implementing
the legislation ("Interim Rules"),7 require that a complaint
against the CPST rate be filed with the Commission by an LFA that
has received more than one subscriber complaint. The filing of a
valid complaint triggers an obligation upon the cable operator to
file a justification of its CPST rates.8 If the Commission finds
the rate to be unreasonable, it shall determine the correct rate
and any refund liability.9
3. Operators must use the FCC Form 1200 series to justify
rates for the period beginning May 15, 1994.10 Cable operators
may file an FCC Form 1210 to justify quarterly rate increases
based on the addition and deletion of channels, changes in
certain external costs and inflation.11 Operators may justify
their rates on an annual basis using FCC Form 1240 to reflect
reasonably certain and quantifiable changes in external costs,
inflation, and the number of regulated channels that are
projected for the twelve months following the rate change.12 Any
incurred cost that is not projected may be accrued with interest
and added to rates at a later time.13
4. In the Prior Order, the Cable Services Bureau rejected
Operator's proposed refund plan ("1995 Refund Plan"), filed in
response to Order, DA 95-30714 and concluded that Operator's CPST
rates for the period beginning May 15, 1994 were unreasonable. In
its Petition, Operator argues that it should have been allowed to
raise the issue of inter-tier offsets for the first time when it
filed its 1995 Refund Plan. Because we reject Operator's request
for offsets on substantive grounds, we find the procedural
argument to be moot and decline to address it. In its Petition,
Operator also argues that it should be permitted to offset its
past CPST overcharges with its past basic service tier ("BST")
undercharges. The Commission has addressed the issue of inter-
tier offsets in Cencom Cable Income Partners ("Cencom").15 In
Cencom, the Commission determined that such inter-tier offsets
are "inconsistent with the Commission's conclusion in the
[Implementation of Sections of the Cable Television Consumer
Protection and Competition Act of 1992, Rate Regulation, MM
Docket 92-266, Report and Order and Further Notice of Proposed
Rulemaking]16 that cable operators should not balance low BST
rates with CPST rates that exceed the maximum permitted rate for
the tier."17 Therefore, we will not allow Operator to offset its
CPST overcharges with its BST undercharges and we will deny
Operator's Petition on these grounds.
5. In its Petition, Operator also requests that we allow
Operator to make adjustments to its 1996 and 1997 FCC Form 1240s
to take advantage of an extended true-up period in its initial
1996 FCC Form 1240 filing. Operator argues that it is entitled to
make additional favorable adjustments to its filings because the
Cable Services Bureau made corrections to the filings that
reduced Operator's maximum permitted rate. We disagree. Once an
operator has filed FCC Forms and supporting documentation with
the Commission, which the operator has certified upon filing to
be true and accurate, we are entitled to act upon that
information.18 Moreover, once an order has been released
concerning those FCC Forms, we will not ordinarily allow an
operator to amend those FCC Forms on appeal with information that
an operator should have submitted in the original certification.
We therefore deny Operator's request for an adjustment to the
1996 Form 1240.
6. In addition, Operator requests that we allow Operator
to offset its CPST overcharges with its CPST undercharges from a
later time period. Operator requests that we allow intra-tier
offsets across time periods when there is only one CPST. This
would require subscribers to pay for undercharges that did not
necessarily benefit them. Cross-period offsets could allow an
operator to market a service by undercharging and then pass on
that cost to a subsequent group of subscribers. Our mandate is
to review an operator's actual CPST rates. In doing so, we ensure
that an operator has correctly calculated, and is not charging
above, its maximum permitted rate ("MPR"). We approve an
operator's actual CPST rate if it is equal to or lower than the
MPR as of the effective date of the MPR. If an operator chooses
to charge less than its calculated MPR at one point in time, it
cannot make up the difference at a different time by charging in
excess of its calculated MPR. Operator's refund plan would
require us to approve Operator's acknowledged overcharging of its
CPST subscribers, which we cannot do. Therefore, we will not
allow Operator to offset its CPST overcharges with CPST
undercharges from a different time period.
7. Our review of Operator's 1998 Refund Plan19 reveals that
the 1998 Refund Plan does not fulfill the requirements of the
Refund Order. Operator did not calculate its 1998 Refund Plan in
accordance with the Prior Order.20 Therefore, we calculated
Operator's refund liability as follows: For the period from
January 21, 1994 through July 14, 1994, we calculated an
overcharge of $0.15 per month per subscriber; for the period from
July 15, 1994 through April 5, 1995, we calculated an overcharge
of $0.26 per month per subscriber; for the period from April 6,
1995 through June 30, 1995, we calculated an overcharge of $1.45
per month per subscriber; and for the month of May 1997, we
calculated an overcharge of $0.25 per month per subscriber. Our
total calculation, including franchise fees plus interest on the
overcharges and franchise fees through March 31, 2002 equals
$49,763.16. We order Operator to refund this amount, plus any
additional interest accrued to the date of refund, to its CPST
subscribers within 60 days of the release of this Order.
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 of Marcus Cable Associates, DA 98-
422, 13 FCC Rcd 10530 (1998) IS DENIED.
9. IT IS FURTHER ORDERED, pursuant to Sections 0.111,
0.311 and 76.962 of the Commission's rules, 47 C.F.R. §§ 0.111,
0.311 and §76.962, that Operator's Refund Plan IS NOT ACCEPTED.
10.IT IS FURTHER ORDERED, pursuant to Sections 0.111, 0.311
and 76.962 of the Commission's rules, 47 C.F.R. §§ 0.111, 0.311
and §76.962, that Operator shall refund to subscribers in the
franchise area referenced above the total amount of $49,763.16,
plus interest accruing from April 1, 2002 to the date of refund,
within 60 days of the release of this Order.
11.IT IS FURTHER ORDERED, pursuant to Sections 0.111, 0.311
and 76.962 of the Commission's rules, 47 C.F.R. §§ 0.111, 0.311
and §76.962, that Operator file a certificate of compliance with
the Chief, Enforcement Bureau, within 90 days of the release of
this Order certifying its compliance with this Order.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 Effective March 25, 2002, the Commission transferred
responsibility for resolving cable programming services tier rate
complaints from the former Cable Services Bureau to the
Enforcement Bureau. See Establishment of the Media Bureau, the
Wireline Competition Bureau and the Consumer and Governmental
Affairs Bureau, Reorganization of the International Bureau and
Other Organizational Changes, FCC 02-10, 17 FCC Rcd 4672 (2002).
2 In the Matter of Marcus Cable Associates, DA 98-422, 13 FCC Rcd
10530 (CSB 1998).
3 The term "Operator" includes Operator's successors and
predecessors in interest.
4 47 U.S.C. §543(c) (1996).
5 Pub. L. No. 102-385, 106 Stat. 1460 (1992).
6 Pub. L. No. 104-104, 110 Stat. 56 (1996).
7 See Implementation of Cable Act Reform Provisions of the
Telecommunications Act of 1996, 11 FCC Rcd 5937 1996).
8 See Section 76.956 of the Commission's rules, 47 C.F.R.
9 See Section 76.957 of the Commission's rules, 47 C.F.R.
10 See Section 76.922 of the Commission's rules, 47 C.F.R. §
14 In the Matter of Sammons Communications, Inc., DA 95-307, 10
FCC Rcd 3824 (CSB 1995).
15 See In the Matter of Cencom Cable Income Partners II, L.P.,
12 FCC Rcd 7948 (1997).
16 8 FCC Rcd 5631 (1993).
17 Cencom at ¶22 (footnote omitted).
18 See In the Matter of Time Warner Cable, 13 FCC Rcd 7336
19 Operator calculated a total refund liability of $41,064.00.
20 The Prior Order required Operator to determine the overcharges
to cable programming service tier ("CPST") subscribers for the
period stated in the Refund Order and file a report with the
Chief, Cable Services Bureau, stating the cumulative refund
amount determined (including franchise fees and interest),
describing the calculation thereof, and describing its plan to
implement the refund within 60 days of Commission approval of the