Click here for Adobe Acrobat version
Click here for Microsoft Word version
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-02-
) CUID No. CA0248
Falcon Cablevision )
Petition for Reconsideration )
ORDER ON RECONSIDERATION
Adopted: July 16, 2002
Released: July 17, 2002
By the Chief, Enforcement Bureau:1
1. In this Order we consider a petition for
reconsideration ("Petition") of Order, DA 98-12212 ("Prior
Order"), filed with the Federal Communications Commission
("Commission") by the above-referenced operator
("Operator").3 The Prior Order resolved a complaint against
Operator's October 1, 1997 rate increase for its cable
programming services tier ("CPST") in the community
referenced above. In this Order, we deny Operator's Petition
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 justify quarterly rate increases based
on the addition and deletion of channels, changes in certain
external costs and inflation, by filing FCC Form 1210.11
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 response to the referenced complaint, Operator
filed its rate justification as an unregulated operator
pursuant the Thirteenth Reconsideration Order.14 In the
Thirteenth Reconsideration Order, the Commission decided to
end regulatory review of an operator's entire rate structure
if no prior complaints had been filed against the operator's
CPST rates. An operator may file with the Commission as an
unregulated operator using only an FCC Form 1240 to justify
its current CPST rate increase, rather than filing an FCC
Form 1200 and updating that form. In accordance with the
FCC Form 1240 Instructions the operator should enter, on
Line A1 (Current Maximum Permitted Rate) of the FCC Form
1240, the rate it was charging prior to the rate increase
that triggered the complaint.15
5. In its Petition, Operator asserts that, due to an
error it made when calculating its maximum permitted rate
("MPR") for an earlier time period, the actual rate entered
on Line A1 should have been higher. Operator argues that we
should allow Operator to increase its rate to account for
this earlier omission. We disagree. The purpose of ending
regulatory review of an operator's entire rate structure was
to reduce the regulatory burden on the operator. Operator
took advantage of this methodology to avoid the burden of
having the Commission review its entire rate structure
beginning with its initial FCC Form 1200 rates. We cannot
assume that the actual CPST rate that Operator entered as
the starting rate on its FCC Form 1240 was correctly
calculated using the FCC Form 1200 as a starting point with
the exception of Operator's one claimed error. Had the
Cable Services Bureau reviewed Operator's entire rate
structure, Operator might have qualified for an adjustment
increasing its MPR. On the other hand, Operator might have
suffered an additional CPST rate reduction based on that
review. Operator cannot pick and choose pieces of alternate
rate methodologies. If Operator chooses the advantages of a
particular methodology over another, it must also accept any
concomitant consequences. Therefore, we deny Operator's
6. Because Operator never submitted a refund plan in
response to the Prior Order, we calculate Operator's refund
liability as follows: For the period from October 3, 1997
(the date the first valid complaint was filed with the LFA)
through September 30, 1998, we calculate an overcharge of
$0.96 per month per subscriber. Operator's actual CPST rate
for this period was $8.41 and its MPR was $7.45. Our total
calculation, including five percent franchise fees plus
interest on the overcharges and franchise fees through July
31, 2002, equals $16,760.65. 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.
7. 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 IS DENIED.
8. 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 $16,760.65, plus any additional interest that
accrues between July 31, 2002 and the date of refund, within
60 days of the release of this Order.
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 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.
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 98-1221, 13
FCC Rcd 17174 (CSB 1998).
3 The term "Operator" includes Operator's predecessors and
successors 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 See Implementation of Sections of the Cable Television
Consumer Protection and Competition Act of 1992: Rate
Regulation, Thirteenth Order on Reconsideration, MM Docket
No. 92-266, 11 FCC Rcd 388 (1996).
15 FCC Form 1240 Instructions at p. 12 (July 1996).