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Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-02-TC-105
Marcus Cable Associates, LP ) CUID No. TN0036 (Newport)
Complaint Regarding Cable )
Programming ) )
Services Tier Rates and )
Petition for Reconsideration
Adopted: July 16, 2002 Released: July 17,
By the Chief, Enforcement Bureau:1
1. In this Order we consider complaints filed against
the rates charged by the above-referenced operator
("Operator")2 for its cable programming services tier
("CPST") in the community referenced above. The Cable
Services Bureau has already issued an Order, DA 95-781,3
which resolved complaints filed against Operator's CPST
rates in effect through May 14, 1994. In its Prior Order,
the Cable Services Bureau stated that its findings "do not
in any way prejudge the reasonableness of the price for CPS
service after May 14, 1994 under our new rate regulations."4
Operator filed a refund plan in response to Order, DA 95-
781, which was rejected by the Cable Services Bureau in
Order, DA 97-21025 ("Prior Order"). Operator filed a
petition for reconsideration ("Petition") of the Prior Order
along with amended refund plans. In this Order, we address
Operator's refund plans as well as the reasonableness of
Operator's CPST rates for the period beginning July 15,
2. Under the provisions of the Communications Act7
that were in effect at the time the referenced complaints
were filed, the Federal Communications Commission
("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 19928
("1992 Cable Act") required the Commission to review CPST
rates upon the filing of a valid complaint by a subscriber
or local franchising authority ("LFA"). The filing of a
complete and timely complaint triggers an obligation upon
the cable operator to file a justification of its CPST
rates.9 The Operator has the burden of demonstrating that
the CPST rates complained about are reasonable.10 If the
Commission finds a rate to be unreasonable, it shall
determine the correct rate and any refund liability.11
3. Operators must use the FCC Form 1200 series to
justify rates for the period beginning May 15, 1994.12
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.13 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.14 Any incurred
cost that is not projected may be accrued with interest and
added to rates at a later time.15
4. Upon review of Operator's FCC Form 1200, we accept
Operator's calculated maximum permitted rate ("MPR") of
$8.05. Because Operator's actual CPST rate of $9.46,
effective July 15, 1994 through September 30, 1994, exceeds
its calculated MPR of $8.05, we find Operator's actual CPST
rate of $9.46, effective July 15, 1994 through September 30,
1994, to be unreasonable. Upon review of Operator's FCC
Form 1210, covering the period April 1, 1994 through
September 30, 1994, we accept Operator's calculated MPR of
$9.14. Because Operator's actual CPST rate of $9.46,
effective October 1, 1994 through May 31, 1996, exceeds its
calculated MPR of $9.14, we find Operator's actual CPST rate
of $9.46, effective October 1, 1994 through May 31, 1996, to
be unreasonable. Upon review of Operator's FCC Form 1240,
for the projected period June 1, 1996 through May 31, 1997,
we find Operator's actual CPST rate of $11.14, effective
June 1, 1996, to be reasonable.16
5. In the Prior Order, the Cable Services Bureau
rejected Operator's proposed refund plan filed in response
to Order, DA 95-781. 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 initial 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").17 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]18 that
cable operators should not balance low BST rates with CPST
rates that exceed the maximum permitted rate for the
tier."19 Therefore, we will not allow Operator to offset
its CPST overcharges with its BST undercharges and we deny
6. Operator filed two amended refund plans with its
Petition. For the reasons stated above, we reject the
refund plan submitted by Operator that includes inter-tier
offsets. Upon review of Operator's refund plan that does
not include inter-tier offsets ("Amended Refund Plan"),20 we
find the refund plan to be acceptable provided Operator's
amends the refund plan to include interest to the date of
payment of refunds.
7. Accordingly, IT IS ORDERED, pursuant to Sections
0.111 and 0.311 of the Commission's rules, 47 C.F.R. §§
0.111 and 0.311, that the CPST rate of $9.46, charged by
Operator in the community referenced above, effective July
15, 1994 through March 31, 1996, IS UNREASONABLE.
8. IT IS FURTHER ORDERED, pursuant to Sections 0.111
and 0.311 of the Commission's rules, 47 C.F.R. §§ 0.111 and
0.311, that the CPST rate of $11.14, charged by Operator in
the community referenced above, effective June 1, 1996, IS
9. IT IS FURTHER ORDERED, pursuant to Section 76.961
of the Commission's rules, 47 C.F.R. § 76.961, that Operator
shall refund to subscribers in the community referenced
above that portion of the amount paid in excess of the
maximum permitted CPST rate of $8.05 per month (plus
franchise fees), plus interest to the date of the refund,
for the period July 15, 1994, through September 30, 1995.
10. IT IS FURTHER ORDERED that Operator shall promptly
determine the overcharges to CPST subscribers for the stated
periods, and shall within 30 days of the release of this
Order, file a report with the Chief, Enforcement Bureau,
stating the cumulative refund amount so 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
11. IT IS FURTHER ORDERED, pursuant to Sections 0.111
and 0.311 of the Commission's rules, 47 C.F.R. §§ 0.111 and
0.311, that the complaints referenced herein against the
CPST rates charged by Operator in the community referenced
above ARE GRANTED.
12. IT IS FURTHER ORDERED, pursuant to Section 1.106
of the Commission's rules, 47 C.F.R. § 1.106, that the
petition for reconsideration filed by Operator is DENIED.
13. IT IS FURTHER ORDERED, that Operator's Amended
Refund Plan IS APPROVED provided operator modifies its
Amended Refund Plan to the extent indicated herein, and IT
IS FURTHER ORDERED, pursuant to Section 76.962 of the
Commission's rules, 47 C.F.R. § 76.962, that Operator
implement its Amended Refund Plan within 60 days of the
release of this Order.
14. IT IS FURTHER ORDERED, pursuant to Section 76.962
of the Commission's rules, 47 C.F.R. § 76.962, that Operator
shall 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 The term "Operator" includes Operator's successors and
predecessors in interest.
3 In the Matter of Sammons Communications, Inc., DA 95-781,
10 FCC Rcd 8278 (CSB 1995).
4 Id. at n. 1.
5 In the Matter of Marcus Cable Associates, LP, DA 97-2102,
13 FCC Rcd 7071 (CSB 1998).
6 The Commission's rules provide for a refund liability
deferral period, if timely requested by the Operator,
beginning May 15, 1994 and ending July 14, 1994, for any
overcharges resulting from Operator's calculation of a new
maximum permitted rate on its FCC Form 1200. See 47 C.F.R.
§ 76.922(b)(6)(ii). Operator elected to defer refund
liability. However, Operator will incur refund liability
from May 15, 1994 through July 14, 1994 for any CPST rates
charged above the FCC Form 393 maximum permitted rate.
Operator's Amended Refund Plan, which we review herein,
includes this time period in its refund calculation for
Order, DA 95-781.
7 Communications Act, Section 623(c), as amended, 47 U.S.C.
§ 543(c) (1996).
8 Pub. L. No. 102-385, 106 Stat. 1460 (1992).
9 See Section 76.956 of the Commission's rules, 47 C.F.R. §
11 See Section 76.957 of the Commission's rules, 47 C.F.R. §
12 See Section 76.922 of the Commission's rules, 47 C.F.R. §
16 Because Operator's refund liability for the period
October 1, 1995 through May 31, 1996 was trued up in a
subsequent FCC Form 1240, which we review herein, Operator
is not required to separately calculate that refund
liability and submit a refund plan for that time period.
17 See In the Matter of Cencom Cable Income Partners II,
L.P., 12 FCC Rcd 7948 (1997).
18 8 FCC Rcd 5631 (1993).
19 Cencom at ¶22 (footnote omitted).
20 Operator calculated a total refund liability of