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-TC-053
) CUID No. CA1441 (Montrose)
Marcus Cable Associates, LP )
Petition for Reconsideration )
ORDER ON RECONSIDERATION
Adopted: August 6, 2002 Released:
August 8, 2002
By the Chief, Enforcement Bureau:1
1. In this Order we consider a petition for reconsideration
("Petition") of Order, DA 99-3772 ("Second Order"), filed with
the Federal Communications Commission ("Commission"). The Second
Order resolved a complaint against the June 1, 1998 rate increase
by the above-referenced operator ("Operator")3 for its cable
programming services tier ("CPST") in the community referenced
above. It also resolved a petition for reconsideration of Order,
DA 97-2648 ("First Order").4 In this Order, we grant Operator's
Petition, amend the Second Order and calculate Operator's refund
2. Under the provisions of the Communications Act5 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")6 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"),7 and the Commission's rules implementing
the legislation ("Interim Rules"),8 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.9 If the Commission finds
the rate to be unreasonable, it shall determine the correct rate
and any refund liability.10
3. Operators must use the FCC Form 1200 series to justify
rates for the period beginning May 15, 1994.11 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 1210.12 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.13 Any
incurred cost that is not projected may be accrued with interest
and added to rates at a later time.14 Additionally, an Operator
may file an FCC Form 1235, which allows cable operators to
justify rate increases related to significant capital
expenditures used to improve rate-regulated services. This
option is extended only in cases of significant upgrades
requiring added capital investment, such as bandwidth capacity
and conversion to fiber optics, and for system rebuilds. Normal
improvements and expansions of service remain subject to the
usual rate adjustments allowed by filing FCC Form 1210s, 1220s,
and 1240s. Cable operators that incur increases in operating
costs associated with a significant network upgrade will be
permitted to charge additional rates as justified by their FCC
Form 1235 filings.
4. In the Second Order, the Cable Services Bureau reduced
Operator's FCC Form 1235 maximum permitted rate ("MPR") from
$3.95 to $3.60, based on a previous Cable Service Bureau decision
concerning Operator's FCC Form 1235.15 In that previous
decision, the Cable Services Bureau adjusted Operator's FCC Form
1235 subscriber count because the subscriber count reflected the
number of subscribers that existed ten months after the
completion of the upgrade.16 In its Petition, Operator requests
that it be allowed to use the subscriber count that existed as of
the date of the completion of Operator's upgrade, when Operator's
final costs were known and Operator calculated its final FCC Form
1235 MPR. Operator attached an amended FCC Form 1235 to its
Petition, using this subscriber count and calculating an MPR of
$3.95, the same MPR that Operator requested with its initial
response to the complaint. We find Operator's request to be
reasonable and consistent with the FCC Form 1235 Instructions.17
Therefore, we grant Operator's Petition.
5. Operator did not submit a refund plan in response to
the Second Order. Therefore, we calculate Operator's refund
liability as follows: For the period from March 1, 1998 through
May 31, 1998,18 we calculate an overcharge of $1.98 per month per
subscriber. Operator's actual CPST rate for this period was
$19.50 and its MPR was $17.52 ($13.57 plus $3.95). For the period
June 1, 1998 through March 31, 1999, we calculate an overcharge
of $2.30 per month per subscriber. Operator's actual CPST rate
for this period was $21.34 and its MPR was $19.04 ($15.09 plus
$3.95). Our total calculation, including interest on the
overcharges through September 30, 2002, equals $55,435.00. Our
calculation does not include franchise fees. We order Operator to
refund this amount, plus any additional interest accrued to the
date of refund, plus franchise fees, if any, and interest on the
franchise fee principal amount, to its CPST subscribers within 60
days of the release of this Order.
6. 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 GRANTED and In the Matter of
Marcus Cable Associates, LP, DA 99-377, 14 FCC Rcd 3390 (CSB
1999) IS MODIFIED TO THE EXTENT INDICATED HEREIN.
7. 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
$55,435.00, plus any additional interest accruing between
September 30, 2002 and the date of refund, plus franchise fees,
if any, and interest on the franchise fee principal amount within
60 days of the release of this Order.
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 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, LP, DA 99-377, 14 FCC
Rcd 3390 (CSB 1999).
3 The term "Operator" includes Operator's predecessors and
successors in interest.
4 In the Matter of Marcus Cable Associates, LP, DA 97-2648, 12
FCC Rcd 21970 (CSB 1997).
5 47 U.S.C. §543(c) (1996).
6 Pub. L. No. 102-385, 106 Stat. 1460 (1992).
7 Pub. L. No. 104-104, 110 Stat. 56 (1996).
8 See Implementation of Cable Act Reform Provisions of the
Telecommunications Act of 1996, 11 FCC Rcd 5937 1996).
9 See Section 76.956 of the Commission's rules, 47 C.F.R.
10 See Section 76.957 of the Commission's rules, 47 C.F.R.
11 See Section 76.922 of the Commission's Rules, 47 C.F.R. §
15 See Second Order at n. 18, citing Marcus Cable Associates, LP,
DA 98-2308, 13 FCC Rcd 22314 (CSB 1998) ("Form 1235 Order").
16 Form 1235 Order at ¶ 6, n. 15.
17 See FCC Form 1235 Instructions at p. 8, requiring that the
subscriber count reflect the number of subscribers at the time of
filing - for a final FCC From 1235, this would be at the
completion of the upgrade.
18 This time period was not included in the true-up portion of
Operator's FCC Form 1240 for the projected period beginning June
1, 1998, which the Cable Services Bureau reviewed in the Second
Order. See Second Order at n. 16.