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xadjusted Line A1(b) to reflect the MPR calculated by Operator on its previous FCC Form 1240
filing.
X
` x6.` ` Next, we disallowed three months of Operator's trueup period. In particular,
xOperator made trueup adjustments through to the effective date of the rate increase. This is
xincorrect. The annual adjustment afforded by FCC Form 1240 allows operators to project
xchanges in external costs, inflation, and the number of regulated channels. This structure avoids
x\the delay some operators experienced in recouping costs through multiple rate adjustments
xthroughout the year. Because projections will not reflect the costs that actually occur, the
xCommission provided, as part of the annual adjustment, a "trueup" mechanism to correct
xprojected cost changes with the actual cost changes. However, the Commission has noted that,
xas FCC Form 1240 must be filed 90 days before an increase is to take effect, the period for the
X

xytrueup will not coincide with the previous year's projections.^
_
{Oe

xԍ See In the Matter of Implementation of Sections of the Cable Television Consumer Protection and Competition
{O/
xAct of 1992: Rate Regulation, MM Docket No. 92266, Thirteenth Order on Reconsideration ("Thirteenth
{OReconsideration Order"), 11 FCC Rcd 388, 420 at n.151 (1995). The trueup data is intended to
X
xindicate real, not projected data.3_
{Otԍ Id.3 This policy is reflected in the instructions accompanying FCC
XForm 1240.d_
{Oԍ See FCC Form 1240 Instructions, "Timing" at pp. 34.d
X
` nx7.` ` Based on this instruction and considering evidence in the filing,z_
yOS
xЍ Operator, for instance, did not reflect in its trueup the inflation factor for the second quarter of 1996 released
{O
xYby the Commission in November 1996. See Public Notice, "Inflation Adjustment Figures for Cable Operators Using
xFCC Forms 1210 and 1240 Now Available", DA 961986 (November 27, 1996). Had this been available to Operator
xat the time of filing, Operator would have been required to include the factor released (2.22%) for all months after
xMarch 1996 and for its projection period. Instead, Operator used the previous factor (2.39%) for all inflation
xadjustments and projections. It is evident, therefore, that Operator did not have November 1996 data available at
the time it completed its FCC Form 1240. reasonable time
xfor closing accounts and completing forms, we have adjusted Operator's trueup period from 12
xmonths to 9 months. This adjustment required that we refresh Operator's inflation factors to 2.22
x.for the second quarter of 1996 and to 2.21 for the third quarter of 1996 and adjust Worksheet 1
xaccordingly. As a result, the trueup inflation factor in Module C, Line C1 for the 9 month
xperiod was corrected to 1.0171 instead of the 1.0239 used by the Operator for a 12 month period.
xWe have adjusted Module E, and have corrected the number of months on Line E2 to 9 months.
xWe have also adjusted the inflation segment in Module F, Line F5 to reflect the corrections made
xin Line C1. This has resulted in a corresponding adjustment on Line F9 (MPR for TrueUp
Period 1).
X
` x8.` ` The reduction in the length of the trueup period also results in a reduction in Line
xH2 (Revenue From MPR for Period 1). This results in a corresponding reduction in Line I8"T
,N(N(ZZ"
x(TrueUp Segment for the Projected Period). We also corrected Operator's current FCC inflation
xfactor at Line C3 to 2.22 percent. In total, our adjustments to Operator's FCC Form 1240
xjresulted in a revised MPR for the projected period of $17.52 rather than Operator's MPR for the
xprojected period of $18.16. Because Operator's actual CPST rate of $16.60 is less than the
xMrevised MPR of $17.52, we find Operator's actual CPST rate of $16.60 for the period January
X1, 1997 to the present to be reasonable.x_
yO
xwԍ These findings are based solely on the representations of Operator. Should information come to our attention
xYthat these representations were materially inaccurate, we reserve the right to take appropriate action. This Order is
xnot to be construed as a finding that we have accepted as correct any specific entry, explanation or argument made
xby any party to this proceeding not specifically addressed herein. Information regarding the specific adjustments
xmade to Operator's filings can be found in the public file for CUID No. NE0032, which is available in the Cable
x,Services Bureau's public reference room, or through the Commission's copy contractor, International Transcription
Services (ITS), 1919 M Street N.W., Washington, DC, 20554, or by calling ITS at (202) 8573800.
X_
` }x9.` ` To the extent that external costs from the three months disallowed from Operator's
XH
xtrueup periodTH_
yOԍ As found on Operator's Worksheets 7 and 8.T have been averaged into the rates charged in the nine months allowed in
xKOperator's trueup period, and have not been removed by our adjustments, we will order Operator
xto make a monthbymonth accounting of such external costs. Such accounting shall allow a
xcomparison of the actual external costs for the permitted ninemonth trueup period with the
xrecovery of external costs afforded by the external cost segment for that period as calculated on
xLWorksheet 7. We will order the removal of any overrecovery, plus interest, identified thereby
xin Operator's next FCC Form 1240 filed with the Commission. Any such overrecovery of
xLexternal costs shall be added to the amount otherwise reportable on Line H1 of Operator's next
XFCC Form 1240 rate calculation.
Xb
` x10.` ` Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's
x rules, 47 C.F.R. 0.321, that the CPST rate of $16.60 charged by Operator in the community
referenced above for the period January 1, 1997 through the present IS REASONABLE.
X
` 4x11.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's
xrules, 47 C.F.R. 0.321, that Operator take into account our FCC Form 1240 adjustments when
xcalculating its maximum permitted rate and performing the trueup calculation on its next FCC
xForm 1240 and that Operator attach to its next FCC Form 1240 filing a monthbymonth
xiaccounting of its external costs from Operator's ninemonth trueup period as found on Operator's
xkWorksheets, and that Operator adjust its rates in its next FCC Form 1240 filing for any over
Xrecovery of external costs, plus interest, identified thereby.
"N,N(N(ZZ"
X
` 4x12.` ` IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's
xrules, 47 C.F.R. 0.321, that the complaint against the CPST rates charged by Operator in the
community referenced above, IS DENIED.
x` ` hhFEDERAL COMMUNICATIONS COMMISSION
x` ` hhElizabeth W. Beaty
X1x` ` hhChief, Financial Analysis and Compliance Division(#(#Xx` ` hhCable Services Bureau