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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) SVHH Cable Acquisition, L.P.,) CUID No. SC0058 (Hilton Head Island) d/b/a Adelphia Cable Communications ) ) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: December 31, 1997 Released: January 7, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the August 1, 1997 rate increase that the above-captioned operator ("Operator") implemented for its cable programming services tier ("CPST") in the community set forth above. Operator has attempted to justify its CPST rate through a benchmark showing on FCC Forms 1240. We have already issued a separate order which resolved complaints filed against Operator's CPST rates for the period from September 1, 1993 to December 31, 1995 ("Resolution Order"). This Order addresses only the reasonableness of the Operator's CPST rate of $17.19 effective August 1, 1997. 2. The Communications Act authorizes the Federal Communications Commission ("Commission") to review the CPST rates of cable systems not subject to effective competition to ensure that rates charged are not unreasonable. If the Commission finds the rate unreasonable, it shall determine the correct rate and any refund liability. The Telecommunications Act of 1996 ("1996 Act") and our rules implementing the new legislation ("Interim Rules"), require that complaints against the CPST rates be filed with the Commission by a local franchising authority ("LFA") that has received subscriber complaints. An LFA may not file a CPST rate complaint unless, within 90 days after such increase becomes effective, it receives more than one subscriber complaint. 3. Cable operators may justify adjustments to 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. Any incurred cost that is not projected may be accrued with interest and added to rates at a later time. If actual and projected costs are different during the rate year a "true-up" mechanism is available to correct estimated costs with actual cost changes. The "true-up" requires Operators to decrease their rates or alternatively permits them to increase their rates to make an adjustment for over or under estimations of these costs changes. 4. On November 4, 1997, the LFA filed a complaint regarding the August 1, 1997 increase in Operator's CPST rate in the community referenced above. In its complaint, the LFA asserts that it has received more than one subscriber complaint against Operator's CPST rate increase, thereby triggering the Commission's jurisdiction to review this complaint. The valid complaint from the LFA triggers an obligation by the cable operator to file a justification of its CPST rates with the LFA. Thus, in this case, Operator is required to justify the increase in its CPST rate which is the subject of the LFA's complaint. Operator submitted FCC Forms 1210 and 1240 for the community set forth above to justify the rate increase that went into effect on August 1, 1997. 5. Upon review of Operator's FCC Form 1240 for the projected period August 1, 1996 to July 31, 1997, pursuant to the Resolution Order, we find that Operator has correctly carried forward its maximum permitted rate ("MPR") of $9.87 on Line A1 and that Operator has correctly calculated its MPR of $13.80. Upon review of Operator's FCC Form 1240 for the projected period August 1, 1997 to July 31, 1998, we find that Operator has incorrectly reported its true-up period on Line 6. Therefore, we have revised Line 6 to reflect the correct true-up period of May 1, 1996 to April 30, 1997 reported on Worksheet 1 (True-Up Period Inflation). Notwithstanding our adjustment, we find that Operator has justified its CPST rate of $17.19 effective August 1, 1997. 6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $17.19 effective August 1, 1997 in the community set forth above, IS NOT UNREASONABLE. 7. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint referenced herein, IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau