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                                Before the
                     Federal Communications Commission
                          Washington, D.C. 20554


In the Matter of                     )     CUID No.    MI0051 (City of Manistee)
                                     )                 MI0122 (Midland)
C-TEC Cable Systems of Michigan, Inc.)                 MI0282 (Frankfort)
                                     )                 MI0344 (Holland Charter
Twp.)
                                     )                 MI0373 (Spring Lake Village)
                                     )                 MI0399 (Township of Milton)
                                     )                 MI0435 (City of Zeeland) 
                                     )                 MI0451 (City of Reed City)
Complaints Regarding                 )                 MI0595 (City of Wayland)
Cable Programming Services Tier      )                 MI0674 (Courtland Twp.)
Rate Increase                        )                 MI1542 (Orleans Twp)


ORDER
                       
   Adopted:  February 25, 1998                     Released:  March 2, 1998  

By the Deputy Chief, Cable Services Bureau:

  1.    Here we consider complaints about the rates the above-captioned operator ("Operator")
was charging for its two cable programming service tiers ("CPSTs") in the communities referenced
above.  Operator has chosen to attempt to justify its CPST rates through cost of service showings on FCC
Form 1220s, updated by FCC Form 1210s and/or FCC Form 1240s.  

  2.    Under the Communications Act, 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.  If the Commission finds a rate to be
unreasonable, it shall determine the correct rate and any refund liability.  

  3.     Valid complaints for each community referenced above were filed with the Commission
against the February 1996 CPST rates Operator was charging in each community.  The filing of a
complete and timely complaint triggers an obligation upon the cable operator to file a justification of its
CPST rates.  The Operator has the burden of demonstrating that its CPST rates are reasonable. 

  4.     Cable operators attempting to justify their rates through a cost of service showing must
complete and file FCC Form 1220.  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 cost changes. 

  5.     Initially, Operator requested small system relief and attempted to justify its CPST rates
using the FCC Form 1230 (Establishing Maximum Permitted Rates for Regulated Cable Services on
Small Cable Systems).  Several of the local franchising authorities ("LFAs") for the communities
referenced above complained that operator did not qualify for small system relief and could not file the
FCC Form 1230 for that and other reasons.  Because we have previously determined that Operator is
not entitled to small system relief and have accepted Operator's FCC Form 1240 (Annual Update Form)
filings in lieu of its FCC Form 1230 filing, we need not reach the LFAs' other arguments.

  6.     Upon review of Operator's FCC Form 1220, FCC Form 1210 and FCC Form 1240
filings, we find Operator's actual CPST rates, for both its CPSTs, for the period under review through
the present, to be reasonable.  

  7.     Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules,
47 C.F.R.  0.321, that the CPST rates, charged by Operator in the communities referenced above, ARE
REASONABLE.

  8.     IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that the complaints against the CPST rates charged by Operator in the communities
referenced above,  ARE DENIED.
  
  FEDERAL COMMUNICATIONS COMMISSION 



  John E. Logan
  Deputy Chief, Cable Services Bureau