******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. 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 WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Comcast Cablevision of Indianapolis, Inc.) CUID No. IN0556 (Marion County) ) ) Complaints Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: March 25, 1998 Released: March 30, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider complaints against the November 1, 1997 rate increases of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the re-build and existing systems in the community referenced above. Operator has attempted to justify its CPST rates through a benchmark showing on FCC Forms 1240. We have issued an order ("Final Resolution") that resolved all pending complaints against Operator's rates charged from September 1, 1993 through July 14, 1994. We subsequently issued an order ("Prior Order") in which we found that Operator's CPST rate increases effective November 1, 1996 were unreasonable. This order addresses only the reasonableness of Operator's November 1, 1997 rate increases. 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. To justify rates for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200 series. 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. 4. The LFA for the franchise areas referenced above filed complaints with the Commission on January 6, 1998 against Operator's November 1, 1997 CPST rate increase from $13.38 to $13.99 in the existing system and from $13.93 to $14.92 in the rebuilt system. The LFA verified that it received more than one subscriber complaint for each franchise area and that the first valid complaint was received by the LFA on November 3, 1997. The filing of a complete and timely LFA complaint triggers an obligation upon the cable operator to file a justification of its CPST rates. The Operator has the burden of demonstrating that the CPST rates complained about are reasonable. 5. The LFA has challenged the rate increases to Operator's Value Pak tiers. We have previously determined that Operator's Value Pak services created as a result of a la carte packaging and containing a small number of channels may be treated as a New Product Tier ("NPT") not subject to regulation. We believe that in this instance Operator's Value Pak is similar to other Value Pak offerings not subject to regulation created by Operator because of the small number of channels carried on the tier. Consequently, we find that Operator's Value Pak is not subject to our jurisdiction. 6. Upon review of Operator FCC Form 1240, for the projected period November 1, 1997 to October 31, 1998, we find that Operator has justified its CPST rate of $13.99, effective November 1, 1997, for the existing system. Upon review of Operator's FCC Form 1240, for the projected period November 1, 1997 through October 31, 1998, we find that Operator has justified its CPST rate of $14.92, effective November 1, 1997, for the rebuilt system. 7. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the CPST rates of $13.99 for the existing system and $14.92 for the rebuilt system, charged by Operator in the franchise area referenced above, effective November 1, 1997, 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 referenced complaints ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau