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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 ) ) Post-Newsweek Cable, Inc. ) CUID No. NM0007 (Roswell) ) Complaints Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: April 3, 1998 Released: April 8, 1998 By the Acting Chief, Cable Services Bureau: 1. In this Order we consider complaints against the rates the above-referenced operator ("Operator") was charging for its cable programming services tier ("CPST") in the community referenced above. We have already issued an order in which we found that Operator's rates in effect prior to May 15, 1994 were reasonable ("Prior Order"). Accordingly, this Order addresses only the reasonableness of Operator's CPST rates in effect after May 14, 1994. 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. 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 the CPST rates complained about are reasonable. 3. To justify rates for the period beginning May 15, 1994, operators must use the FCC Form 1200 series. Operators are permitted to make changes to their rates on a quarterly basis using FCC Form 1210. Operators may alternatively 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. 4. Upon review of Operator's FCC Form 1200, we find Operator's maximum permitted rate ("MPR") of $13.28 to be reasonable. However, Operator's actual CPST rate in effect from May 15, 1994 through July 13, 1994 was $14.50. The Commission's rules provide for a refund liability deferral period, if timely requested by Operator, beginning May 15, 1994 and ending July 14, 1994, for any overcharges resulting from Operator's calculation of a new MPR on FCC Form 1200. Operator elected to defer refund liability pursuant to the Commission's Rules. Consequently, Operator does not incur refund liability for charging in excess of the MPR calculated on its FCC Form 1200 until July 15, 1994. Operator will incur refund liability between May 15, 1994 and July 14, 1994 for any CPST rates charged above the FCC Form 393 MPR approved by the Commission. In our Prior Order, we approved Operator's MPR of $14.50. Because Operator's actual CPST rate of $14.50 does not exceed its FCC Form 393 MPR, we find Operator's actual CPST rate of $14.50, effective May 15, 1994 through July 13, 1994, to be reasonable. Because Operator's actual CPST rate of $13.28, effective July 14, 1994 through December 31, 1994, does not exceed its MPR of $13.28, we find Operator's actual CPST rate of $13.28, effective July 14, 1994 through December 31, 1994, to be reasonable. 5. Upon review of Operator's FCC Form 1210 for the period July 1, 1994 through September 30, 1994, we find Operator's MPR of $13.84 to be reasonable. Because Operator's actual CPST rate of $13.81, effective January 1, 1995, does not exceed its MPR, we find Operator's actual CPST rate of $13.81, effective January 1, 1995 through January 31, 1995, to be reasonable. Pursuant to our Going Forward Order, Operator amended its filing to include the addition of seven channels and increased its rate by $1.25, effective February 1, 1995, which included $1.20 for six channels at $.20, the maximum permitted increase under the CAPS methodology, and $.05 for license fees. Upon review of Operator's amended filing, we find Operator's MPR of $15.06 to be reasonable. Because Operator's actual CPST rate of $15.06, effective February 1, 1995, does not exceed its MPR, we find Operator's actual CPST rate of $15.06, effective February 1, 1995 through May 31, 1995 to be reasonable. 6. Upon review of Operator's FCC Form 1210 covering the period from January 1, 1995 through March 31, 1995 and its supplemental attachment entitled "Inflation Adjustment on Transition Rates," we corrected Operator's inflation rate from 5.21 to 2.15 percent for unclaimed inflation for the October 1, 1993 to June 30, 1994 period, pursuant to the Ninth Reconsideration Order. Operator had until March 31, 1996 to implement this inflation adjustment. Because Operator had taken a 3 percent inflation adjustment in its FCC Form 1200 filing, it was not entitled to take the 3 percent inflation adjustment again by applying the 5.21 percent inflation rate. However, because Operator used the 5.21 percent rate based on its good faith reliance on Commission instructions, we have allowed the full 5.21 percent inflation adjustment through March 31, 1996. The Commission's rules require the removal of Operator's excess 3 percent inflation adjustment in the next rate adjustment after November 9, 1995 or by April 1, 1996, whichever is earlier. Consequently, effective April 1, 1996, we have eliminated this excess. Our adjustment to Operator's inflation factor resulted in a revised MPR of $15.99 rather than Operator's MPR of $16.25. However, we find Operator's MPR of $16.25 to be reasonable through March 31, 1996. Because Operator's actual CPST rate of $16.25, effective June 1, 1995, does not exceed its MPR of $16.25, we find Operator's actual CPST rate of $16.25, effective June 1, 1995 through October 31, 1995 to be reasonable. 7. Upon review of Operator's FCC Form 1210 covering the period July 1, 1995 through September 30, 1995, we adjusted Operator's Line A1 to account for our previous reduction in Operator's inflation factor. This adjustment resulted in a revised MPR of $16.28 rather than Operator's MPR of $16.56. However, for the reasons stated above, we find Operator's MPR of $16.56 to be reasonable through March 31, 1996. Because Operator's actual CPST rate of $16.56 does not exceed its MPR of $16.56, we find Operator's CPST rate of $16.56, effective November 1, 1995 through March 31, 1996, to be reasonable. We revise Operator's MPR to $16.28, effective April 1, 1996. Therefore, we find Operator's actual CPST rate of $16.56, effective April 1, 1996 through May 31, 1996, to be unreasonable. 8. Upon review of Operator's FCC Form 1240 for the projected period June 1, 1996 through May 31, 1997, we adjusted Operator's Line A1 to $16.28 to coincide with the revised MPR from Operator's previous FCC Form 1210. This adjustment resulted in a revised MPR of $17.43 rather than Operator's MPR of $17.95. Because Operator's actual CPST rate of $17.95 exceeds its revised MPR, we find Operator's actual CPST rate of $17.95, effective June 1, 1996, to be unreasonable. 9. 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 franchise area referenced above, effective May 15, 1994 through March 31, 1996, ARE REASONABLE. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $16.56, charged by Operator in the franchise area referenced above, effective April 1, 1996 through May 31, 1996, IS UNREASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $17.95, charged by Operator in the franchise area referenced above, effective June 1, 1996, IS UNREASONABLE. 12. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $16.28 per month (plus franchise fees), plus interest to the date of the refund, for the period April 1, 1996 through May 31, 1996. 13. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $17.43 per month (plus franchise fees), plus interest to the date of the refund, for the period June 1, 1996 through the day before Operator implements the maximum permitted CPST rate of $17.43. 14. IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to CPST subscribers for the stated periods, and shall within 30 days of the release of this Order, file a report with the Chief, Cable Services Bureau, stating the cumulative refund amount so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. 15. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator take into account our FCC Form 1240 adjustments when calculating its maximum permitted rate and performing the true-up calculation on its next FCC Form 1240. 16. 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 GRANTED TO THE EXTENT INDICATED HEREIN. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Acting Chief, Cable Services Bureau