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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 ) ) Falcon Cable TV ) CUID No. AL0116 (Attalla) ) 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 charged by the above-referenced Operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator has attempted to justify its CPST rates though a benchmark showing on FCC Forms 1200, 1210 and 1240. We have already issued an Order which found that Operator's CPST rates in effect from September 1, 1993 though May 14, 1994 were not unreasonable ("Prior Order"). Accordingly, this Order only addresses the reasonableness of Operators rates 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. The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), and our rules in effect at the time the complaints were filed, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rates. If the Commission finds the rate to be unreasonable, it shall determine the correct rate and any refund liability. 3. The Commission's original rate regulations took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. Cable operators with valid CPST complaints filed against them prior to May 15, 1994 must demonstrate that their CPST rates were in compliance with the Commission's initial rules from the time the complaint was filed through May 14, 1994, and that their rates were in compliance with the revised rules from May 15, 1994 forward. Cable operators attempting to justify their rates for the period prior to May 15, 1994 using a benchmark showing must complete and file FCC Form 393. Operators must use the FCC Form 1200 series to justify their rates for the period beginning May 15, 1994 using a benchmark showing. Cable operators may also justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation, by filing FCC Form 1210. FCC Form 1210 must be filed at least 30 days before new rates are scheduled to go into effect where the Commission has found the cable programming service rate to be unreasonable less than one year prior to the filing, or where there is a pending complaint against the CPST rate. 4. 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 year a "true-up" mechanism is available to correct estimated costs with actual cost changes. 5. On August 16, 1994, Operator filed an FCC Form 1200. Upon review of this FCC Form 1200, we find that Operator has justified its CPST rate of $1.25 effective May 15, 1994. Consequently, we find that Operator's CPST rate of $1.25, effective May 15, 1994, is not unreasonable. 6. Upon review of Operator's FCC Form 1210 for the period April 1, 1994 though December 31, 1994, to justify its CPST rate effective January 1, 1995, we find that Operator has justified its maximum permitted rate ("MPR") of $3.11 effective January 1, 1995. Because Operator was actually charging $4.15, we find that Operator's actual CPST rate of $4.15, effective January 1, 1995, is unreasonable. 7. Upon review of Operator's FCC Form 1210 for the period January 1, 1995 though December 31, 1995, we corrected the starting rate on Line A2 to reflect the MPR of $3.11 from Operator's prior FCC Form 1210 filing. We also adjusted Line C14 (Previous External Costs) which reduced the CPST MPR to $3.25, effective January 1, 1996. Therefore, we find that Operator's actual CPST rates of $4.15, effective January 1, 1996, and $4.41, effective April 1, 1996, are unreasonable. 8. Upon review of Operator's FCC Form 1240 for the projected period October 1, 1996 though September 30, 1997, we adjusted Line A1 to reflect the MPR of $3.25 from Operator's previous FCC Form 1210 filing. We also adjusted Line C1 (Inflation Factor for True-Up Period 1) and Line C3 (Current FCC Inflation Factor) which reduced Operator's CPST MPR to $3.13, effective October 1, 1996. Therefore, we find that Operator's actual CPST rates of $4.41, effective October 1, 1996 and $5.02 effective November 1, 1996 are unreasonable. 9. Upon review of Operator's FCC from 1240 for the projected period October 1, 1997 though September 30, 1998, we adjusted Line A1 to reflect the MPR of $3.13 from Operator's previous FCC Form 1240 filing. We also adjusted Line C3 (Current FCC Inflation Factor) which reduced Operator's CPST MPR to $1.73, effective October 1, 1997. Consequently, we find that Operators actual CPST rate of $5.28, effective October 1, 1997 is unreasonable. 10. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the monthly CPST rate of $1.25 charged by Operator in the community referenced above, effective May 15, 1994, IS NOT UNREASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the monthly CPST rate of $4.15 charged by Operator for the community referenced above, effective January 1, 1995, IS UNREASONABLE. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the monthly CPST rate of $4.41 charged by Operator for the community referenced above, effective April 1, 1996, IS UNREASONABLE. 13. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. that the monthly CPST rate of $5.02 charged by Operator for the community referenced above, effective November 1, 1996, IS UNREASONABLE. 14. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in Attalla, Alabama, CUID No. AL0116 that portion of the amount paid in excess of the maximum permitted CPST rate of $3.11 per month (plus franchise fees), plus interest to the date of the refund, for the period from January 1, 1995 to December 31, 1995. 15. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in Attalla, Alabama, CUID No. AL0116 that portion of the amount paid in excess of the maximum permitted CPST rate of $3.25 per month (plus franchise fees), plus interest to the date of the refund, for the period from April 1, 1996 to September 30, 1996. 16. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in Attalla, Alabama, CUID No. AL0116 that portion of the amount paid in excess of the maximum permitted CPST rate of $3.13 per month (plus franchise fees), plus interest to the date of the refund, for the period from October 1, 1996 to September 30, 1997. 17. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscriber in Attalla, Alabama, CUID No. AL0116 that portion of the amount paid in excess of the maximum permitted CPST rate of $1.73 per month (plus franchise fees), plus interest to the date of the refund, for the period from October 1, 1997 though the day before Operator implements the maximum permitted CPST rate of $1.73. 18. 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. 19. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that the complaints referenced herein against the rates charged by Operator in the community set forth above ARE GRANTED. 20. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that Operator revise the calculation of its maximum permitted CPST rate in its next FCC Form 1240 filing in accordance with our findings in this order. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Acting Chief, Cable Services Bureau