******************************************************** 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 ) ) Northland Cable Television, Inc.) CUID No. WA0119 (Moses Lake) ) ) Complaint Regarding ) Cable Programming Services Tier Rates) ORDER Adopted: April 17, 1998 Released: April 22, 1998 By the Acting Chief, Cable Services Bureau: 1. In this Order we consider a complaint concerning the rates of the above-captioned operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator's response includes benchmark justifications filed on FCC Forms 1200, 1210 and 1240. We have already issued a separate order in which we found that Operator's CPST rate in effect before May 15, 1994 were not unreasonable. This Order addresses the reasonableness of Operator's rates for the period after May 14, 1994, as justified on Operator's FCC Forms 1200, 1210 and 1240. 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 complaint was 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. The Commission's rules also 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 maximum permitted rate ("MPR") on FCC Form 1200. This deferral of refund liability, however, does not apply to refund liability that may have occurred because Operator's March 31, 1994 rates for its CPST subject to regulation were higher than levels permitted under the Commission's rules in effect before May 15, 1994. Accordingly, while the liability period for Operator's overcharges associated with its FCC Form 1200 filing may not begin to run until July 15, 1994, Operator will incur refund liability between May 15, 1994 and July 14, 1994 for any CPST rates charged above the MPR approved by the Commission on Operator's FCC Form 393. 5. Upon review of Operator's FCC Form 1200, filed to justify its CPST rates beginning August 15, 1994, we find Operator's MPR of $8.42 to be reasonable. Because Operator's actual CPST rate of $8.37 does not exceed its MPR, we find Operator's actual CPST rate of $8.37, effective May 15, 1994, to be reasonable. 6. Upon review of Operator's FCC Form 1210 for the period April 1, 1994 through September 30, 1995, we find Operator's MPR of $9.42 to be reasonable. Because Operator's actual CPST rate of $9.42 does not exceed its MPR, we find Operator's actual CPST rate of $9.42, effective October 1, 1995, to be reasonable. 7. Upon review of Operator's FCC Form 1240 for the projected period June 1, 1996 through May 31, 1997, we find that Operator did not use the most current inflation factors available at the time it signed and filed its FCC Form 1240. Therefore, we have adjusted Module C, Line C1 to 1.0151 instead of 1.0197 and Line C3 to 1.0222. These inflation factors reflect the most accurate inflation factors for the time period covered by Operator's FCC Form 1240. These adjustments reduced Operator's MPR to $10.19. Because Operator's actual CPST rate of $10.29 exceeds its MPR, we find Operator's actual CPST rate of $10.29, effective June 1, 1996, to be unreasonable. 8. Accordingly, IT IS ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that Operator's CPST rate of $8.37, effective May 15, 1994, in the community set forth above, IS NOT UNREASONABLE. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rate of $9.42, effective October 1, 1995 IS NOT UNREASONABLE. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rate of $10.29 charged by Operator in the communities referenced above, effective June 1, 1996 IS UNREASONABLE. 11. 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 the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $10.19 per month (plus franchise fees), including interest to the date of the refund, for the period from June 1, 1996 to the day Operator implements a CPST rate of $10.19. 12. 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), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. 13. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that the complaint referenced herein against the rates charged by Operator in the community set forth above IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Acting Chief, Cable Services Bureau