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Rate justifications were filed in response to such complaints.  S- |3.The Commissions Cable Services Bureau ( Bureau), under delegated authority, has reviewed   LCTECs rate justifications pursuant to the Cable Television Consumer Protection and Competition Act   =of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992) ( 1992 Cable Act), and the Commissions cable   rate regulations. As a result of that review, the Bureau has determined that certain refunds are owed to subscribers.  S- N4. CTEC and the Commission propose to resolve all of CTEC's CPST rate cases for the franchise   zareas listed in Exhibits 1 and 2, that were pending as of January 31, 1998, and filed under FCC Forms 393, 1200, 1210 and 1240, under the terms set forth below.  S-  Sx-;III. Definitions ă  S(- ]5.As used herein, the following definitions will apply. When used throughout this document, these definitions are capitalized.  S-  (a)` ` Billing Cycle means the time period during which monthly bills are sent to subscribers, but in no event longer than 31 days.  S8-  (b)` ` Buyer means a company not affiliated with CTEC Cable Systems of Michigan, Inc.,   zMercom, Inc., River Raisin Cablevision, Allegan County Cablevision, Coldwater Cablevision, CTEC   Cable Systems of New York, Inc., Home Link Communications of Princeton, L.P. or ComVideo Systems, Inc., under the affiliation standard set forth in Section 76.501 of the Commission Rules.  Sp#-  (c)` ` Commission Rules means all Commission rules currently in effect as of January 31,   1998, as well as all subsequent clarifications, amendments, and additions thereto, including, but not limited   to, changes initiated by the Commission or changes required by or made pursuant to changes in federal law. "&,p(p(88n("Ԍ S-  (d)` ` "Current Rates" means the CTEC New Jersey and CTEC New York CPST rates in effect as of January 31, 1998.  S- ` x(e)` ` Effective Date means the date on which the Commission adopts the Resolution Order approving this Proposed Resolution.  S- ` Ax(f)` ` Eligible Subscribers means CPST subscribers of record to C-TECs New Jersey or New York cable franchises listed in Exhibits 1 and 2 as of the date bills are issued reflecting Refunds.  S-x(g)` ` Interest means the Internal Revenue Service rate of interest for tax underpayments.  SH -x(h)` ` LFA means the local franchising authority entitled to regulate CPST rates.  S - ` Px(i)` ` Maximum Permitted Rates means the maximum rates that may be charged for the CPST under the Commission Rules.  S -x(j)` ` Refund means a credit on a subscribers bill.  S0- ` x(k)` ` Resolution Order means a final order issued by the Commission regarding the terms of  S-this Proposed Resolution.  S- 53IV. Terms  S-  Sh-  @6.xCTEC accepts the jurisdiction of the Commission over it and the subject matter of these rate resolutions for purposes of the Resolution Order approving these terms.  S-  O7.xCTECs pending CPST rate cases for the franchise areas listed in Exhibits 1 and 2 filed under  xFCC Forms 393, 1200, 1210 and 1240 for the period through January 31, 1998, are finally resolved under  xthe terms provided herein, including any Applications for Review, Petitions for Reconsideration, Petitions for Stay or other appeals.  S(-  8.xCTEC agrees that the terms contained in this Proposed Resolution shall be incorporated by  xreference in the Resolution Order. Assuming the adoption of these terms in the Resolution Order, CTEC  xand the Commission will each actively defend the Resolution Order against any appeal of, or other legal  xchallenge to, the Resolution Order by any third party. CTEC and the Commission will reasonably cooperate in any such defense of these terms.  S8-  9.xAssuming the adoption of these terms in the Resolution Order, CTEC agrees that any violation  xof the Resolution Order approving these terms shall constitute a violation of a Commission order, entitling the Commission to exercise any rights and remedies attendant to the enforcement of a Commission order.  S"-  10.x These terms are for purposes of settlement only, and do not constitute an admission by CTEC  xkof any violation of, or failure to conform to, the 1992 Cable Act, the Commission Rules, or any other  xapplicable law, rule, or policy. CTEC maintains that it has followed the letter and spirit of the  xCommissions cable rate regulations and the 1992 Cable Act in the rate justification filings, and that its CPST rates generally are within the maximum permitted levels. "&,p(p(88n("Ԍ S-  11.xThe Commission will not institute, on its own motion, any proceedings against CTEC based on  xLthe information obtained during consideration of the Proposed Resolution. In addition, in the absence of  xadditional facts, any allegations and other circumstances involved in consideration of this Proposed Resolution will not be used against CTEC with respect to any future proceeding.  S8-  12.xIn consideration for the resolution of CTECs CPST rate cases for the franchise areas listed in  xExhibits 1 and 2, pending as of January 31, 1998, CTEC hereby agrees to the following terms, conditions  xand procedures which will facilitate a fair and expeditious resolution of those matters in a manner that serves the public interest:  Sp- ` x(a)` ` CTEC will issue Refunds to Eligible Subscribers in the amount of $5.00 per Eligible  xSubscriber for the New Jersey communities listed in Exhibit 1 and $3.30 per Eligible Subscriber for the  xNew York communities listed in Exhibit 2. Refunds will be reflected as a one-time credit on Eligible Subscribers' bills.  S - ` Ax(b)` ` CTEC will provide Refunds to Eligible Subscribers during the first monthly Billing Cycle  xbeginning 60 days after the Effective Date (the last day of which Billing Cycle shall be called the Refund  xLDate). If Refunds are not issued by the Refund Date, CTEC will adjust the Refunds to reflect Interest from the Refund Date to the day before the date on which the issuance of Refunds begins.  S- ` x(c)` ` The Resolution Order issued by the Commission will find that the Current Rates and  x\Maximum Permitted Rates for the communities listed in Exhibits 1 and 2 are deemed reasonable as of  xJanuary 31, 1998. CTEC New Jersey and CTEC New York's Family Value Package will be treated as a new product tier as defined by the Commission Rules.  S- ` x(d)` ` CTEC New Jersey and CTEC New York may adjust rates for the CPST after January $8M Ԡ $8M 31, 1998 in accordance with the Commission Rules.  S- ` x(e)` ` CTEC shall withdraw all Petitions for Reconsideration, Applications for Review, Petitions  x[for Special Relief, or Petitions for Stay of any Bureau orders regarding the communities listed in Exhibits  xM1 and 2 and the CTEC Michigan communities, and any other appeals, pleadings or letters before the  xCommission or the Bureau challenging rulings by the Bureau concerning CPST rates or challenging the  xBureaus orders denying C-TEC eligibility as a small system operator under the Commission Rules and the 1996 Telecommunications Act.  S- ` x(f)` ` As of the Effective Date, any Bureau orders which concern CTEC New Jerseys CPST  x>rates through January 31, 1998, are vacated. This Proposed Resolution supersedes any such Bureau  xNorders. Any Bureau orders which concern CTEC Michigan's CPST rates are not vacated by this Resolution.  S!- ` x(g)` ` The terms of this Proposed Resolution will continue to apply to cable systems divested  xby CTEC through a system sale or trade, except to the extent that the Buyer of a CTEC system qualifies  x>for small operator treatment under the Commissions Rules or the Telecommunications Act of 1996.  xDuring the time that the CTEC Michigan communities are controlled by current owners, CTEC shall not  xzseek to qualify for treatment as a small system operator under current Commission Rules or the 1996   Telecommunications Act.  "&,p(p(88n("Ԍ S- ` x(h)` ` A copy of this Proposed Resolution shall be provided to: (1)the LFA for each franchise  S- xarea listed in Exhibits 1 and 2 (2) to each party that filed a valid complaint on FCC Form 329 pursuant  xto 47 C.F.R.  76.950, in the franchise areas listed on Exhibits 1 and 2. The LFAs and the parties that filed a complaint shall be given 30 days to comment on the Proposed Resolution.  S8- ` Px(i)` ` Except as provided in paragraph (j) hereof, these terms may not be terminated or modified  xwithout the mutual written agreement of CTEC and the Commission. The Commissions consent to any  xsuch termination or modification shall be demonstrated by an order issued by the Bureau or, at the Commissions option, by the Commission itself.  Sp- ` _x(j)` ` Notwithstanding the terms hereof, CTEC may avail itself of any applicable modifications  SH - xof any law or regulation governing the CPST rates charged in any CTEC franchise listed in Exhibits 1  xand 2, including the adoption by the Commission of any regulation governing rates as applied to the cable  xindustry generally. If C-TEC exercises this election, the terms contained herein shall be superseded upon  xthe effective date of such law or regulation, except that CTEC shall provide Refunds to Eligible  xSubscribers pursuant to the terms of this Proposed Resolution. Nothing herein shall restrict the ability of  xany CTEC system to adjust its rates in the event such rates are not regulated for any reason, including changes to the Communications Act of 1934, as amended, or the Commission Rules.  S0-  S-  13.xThe Resolution Order shall affirmatively state that any and all waivers of Commission Rules  x\necessary to effectuate these terms are deemed to be granted. The Commission will not assert in any  xproceeding that CTEC's compliance with the terms of the Proposed Resolution violates any Commission  xRule or order, and, in any proceeding before the Commission brought by a third party, a showing by C xTEC that it has complied with these terms shall constitute a defense to any claim that CTEC's actions  xin meeting the terms constitute a violation of any applicable Commission Rule or order. Notwithstanding  xthe foregoing, nothing in this Proposed Resolution should be construed to preempt the authority of a local  xzfranchising authority to regulate the basic service tier and related equipment rates, consistent with the  xCommission's regulations and orders. This Proposed Resolution will not alter the effect of any future Commission order concerning commercial rate issues.  Sx-   SP-  14.xIf any provision, clause, or part of this Proposed Resolution is invalidated, the remainder of this  xProposed Resolution shall not be affected thereby and shall remain in effect; provided, however, that if  xsuch invalidation is material to this Proposed Resolution, CTEC and the Commission (or the Bureau) shall  xattempt in good faith to reconstitute the Proposed Resolution in a form that is, to the maximum extent possible, consistent with the original intent of the Proposed Resolution.  S`-  15.xNothing in this Proposed Resolution shall be deemed to affect any CTEC rate case other than the  xLCPST rate cases resolved by this Proposed Resolution in the franchise areas referenced in Exhibits 1 and 2 and the appeals of CTEC Michigan rate cases. "!,p(p(88(#"  S-/7EXHIBIT 1  S-C-TEC NEW JERSEYă  S-FRANCHISE NAME Community Unit ID #hppMPR 1/31/98  CPST Rate 1/31/98  S8-PRINCETON BOROUGHhhNJ 0481hpp $8.18  xx $7.95  S-PRINCETON TWP hhNJ 0482hpp $8.18  xx $7.95  S-HILLSBOROUGH  hhNJ 0463hpp $10.95  xx$10.93  S-LEBANON ` `  hhNJ 0491hpp $10.95  xx$10.93  Sp-CLINTON TWP hhNJ 0492hpp $10.95  xx$10.93  SH -READINGTON  hhNJ 0493hpp $10.95  xx$10.93  S -CLI NTON TWP hhNJ 0494hpp $10.95  xx$10.93  S -LONG HILL TWP (Passaic)hhNJ 0495hpp $10.95  xx$10.93  S -BRANCHBURG  hhNJ 0504hpp $10.95  xx$10.93  S -BERNARDSVILLE  hhNJ 0505hpp $10.95  xx$10.93  S -FLEMINGTON  hhNJ 0506hpp $10.95  xx$10.93  SX-RARITAN ` `  hhNJ 0507hpp $10.95  xx$10.93  S0-CHATHAM` `  hhNJ 0509hpp $10.95  xx$10.93  S-FRANKLIN` `  hhNJ 0510hpp $10.95  xx$10.93  S-MENDHAM BOROUGHhhNJ 0546hpp $10.95  xx$10.93  S-PEAPACK-GLADSTONEhhNJ 0547hpp $10.95  xx$10.93  S-MENDHAM TWP hhNJ 0565hpp $10.95  xx$10.93  Sh-BEDMINSTER  hhNJ 0572hpp $10.95  xx$10.93  S@-CHESTER BOROUGHhhNJ 0573hpp $10.95  xx$10.93  S-CHESTER TWP hhNJ 0574hpp $10.95  xx$10.93  S-TEWKSBURY hhNJ 0575hpp $10.95  xx$10.93  S-MONTGOMERY hhNJ 0576hpp $10.95  xx$10.93  S-ROCKY HILL` `  hhNJ 0577hpp $10.95  xx$10.93  Sx-HARDING ` `  hhNJ 0583hpp $10.95  xx$10.93  SP-EAST AMWELL  hhNJ 0586hpp $10.95  xx$10.93  S(-FRANKLIN ` `  hhNJ 0591hpp $10.95  xx$10.93  S-UNION TWP` `  hhNJ 0597hpp $10.95  xx$10.93  S-MILLSTONE ` `  hhNJ 0601hpp $10.95  xx$10.93  S-BETHLEHEM TWP hhNJ 0602hpp $10.95  xx$10.93  S-DELAWARE ` `  hhNJ 0611hpp $10.95  xx$10.93  S`-FAR HILLS ` `  hhNJ 0616hpp $10.95  xx$10.93  S -" ,p(p(88G""  S-/7EXHIBIT 2  S-!C-TEC NEW YORKă  S-FRANCHISE NAME Community Unit ID #hppMPR 1/31/98  CPST Rate 1/31/98  S-TOWN OF PAWLINGhhNY 1054hpp $12.66  xx$12.65  S-TOWN OF CARMEL (Mahopac)hhNY 1099hpp $12.66  xx$12.65  S-TOWN OF BEEKMANhhNY 1454hpp $12.66  xx$12.65 "p,p(p(88"  S-  Dissenting Statement of Commissioner Harold FurchtgottRoth  S-In the Matter of CTEC Corporation, Resolution of Cable Programming Service Rate Complaints   {xFor the reasons that follow, I must respectfully dissent from the order serving this "resolution" of cable programming service tier ("CPST") rate complaints upon interested parties.  S-  xFirst, I do not believe that the Commission possesses statutory authority to resolve CPST rate  xcomplaints by way of this sort of negotiated global settlement. It is true, as the Commission has observed  xin similar items, that section 4(i) of the Communications Act states that the Commission may "issue such  xorders, not inconsistent with this Act, as may be necessary in the execution of its functions," and that  xsection 4(j) authorizes the Commission to "conduct its proceedings in such a manner as will best conduce to the proper dispatch of business and to the ends of justice." 47 U.S.C. sections 154(i)(j).   xBut the Communications Act includes another provision one that, unlike sections 4(i) and (j),  S - xspeaks directly to the proper processing of CPST complaints. Unfortunately, the Commission fails to  S - xfollow the dictates of this provision, which mandates that "the Commission shall, by regulation,  S^- xestablish... fair and expeditious procedures for the . . . resolution of complaints from any franchising  x_authority . . . alleging that a rate for cable programming" is unreasonable. 47 U.S.C. section  x623(c)(1)(B)(emphasis added). The simple fact, however, is that there are no Commission regulations that  xeven arguably provide procedures for a negotiated settlement such as this; the requirements of this section therefore have not been met.  Sp-  xConversely, the regulations that the Commission has adopted to govern procedures for rate  xcomplaints, which, like the statute itself, generally contemplate individualized adjudication of complaints,  S"- xsee, e.g., id. section 623(c)(1)(A); 47 CFR section 76.957,X"=, yO- xYԍWhere the regulations permit collective treatment of complaints, they allow only consolidated responses by the  yOR- xcable operator, and only when the complaints at issue involve "the identical rate or rate increase." 47 CFR section 76.956(d). Here, of course, many of the complaints arise out of different franchise areas. have clearly not been observed here. The  xCommission's noncompliance with these regulations raises its own separate set of potential legal problems.  S- x=See generally Service v. Dulles, 354 U.S.363, 388 (1957) (administrative agencies must follow their own regulations).   AxIn sum, given the existence of section 623, I simply do not understand how the use of this  S6- xkmechanism could comport with the Communications Act. Absent conformity with duly promulgated regulations providing for the use of this procedure, this resolution violates section 623.   xThe existence of section 623 also renders inapposite the caselaw often cited by the Commission  xin support of its position that these global settlements are proper. To be sure, courts have held that  xagencies generally possess broad discretion to choose between administrative processes. But none of those  SF- xcases involve, as here, an agency's failure to conform with statutorilyprescribed limitations on that  S - xMdiscretion. Cf. Heckler v. Chaney, 470 U.S. 821, 833 (1985) (presumption against unreviewability of  xagency nonenforcement decisions rebutted where "the substantive statute has provided guidelines for the  S!- xagency to follow"). Indeed, the decisions typically cited by the Commission are expressly premised on the  S"- x=lack of any statutory language precluding the agency's choice of processes. See, e.g., In re Permian Rate  S#- xBasin Area Rate Cases, 390 U.S. 747, 797 (1968) (stating, in affirming the Federal Power Commission's"#,p(p(88$"  xtwoprice rate structure for regulation of gas prices, that "[w]e find no objection under the Natural Gas  xAct to this dual arrangement" and that "[n]othing in the purposes or history of the Act forbids the Commission to require different prices for different sales").   xI understand the argument from utility for this sort of creative processing mechanism. If the  xCommission believes that rate "resolutions" are procedurally necessary, however, section 623 requires that  xwe establish them by regulation, with notice and comment. Pragmatic considerations are undeniably  ximportant, but they cannot overcome the clear letter of the law. Our paramount duty is to implement the  S- xlaw as written by Congress and enacted by the President not based on our own conceptions of the most  S- xefficient and effective way to proceed. See Chevron v. Natural Resources Defense Council, 467 U.S.  x837, 84243 (1985) (where statutory language is clear, "that is the end of the matter," for the agency "must  SJ -give effect to the unambigously expressed intent of Congress"). J =, yO - xjԍA "good cause" waiver of our regulations cannot cure this problem. Although the Commission can waive  xcompliance with its rules, it cannot waive compliance with section 623. Pursuant to that statutory provision, any  x<procedures employed by the Commission as an alternative to adjudication under our rules, even if those rules are waived, must still be set out by regulation.   S -  mxSecond, I do not believe that the Commission is at least at this stage of this proceeding on  S - xthe right path toward meeting its obligation under the Administrative Procedure Act to engage in reasoned  S - x.decisionmaking. Cf. Koch Gateway Pipeline Co. v. FERC, 136 F.3d 810, 814 (D.C. Cir. 1998)("reasoned  xdecisionmaking" requires "a process demonstrating the connection between the facts found and the choice  S^- xmade"). In this order, there is virtually no explanation as to how the Commission arrived at the refund  S6- x.amounts that it tenatively approves. There is no suggestion that any of the mandatory factors set out in  S- x.the statute, see 47 USC section 623(c)(2)(A)(F), or the objective criteria in our regulations, see 47 CFR section 76.922, for measuring the reasonableness of rates were either considered or applied.   }xThis lack of explanation as to methodology, as well as the uniformity of the refunds across  xfranchise areas in the respective States, causes me to suspect that the number at which the Commission  xand the cable operator have arrived has little do with actual rate analysis but more to do with simple  xhorsetrading. And due to this lack of explanation of the methodology or factors employed to calculate  xthe refund, there is no way for the local franchise authorities or other complainants to know whether they  xMhave been given a fair deal or even what the terms of that deal are, much less for a court to review the rationality of the refund determination.  SX-  lxThird, I am deeply concerned that the actual complainants were not party to the negotiations that  xproduced this "resolution." As I have made clear in other contexts, I believe that it is most unseemly, if  S - xLnot illegal, when regulated entities and regulators go behind closed doors to hammer out settlements. See,  S- xe.g., Third Order on Reconsideration, Revision of Universal Service Collection Amounts for 1998, FCC  x\No. 97411 (Dec. 16, 1997). I realize that the complainants are now being given a chance to comment  xon the final agreement reached by the Commission and the cable company, but this participation comes  xyat the eleventh hour, after the essential terms of the resolution have already been finalized as between the company and the Commission.  S -  xIt is true that the local franchising authorities and other complainants were not deprived of any  xparticipation they would have been afforded in a traditional cable rate adjudication. But that is not the  xpoint: under a traditional proceeding, municipalities may not have been able to participate beyond the"" ,p(p(88$"  S- xpoint of submitting their complaint, but neither would the cable operator have been able to participate  S- xbeyond the point of submitting their response. The problem is not that the complainants did not get  S- xZadditional participation per se but that the cable operator was afforded greater participation rights than they  S- xywere. Whether or not this amounts to a violation of our ex parte rules, a process in which the heart of the  xMnegotiations are conducted without the participation of the complainants themselves is just not a fair process. x   lxFinally, in the context of these rate resolutions, the Commission has often purported to bind even  xthose complaining parties who vigorously object to the terms of the resolution. It is a fundamental,  S- x[however, that settlements require the consent, whether on an optin or optout basis, of all the parties in  xinterest. If, in response to this order, franchising authorities or other complainants object to its terms and  xconditions, I have difficulty seeing how, as a matter of black letter settlement law, they could be bound by this "resolution."   xI appreciate that these "resolutions" are efficient in that they dispose of large numbers of  xcomplaints in one fell swoop. The Commission saves itself a lot of timeconsuming work, and the cable  xzoperator saves itself a lot of regulatory headaches and uncertainty. But it is the municipalities and the  S`- xiratepayers they represent, who were not a party to the negotiations that produced this resolution, that seem  xto be getting the short end of this regulatory stick. However convenient global rate resolutions might be  xfor the Commission and for cable companies, they do not appear to be within the bounds of governing law. I therefore cannot sanction their use.  S-x` `  hh*@*h* x   xIn closing, I observe that the administrative burdens that drove the Commission to employ this  xcreative but unlawful method of resolving consumer complaints are the sorry and inevitable byproduct  xof rate regulation itself. The better method for avoiding the administrative disaster that would be  xoccasioned by individualized adjudication of these backlogged complaints is simply to abolish rate  x regulation. That is, in part, precisely what Congress wisely recognized when it mandated that CPST  xregulation cease in March of 1999. When that time comes, we will be free of the administrative and regulatory demons that haunt this item.