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In the event its complaint was barred by the filing  S- xdeadlines in section 76.953 of the Commission's rules,E E yOn!-ԍ47 C.F.R.  76.953 (1994).E the Township asked for a waiver of that rule.7 E {O"-ԍId. at 7.7 "8 ,`(`(88"  xThe Township argued in comments on the proposed Social Contract that it was entitled to a ruling on the  S-merits. E yO@- xԍComments of the Township of Middletown, PA, pp. 48, filed Sept. 1, 1995. The Township also argued that  xit should have been included in the decisionmaking, questioned provisions regarding lifeline basic service and  xregional equipment rates, and expressed concern that the proposed Social Contract appeared to preempt its negotiations with the cable operator regarding system upgrades. It did not raise these matters on reconsideration.  S- ` Px6.` ` The Township now seeks reconsideration of the Social Contract insofar as it resolved that  x[complaint. The Township asks that the Commission address its complaint and issue a refund order. As  xjit did in the supplement to its complaint, the Township argues that Lower Bucks implicitly increased its  xCPST rate by failing to lower the rate after the Commission adopted revised ratemaking guidelines in May  x1994. It again asks for a waiver of the filing deadlines in section 76.953(a), (b) of the Commission's  S- xrules., E yO - xyԍ47 C.F.R.  76.953(a), (b) (1994). Paragraph (a) provided that a complaint regarding a rate in effect on  xSeptember 1, 1993, must be filed by February 28, 1994. Paragraph (b) provided that, except for complaints under  xparagraph (a), a complaint can only be filed regarding a change in rate and must be filed within 45 days of the  xxchange. Paragraph (c) provided that latefiled complaints were to be dismissed with prejudice. Paragraph (a) was  x[deleted from the Commission's Rules as no longer necessary; paragraph (b) was redesignated as paragraph (a);  {O- xparagraph (c), as paragraph (b). See Implementation of Sections of the Cable Television Consumer Protection an  xCompetition Act of 1992: Rate Regulation, MM Docket No. 92266, Sixth Report and Order and Eleventh Order  xon Reconsideration, 10 FCC Rcd 7393, App. B at 7442 (1995); 47 C.F.R.  953 (1995). Section 76.953 was further  xamended to conform to the Telecommunications Act of 1996, Pub. L. No. 104104,  301(b)(1)(C), 110 Stat. 56,  {O- x 115 (1996); see Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, CS Docket  xNo. 9685, Order and Notice of Proposed Rulemaking, 11 FCC Rcd 5937, App. A at 5986 (1996); 47 C.F.R.  953  x(1996). Unless otherwise indicated herein, all references to  76.953 are to the rule in effect at the time of the Township's complaint and supplements. According to the Township, the Commission's failure to consider the complaint on its merits is  xka violation of the Township's right to fundamental fairness and due process and precludes meaningful  xjudicial review. While Time Warner opposes the Petition for Reconsideration, arguing that the Township's  xunderlying complaint came too late to be considered, it states that it would not object to a written decision  S -addressing the issue.s E yOd-ԍTime Warner Opposition to Petition for Reconsideration at 3 ("Opposition").s  S - ` x7.` ` The Communications Act of 1934, as amended ("Communications Act"),M 4E {O-ԍ47 U.S.C.  151, et seq.M gives the  xCommission authority to regulate the CPST rates of cable systems that are not subject to effective  S - xcompetition. This authority is invoked if the Commission receives a valid and timely complaint.n E yO!-ԍCommunications Act  623(a)(2), (c), 47 U.S.C.  543(a)(2), (c).n Former  xLsection 623(c)(3) of the Communications Act gave local franchising authorities and subscribers 180 days  S0- xafter the Commission's rate regulations became effective to complain about existing rates.0VE {O&%- x;ԍCommunications Act  623(c)(3), as amended by the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102385,  3, 106 Stat. 1460, 1469 ("1992 Cable Act"). Thereafter,"0,`(`(88"  S- xj %MQ R %MQ complaints could be accepted only if filed "within a reasonable period of time following a change in rates  S- xL. . . ."CE {OB-ԍId. (emphasis added).C The Commission's rules became effective on September 1, 1993,ZE {O- xԍSee Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992:  xxRate Regulation, MM Docket No. 92266, Report and Order and Further Notice of Proposed Rulemaking, 8 FCC  {Of- x<Rcd 5631 (1993) ("Rate Order") (adopting rate regulations), effective date set, FCC 93372, 58 Fed. Reg. 41042  {O0- x(Aug. 2, 1993), reconsideration granted in part and denied in substantial part, First Order on Reconsideration,  {O- xSecond Report and Order, and Third Notice of Proposed Rulemaking, 9 FCC Rcd 1164 (1993), rate regulations  {O- xamended, Second Order on Reconsideration, Fourth Report and Order, and Fifth Notice of Proposed Rulemaking,  {O - x9 FCC Rcd 4119 (1994) ("Second Reconsideration Order"), rate regulations substantially affirmed, Time Warner  xhEntertainment Co., L.P. v. FCC, 56 F.3d 151 (D.C. Cir. 1995) (court vacated only treatment of gap period external  {O -costs), cert. denied, 116 S.Ct. 911, 133 L.Ed.2d 842 (1996). and complaints about existing  S- x=rates were due by February 28, 1994.H8 E yO -ԍ47 C.F.R.  76.953(a) (1994).H The Commission's Rules provided that, thereafter, "a complaint %MQ R %MQ   xalleging an unreasonable rate for cable programming service . . . may be filed against a cable operator  xonly in the event of a rate change" and must be filed "within 45 days" after the complainant receives a  S:-bill reflecting the rate change.}: E {O-ԍ47 C.F.R.  76.953(b) (1994); see Rate Order, 8 FCC Rcd at 5855 n.862.} "Latefiled complaints will be dismissed with prejudice."H:Z E yO4-ԍ47 C.F.R.  76.953(c) (1994).H  S- ` $x8.` ` When the Commission's rate regulations became effective on September 1, 1993, cable  xLoperators were not required to revise their rates, although those that disregarded the criteria were subject  xto refund liability if a valid complaint was filed and the challenged rate was found to be too high under  xthe Commission's rate regulations. When the Commission revised the criteria for determining maximum  x permitted rates in May 1994, only cable operators with valid complaints pending against them were  xrequired to comply with the revised criteria or justify higher rates with a costofservice showing in order  S - x.to avoid refund liability.Z E {O- xԍSecond Reconsideration Order, 9 FCC Rcd 4119, 4167  109, 4183  135 (1994). See FCC Form 1200:  xYSetting Maximum Initial Permitted Rates for Regulated Cable Services Pursuant to Rules Adopted February 22, 1994  yO-(May 1994), page 1 ("Form 1200").#Xj\  P6G;ynXP#ё Other operators failing to comply with the revised regulations again did so at  xtheir own risk. If a complaint was filed against an operator and its rates were subsequently found to be  S - x"unreasonable,"m E yOV -ԍCommunications Act  623(c)(1)(A), 47 U.S.C.  543(c)(1).m the Commission could order a refund of the excess amount charged subscribers, with  S - xjinterest, and a reduction of the rate to the maximum permitted rate.J E yO"-ԍ47 C.F.R.  76.961, 76.960.J The cumulative refund and interest would be calculated from the date a valid complaint was filed with the Commission.  S - ` x9.` ` The Township filed its complaint on December 30, 1994 and supplemented it on February  x23 and June 7, 1995. The Township and Time Warner agree that no complaint was filed against Lower",,`(`(88"  S- xjBucks' September 1, 1993 rate within the 180 day window established by the Act.E yOh- xԍTownship Feb. 1995 Supplement to Complaint at 5, Petition for Reconsideration at 8; Time Warner Opposition at 3. The Township and  xTime Warner also agree that Lower Bucks did not change the rate before the Township complained to the  S- xmCommission. E {Op- xԍTownship Feb. 1995 Supplement Complaint at 5; Time Warner Opposition at 56; see Township Petition for Reconsideration at 8. The Township's argument in its Supplement to Complaint and its Petition for  xLReconsideration, that Lower Bucks' failure to reduce its rate after the Commission revised its ratemaking  S`- xycriteria in 1994 is a de facto or implicit rate increase, is contrary to section 623(c) of the Communications  S:- xkAct. A change in the Commission's ratemaking criteria for regulated systems does not effect a change  x=in a system's rates or otherwise establish Commission jurisdiction over CPST rates which have not been the subject of a timely complaint.  S- ` Bx 10.` ` The Township argues that the Commission can waive section 76.953 for good cause.zE yO-ԍTownship Feb. 1995 Supplement to Complaint at 7, Petition for Reconsideration at 2, 10.  xzWhile the Commission can waive its own rules, it can do so only if the rule contains provisions about  xwhich the Commission has discretion. The requirement that a complaint be filed by February 28, 1994  xN(180 days from the effective date of rate regulation) or after a rate change is based on limits to the  xCommission's jurisdiction in the Cable Television Consumer Protection and Competition Act of 1992 (the  S - x["1992 Cable Act").N E yO|-ԍ1992 Cable Act  3, 106 Stat. 1469.N The Commission lacks authority to waive these statutory prerequisites. The only  S - xauthority cited by the Township, E yO- x,ԍTownship of Middletown, Pennsylvania, Reply to Opposition to Petition for Reconsideration; Social Contract for Time Warner Cable; FCC 95478, at 2. Complaints Regarding Cable Programming Service Prices, Northern  S - xDakota County Cable Communications Comm'n, MN, et al ("Complaints"),[ E yO-ԍDA 951592, 10 FCC Rcd 8801 (Cab. Serv. Bur. 1995).[ does not support its  xargument that the Commission can waive the 180 day limit to consider a complaint filed ten months  xbeyond the limit or, alternatively, consider a complaint without any underlying rate change. In  S - xComplaints, the Cable Services Bureau ("Bureau") recognized an exception to the Commission requirement  xkthat complaints had to be received at the Commission by February 28, 1994, and stated that it would  xconsider complaints postmarked on that date, because the Commission's rate complaint form was not clear  xabout whether a complaint had to be postmarked or actually received in order to be timely. The Bureau  xalso recognized an exception for those complainants who attempted to transmit their complaints by  xzfacsimile on February 28, 1994, but were unsuccessful because busy lines at the Commission blocked  S- xaccess throughout the day. Those documented efforts to make timely filings distinguish Complaints from the instant situation.  S- ` x 11.` ` The Township's complaint did not meet the statutory requirements or the Commission's  S- ximplementing regulatory requirements; nor did it fall within the limited exceptions set forth in Complaints  xfor timely attempts to file within the first 180 days after rate regulation became effective. Our process  xkwas fair in affording an opportunity to bring a complaint and was reasonable in terms of the elements"2 ,`(`(88"  xupon which a complaint could be based. The Township has submitted no information in its complaint,  xcomplaint supplements, comments, or petition for reconsideration that the Commission can consider to  S- x\show that subscribers within the Township are entitled to refunds.!E yO- xԍThe Township did file a complaint about a January 1996 rate increase taken by Lower Bucks. Its March 1996  x,corrected complaint indicates that the system took a CPST rate increase some time before comment was sought on  {O- xthe proposed Social Contract. See FCC Form 329: Cable Programming Services Rate Complaint (Aug. 1993),  x;Question 8, signed by John Burke on March 20, 1996. The Commission has no record of any complaint about such  xan increase, and the Township does not claim in its September 1, 1995 Comments or its Petition for Reconsideration that it filed a complaint. The Social Contract will not be amended to include the Township in the list of municipalities where refunds are due.  S8-@ III. CLARIFICATION ĐTP  S- ` x 12.` ` In light of a pending petition for review in the United States Court of Appeals for the  xDistrict of Columbia Circuit, we take this opportunity, on our own motion, to elaborate on certain points  xraised in petitioner's comments on the Social Contract. The Intercommunity Cable Regulatory  xCommission ("ICRC"), a regional council of governments comprised of 28 communities in the Cincinnati,  SH - xOhio area, viewed the proposed Social Contract as consideration for resolving rate complaints.E"H BE {O*-ԍSee ICRC Comments at 1.E It  xobjected to being included without prior notice or opportunity to participate, arguing that rate complaints  xkfrom its member communities were not then before the Commission. It also objected to the incentive  xLsurcharge and lifeline basic rates in the proposed Social Contract, was concerned that the Social Contract  xlwould preempt or be inferior to local franchise requirements regarding state of the art rebuilds and  xconnections to schools, and argued that provisions of the proposed Social Contract were inconsistent with the Commission's social contract requirements.  S- ` 3x 13.` ` We are clarifying that resolution of rate complaints in the Social Contract is within the  xauthority delegated to the Commission by the Communications Act, and that proper procedures were  xLfollowed in agreeing to the Social Contract; and that the upgrade incentive surcharge is fair to subscribers and not precluded by Commission rules or orders.  S@- A. Authority and Procedures in Negotiating the Social Contract  S- ` 3x 14.` ` In the Social Contract Order, the Commission concluded that proper procedures were  xLfollowed with respect to the Social Contract, including those provisions addressing the resolution of rate  S- xcomplaints._#E {O!-ԍSee Social Contract Order, 11 FCC Rcd at 280810._ The Commission relied on the broad mandate of the 1992 Cable Act, which gives the  xCommission discretion to resolve rate complaints and directs the Commission to create "fair and  SR- xzexpeditious procedures."j$Rf E yOX$-ԍCommunications Act  623(c)(1)(B), 47 U.S.C.  543(c)(1)(B).j The Commission also pointed to Implementation of Sections of the Cable  xTelevision Consumer Protection and Competition Act of 1992: Rate Regulation, and Adoption of a  xUniform Accounting System for Provision of Regulated Cable Services, MM Docket No. 93215, Report" $,`(`(88\"  S- xand Order and Further Notice of Proposed Rulemaking ("Cost Order),G%E yOh-ԍ9 FCC Rcd 4527, 467780 (1994).G which provided for social  xkcontracts as one method for setting cable rates, and explained that a social contract is also an available method for resolving rate complaints and providing refunds of excessive charges.  Sb- ` x15.` ` The Communications Act generally provides the Commission with wide discretion to  x.resolve rate cases. Section 4(i) of the Communications Act authorizes the Commission to "perform any  S- xand all acts . . . not inconsistent with [the] Act, as may be necessary in the execution of its functions.">&XE yO -ԍ47 U.S.C.  154(i).>  xSection 4(j) of the Communications Act provides that the "Commission may conduct its proceedings in  S- xsuch manner as will best conduce to the proper dispatch of business and the ends of justice. . . .">'E yOJ -ԍ47 U.S.C.  154(j).> As  xthe Commission has held in other orders, we believe that sections 4(i) and 4(j) of the Communications  Sr-Act allow us to consider cable operators' proposals to resolve rate complaints.(^rxE {O- x;ԍSee Continental Cablevision, Inc., 11 FCC Rcd 11118, 11136 (1996); TCI Communications, Inc., 11 FCC Rcd  {OT- x14696, 1469914700 (1996); Comcast Cable Communications, Inc., 11 FCC Rcd 4029, 403233 (1995), petition for  {O-review dismissed, City of Tallahassee v. FCC, No. 953722 (11th Cir., Nov. 4, 1996).  S" - ` Rx16.` ` In addition to the authority from sections 4(i) and 4(j) of the Communications Act,  S - x.resolution of past overcharges under a social contract is consistent with the intent of the Cost Order. A  S - xsignificant purpose of the Cost Order is to promote the formation and implementation of innovative plans  S - x.that encourage operators to upgrade their systems.S) E {O-ԍSee Cost Order, 9 FCC Rcd at 467879.S Including a global rate resolution as part of a social  xcontract is one such plan. Otherwise, a cable operator that was concerned about the uncertainty of  xypending rate controversies could have little or no incentive to enter into a social contract, and the upgrade  S6- x incentive plans contemplated by the Cost Order would not be available to that operator, despite the  xMbenefits a contract could bring to the operator's customers. To exclude global rate settlements from a  S- xsocial contract on the ground that they are not specifically addressed in the Cost Order would preclude  x\other beneficial provisions, such as the home wiring and free service to schools provisions offered by  S- xyTime Warner, since they, too, are not listed in the Cost Order. Moreover, in Implementation of Sections  xof the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, MM Docket  xNo. 93215, Second Report and Order, First Order on Reconsideration, and Further Notice of Proposed  S$- x.Rulemaking ("Cost Order II"),E*$0 E yO -ԍ11 FCC Rcd 2220, 2282 (1996).E adopting the social contract approach as part of the Commission's final  xrules, the Commission reaffirmed its intent to "remain flexible with respect to the scope and terms of such [social contract] arrangements."  S- ` x17.` ` The courts have long recognized that regulatory agencies have broad discretion to choose  S^- xamong ratemaking methods and procedures in ratemaking determinations.+^ E {O&- x-ԍSee FERC v. Pennzoil Producing Co., 439 U.S. 508, 517 (1979); Permian Basin Area Rate Cases, 390 U.S. 747, 797 (1968). The Commission has found"^+,`(`(88"  xthat one way to avoid the lengthy and costly process of adjudicating each rate complaint and litigating  xthose rulings through the court system is to adopt a global rate settlement that ensures reasonable rates,  x[provides prompt refunds to subscribers, and fulfills the Commission's statutory mandate that challenged  S- xCPST rates are not unreasonable.Y,E yO-ԍTCI Communications, Inc., 11 FCC Rcd at 1470001.Y Since the Commission approved the Social Contract, Congress has  S`- xpassed the Telecommunications Act of 1996,Q-`XE yOX-ԍPub. L. No. 104104, 110 Stat. 56 (1996).Q which demonstrates a desire to streamline cable rate  S8- xregulation.V.8E yO - xԍThe Telecommunications Act of 1996 amended  623(c)(3) of the Communications Act, 47 U.S.C.  543(c)(3),  xto limit Commission review to complaints filed by local franchising authorities who have received complaints from  xat least two subscribers within 90 days after a rate increase becomes effective. Before the amendment, subscribers  xcould complain directly to the Commission, and local franchising authorities could file complaints whether or not any subscribers had complained.V The Social Contract the Commission approved is consistent with that legislation, for it makes  xa far more expeditious means available for resolving complaints and affords protection to subscribers. To  x\the extent the Commission has diverged from the Commission's rules in adopting the Social Contract,  S- xthere was good cause to waive these rules pursuant to section 1.3 of the Commission's rules./E yO- xԍ47 C.F.R.  1.3 ("Any provision of the rules may be waived by the Commission on its own motion . . . if good cause therefor is shown."). The waiver  xachieves the objectives of the 1992 Act by ensuring the expeditious resolution of rate complaints while protecting consumers from unreasonable CPST rates.  S - ` x18.` ` As discussed in the Social Contract Order,;0 E yO-ԍ11 FCC Rcd at 2809.; the Commission conducted this proceeding  S - xin a manner consistent with Modification of Ex Parte Procedures in Certain Cable Rate Proceedings  S - x("Cable Ex Parte Order").1 E {O- xԍ9 FCC Rcd 7812 (1994). In addition to the Cable Ex Parte Order, 47 C.F.R.  1.1204(b)(7) provided an  {O- xexemption from ex parte restrictions for presentations requested by the Commission or staff for the resolution of  {O- xissues. In amending its ex parte rules, the Commission reclassified cable rate complaint proceedings as permitbut {OR- xdisclose proceedings. See 47 C.F.R.  1.1206(11), adopted in Amendment of 47 C.F.R.  1.1200 et seq. Concerning Ex Parte Presentations in Commission Proceedings, 12 FCC Rcd 7348 (1997). Although some franchising authorities complained that they were not part  xof the discussions themselves, the scope of the Social Contract made participation in discussions by a large  S - xnumber of franchising authorities unrealistic.[2 8E {O^ -ԍSocial Contract Order, 11 FCC Rcd at 280910.[ Comment was invited on the proposed Social Contract and  xthe comment period was extended to accommodate several local franchising authorities. The Social  xContract was modified to recognize concerns raised by local franchising authorities about the upgrade and  x[its funding. Although local franchising authorities were not asked to present their written views to Time  xWarner for inclusion in Time Warner's initial proposal to the Commission, which was the procedure  S- xdescribed in the Cost Order for social contracts involving individual franchise areas,3E {O(&- x-ԍSee Cost Order, 9 FCC Rcd at 4680, providing that social contract proposals should be accompanied by the written views of the local franchising authority. local franchising"$3,`(`(88"  xKauthorities were afforded an adequate opportunity to present their views directly to the Commission before  xit acted on the Social Contract. Indeed, 220 local franchising authorities filed comments on the draft  x!Social Contract, 167 expressing unqualified support and others expressing support while seeking  xclarification or adjustments. The difficulty of developing a uniform proposal through negotiations with  S`- xa large number of local franchising authorities established good cause for waiving the Cost Order  xLprovision allowing local franchising authorities to comment to the operator on the Social Contract before its presentation to the Commission.  S- ` x19.` ` The Social Contract was careful to preserve the authority of local franchising authorities  xto regulate the basic service tier ("BST"), negotiate more extensive upgrading requirements with the  xoperator, and negotiate more substantial commitments for wiring schools than those included in the Social  xContract. The Intercommunity Cable Regulatory Commission objected specifically to the BST lifeline  xservice authorized in the Social Contract, but each franchising authority had the option of opting out of  xthat provision and as a result could not be prejudiced by it. The Intercommunity Cable Regulatory  xCommission was also concerned about language in the Social Contract preempting "any state or local law,  S - xLregulation, ordinance or franchise that is inconsistent or conflicts with this [Social] Contract."A4Z E {O- xԍSocial Contract Order, App. B  III.I.3.a, 11 FCC Rcd at 2873. See Comments of the Intercommunity Cable  xJRegulatory Commission on the Proposed Federal Communications Commission Time Warner Cable Social Contract at 2 ("ICRC Comments").A Because  xof concerns raised by commenters, Time Warner agreed to a modification of the Social Contract limiting  xthe preemption provision to regulating rates or ordering refunds in a manner inconsistent with the terms  xof the Social Contract. The Social Contract is not intended to preempt existing or future franchising  x=agreements providing for a different or higher level of upgrades or benefits than required under the Social  S- xNContract.5E {Ol-ԍSee Social Contract Order at 282526 & App. B  III.I.2.a, id. at 287172. In addition, the Social Contract Order preempted on a onetime basis any nonfederal  xyrequirement that Time Warner give more than thirtyday notice of its intention to implement the rate and  xservice restructuring allowed by the Social Contract, so that the restructuring could be implemented by  Sl- xJanuary 1, 1996. Such preemption was limited to the period prior to February 1, 1996.S6l|E {O-ԍSee Social Contract Order at 279697.S The Commission did not preempt any other requirements.  S- B. System Upgrades and Upgrade Incentive Surcharge  S- ` 2x20.` ` The Social Contract commits Time Warner to investing more than $4 billion for upgrading  x.all of its cable systems over a five year period. It allows Time Warner to recover some of these upgrade  x/costs by annually increasing its monthly rates by $1.00, the upgrade incentive surcharge. The Social  xContract provides that: (1) at least 60 percent of the $4 billion investment would be applied for the  S- xbenefit of BST and CPST services that are subject to traditional rate regulation;m7E {O#-ԍSocial Contract Order, App. B  III.F.1, 11 FCC Rcd at 2863.m (2) the full amount of  xLcapital costs recovered in rate increases on regulated CPST service will be applied for the benefit of BST  S- xand CPST subscribers during the period of the Social Contract;v8E {O&-ԍSocial Contract Order at 2808  35 and App. B  III.F.4.a at 2864.v and (3) Time Warner will not pass" 2 8,`(`(88"  xthrough any capital costs for the upgrade other than the surcharge, unless a local franchising authority  S-requires more than the Social Contract requires.`9E {O@-ԍId., App. B  III.F.4.b, 11 FCC Rcd at 286465.`  S- ` 3x21.` ` The Social Contract's upgrade provisions represent a valuable benefit to subscribers in  xlterms of technology, improved reliability and picture quality, and increased programming choices,  S8- xincluding the possibility of new tiers and new types of services.d:8ZE {O2-ԍSee Social Contract Order, 11 FCC Rcd at 2803  36.d For all systems, upgrading will increase  xMsystem quality and make new services possible. We emphasize, however, that the upgrade incentive surcharge is intended to recover only the costs allocable to BST and CPST subscribers.  S- ` x22.` ` The Social Contract specifies minimum technical standards in the context of minimum  xbandwidth capacity for Time Warner systems. "[E]ach [Time Warner] cable system with a present  xcapacity of at least 550 MHz will have a bandwidth capacity of at least 750 MHz within five years after  x=the Effective Date; all other [Time Warner] cable systems will have a bandwidth capacity of at least 550  xMHz within five years after the Effective Date. At least 50% of all [Time Warner] subscribers will be  xserved by a system with a capacity of at least 750 MHz, of which at least 200 MHz is expected to be  S - x0allocated to digital distribution."[; E {O4-ԍId., App. B  III.F.1, 11 FCC Rcd at 2862.[ For systems upgraded to at least 750 MHz, fibertothenode  xarchitecture must be deployed to improve signal quality and reliability. Adding fiber and the associated  xconnections will generally allow increased system addressability and interactive capability, which will give  x{operators the flexibility to offer a variety of viewing packages from which subscribers can choose,  xtailoring their viewing packages according to their individual needs and potentially reducing the rates they  S-pay.m<~E {O-ԍSee Time Warner Reply Comments at 3031 (filed Sept. 25, 1995).m  S- ` Px23.` ` The technology prescription is general enough to provide Time Warner with the flexibility  xto employ state of the art technology throughout the building process required by the Social Contract.  xIt also allows local franchising authorities and Time Warner to negotiate reasonable technical requirements,  S-meeting both the local community's and Time Warner's needs.=2 E {O- x-ԍSee Social Contract Order, 11 FCC Rcd at 2802. See generally Communications Act  624(e), 47 U.S.C.   {O- x544(e), as amended by Telecommunications Act of 1996  301(e), Pub. L. No. 104104  301(e), 110 Stat. 116,  xdirecting the Commission to establish and update minimum technical standards and prohibiting states and local  xfranchising authorities from prohibiting, conditioning, or restricting a cable system's use of any type of subscriber  xequipment or any transmission technology. However, a franchising authority may require proposals for system  x>upgrades and may also consider the quality of the operator's service during the franchise renewal process.  xCommunications Act  626(b)(2), (c)(1)(B), 47 U.S.C.  546(b)(2), (c)(1)(B). A franchising authority awarding a  x;franchise "may require adequate assurance that the cable operator has the . . . technical . . . qualifications to provide  {O $- xcable service." Id.  621(a)(4)(C), 47 U.S.C.  541(a)(4)(C). Before the 1996 amendment to  624(e), a franchising  xauthority could apply to the Commission for a waiver to impose more stringent technical standards than those  {O%- xprescribed by the Commission. See 1992 Cable Act  16(a), Pub. L. No. 102385  16(a), 106 Stat. 1490. In CS  x;Docket No. 9685, the Commission is considering how amended  624(e) affects the scope of the cable franchising,  {O0'- xrenewal or transfer process in the area of technical considerations. See Implementation of Cable Act Reform"0'<,`(`('"  x,Provisions of the Telecommunications Act of 1996, Order and Notice of Proposed Rulemaking, 11 FCC Rcd 5937, 5973 (1996)." =,`(`(885"Ԍ S- ` ԙx24.` ` Although the Commission emphasized in the Social Contract Order that the upgrade  S- xincentive surcharge is being paid for modernized facilities rather than new services,`> E {O-ԍSocial Contract Order, 11 FCC Rcd at 2803  36.` the Social Contract  xalso requires that at least 60 per cent of new analog services added to Time Warner systems under the  S- xSocial Contract go to rate regulated BST and CPST,]?E {O-ԍId, App. B  III.F.1, 11 FCC Rcd at 286263.] rather than services such as premium services and  xnew product tiers. At least 15 additional CPST channels must be provided on average to the upgraded systems.  S- ` ~x25.` ` In exchange for the upgrade incentive surcharge, Time Warner agreed not to file costof S- xservice showings@* DE yO- xԍAlthough the Commission adopted a benchmark and price cap mechanism as the primary regulatory mechanism  xfor setting initial regulated rates and for governing rates on a going forward basis, it acknowledged that this  xmechanism might not produce fully compensatory rates in all cases. Where the benchmark and price cap mechanism  xKare inadequate, an operator may establish rates based on the reasonable costs of providing regulated cable service  xhthrough a costofservice proceeding governed by Commissionadopted accounting and cost allocation requirements.  xThese costofservice requirements are designed to be consistent with the ratebase/rate of return formula traditionally  xused in public utility regulation, but implemented in a manner that is simpler and easier to administer than the  xtelephone model. The Commission also allows abbreviated cost showings for rate increases needed to support capital  ximprovements such as network upgrades and rebuilds. Under this model, only the costs of the capital improvement  xare used to compute a capital improvement surcharge to benchmark rates. The surcharge is determined in accordance  xiwith the Commission's costofservice requirements, can be charged over the useful life of the improvement, and  {O>- xcannot be adjusted for inflation. See Cost Order, 9 FCC Rcd 4527; Cost Order II, 11 FCC Rcd 2220; 47 C.F.R.  76.922(g)(l), 76.924. for any of this upgrade or take the price increases allowed by the Commission's "going  S- xforward" rules for additional CPST channels.A6E yOp- xԍOur rules have provided two alternative methods for adjusting rates for the addition of programming services.  xFirst, an operator can add channels to CPSTs using our original "goingforward" rules, which allow the operator to  xcharge subscribers the cost of the additional programming plus up to an additional 7.5% markup on that cost and,  xwuntil January 1, 1998, a residual. 47 C.F.R.  76.922(d), (e), (f)(8), and (g)(2). Alternatively, until January 1, 1998,  xan operator could add programming services under the Commission's more recently adopted goingforward option,  x-which allowed an operator to charge subscribers up to $0.20 per channel for up to seven additional channels and  {O - xZamounts with respect to associated licensing fees. Id.  76.922(g)(3). The goingforward rules similarly required  xspecific decreases in subscriber rates when an operator deleted channels from its lineup, depending on when the  {O - xchannel in question was added. Id.  76.922(g)(4); Implementation of Sections of the Cable Television Consumer  xProtection and Competition Act of 1992: Rate Regulation, Sixth Order on Reconsideration, Fifth Report and Order,  yOD"-and Seventh Notice of Proposed Rulemaking, MM Docket No. 92266, 10 FCC Rcd 1226 (1994).#Xj\  P6G;ynXP# Not only does this agreement reduce regulatory burdens  xon the Commission as well as the operator, but it also provides a commitment that brings a tangible  x.benefit to subscribers. The Commission concluded that the $1.00 increase is reasonable and justified by  xthe magnitude of Time Warner's upgrade commitment. The Commission considered the impact of the  x?incentive surcharge on subscribers and, as shown in Tables A and B below, determined that Time  xyWarner's rates under the Social Contract will be within the parameters of the rates it would be authorized  xto implement under a typical costofservice analysis. Furthermore, by agreeing to forego costofservice" A,`(`(88k "  xshowings, Time Warner bears all of the risk of cost overruns for the upgrades required by the Social  S- xContract.sBE {O@-ԍSee Social Contract Order, App. B  IV.F.4, 11 FCC Rcd at 286465.s Table A shows rate increases based upon the current upgrade plan. Table B shows rate  xincreases that would accrue if Time Warner were required to justify increases under costofservice and  xForm 1240 filings based on actual cost forecasts. The projected costofservice surcharges are based on  xLcomposite plant upgrade costs and attendant operating expenses provided by Time Warner for regulated  xcable services. No noncable costs or costs attributable to unregulated cable services are included in the  S- xprojections.ACZE yO - xԍTime Warner further assured the Commission: "Time Warner's price cap under the Social Contract does not  x<include the costs of any additional equipment, such as telephone switches, needed to provide telephone service."  xReply Comments of Time Warner Cable at 30 ("Time Warner Reply Comments"). Should information come to our  x+ attention that this representation and the representations in the Social Contract were materially incorrect, we can take appropriate action.A The Form 1240 adjustments are based on Time Warner's projected inflation and external cost estimates. For comparison purposes, the Table B rates have been annualized. " C,`(`(88&"  S-  Table A: Time Warner Rates Under Social Contract ă  S-x` `  hh@1996h1997pp19981999  2000  S`-Initial Regulated Rate(a)hh@21.00h22.63pp24.2825.95  27.64  S8-Inflation(b)` `  hh@00.63h00.65pp00.6700.69  00.71  S-Surcharge Pursuant to Contract(c)hh@01.00h01.00pp01.0001.00  01.00  S-Year End Regulated Rates(d)hh@ 22.63 h 24.28 pp 25.95  27.64    29.35  Sp-Percentage Increase hh@7.76%h7.29%pp6.88%6.51%  6.19%  SH -  S -  #(a)XxThe Initial Regulated Rate for 1996 represents the average rate for BST and CPST service companywide. This rate was provided by Time Warner.(#  S -  (b)XxAssumes a 3% annual inflation rate applied to the Initial Regulated Rates each year. Inflation is not applied to annual surcharges.(#  S -(c)XxRepresents the incremental change in the surcharge each year to a cap at $5.00 in 2000.(#  SX-(d)XxRepresents the yeartoyear percentage increase in the Year End Regulated Rates.(#  S-0  Table B: Rates Based on Typical CostofService Justification ă  S-x` `  hh@1996h1997pp19981999  2000  Sh-Initial Regulated Rate(a)hh@21.00h22.81pp24.8326.80  28.74  S@-Inflation(b)` `  hh@00.63h00.65pp00.6700.69  00.71  S-Surcharge Pursuant to COS/Form 1240(c)@01.18h01.37pp01.3001.25  01.19  S-Year End Regulated Rates(d)hh@ 22.81 h 24.83 pp 26.80  28.74    30.64  Sx-Percentage Increase hh@8.62%h8.86%pp7.93%7.24%  6.61%  S-  #(a)XxThe Initial Regulated Rate for 1996 represents the average rate for BST and CPST service companywide. This rate was provided by Time Warner.(#  S-  (b)XxAssumes a 3% annual inflation rate applied to the Initial Regulated Rates each year. Inflation is   #not applied to annual surcharges, consistent with the Table A assumption, although some   msurchargerelated costs would entitle Time Warner to inflation adjustments if claimed on Form 1240.(#  S -  1(c)XxRepresents the incremental change in the surcharge justifiable under a costofservice or Form   1240 for each year through 2000. As a conservative assumption, upgrade costs are spread ratably over five years.(#  S"-(d)XxRepresents the yeartoyear percentage increase in the Year End Regulated Rates.(#  S %- ` nx26.` ` Several considerations may materially affect these projections, and most favor subscribers.  x.For instance, if Time Warner's capital investment were to occur more quickly than assumed, subscribers  xcould be subject to extreme price increases under costofservice justifications. The phased surcharge price"& C,`(`(88("  xincreases minimize price volatility. Subscribers are not subject to inflation on surcharged amounts, but  xwould be subject to inflation on some external cost increases claimed on Form 1240 filings. Under both  x\surcharge and actual pricing, only 60% of upgrade costs are passed on to regulated subscribers. Both  xpricing schemes assume an 11.25% return on net investment, a 50% debt/ 50% equity capital structure,  S`- x[and income tax allowances based on a 35% Federal and 5% State tax rate. Overall, excluding the inflation  xavoidance benefit provided by the surcharge, costofservice and Form 1240 justifications would result in rates $1.35, or 4.4%, costlier to subscribers than the surcharge over the period 19962000.  S- ` x27.` ` The Social Contract includes provisions to protect subscribers' interests in the upgrade.  S- xAs noted in the Social Contract Order, it requires annual reporting of the progress during the previous  x.calendar year and projections for the next year, with reports going to both the Commission and the local  SJ - xLfranchising authorities.sDJ E {O -ԍSocial Contract Order, App. B  III.F.3, 11 FCC Rcd at 2863.s If Time Warner does not meet its commitment in any franchise area by the end  xof the Social Contract, Time Warner must return the upgrade incentive surcharge collected from that  S - xfranchise area, plus interest and liquidated damages.SE ZE {O-ԍId.  III.F.5, 11 FCC Rcd at 2865.S The Commission can audit Time Warner's books  xand records to evaluate compliance. If there is any problem, the Commission can exercise the rights and  xremedies attendant on a violation of any Commission order. These provisions ensure that subscribers will receive the promised value from the upgrade surcharge.  S2- ` 4x28.` ` The Intercommunity Cable Regulatory Commission saw no reason for the upgrade  x{surcharge, because it had previously negotiated an upgrade commitment without a surcharge when  xrenewing Time Warner's franchises. The ICRC does not say, however, that the upgrade commitment it  xynegotiated with Time Warner included any commitment from Time Warner to forego recovering the costs  x=of the upgrade consistent with the Commission's costofservice rule or modified costofservice rule for  Sj- xynetwork upgrades.)F"jE {O- xԍSee 47 C.F.R.  76.922(i), (j), 76.924. The Social Contract does not supplant franchise upgrade commitments  xin excess of those in the Social Contract and does not preclude Time Warner from seeking to recover the costs of  x,any additional commitments required in a franchise. Any recovery through BST rates of franchiserequired upgrade costs in excess of the costs required by the Social Contract is subject to review by the franchising authority.) The ICRC also criticized the surcharge as inconsistent with the 1992 Cable Act and  SB- x[the Cost Order's intent that rates for current services should be kept at the benchmark/price cap rate and  S-continue to purchase comparable services after a social contract.GE {O- xԍSee ICRC Comments at 13. The upgrade surcharge is imposed only on CPST rates, which are the exclusive jurisdiction of the Commission. We disagree.  S- ` 2x29.` ` An important goal of the 1992 Cable Act was to afford cable operators an opportunity to  S- xexpand capacity and the programming available to subscribers.H0 E {Ot#-ԍ1992 Cable Act  2(b)(3), 106 Stat. 1463; see Cost Order, 9 FCC Rcd at 4677  295. The Cost Order proposed incentives for  S~- xLoperators to pursue this goal. The Cost Order envisioned that an operator, after completing an upgrade,  xwould seek changes in its rates, most likely through a flexible rate structure for the new regulated services  xresulting from the upgrade. The Commission was concerned, however, that a flexible pricing approach  xfor new services could provide an incentive for operators to seek to recoup investment through these new" H,`(`(88k"  S- x-services to the detriment of current regulated services.nIE {Oh-ԍCost Order, Notice of Proposed Rulemaking, 9 FCC Rcd at 468991.n The Cost Order proposed to temper this incentive by limiting an operator's flexibility to alter current service if it priced new services flexibly.  S- ` _x30.` ` The Social Contract upheld the premise reflected in the Cost Order that upgrades financed  xby subscribers protect and enhance current regulated services. It also set forth a reasonable plan for  xrecovering the costs of the upgrade. Through the social contract process, Time Warner sought advance  xLapproval of its upgrade plans, committed to add an average of 15 channels to its current CPST, accepted  xa specific surcharge in lieu of either rate increases to which it would otherwise be entitled or flexible  xpricing for all of the new channels added, subjected itself to oversight for the period of the Social  xContract, and agreed to penalties if the upgrades were not completed by the end of the Social Contract.  St- xyWe do not read the Cost Order as precluding Commission consideration of a proposal like the one in this Social Contract that achieves the Commission's objectives.  S - ` Cx31.` ` Although Time Warner could have recovered its costs consistent with Commission  S - xmparameters through individual costofservice showings,J ZE {O- xԍSee Cost Order, 9 FCC Rcd 4527; Cost Order II, 11 FCC Rcd 2220; 47 C.F.R.  76.922, 76.924. Operators  xiseeking to recover the costs of network upgrades could use FCC Form 1220: Cost of Service Filing for Regulated  xCable Services (May 1994, updated July 1996) ("Form 1220") to make a full costofservice showing or FCC Form  x1235, Abbreviated Cost of Service Filing for Cable Network Upgrades (Feb. 1996) to make an abbreviated costof {O-service showing only of the upgrade costs. Cost Order, 9 FCC Rcd at 467475. the Social Contract was a viable and  xadministratively efficient proposal that would enhance the quality and capacity of cable systems, increase  xcurrent regulated services, and protect subscribers from unreasonable rates and "rate shock" from a one xtime rate increase reflecting all of the upgrade costs to which Time Warner would be entitled at the  xjcompletion of the upgrade. Moreover, the Social Contract provides a base to attract investment, a factor  xthat brings enhanced services to all subscribers, including those already benefitting from upgrades. That  x=it helps make Time Warner more competitive is also a benefit. Competition brings more services, higher  S- xyquality, and lower prices. These results are all goals of the 1992 Cable Act and our Cost Order. We find  xthat the balance struck in approving the Social Contract, of allowing a surcharge adjustment in exchange  x for specific commitments by Time Warner to upgrade its system, comports fully with the statutory structure and intent in the Communications Act.  S-w IV. ORDERING CLAUSES ă  S- ` x32.` ` ACCORDINGLY, IT IS ORDERED that, pursuant to 47 C.F.R.  1.106(a)(1), (k), the  xPetition for Reconsideration of Social Contract for Time Warner, FCC 95478, 11 FCC Rcd 2788 (1995), filed January 11, 1996 on behalf of Township of Middletown, Pennsylvania IS DENIED. "0J,`(`(88]"  S- ` #x 33.` ` IT IS FURTHER ORDERED That, pursuant to 47 C.F.R.  1.106(a)(1), (k), the Petition  xkfor Reconsideration of Social Contract for Time Warner Cable, DA 952491, 11 FCC Rcd 3099 (Cab.  xmServ. Bur. 1995) filed January 11, 1996, on behalf of Middletown Township, Pennsylvania IS DISMISSED as moot. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@ x` `  hh@Magalie Roman Salas x` `  hh@Secretary "pJ,`(`(88"  S- lStatement of Commissioner Harold W. FurchtgottRoth, Dissenting In Part  S- In the Matter of Social Contract for Time Warner, FCC 98316 ă   xBecause I do not believe that the Commission has the statutory power to resolve cable rate  xycomplaints by entering into "social contracts," and because their use raises other legal problems, I dissent  S- x?from today's ratification of the Time Warner contract and also from the Commission's sua sponte  S-"clarification" of its legality.JE yOR- xԍI support, however, Part II of the item which dismisses the Lower Bucks Cablevision complaint on the basis  {O -of being filed out of time. See supra at paras. 510. OI.   xAs I have previously explained, I do not think that the Commission possesses statutory authority  S" - xto adopt global rate resolutions. See, e.g, TCI Communications, Inc., Final Resolution of Cable  S - xProgramming Service Rate Complaints (released July 9, 1998); Cablevision Systems Corporation,  S - xResolution of Cable Programming Service Rate Complaints (released Aug. 11, 1998). Among the other  xnettlesome issues raised by this process are questions of fundamental fairness and of the binding nature  xLof the settlement on the complainants, as they themselves were neither party nor otherwise privy to the  S`-negotiations that resulted in the agreement. See id.   xMoreover, in this case, there are new twists. To name a significant one, the subscribers who are  x/paying out additional rates for service in order to cover the costs of upgrades are required to do so in  xkadvance of the receipt of any direct benefits from those upgrades. In theory, a subscriber could begin  xpaying the additional rates in the first year of the contract, but not see any upgrades in place until the last  xyear. This violates the basic regulatory principle that the Commission has established in other  xjproceedings, namely, that rates should not include plant investments until that part of the plant becomes  S"- x"used and useful." See Implementation of Sections of the Cable Television Consumer Protection and  xCompetition Act of 1992: Rate Regulation and Adoption of a Uniform Accounting System for Provision  S- xof Regulated Cable Service, FCC 94-39 (released March 30, 1994), at paras. 3840 (adopting "used and  xuseful" standard and explaining that it "ensures that subscribers pay for only those portions of plant that  S- xare used and useful in the provision of regulated cable services"), para. 288 (applying standard to network  xupgrades and concluding that "the upgrade rate increase should not be assessed on customers until the  xupgrade is complete ). Moreover, the orders and rules adopted therein relied upon by the Commission  S- xfor authority speak only of setting rates on a prospective basis, not settling disputes about past rates, see  S-Cost Order, 9 FCC Rcd 4527 (1994); Cost Order II, 11 FCC Rcd 2220 (1996), as this agreement does.}"E yO - xԍI make these regulatory points not because I support the concept of cable rate regulation or believe that it  xbenefits consumers. To the contrary, I have a long record of skepticism about such regulation and any possible  xconsumer benefits thereof. In negotiating "social contracts," however, the Commission cannot simply discard its rules  xfor rate regulation for one particular regulatee, no matter how much those rules may harm consumers. These "social contracts' are merely symptomatic of the futility of rate regulation.} ",`(`(88"Ԍ`NII.   xThis "social contract" does far more than just globally settle rate complaints, however. The  xoriginal Memorandum Opinion & Order, which the Commission today ratifies and indeed seeks to b`uttress  xas a litigation strategy, purports to regulate Time Warner in breathtakingly detailed and extensive ways.  S8-See generally  11 FCC Rcd 2788. Among other things, the "contract" requires that Time Warner:  XxInvest $4 billion to rebuild and upgrade all of its domestic cable systems. In doing so,  S- ~it must use fiber optic specifically, "fiber to the node architecture" technology. Id.  S-at paras. 5, 25.   XxBuild systems with a minimum bandwidth capacity of 500 MHz and ensure that at least  S$ -50% of subscribers have access to 750 MHz systems. Id. at para. 25.   5XxAllocate a minimum of 60% of the investment for the benefit of basic and cable  S -programming service tier subscribers. Id. at para. 5.   XxAllocate a minimum of 60% of new analog capacity for "traditionally regulated" cable  S8-programming service tiers. Id.   3XxProvide, on average, at least 15 additional channels on cable programming service tiers.  S-Id.   St-XxCreate lifeline basic tiers at "affordab[le]" rates. Id. at paras. 7, 52.   #XxFor systems that serve 85% of total subscribers, reduce the price of basic service by 10%  within 6 months of the effective date of the contract and include a revenueneutral  S-increase in premium services. Id.   XxFor all other systems, remove anything other than those stations required by law and  Pmove them to the premium level, with revenueneutral decreases to the basic and increases  S8-to the premium services. Id.   S- XxProvide free cable connections to all public schools in its franchise areas. Id. at paras. 8, 65.   St-XxFor existing public schools, wire additional classrooms at cost. Id.   XxFor public schools to be built and those undergoing renovation, wire each classroom free  S -of charge. Id.   XxProvide cable connections at cost to all secondary private schools that receive certain  S#-federal funds. Id.   S:%-xWire additional classrooms in covered private schools at cost. Id.  S&-XxProvide free basic and enhanced programming services to all wired schools. Id. "&,`(`(88n("Ԍ XxProvide a monthly educational program guide containing "curriculum support ideas" for  S-teachers. Id.   S-XxProvide a new online personal computer service to all wired schools. Id   S<-XxProvide free modems for use with the personal computer service to all wired schools. Id.   S-xNot restrict subscribers' ability to remove or maintain cable wiring in situations not  S-Xxcovered by Commission home wiring rules. Id. at 76.   Sz-XxTo "educat[e]" consumers about their homewiring options under the agreement. Id.    x"If to describe this case is not to decide it," then, in my view, the idea of federal administrative  S - xagencies with only those powers conferred by Congress "no longer has meaning." Morrison v. Olson, 487  xU.S. 654, 703 (1988) (Scalia, J., dissenting). Nothing in the Communications Act authorizes the  xLCommission to dictate the technical requirements of cable plants other than in rulemakings under section  x624(e); allocate private investment capital as among service offerings; set channel capacity levels on cable  Sf- xsystems; regulate rates to be anything other than "reasonable," i.e., "affordable"; mandate the provision  xof free cable goods and services, programming guides, and educational curricula; or extend homewiring  x]requirements for one particular regulatee, outside of a rulemaking under section 16(d) of the Cable Television Consumer Protection and Competition Act of 1992.   xIn short, the original Order undertakes virtually everything but a reasoned determination of fair  xand reasonable rates during the relevant time period and in the relevant franchise areas, the one task that  SP- xCongress explicitly assigned to the Commission. See 47 USC section 543(c) (Commission must  x="identify[], in individual cases, rates for cable programming services that are unreasonable"). Indeed, the  S- xitem assiduously avoids (to an extent verging on the nonsensical) any such finding. See 11 FCC Rcd at  S- xpara. 46 ("We find that the rates provided for in the Social Contract are reasonable. Although past rates  S- xare not found to be unreasonable, the Social Contract provides for refunds of amounts paid in excess of rates we find in this Order to be reasonable.") (emphasis added).   nxThe fact that Time Warner agreed to the imposition of these conditions does not create the  xCommission's requisite statutory authority to demand them. Only Congress can do that. And I am fairly  x/certain, after reviewing the sections of the Act that actually deal with cable rate complaints, that this  xz"social contract" with all the conditions it imposes that are wholly unrelated to just and reasonable  x.rates, such as requirement that Time Warner provide school teachers with curriculum plans was never contemplated by Congress as an action that the Commission could take.   xIn essence, what the Commission has done is to trade the bulk resolution of rate complaints for  xa number of conditions that it could not, for lack of statutory authority, otherwise require. Such an  S!- x.approach often characterized as "administrative armtwisting" is legally troublesome. See generally  S"- xLars Noah, "Administrative ArmTwisting in the Shadow of Congressional Delegations of Authority,"  x1997 Wis. L. Rev. 8873; Remarks by Commissioner Harold W. Furchtgott Roth Before the Media  x<Institute, Nov. 17, 1998, at . The Commission should not use standard proceedings such  xas cable rate complaints or license transfer applications to create regulations in the form of conditions  xthat it could not require outright. It is an evasion of statutory limits. And the Commission should not  xbe able to place conditions on applications that have nothing to do with the specific underlying issues:"&,`(`(88n("  xhere, for instance, what authority does the Federal Communications Commission have to involve itself,  x/or cable companies, in teachers' class plans, much less in the context of adjudicating rate complaints? Even the most generous interpretation of the Communications Act could not yield a finding of such power.  S`-x` `  hh*@*h*   ]xFor the foregoing reasons, I do not support this "social contract" and thus must dissent from Part III of this item.  S- ",`(`(88" X(#  S-X(#m` CONCURRING STATEMENT OF COMMISSIONER MICHAEL K. POWELL  S-eIN THE MATTER OF SOCIAL CONTRACT FOR TIME WARNER, FCC 98316 ĐTP    xI concur in this Memorandum Opinion and Order. I do so because the basic decision of the  xCommission to enter this "Social Contract" with Time Warner has been implemented. Although I wish  x/to make clear that I have serious doubts about the wisdom of entering this deal in the first instance, I  x.believe it is appropriate for the Commission to defend decisions once made. For this reason, I concur in the clarification included in this decision which is intended to aid in the court review.