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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) File No. EB-02-
TC-094 )
Time Warner Communications ) CUID No.
NY0887 (Fairport Village)
)
Petition for Reconsideration )
ORDER ON RECONSIDERATION
Adopted: July 16, 2002 Released: July 17,
2002
By the Chief, Enforcement Bureau:1
1. In this Order we consider a petition for
reconsideration and an amendment to the petition (together
"Petition") of Order, DA 97-1867 ("Prior Order"),2 filed
with the Federal Communications Commission ("Commission") by
the above-referenced operator ("Operator").3 The Prior Order
resolved a complaint against Operator's January 1, 1997
cable programming services tier ("CPST") rate increase,
found Operator's CPST rate to be unreasonable and ordered
refunds for the period from January 23, 1997 (the date of
the filing of the first valid complaint) through December
31, 1997. Operator's refund liability was held in abeyance
pending resolution of its appeal of the Uniform Rates
Order.4 In this Order, we grant Operator's Petition in part
and order refunds.
2. Under the provisions of the Communications Act5
that were in effect at the time the complaints were filed,
the 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")6 and the Commission's rules required the
Commission to review CPST rates upon the filing of a valid
complaint by a subscriber or local franchising authority
("LFA"). The Telecommunications Act of 1996 ("1996 Act"),7
and the Commission's rules implementing the legislation
("Interim Rules"),8 required that a complaint against the
CPST rate be filed with the Commission by an LFA that has
received more than one subscriber complaint. The filing of
a valid complaint triggers an obligation upon the cable
operator to file a justification of its CPST rates.9 If the
Commission finds the rate to be unreasonable, it shall
determine the correct rate and any refund liability.10
3. Operators must use the FCC Form 1200 series to
justify rates for the period beginning May 15, 1994.11
Operators may file an FCC Form 1210 to justify quarterly
rate increases based on the addition and deletion of
channels, changes in certain external costs and inflation.12
Operators may justify their rates on an annual basis using
an 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.13 Any incurred
cost that is not projected may be accrued with interest and
added to rates at a later time.14
4. In its Petition, Operator asserts that it should
not have to initiate any refunds until its appeal of the
Uniform Rates Order is resolved. Operator's application for
review of the Uniform Rates Order was denied on August 16,
1999.15 Therefore, that portion of Operator's Petition is
now moot. In addition, Operator included amended FCC Form
1240s with its Petition. Operator asserts that the amended
FCC Form 1240s are consistent with the bifurcated
methodology approved by the Cable Services Bureau for
Operator following the Commission's adoption of the Time
Warner Social Contract.16 We agree that Operator's
methodology is consistent with prior Cable Service Bureau
orders,17 and we accept Operator's amended FCC Form 1240s
through 1997. Upon review of Operator's amended FCC Form
1240s, we accept Operator's calculated maximum permitted
rate ("MPR") of $22.15, effective January 1, 1997. Because
Operator's actual CPST rate of $22.47, effective January 23,
1997 through December 31, 1997, exceeds its calculated MPR
of $22.15, we find Operator's actual CPST rate of $22.47,
effective January 23, 1997 through December 31, 1997, to be
unreasonable.18
5. Operator did not file a refund plan. Rather than
calculating its refund liability for 1997, the period
reviewed in the Prior Order, Operator submitted additional
FCC Form 1240s covering the period January 1, 1998 through
December 31, 1998, which purport to true-up Operator's 1997
refund liability. We have not reviewed the 1998 FCC Form
1240s, and there is no pending complaint requiring us to do
so. We will not accept FCC Form 1240s filed subsequent to a
released order simply to allow an Operator to attempt to
true-up refund liability and avoid the payment of refunds.19
In addition, the Bureau does not have the resources to
review additional filings made subsequent to the release of
an order. We cannot assume that Operator calculated its
1998 FCC Form 1240s accurately. A review of the additional
filing might reveal errors were made in the calculation of
the 1998 rate. We therefore reject Operator's 1998 FCC Form
1240s.
6. We calculate Operator's refund liability as
follows: For the period from January 23, 1997 through
December 31, 1997, we calculate an overcharge of $0.32 per
month per subscriber, in accordance with this Order. Our
total calculation, including interest through July 31, 2002,
equals $7,915.00. We order Operator to refund this amount,
plus franchise fees and any additional interest accrued from
July 31, 2002 to the date of refund, to its CPST subscribers
within 60 days of the release of this Order.
7. Accordingly, IT IS ORDERED, pursuant to Section
1.106 of the Commission's rules, 47 C.F.R. § 1.106, that
Operator's Petition for Reconsideration IS GRANTED IN PART
TO THE EXTENT INDICATED HEREIN.
8. IT IS FURTHER ORDERED, pursuant to Sections 0.111
and 0.311 of the Commission's rules, 47 C.F.R. §§ 0.111 and
0.311, that In the Matter of Time Warner Communications, DA
97-1867, 12 FCC Rcd 23757 (1997), IS MODIFIED TO THE EXTENT
INDICATED HEREIN.
9. IT IS FURTHER ORDERED, pursuant to Sections 0.111
and 0.311 of the Commission's rules, 47 C.F.R. §§ 0.111 and
0.311, that the CPST rate of $22.47, charged by Operator in
the community referenced above, effective January 23, 1997
through December 31, 1997, IS UNREASONABLE.
10. IT IS FURTHER ORDERED, pursuant to Section 76.962
of the Commission's rules, 47 C.F.R. § 76.962, that Operator
shall refund to subscribers in the franchise area referenced
above the total amount of $7,915.00, plus franchise fees,
plus any interest accruing from July 31, 2002 to the date of
refund, within 60 days of the release of this Order.
11. IT IS FURTHER ORDERED, pursuant to Section 76.962
of the Commission's rules, 47 C.F.R. § 76.962, that Operator
shall file a certificate of compliance with the Chief,
Enforcement Bureau, within 90 days of the release of this
Order certifying its compliance with this Order.
FEDERAL COMMUNICATIONS
COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 Effective March 25, 2002, the Commission transferred
responsibility for resolving cable programming services tier
rate complaints from the former Cable Services Bureau to the
Enforcement Bureau. See Establishment of the Media Bureau,
the Wireline Competition Bureau and the Consumer and
Governmental Affairs Bureau, Reorganization of the
International Bureau and Other Organizational Changes, FCC
02-10, 17 FCC Rcd 4672 (2002).
2 In the Matter of Time Warner Communications, DA 97-1867,
12 FCC Rcd 23757 (CSB 1997).
3 The term "Operator" includes Operator's predecessors and
successors in interest.
4 In Re Petition of Time Warner Cable, DA 98-1219, 13 FCC
Rcd 12185 (CSB 1998).
5 47 U.S.C. §543(c) (1996).
6 Pub. L. No. 102-385, 106 Stat. 1460 (1992).
7 Pub. L. No. 104-104, 110 Stat. 56 (1996).
8 See Implementation of Cable Act Reform Provisions of the
Telecommunications Act of 1996, 11 FCC Rcd 5937 1996).
9 See Section 76.956 of the Commission's rules, 47 C.F.R.
§76.956.
10 See Section 76.957 of the Commission's rules, 47 C.F.R.
§76.957.
11 See Section 76.922 of the Commission's rules, 47 C.F.R.
§76.922.
12 Id.
13 Id.
14 Id.
15 See In the Matter of Time Warner Cable, FCC 99-217, 14
FCC Rcd 13760 (1999).
16 See In the Matter of Social Contract for Time Warner, 11
FCC Rcd 2788 (1996).
17 See, e.g. In the Matter of Time Warner Cable, DA 98-1826,
13 FCC Rcd 19534 (CSB 1998).
18 These findings are based solely on the representations of
Operator. Should information come to our attention that
these representations were materially inaccurate, we reserve
the right to take appropriate action. This Order is not to
be construed as a finding that we have accepted as correct
any specific entry, explanation or argument made by any
party to this proceeding not specifically addressed herein.
Information regarding the specific adjustments made to
Operator's FCC Forms can be found in the public files for
the above-referenced community which are available in the
FCC Reference Information Center, Portals II, 445 12th
Street, SW, Room CY-A257, Washington, DC, 20554. This
document may also be purchased from the Commission's
duplicating contractor, Qualex International, Portals II,
445 12th Street, SW, Room CY-B402, Washington, DC, 20554,
telephone 202-863-2893, facsimile 202-863-2898, or via e-
mail qualexint@aol.com.
19 See, e.g., In the Matter of Cableone, DA 02-522, 17 FCC
Rcd 4300 (CSB 2002).