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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554
                                 

In the Matter of                        )    File No.    EB-
02-TC-016
                              )         
Suburban Cable TV Co., Inc.             )    CUID        No.  
PA1991 (Blue Bell)
                              )    
Complaints Regarding                    )    
Cable Programming Services Tier Rates        )    
and Petition for Reconsideration             )    


                            ORDER

     Adopted:  July 16, 2002            Released:   July 17, 
2002 

By the Chief, Enforcement Bureau:1

     1.   In  this   Order,  we  consider  a   petition  for 
reconsideration ("Petition") of Cable Services Bureau Order, 
DA  95-1226   ("Prior  Order"),2  filed  with   the  Federal 
Communications  Commission  ("Commission")   by  the  above-
referenced operator ("Operator").3   Operator also requested 
a stay  of the  Prior Order, which  was granted.4  The Prior 
Order resolved complaints filed against the rates charged by 
Operator for its cable programming services tier ("CPST") in 
the community referenced above through May14, 1994.  In the 
Prior  Order,  the Cable  Services  Bureau  stated that  its 
findings "do not  in any way prejudge  the reasonableness of 
the price for  CPS service after May 14, 1994  under our new 
rate  regulations."5   In  this  Order  we  deny  Operator's 
Petition, vacate the stay  and address the reasonableness of 
Operator's CPST rates beginning May 15, 1994.
 
             2.     Under    the     provisions    of    the 
Communications  Act6 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")7  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"),8  and  the 
Commission's  rules implementing  the legislation  ("Interim 
Rules"),9 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.10  If the Commission 
finds the  rate to be  unreasonable, it shall  determine the 
correct rate and any refund liability.11 

     3.   During the  first phase  of rate  regulation, from 
September 1,  1993 until  May 15,  1994, the  benchmark rate 
analysis and comparison with an operator's actual rates were 
calculated using the FCC  Form 393.12  The benchmark formula 
was  revised,  effective  May  15, 1994.13    Systems  first 
becoming subject to rate regulation  after May 15, 1994 were 
required  to justify  their  initial  regulated rates  using 
forms in the  FCC Form 1200 series.14  Systems against which 
rate  complaints  were  still pending  when  the  Commission 
revised its  benchmark formula were required  to recalculate 
their benchmark rates as of May  15, 1994 using the FCC Form 
1200.15  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.16  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.17  Any  incurred 
cost that is not projected  may be accrued with interest and 
added to rates at a later time.18

     4.   In its  Petition, Operator  argues that  the Cable 
Services  Bureau erred  when  imputing  normalized taxes  to 
Operator's  customer  equipment  costs prior  to  unbundling 
those  costs  from  Operator's  service  rates.   The  Cable 
Services Bureau previously addressed this issue at length in 
Suburban Cable.19   The discussion in that  case is directly 
on point and need not  be repeated here.  The Cable Services 
Bureau  concluded   that  the  benchmark   rate  methodology 
contemplates the unbundling of normalized taxes and it would 
be arbitrary  and inconsistent  for the Commission  to build 
normalized taxes into the pricing of tier offerings and only 
unbundle actual  taxes attributable to equipment  costs.  We 
conclude here, as the Cable  Services Bureau did in Suburban 
Cable, that it  was not error for the  Cable Services Bureau 
to impute normalized taxes  to Operator's customer equipment 
costs  prior  to  unbundling  those  costs  from  Operator's 
service rates.  Therefore, we deny Operator's Petition.

     5.   Upon review of Operator's FCC Form 1200, we accept 
Operator's  calculated  maximum  permitted rate  ("MPR")  of 
$10.12.   Because Operator's  actual  CPST  rate of  $11.58, 
effective May  15, 1994  through December 31,  1994, exceeds 
its MPR  of $10.12, we  find Operator's actual CPST  rate of 
$11.58, effective May 15, 1994 through December 31, 1994, to 
be unreasonable.   Upon review  of Operator's FCC  Form 1210 
covering the period April 1, 1994 through December 31, 1994, 
we  accept Operator's  calculated  MPR  of $10.22.   Because 
Operator's actual CPST rate  of $11.58, effective January 1, 
1995 through  June 30, 1995,  exceeds its MPR of  $10.22, we 
find  Operator's  actual  CPST  rate  of  $11.58,  effective 
January 1, 1995  through June 30, 1995,  to be unreasonable.  
Upon review of Operator's FCC  Form 1210 covering the period 
January 1, 1995 through June  30, 1995, we accept Operator's 
calculated MPR  of $12.33.   Because Operator's  actual CPST 
rate of $11.58, effective July  1, 1995, does not exceed its 
MPR  of  $12.33, we  find  Operator's  actual CPST  rate  of 
$11.58, effective July 1, 1995, to be reasonable.  

     6.   Accordingly,  IT IS  ORDERED, pursuant  to Section 
1.106 of the Commission's rules, 47 C.F.R.  1.106, that the 
petition for reconsideration filed by Operator IS DENIED.

     7.   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  stay of In The Matter of  Suburban Cable TV 
Co., Inc., DA  95-1226, 10 FCC Rcd 6509  (CSB 1995), granted 
in  Petitions for  Stay of  Action, DA  95-1795, 10  FCC Rcd 
10591 (CSB 1995), IS VACATED.

     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 the CPST rate  of $11.58, charged by Operator in 
the community  referenced above,  effective October  5, 1993 
(the date  of the first  valid complaint was filed  with the 
Commission) through June 30, 1995, IS UNREASONABLE.

     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 $11.58, charged by Operator in 
the community  referenced above, effective July  1, 1995, IS 
REASONABLE.

     10.  IT IS FURTHER ORDERED,  pursuant to Section 76.961 
of the Commission's rules, 47 C.F.R.  76.961, that Operator 
shall refund to subscribers that  portion of the amount paid 
in excess  of the maximum  permitted CPST rate of  $9.98 per 
month (plus  franchise fees), plus  interest to the  date of 
the refund, for  the period October 5, 1993  through May 14, 
1994.

     11.  IT IS FURTHER ORDERED,  pursuant to Section 76.961 
of the Commission's rules, 47 C.F.R.  76.961, that Operator 
shall refund to subscribers that  portion of the amount paid 
in excess of  the maximum permitted CPST rate  of $10.12 per 
month (plus  franchise fees), plus  interest to the  date of 
the refund, for the period May 15, 1994 through December 31, 
1994.

     12.  IT IS FURTHER ORDERED,  pursuant to Section 76.961 
of the Commission's rules, 47 C.F.R.  76.961, that Operator 
shall refund to subscribers that  portion of the amount paid 
in excess of  the maximum permitted CPST rate  of $10.22 per 
month (plus  franchise fees), plus  interest to the  date of 
the refund, for the period  January 1, 1995 through June 30, 
1995.

     13.  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,  Enforcement Bureau, 
stating   the  cumulative   refund   amount  so   determined 
(including  franchise  fees  and interest),  describing  the 
calculation thereof,  and describing  its plan  to implement 
the  refund within  60 days  of Commission  approval of  the 
plan.
     
     14.  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  complaint  referenced  herein against  the 
rates charged by Operator  in the community referenced above 
IS GRANTED.


                              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  See In The Matter of  Suburban Cable TV Co., Inc., DA 95-
1226, 10 FCC Rcd 6509 (CSB 1995). 
3  The term  "Operator" includes  Operator's successors  and 
predecessors in interest.
4 See Petitions  for Stay of Action, DA 95-1795,  10 FCC Rcd 
10591 (CSB 1995).
5 Prior Order at n. 1.
6 47 U.S.C. 543(c) (1996).
7 Pub. L. No. 102-385, 106 Stat. 1460 (1992).
8 Pub. L. No. 104-104, 110 Stat. 56 (1996).  
9 See Implementation  of Cable Act Reform  Provisions of the 
Telecommunications Act of 1996, 11 FCC Rcd 5937 1996).
10 See Section  76.956 of the Commission's  rules, 47 C.F.R. 
76.956.
11 See Section  76.957 of the Commission's  rules, 47 C.F.R. 
76.957.
12 See  Implementation of  Sections of the  Cable Television 
Consumer  Protection  and  Competition  Act  of  1992:  Rate 
Regulation,  8  FCC  Rcd  5631,  5755-56,  5766-67,  5881-83 
(1993). 
13 See  Implementation of  Sections of the  Cable Television 
Consumer  Protection  and  Competition  Act  of  1992:  Rate 
Regulation, 9 FCC Rcd 4119 (1994).
14 See Section 76.922 of the Commission's rules, 47 C.F.R.  
76.922.
15 Id.
16  Id.
17  Id.
18  Id.
19 In the Matter of Suburban  Cable TV, Inc., DA 97-2032, 13 
FCC  Rcd 13111  (CSB  1997).   See also,  In  the Matter  of 
Charter Communications,  DA 02-637  (CSB released  March 20, 
2002).