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


In the Matter of                        )  File No. EB-02-TC-053
                              )    CUID No. CA1441 (Montrose)    
Marcus Cable Associates, LP             )
                              )            
Petition for Reconsideration            )


                    ORDER ON RECONSIDERATION
                                

        Adopted:    August 6, 2002                     Released:  
August 8, 2002         

By the Chief, Enforcement Bureau:1

     1. In this Order we consider a petition for  reconsideration 
("Petition") of Order,  DA 99-3772 ("Second  Order"), filed  with 
the Federal Communications Commission ("Commission").  The Second 
Order resolved a complaint against the June 1, 1998 rate increase 
by the  above-referenced  operator ("Operator")3  for  its  cable 
programming services tier  ("CPST") in  the community  referenced 
above.  It also resolved a petition for reconsideration of Order, 
DA 97-2648 ("First Order").4 In  this Order, we grant  Operator's 
Petition, amend the Second Order and calculate Operator's  refund 
liability.

     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 require  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 May15, 1994.11  Cable  operators 
may justify quarterly  rate increases based  on the addition  and 
deletion of  channels,  changes  in certain  external  costs  and 
inflation, by  filing FCC  Form  1210.12  Operators  may  justify 
their rates on  an annual basis  using 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 Additionally, an  Operator 
may file  an  FCC Form  1235,  which allows  cable  operators  to 
justify   rate   increases   related   to   significant   capital 
expenditures  used  to  improve  rate-regulated  services.   This 
option  is  extended  only  in  cases  of  significant   upgrades 
requiring added capital  investment, such  as bandwidth  capacity 
and conversion to fiber optics, and for system rebuilds.   Normal 
improvements and  expansions of  service  remain subject  to  the 
usual rate adjustments allowed by  filing FCC Form 1210s,  1220s, 
and 1240s.   Cable operators  that incur  increases in  operating 
costs associated  with  a  significant network  upgrade  will  be 
permitted to charge  additional rates as  justified by their  FCC 
Form 1235 filings.

     4.   In the Second Order, the Cable Services Bureau  reduced 
Operator's FCC  Form 1235  maximum  permitted rate  ("MPR")  from 
$3.95 to $3.60, based on a previous Cable Service Bureau decision 
concerning  Operator's  FCC  Form   1235.15   In  that   previous 
decision, the Cable Services Bureau adjusted Operator's FCC  Form 
1235 subscriber count because the subscriber count reflected  the 
number  of  subscribers  that   existed  ten  months  after   the 
completion of the upgrade.16  In its Petition, Operator  requests 
that it be allowed to use the subscriber count that existed as of 
the date of the completion of Operator's upgrade, when Operator's 
final costs were known and Operator calculated its final FCC Form 
1235 MPR.   Operator attached  an amended  FCC Form  1235 to  its 
Petition, using this subscriber count  and calculating an MPR  of 
$3.95, the  same MPR  that Operator  requested with  its  initial 
response to  the complaint.   We find  Operator's request  to  be 
reasonable and consistent with the FCC Form 1235  Instructions.17  
Therefore, we grant Operator's Petition.

     5.   Operator did not  submit a refund  plan in response  to 
the Second  Order.   Therefore, we  calculate  Operator's  refund 
liability as follows: For the  period from March 1, 1998  through 
May 31, 1998,18 we calculate an overcharge of $1.98 per month per 
subscriber. Operator's  actual  CPST  rate for  this  period  was 
$19.50 and its MPR was $17.52 ($13.57 plus $3.95). For the period 
June 1, 1998 through March  31, 1999, we calculate an  overcharge 
of $2.30 per  month per subscriber.  Operator's actual CPST  rate 
for this period was  $21.34 and its MPR  was $19.04 ($15.09  plus 
$3.95).  Our  total  calculation,   including  interest  on   the 
overcharges through September  30, 2002,  equals $55,435.00.  Our 
calculation does not include franchise fees. We order Operator to 
refund this amount, plus any  additional interest accrued to  the 
date of refund, plus franchise fees, if any, and interest on  the 
franchise fee principal amount, to its CPST subscribers within 60 
days of the release of this Order. 

     6.   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 and  In the  Matter  of 
Marcus Cable  Associates, LP,  DA 99-377,  14 FCC  Rcd 3390  (CSB 
1999) IS MODIFIED TO THE EXTENT INDICATED HEREIN.

     7.   IT IS  FURTHER  ORDERED, pursuant  to  Sections  0.111, 
0.311 and 76.962 of the  Commission's rules, 47 C.F.R.   0.111, 
0.311 and 76.962, that Operator  shall refund to subscribers  in 
the  franchise  area  referenced   above  the  total  amount   of 
$55,435.00,  plus  any   additional  interest  accruing   between 
September 30, 2002 and the  date of refund, plus franchise  fees, 
if any, and interest on the franchise fee principal amount within 
60 days of the release of this Order.

     8.   IT IS  FURTHER  ORDERED, pursuant  to  Sections  0.111, 
0.311 and 76.962 of the  Commission's rules, 47 C.F.R.   0.111, 
0.311 and 76.962, that Operator 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 Marcus Cable Associates, LP, DA 99-377, 14 FCC 
Rcd 3390 (CSB 1999).

3 The term "Operator" includes Operator's predecessors and 
successors in interest.

4 In the Matter of Marcus Cable Associates, LP, DA 97-2648, 12 
FCC Rcd 21970 (CSB 1997).

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 Second Order at n. 18, citing Marcus Cable Associates, LP, 
DA 98-2308, 13 FCC Rcd 22314 (CSB 1998) ("Form 1235 Order").

16 Form 1235 Order at  6, n. 15.

17 See FCC Form 1235 Instructions at p. 8, requiring that the 
subscriber count reflect the number of subscribers at the time of 
filing - for a final FCC From 1235, this would be at the 
completion of the upgrade.

18 This time period was not included in the true-up portion of 
Operator's FCC Form 1240 for the projected period beginning June 
1, 1998, which the Cable Services Bureau reviewed in the Second 
Order.  See Second Order at n. 16.