NEWS
Report No. CS 96-4          CABLE SERVICES ACTION                January 26, 1996

             COMMISSION ADOPTS COST OF SERVICE ORDER INVOLVING
                      MEDIA GENERAL OF FAIRFAX COUNTY

     The Commission has adopted an order (FCC-96-13) that finds, through a cost of
service filing, that Media General of Fairfax County (Va.) Inc. justified its cable
programming service ("CPS") rate of $17.77 per month for the period from September 1,
1993 through May 14, 1994.  The order also finds that Media General does not owe refunds
to its CPS subscribers for that period.  This action denies 86 cable rate complaints received
from subscribers in the five Media General service areas.  Key issues addressed in the order
include:

     Accumulated Start-up Losses:  Media General is allowed to recover its accumulated
     start-up losses incurred during the first 8 years of its operations.  For the years 1984
     through and including 1991, Media General accumulated operating losses totalling
     more than $61 million.  The order requires Media General to amortize these losses
     over a time period equal to the service life of its longest depreciable asset.  

     Rate of Return:  In its filing, Media General claimed an allowable after-tax rate of
     return of 16%.  The Commission found:

         The overall rate of return range of 10% to 14% established in the Rate Order
          (MM Docket No. 92-266) is appropriate and reasonable to use as a general
          rule for the evaluation of refund liability for cases of this type.

         In the Cost Order (MM Docket No. 93-215), which was issued shortly after
          Media General filed its cost of service showing, the Commission adopted a
          presumptive unitary rate of return of 11.25%.

         The time period for which the 11.25% rate of return was calculated is
          sufficiently close to the period of time at issue in Media General's cost of
          service showing to use the 11.25% for purposes of this showing, and the
          methodology used in arriving at a presumptive rate of return of 11.25% is
          reasonable, and would be reasonable in this context as well.

         Media General did not sustain its burden of proving that a 16% rate of return
          is reasonable.


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         Even using a rate of return of 11.25% rather than the 16% claimed by Media
          General, Media General's CPS rates are reasonable, and no refund is due.

     Construction Work In Progress:  More than $450,000 reported as construction work
     in progress is disallowed.  This amount represents construction costs that Media
     General incurred for building new facilities which were not "used and useful" at the
     time of its cost of service filing.

Action by the Commission, January 19, 1996, by Order (FCC 96-13).  Chairman Hundt,
Commissioners Quello, Barrett, Ness and Chong.

News Media contact: Morgan Broman (202) 416-0852; Cable Services Bureau contact:
Lenworth Smith (202) 416-0800.


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