FOR FCC RECORD ONLY $/ORDER in Bishopville, SC, DA 95-713/$ $/76.922 Rates for the basic service tier/$ $/76.923 Rates for equipment and installations/$ $/76.944 Commission Review of Franchising Authority Decisions/$ $/1.45 Request for Stay/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of: ) ) Cablevision Industries Corporation ) DA 95-713 ) Appeal from a Rate Order of ) the City of Bishopville, South Carolina ) ORDER Adopted: April 3, 1995 Released: April 5, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On July 5, 1994, Cablevision Industries Corporation ("CVI") filed with the Commission an appeal from a rate order ("Appeal") adopted by the City of Bishopville, South Carolina ("the City"). In its local order, the City established CVI's rates for basic cable service, equipment, installations and hourly service charges. The City ordered CVI to refund or credit subscribers for all payments made in excess of the rates set forth in the local order for the period beginning September 1, 1993. 2. In its appeal, CVI challenges the City's rate order with respect to two issues. CVI asserts that the City improperly ordered the operator to refund all charges designated as an "FCC Mandated Adjustment." CVI further argues that the City did not have the authority to review CVI's late payment charges. The City argues that the "FCC Mandated Adjustment" should be disallowed because CVI did not comply with the Commission's rules and regulations regarding the timing of the adjustment. The City also contends that late fees charged by the operator should be disallowed under the customer service standards of the 1992 Cable Act. 3. Under our rules, rate orders made by local franchising authorities may be appealed to the Commission. In ruling on appeals of local rate orders, the Commission will not conduct a de novo review, but instead will sustain the franchising authority's decision as long as there is a reasonable basis for that decision. Therefore, the Commission will reverse a franchising authority's decision only if it determines that the franchising authority acted unreasonably in applying the Commission's rules in rendering its local rate order. If the Commission reverses a franchising authority's decision, it will not substitute its own decision but instead will remand the issue to the franchising authority with instructions to resolve the case consistent with the Commission's decision on appeal. II. DISCUSSION A. Billing Adjustments 4. When the Commission adopted rate regulations, pursuant to the 1992 Cable Act, it initially selected June 21, 1993 as the effective date. However, on June 18, 1993, the implementation date was changed to October 1, 1993 to provide the Commission an opportunity to obtain a supplemental appropriation and to allow cable operators and local authorities additional time to implement rate regulation. Subsequently, the Commission obtained the needed appropriation, and on July 27, 1993, the effective date of regulation was moved up to September 1, 1993. Accordingly, by September 1, 1993, cable operators were required to restructure their rates and make revisions to service offerings that were necessary to be in compliance with our rules. When the Commission moved the effective date of regulation to September 1, 1993, it recognized that, due to centralized billing practices, some cable operators would not be able to begin billing subscribers for new, restructured rates by September 1, 1993. Therefore, in order to have the restructured rates of such operators deemed to be "in effect" as of September 1, 1993, the Commission allowed those operators to begin billing the restructured rates as soon as practically possible after September 1, 1993, but no later than October 1, 1993. The Commission directed those operators that could not begin billing the restructured rates by September 1, 1993 to make a one-time correction on a subsequent bill to adjust for any subscriber overcharges or undercharges, which were to be calculated as the difference between the billed rate and the restructured rate. This one-time adjustment would place subscribers in the same position as if they had been paying the restructured rates since September 1, 1993. We stated that this adjustment must be implemented in a reasonable manner, but did not specify a time period. 5. CVI contends that when the Commission changed the effective date of rate regulation from October 1, 1993 to September 1, 1993, CVI was unable to meet the new deadline. However, CVI apparently did bill subscribers in accordance with its restructured rates prior to October 1, 1993. Subsequently, CVI added the authorized adjustments to subscribers' bills to reflect refunds of overcharges and surcharges of undercharges. The record does not reflect the date or dates on which CVI billed the adjustments. The City argues that the adjustments should be disallowed in this case because it asserts that CVI waited until its December, 1993 billing to implement the adjustments. 6. The City asserts that CVI billed these adjustments two months after CVI implemented its restructured rate schedule. Although the Commission did not specify a deadline by which operators must actually make the adjustments, the City construed the Commission's order to require CVI to bill the adjustments, as well as the restructured rates, by October 1, 1993. This is not the case. The Commission did not specify a time period in which the adjustments had to be made. CVI had to restructure its rates and begin billing the correct rates by October 1, 1993. Subscribers ultimately paid what they would have paid had CVI been able to fully implement its restructured rates prior to September 1, 1993. We find that CVI complied with the time limits set forth in our order. We are not presented with anything in the record which causes us to conclude that CVI's handling of the adjustments was inappropriate. We remand this issue to the City so that it can enter a ruling consistent with these findings. B. Late payment fees 7. The City states that due to CVI's practice of billing subscribers in advance of the service period, subscribers who do not pay their bills before the end of the time allotted by CVI for them to do so could be assessed late payment fees prior to the receipt of all of the service for which they had been billed. The City ordered CVI to cease assessing late fees in those situations. CVI asserts that it advised the City that late payment fees are not subject to regulation under the 1992 Cable Act. CVI requests that the Commission instruct the City that it may not prohibit or otherwise regulate CVI's late payment charges and related billing practices. It further contends that the issue is moot because it has voluntarily agreed to modify its billing methods so that a subscriber is not obligated to pay a late charge until the completion of the service period for which the initial bill was imposed. The City does not contest the fact that late fees are not specifically referred to under the 1992 Cable Act or Commission regulations, but argues that the fees can be disallowed by the Commission under the customer service standards of the 1992 Cable Act. Additionally, the City rejects the operator's claim that the issue is moot. The City further asserts that CVI's proposal is an abusive billing practice as defined by Section 623 of the Communications Act of 1934. 8. We have previously stated that late payment fees are not subject to regulation under the 1992 Cable Act." Subsequently we revisited the issue and clarified that the regulation of late fees is within the purview of local franchising authorities. Accordingly, we will not rule on the reasonableness of the City's decision to prohibit CVI's late fees. We deny CVI's appeal with respect to this issue. III. ORDERING CLAUSES 9. Accordingly, IT IS ORDERED that Cablevision Industries Corporation's appeal of the rate order adopted by the City of Bishopville, South Carolina regarding the issue of CVI's bill adjustment is REMANDED to the City so that it can enter a ruling consistent with these findings. 10. IT IS FURTHER ORDERED that Cablevision Industries Corporation's appeal of the rate order adopted by the City of Bishopville, South Carolina regarding the issue of CVI's late payment charges and related billing practices is DENIED for the reasons set forth in this Order. 11. This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission's rules. 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau