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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of) ) Telenois, Inc.d/b/a ) TCI of Illinois, Inc. ) CUID No. IL0558 (Mount Prospect) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: December 2, 1996 Released: December 6, 1996 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the June 1, 1996 rate increase by Telenois, Inc. d/b/a TCI of Illinois, Inc. ("TCI") for its cable programming services tier ("CPST") in Mount Prospect, Illinois CUID IL0558. In response, TCI filed its FCC Form 1240. This Order addresses only the reasonableness of TCI's rate increase of June 1, 1996. We conclude that the CPST rate increase of $2.94 that TCI began charging on June 1, 1996 is not unreasonable. 2. The Communications Act authorizes the Federal Communications Commission ("Commission") to review the CPST rates of cable systems not subject to effective competition to ensure that rates charged are not unreasonable. If the Commission finds the rate unreasonable, it shall determine the correct rate and any refund liability. The Telecommunications Act of 1996 ("the 1996 Act") and our rules implementing the new legislation, require that complaints against the CPST rates be filed with the Commission by a franchising authority that has received subscriber complaints. A franchising authority may not file a CPST rate complaint unless it receives more than one subscriber complaint within 90 days after such increase becomes effective. 3. To justify rates for the period beginning May 15, 1994 through a benchmark or cost of service showing, operators must use the FCC Form 1200 series. Operators may justify adjustments to 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. Any incurred cost that is not projected may be accrued with interest and added to rates at a later time. If actual and projected costs are different during the rate year a "true-up" mechanism is available to correct estimated costs with actual cost changes. The "true-up" requires operators to decrease their rates or alternatively permits them to increase their rates to make an adjustment for over or under estimations of these cost changes. 4. On October 3, 1996, the local franchising authority the Village of Mount Prospect, Illinois ("Village") filed a complaint regarding the June 1, 1996 increase in TCI's CPST rate in CUID IL0558 Mount Prospect, Illinois. The Village has certified that it has complied with the Interim Rules. TCI submitted FCC Form 1240 to justify the rate increase that went into effect June 1, 1996. 5. Upon reviewing TCI's FCC Form 1240 filing we found that TCI calculated the inflation incorrectly. Therefore, we adjusted the inflation which resulted in a correction to the projected period maximum permitted rate (Line I9, Tier 2) from $15.58 to $15.34, after adjustment for the GAP period. Upon review of the record herein, we conclude that notwithstanding our adjustment, TCI has justified its June 1, 1996 rate increase of $2.94. We conclude, therefore, that TCI's CPST rate increase of $2.94 which went into effect June 1, 1996 in Mount Prospect, Illinois, CUID No. Il0558 is justified. 6. Accordingly, IT IS ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that the monthly CPST rate increases of $2.94 charged by TCI in Mount Prospect, Illinois, CUID No. Il0558 beginning June 1, 1996 IS NOT UNREASONABLE. 7. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that the Village's complaint against the CPST rate increase, effective June 1, 1996, charged by TCI in Mount Prospect, Illinois, CUID No. IL0558 IS DENIED. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Telenois, Inc. d/b/a TCI of Illinois, Inc., in Mount Prospect, Illinois, CUID No. IL0558, revise its calculation of its maximum permitted CPST rate in its next FCC Form 1240 filing. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau