******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) ) TCI of Pennsylvania, Inc. ) . ) CUID No. PA1855 (Pittsburgh) ) 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 TCI of Pennsylvania, Inc. ("TCI") for its cable programming services tier ("CPST") in Pittsburgh, Pennsylvania. This Order addresses only the reasonableness of TCI's rate increase of June 1, 1996. We conclude that the CPST rate increase of $2.97 that TCI began charging on June 1, 1996 is not unreasonable. 2. Tthe 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. 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. If the Commission finds the rate unreasonable, it shall determine the correct rate and any refund liability. 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 September 3, 1996, the local franchising authority The City of Pittsburgh, Pennsylvania, Department of General Services ("City") filed a valid complaint with TCI regarding the June 1, 1996 increase of TCI's CPST rate in CUID PA1855 Pittsburgh, Pennsylvania. In response, TCI submitted FCC Form 1240 on August 6, 1996 with the City to justify the rate increase. The City submitted TCI's FCC Form 1240 when it filed its complaint with the Commission on September 16, 1996. 5. Upon review of the record before us, we find that TCI has provided sufficient evidence to support a CPST rate increase of $2.97. We conclude, therefore, that TCI's CPST rate increase of $2.97 which went into effect June 1, 1996 in Pittsburgh, Pennsylvania, CUID No. PA1855 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 $2.97 charged by TCI in Pittsburgh, Pennsylvania, CUID No. PA1855, 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 City's complaint against the CPST rate increase, effective June 1, 1996, charged by TCI in Pittsburgh, Pennsylvania, CUID No. PA1855 IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau