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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 ) ) TCI Cablevision of California, Inc. ) CUID No. CA0175 (Monterey) ) Complaint Regarding ) Cable Programming Service Tier ) Rate Increases ) ORDER Adopted: March 14, 1997 Released: March 19, 1997 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the rates charged by the operator referenced above ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator has chosen to justify its CPST rates through benchmark showings on FCC Forms 393, 1200 and 1210. This Order addresses the reasonableness of Operator's rates from September 1, 1993 to the present. We conclude, for the reasons discussed below, that the rates charged by Operator are 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. The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act") required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. If the Commission finds the rate to be unreasonable, it shall determine the correct rate and any refund liability. 3. The Commission's original rate regulations became effective on September 1, 1993. The Commission revised its rate regulations effective May 15, 1994. Cable operators with valid CPST complaints filed prior to May 15, 1994 must demonstrate that their CPST rates complied with the Commission's initial rules from the time the complaint was filed through May 14, 1994. Their rates must also comply with the revised rules from May 15, 1994 forward. Cable operators attempting to justify their rates for the period prior to May 15, 1994 using a benchmark showing must complete and file FCC Form 393. Operators must use the FCC Form 1200 series to justify their rates for the period beginning May 15, 1994 using a benchmark showing. Cable operators may file a FCC Form 1210 to justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation. The Operator must file FCC Form 1210, at least 30 days before new rates are scheduled to go into effect, where the Commission has found the cable programming service rate to be unreasonable less than one year prior to the filing, or where there is a pending complaint against the CPST rate. 4. The first complaint for this community was filed with the Commission on October 9, 1993 and was returned as invalid. The first valid complaint for this community was filed with the Commission on November 15, 1993. Upon review of Operator's filings we find that Operator has incorrectly calculated its maximum permitted rates beginning September 1, 1993 and we make the appropriate adjustments in accordance with our rules. 5. FCC Form 393 Filing: In its FCC Form 393 filed May 31, 1994, Operator calculated a maximum permitted rate for the CPST of $7.86. However, an examination of the September 1, 1993 rate card reflects a monthly CPST charge of $13.42. We have adjusted the maximum permitted rate accordingly. Further, our review has resulted in discrepancies in the number of subscribers per tier reported as of the initial date of regulation and as of September 30, 1992. On its FCC Form 393, Operator reported the total number of subscribers as of the initial date of regulation as 21,820 for the BST and 21,656 for the CPST (Part I, Worksheet I, Line 103). The FCC Form 1200 filed by Operator reflects the total number of subscribers, as of the initial date of regulation, as 13,375 for the BST and 13,081 for the CPST (Module A, Line A2). The number of subscribers reported on FCC Form 393 for September 30, 1992 was 21,463 for the BST; 21,379 for CPSTI; and 3,653 for CPSTII (Part II, Worksheet 2, Line 203). However, the FCC Form 1200 reflects the number of subscribers as of September 30, 1992 as 13,208 for the BST; 13,139 for CPSTI; and 2,495 for CPSTII (Module G, Line G1). Upon review, we have adjusted the FCC Form 393 figures to reflect those reported on the FCC Form 1200 for the same periods. The equipment revenue amount (Part II, Line 104) has also been adjusted to reflect the restructured equipment cost total reported in Part III, Step G, Line 34. Adjustments have also been made to the September 30, 1992 tier charges of $14.05, $5.54, and $6.04 reported (FCC Form 393, Part II, Line 201). Consequently, we have determined that Operator's maximum permitted rate of $14.65 is reasonable. 6. FCC Form 1200 Filing: On August 15, 1994, an FCC Form 1200 was filed with the Commission to justify CPST rates in effect after July 14, 1994. Operator has calculated a maximum permitted rate of $13.10. Operator's actual rate was $13.42. On June 15, 1994 Operator filed a request for deferral of refund liability. Pursuant to this request, Operator decreased its rates on July 14, 1994. This has resulted in no refund liability being incurred for the applicable period. 7. FCC Forms 1210 Filings: Operator filed four FCC Forms 1210 to justify its CPST rates from July 15, 1994 to April 1, 1996. The first FCC Form 1210 filed was to justify Operator's CPST rate of $13.30, effective August 15, 1994. The second FCC Form 1210 filed was to justify Operator's CPST rate of $14.03, effective October 1, 1994. The third FCC Form 1210 filed was to justify Operator's CPST rate of $14.75, effective January 1, 1995. The fourth FCC Form 1210 filed was to justify Operator's maximum permitted CPST rate of $14.99, effective April 1, 1996. The CPST rates calculated in the FCC Forms 1210 filings covering all periods from April 1, 1994 to March 31, 1996 have been found to be reasonable. 8. Consequently, we find all Operator's maximum permitted rates from November 15, 1993 to the last reported CPST rate of $14.99, effective April 1, 1996 to be justified. 9. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rates charged by Operator in the above-referenced community from November 15, 1993 to March 31, 1996, ARE NOT UNREASONABLE. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $14.99 charged by Operator in the above- referenced community from April 1, 1996 to the present, IS NOT UNREASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the Motion to Dismiss the October 9, 1993 complaint against the CPST rate charged by Operator in the above- referenced community IS DENIED AND DISMISSED. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint against the CPST rate charged by Operator in the above- referenced community IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau