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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. CA0282 ) (City of South San Francisco) Complaint Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: March 14, 1997 Released: March 20, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the rate increase of the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the above- referenced community. Operator has responded by filing an FCC Form 1200 and multiple FCC Forms 1210, with the latest FCC Form 1210 filed for the period ending the first quarter of 1996. This Order addresses the reasonableness of Operator's rates after May 14, 1994. We have already issued a separate order in which we found that Operator's CPST rates in effect before May 15, 1994 were unreasonable. We conclude, for the reasons discussed below, that the CPST rates charged by Operator from May 15, 1994 to July 1, 1994, as well as the CPST rate increase effective April 1, 1996, is unreasonable. We also conclude that the CPST rates charged by Operator from July 1, 1994 to March 31, 1996 are reasonable. 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. Upon review of Operator's FCC Form 1200 and FCC Forms 1210, we find that Operator has was charging in excess of its maximum permitted rates beginning May 15, 1994. It is therefore appropriate to make adjustments to Operator's calculations as discussed in the paragraphs below. 5. FCC Form 1200 Filing: On July 27, 1995, Operator filed an FCC Form 1200 to justify CPST rates in effect after May 14, 1994. In this filing, Operator calculated a maximum permitted rate of $12.64. Upon review, we have also calculated an amount of $12.64. However, Operator was actually charging an amount of $12.70. We therefore find that the CPST rates for this period are unreasonable. 6. FCC Forms 1210 Filings: On April 12, 1995, Operator filed three FCC Forms 1210 to justify its CPST rates in effect after July 1, 1994. Operator filed a fourth FCC Form 1210 on March 6, 1997. The first FCC Form 1210 filed by Operator was filed to justify its CPST rate of $12.70 in effect on July 1, 1994 and the subsequent increase to $12.78, effective July 15, 1994. The second FCC Form 1210 was filed to justify Operator's CPST rate of $13.85, effective October 1, 1994. The third FCC Form 1210 was filed to justify Operator's CPST rate of $13.97, effective January 1, 1995. Upon review, we have determined that the maximum permitted rate calculations for the CPST in all three FCC Forms 1210 are reasonable. 7. On March 6, 1997, Operator filed its fourth FCC Form 1210 to justify a maximum permitted rate of $15.84, effective April 1, 1996. Upon review of this FCC Form 1210 filed covering the period from January 1, 1995 to March 31, 1996, we have made adjustments. Operator included the amount of $926.76 as its non-external cost adjustment taken on previous external costs in Line C3 of this form. Our recalculated amount, based upon the $0.01 per channel rate identified in Operator's FCC Form 1210 filed April 12, 1995, for the period July 1, 1994 to September 30, 1994, reflecting the addition of two new channels to the CPST and the then-current subscriber count of 15,446, reduced the amount on Line C3 from $926.76 to $308.92. On Line F10, Operator included a per channel adjustment of $0.60 reflecting an addition of three channels. After an examination of the Operator's July 15, 1994 channel line-up, we noted an addition of only two channels. Consequently, we reduced the amount on Line F10 from $0.60 to $0.40. Our adjustments have resulted in an updated maximum permitted rate of $15.59. Operator reported a maximum permitted rate of $15.84. Based upon these adjustments, we find that the Operator's maximum permitted rate, effective April 1, 1996, is unreasonable. 8. 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 May 15, 1994 to July 1, 1994 ARE UNREASONABLE. 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 July 1, 1994 to March 31, 1996 ARE REASONABLE. 10. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  0.321, that the maximum permitted rate reported by Operator in the above- referenced community effective April 1, 1996 IS UNREASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the community referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $12.64 per month (plus franchise fees), plus interest to the date of the refund, for the period from May 15, 1994 to July 1, 1994. 12. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the community referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $15.59 per month (plus franchise fees), plus interest to the date of the refund, for the period from April 1, 1996 to the day before Operator implements a CPST rate of $15.59 per month (plus franchise fees). 13. IT IS FURTHER ORDERED, that Operator shall promptly determine the overcharges to CPST subscribers for the stated periods, and shall within 30 days of the release of this Order, file a report with the Chief, Cable Services Bureau, stating the cumulative refund amount so determined (including franchise fees and interest), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. 14. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the referenced complaint IS GRANTED TO THE EXTENT DISCUSSED HEREIN. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau