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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 ) ) Comcast Cablevision of West Florida, Inc. ) CUID No. FL0055 (Punta Gorda) ) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: March 21, 1997 Released: March 26, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a complaint about the rate increase Comcast Cablevision of West Florida, Inc. ("Operator") implemented for its cable programming services tier ("CPST") on November 1, 1996 in the amount of $1.93 in the community referenced above. In response, Operator filed its FCC Form 1240. This Order addresses only the reasonableness of Operator's CPST rate increase on November 1, 1996. We conclude that the rate increase Operator began charging on November 1, 1996 is unreasonable. 2. Under the Communications Act, the Federal Communications Commission ("Commission") is authorized 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 ("1996 Act") and our rules implementing the new legislation, require that complaints against the CPST rates be filed with the Commission by a local franchising authority ("LFA") that has received subscriber complaints. An LFA may not file a CPST rate complaint unless, within 90 days after such increase becomes effective, it receives more than one subscriber rate complaint. 3. To justify rates for the period beginning May 15, 1994 through a benchmark 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. 4. On January 10, 1997, the LFA filed a complaint regarding the November 1, 1996 increase in Operator's CPST rate in the above-referenced community. In its complaint, the LFA asserts that it has received more than one subscriber complaint against Operator's CPST rate increase, thereby triggering the Commission's jurisdiction to review this complaint. The valid complaint from the LFA triggers an obligation on behalf of the cable operator to file a justification of its CPST rates with the LFA. Thus, in this case, Operator is required to justify the increase in its CPST rate which is the subject of the LFA's complaint. In its response, Operator asserts that its November 1, 1996 rate increase is justified by the FCC Form 1240 filed along with the LFA's complaint on January 10, 1997. 5. Upon review of Operator's FCC Form 1240, we find that Operator has not correctly calculated its maximum permitted rate. Specifically, Operator projected the addition of one channel in the first quarter of 1997 under the Caps Method ("Caps"). In its calculations on Worksheet 2 to adjust its rate for the costs of adding this channel under the Caps Method, Operator included its previous Caps Channel-related rate increases of $1.07. Consequently, the Average Caps Method Adjustment calculated on Worksheet 2 (Lines 201 through 214), for the purpose of adjusting the Base Rate for all Caps Method channels, includes the $1.07 associated with previously added Caps Method channels. Normally, the increases under the Caps Method are also considered in Module D of FCC Form 1240 when the Operator creates a Base Rate to adjust its maximum permitted rate. Operator's Base Rate calculated in Module D, however, did not reflect the elimination of the rate segment associated with the previously added Caps Method channels. As a result, Operator's inclusion (on Line I1) of the Total Caps Adjustment from Worksheet 2 in its Maximum Permitted Rate calculation effectively includes the adjustment for the previously added channels twice. We therefore adjust Module D, Line D3, Column b to reflect previous rate increases of $1.07 under Caps that Operator reported in Line 201, Column 9 of Worksheet 2. As a result of this correction the maximum permitted rate of $17.59 calculated by Operator on its FCC Form 1240 is corrected to $16.50, thereby allowing Operator a rate increase of $0.95. We conclude, therefore, that Operator's CPST rate increase of $1.93, which went into effect on November 1, 1996, is not justified. 6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321 that the CPST rate increase of $1.93 implemented by Operator on November 1, 1996 in the community referenced above IS UNREASONABLE. 7. IT FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint referenced herein against the November 1, 1996 CPST rate increase implemented by Operator in the community referenced above IS GRANTED. 8. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund subscribers in the community set forth above that portion of the amount of the CPST rate increase paid by subscribers that exceeded the maximum permitted CPST rate of $16.50 per month (plus franchise fee), plus interest to the date of the refund, for the period from the date of the first complaint with the LFA on November 1, 1996 to the day before Operator implements the maximum permitted CPST rate of $16.50. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator in the community set forth above, revise its calculation of its maximum permitted CPST rate in its next FCC Form 1240 filing. 10. 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. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau