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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 ) ) Suburban Cable TV, Inc. ) CUID No. PA0582 (Derry Township) ) Complaints Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: April 4, 1997 Released: April 9, 1997 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. Here we consider complaints about the price Suburban Cable TV, Inc. ("Operator") was charging for its cable programming service tier ("CPST") in the community referenced above. Operator has chosen to attempt to justify its CPST rates through benchmark showings on FCC Form 1200, FCC Forms 1210 and FCC Form 1240. 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 to be 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. Cable operators may file an FCC Form 1210 to justify rate increases based on the addition and deletion of channels, changes in certain external costs and inflation. In addition, Operators must file a Form 1210 at least 30 days before new rates are scheduled to go into effect, where there is a pending complaint against the CPST rate. 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. The first valid complaint was filed with the Commission on March 17, 1995 against Operator's February 15, 1995 CPST rate increase from $11.84 to $13.16, exclusive of franchise fees. 5. Upon review of Operator's FCC Form 1200 we find Operator's maximum permitted rate ("MPR") of $11.44 to be correct. Although we made minor adjustments to Operator's FCC Form 1210 for the period April 1, 1994 through December 31, 1994, we agree that the MPR of $11.86 is correct. 6. Upon review of Operator's FCC Form 1210 for the period January 1, 1995 through March 31, 1995, we find that Operator has not correctly calculated its MPR. Therefore, we adjusted Operator's FCC Form 1210 so that Line A1 agreed with the MPR of the prior FCC Form 1210, resulting in a new MPR of $13.17 versus the Operator's MPR of $13.18. Because Operator's actual rate of $13.16 was less than its revised MPR of $13.17, we find Operator's CPST rate for the period February 15, 1995 through June 30, 1995 to be reasonable. 7. We also adjusted Operator's FCC Form 1210 for the period April 1, 1995 through June 30, 1995 in a similar manner, resulting in an MPR of $13.25 versus $13.26 claimed by Operator. However, because Operator's actual rate of $13.16 was less than its revised MPR of $13.25, we find Operator's CPST rate for the period July 1, 1995 through March 31, 1996 to be reasonable. 8. Further, we have reviewed the FCC Form 1240 filed by Operator, and have made one adjustment. We have adjusted Line A1 of Operator's FCC Form 1240 to match its maximum permitted rate at the time of filing, Line K9 of the previous FCC Form 1210. This resulted in a revised MPR of $14.04 for the projected period rather than Operator's MPR of $14.05. Because Operator's actual rate is $14.07, we find Operator's CPST rate for the period beginning April 1, 1996 to the present to be unreasonable, as Operator has exceeded its MPR by $.03. However, we determine that the total overcharge per subscriber is de minimis, and is subject to true-up on Operator's next FCC Form 1240. 9. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $13.16 charged by Operator in the community referenced above for the period February 15, 1995 through March 31, 1996, IS REASONABLE TO THE EXTENT INDICATED HEREIN. 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 $14.07 charged by Operator in the community referenced above for the period April 1, 1996 to the present, IS UNREASONABLE TO THE EXTENT INDICATED HEREIN. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaints against the CPST rates charged by Operator in the community referenced above ARE GRANTED TO THE EXTENT INDICATED HEREIN. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator take into account our FCC Form 1240 adjustment when calculating its maximum permitted rate and performing the true-up calculation on its next FCC Form 1240. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau