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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 ) ) Cablevision Systems Corporation ) CUID No. NY0392 (Huntington) ) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increases ) ORDER Adopted: November 17, 1997 Released: November 20, 1997 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the March 1, 1997 rate increases of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. On March 1, 1997, Operator increased its CPST rate to $15.44 in the above-referenced community. We will address Operator's CPST rates and any potential refund liability for the period September 1, 1993 through February 28, 1997 in a separate order. This Order addresses only the reasonableness of Operator's CPST rate $15.44, effective March 1, 1997. 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 Commission's original rate regulations took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. Cable operators must use the FCC Form 1200 series to justify their rates through a benchmark showing for the period beginning May 15, 1994. The Telecommunications Act of 1996 ("1996 Act") and our rules implementing the new legislation ("Interim Rules"), require that complaints against CPST rates be filed with the Commission by an LFA that has received subscriber complaints. An LFA 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. The LFA in the above-referenced community certified that it has complied with the Interim Rules and that it has received more than one valid subscriber complaint. The LFA verified that it received its first valid subscriber complaint on April 3, 1997. Along with its complaint, the LFA filed FCC Forms 1210 that had been submitted by the Operator. The filing of a complete and timely LFA complaint triggers an obligation upon Operator to file a justification of its CPST rates. The Operator has the burden of demonstrating that the CPST rates at issue are reasonable. 4. To justify its CPST rate of $15.44 beginning March 1, 1997, Operator filed two FCC Forms 1210. Operator explained that one portion of the community had originally been served by a different system (the "A" plant) with fewer CPST channels than the system (the "C" plant) serving the rest of the community. Operator explained further that by March 1996, Operator had transferred all of the A plant customers to the C plant and that all customers in the community were receiving the same CPST service. Until the March 1, 1997 CPST rate increase, however, Operator had still been charging the original A plant customers a lower monthly CPST rate. 5. Upon review of Operator's A plant FCC Form 1210 for the period October 1, 1996 to March 31, 1997, we find that Operator has justified the increase in its Maximum Permitted Rate ("MPR") from $14.14 to $15.48. Upon review of Operator's C plant FCC Form 1210 for the period October 1, 1996 to March 31, 1997, we find that Operator has justified the increase in its MPR from $15.06 to $15.48 in its C plant. We note, however, that Operator implemented its rate increase to $15.44 on March 1, 1997; whereas, the periods of these two FCC Forms 1210 extend until March 31, 1997. Because the FCC's quarterly rate justification is based upon actual changes in expenses, Operator is not permitted to take a rate increase justified by an FCC Form 1210 until after the close of the period covered by the form. Consequently, Operator was not entitled to increase its rates until April 1, 1997. Because Operator's actual CPST rate in the community referenced above, for the period beginning March 1, 1997, is $15.44, we find that Operator's CPST rate for the period March 1, 1997 through March 31, 1997 was unreasonable. Operator's refund liability, however, does not begin until the date of the first subscriber complaint filed with the LFA. Because the first subscriber complaint in the community referenced above was filed with the LFA on April 3, 1997, after Operator's CPST rate of $15.44 was justified, we find that Operator has incurred no refund liability. We also find that Operator's CPST rate for the period beginning April 1, 1997 is not unreasonable. 6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $15.44 for the period March 1, 1997 through March 31, 1997 in the community referenced above, IS UNREASONABLE. 7. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $15.44 for the period beginning April 1, 1997 in the community referenced above, IS NOT UNREASONABLE. 8. IT IS 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 CPST rate charged by Operator in the franchise area referenced in the caption IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau