******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) ) Cox Communications, Inc. ) CUID No. OK0187 (Oklahoma City) ) ) Complaints Regarding ) Cable Programming Services Tier Rates) ORDER Adopted: December 3, 1997 Released: December 5, 1997 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider complaints against the rates charged by the above-referenced Operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator has attempted to justify its CPST rates through a benchmark showing on FCC Forms 1210 and 1240. We have already issued an Order which resolved complaints filed against Operator from September 1, 1993 through June 30, 1995 ("Resolution"). Accordingly, this Order only addresses the reasonableness of Operator's rates in effect subsequent to the release of the Resolution. 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. The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), and our rules in effect at the time the complaints were filed, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rates. 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 took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. Cable operators with valid CPST complaints filed against them prior to May 15, 1994 must demonstrate that their CPST rates were in compliance with the Commission's initial rules from the time the complaint was filed through May 14, 1994, and that their rates were in compliance 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 also justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation, by filing FCC Form 1210. FCC Form 1210 must be filed 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. Cable 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 year a "true-up" mechanism is available to correct estimated costs with actual cost changes. 5. Operator filed an FCC Form 1210 for the period of October 1, 1994 through September 30, 1995 to justify its CPST rate, effective December 1, 1995, in its non-upgrade system. Upon review of this FCC Form 1210, we find that Operator has justified its CPST rate of $15.23 effective December 1, 1995. Consequently, Operator's CPST rate of $15.23, effective December 1, 1995, is not unreasonable. Since that time the system in the above-referenced community has been completely upgraded. 6. Upon review of Operator's FCC Form 1210 for the period October 1, 1994 through September 30, 1995, filed to justify Operator's CPST rate in the upgraded segment of its system, we adjusted Line A1 to reflect the transition rate of $17.53 pursuant to the Resolution. This resulted in a revised maximum permitted rate ("MPR") of $18.74, effective October 1, 1995. Because Operator's actual CPST rate was $18.65, we find that Operator's actual rate of $18.65, effective December 1, 1995, to be reasonable for its upgraded system. Upon review of Operator's FCC Form 1240 for the projected period January 1, 1997 to December 31, 1997, we adjusted Line A1 to match the MPR of Operator's prior FCC Form 1210. This reduced the CPST MPR on Line I9 from $20.08 to $20.06. Because Operator's actual CPST rate is $20.03, we find that Operator's CPST rate of $20.03, effective January 1, 1997 is not unreasonable. 7. Upon review of Operator's FCC Form 1240 for the projected period January 1, 1998 through December 31, 1998 we adjusted Line A1 to match the MPR of Operator's prior FCC Form 1240 filing. This reduced the CPST MPR on Line I9 from $21.76 to $21.74. Because Operator's actual CPST rate is $21.48, we find that Operator's CPST rate of $21.48, effective January 1, 1998 is not 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 rate of $15.23 effective December 1, 1995, for Operator's non-upgraded system IS NOT UNREASONABLE. 9. 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 $18.65 effective December 1, 1995 to December 31, 1996 for Operator's upgraded system IS 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 $20.03 charged by Operator in the community referenced above for the period of January 1, 1997 to December 31, 1997 for Operator's upgraded system 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 complaints against the CPST rate of $21.48 changed by Operator in the community referenced above effective January 1, 1998, IS NOT UNREASONABLE. 12. 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 rate charged by Operator in the community referenced above ARE DENIED TO THE EXTENT INDICATED HEREIN. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau