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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 ) ) Falcon Cable Holding Group, Inc. ) CUID No. MO0024 (Warrenburg) ) ) Complaint Regarding ) Cable Programming Services Tier Rates) ORDER Adopted: January 20, 1998 Released: January 23, 1998 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider complaints concerning the rates of the above-captioned operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator's response includes benchmark justifications filed on FCC Form 1200 and multiple FCC Form 1210's and FCC Form 1240. We have already issued a separate Order ("Prior Order") in which we dismissed complaints against Operator's a la carte Satellite Package ("SATPAC") rates. Therefore we will dismiss the pending complaint against Operator's SATPAC rates. However, we will consider the valid complaints against Operator's CPST rates. 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 complaint was 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. Operators may alternatively 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. 4. A complaint was filed on May 22, 1995 against the rate increase for Operator's SATPAC from $3.95 to $4.95. Operator responded on June 13, 1995 stating that the complaint should be dismissed because it was filed against rates for an unregulated a la carte package titled SATPAC. We find that Operator's SATPAC is a tier not currently subject to regulation under the Commission's rules and therefore this complaint will be dismissed. 5. Upon review of Operator's FCC Form 1200, we find Operator's maximum permitted rate ("MPR") of $3.94 to be reasonable. However, Operator's actual CPST rate in effect July 14, 1994 to November 14, 1994 was $7.18. Because Operator's actual CPST rate exceeds its MPR of $3.94, we find Operator's actual CPST rate of $7.18, effective July 14, 1994 to be unreasonable. 6. Upon review of Operator's FCC Form 1210 covering the period July 1, 1994 to September 30, 1994, we find Operator's MPR of $4.49 to be reasonable, effective October 1, 1994. However, we find Operator's actual CPST rate of $7.18 to be unreasonable from October 1, 1994 to November 14, 1994. Operator reduced its actual CPST rate from $7.18 to $4.36, effective, November 15, 1994. Because Operator's actual CPST $4.36 rate does not exceed its MPR, effective November 15, 1994, we find Operator's actual CPST rate of $4.36, effective November 15, 1994 to be reasonable. 7. Upon review of Operator's FCC Form 1210 covering the period October 1, 1994 to December 31, 1994, we find Operator's MPR of $5.19 to be reasonable. Because Operator's actual CPST rate of $5.04 does not exceed its MPR, we find Operator's actual CPST rate of $5.04, effective April 15, 1995 to be reasonable. Operator raised its CPST rate to $6.17, effective September 1, 1995 and we find Operator's actual CPST rate of $6.17, effective September 1, 1995 to be unreasonable. 8. Upon review of Operator's FCC Form 1210 covering the period January 1, 1995 to December 31, 1995, we find Operator's MPR of $6.60 to be reasonable. Because Operator's actual CPST rate of $6.60, effective April 1, 1996, does not exceed its MPR, we find Operator's actual CPST rate of $6.60, effective April 1, 1996 to be reasonable. 9. Upon review of Operator's FCC Form 1240 covering the Projected Period October 1, 1996 to September 30, 1997, we adjusted Worksheet 8, Line H1 to reflect the correct rate of $6.60 instead of $6.17. We also adjusted Operator's FCC Form 1240 Worksheet 1, Line C1 from 2.96% to 2.22%. As a result of these adjustments of Lines C1, C3 and H1, Operator's CPST MPR on Line I9 (MPR for Projected Period) was reduced from $7.25 to $7.08. Because Operator actual CPST rate exceeds its MPR, we find Operator's actual CPST rate of $7.25, effective October 1, 1996 to be unreasonable. 10. Accordingly, IT IS ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that Operator's CPST rate of $7.18, effective July 14, 1994 through November 14, 1994, in the community set forth above, IS UNREASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that Operator's CPST rate of $4.36, effective November 15 1994, in the community set forth above, IS REASONABLE. 12. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that Operator's CPST rate of $5.04, effective April 1, 1995, in the community set forth above, IS REASONABLE. 13. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, and its CPST rate of $6.17, beginning September 1, 1995 IS UNREASONABLE. 14. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that Operator's CPST rate of $6.60, effective April 1, 1996, in the community set forth above, IS REASONABLE. 15. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that Operator's CPST rate of $7.25, effective October 1, 1996, in the community set forth above, IS UNREASONABLE. 16. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $3.94 per month (plus franchise fees), plus interest to the date of the refund, for the period August 30, 1994 to September 30, 1994. 17. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $4.49 per month (plus franchise fees), plus interest to the date of the refund, for the period October 1, 1994 through November 14, 1994. 18. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $5.19 per month (plus franchise fees), plus interest to the date of the refund, for the period September 1, 1995 through December 31, 1995. 19. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $7.08 per month (plus franchise fees), plus interest to the date of the refund, for the period October 1, 1996 through the day before Operator reduces its rate to $7.08. 20. 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. 21. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the complaints against the CPST rate charged by Operator in the community referenced above, ARE GRANTED. 22. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the complaint pending against the rate of the a la carte package titled SATPAC in the community referenced above IS DISMISSED. 23. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that Operator revise the calculation of its maximum permitted CPST rate in its next FCC Form 1240 filing in accordance with our findings in this order. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Deputy Chief, Cable Services Bureau