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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 ) ) Lenfest Atlantic, Inc. ) CUID No. NJ0015 (Millville) d/b/a Suburban Cable TV ) ) Complaints Regarding ) Cable Programming Services Tier Rates) ORDER Adopted: February 25, 1998 Released: March 4, 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 Forms 1200, 1210 and 1240. We have already issued a separate Order addressing the reasonableness of Operator's rates effective September 1, 1993 to May 14, 1994 ("Prior Order"). This Order addresses the reasonableness of Operator's rates for the period after May 14, 1994, as justified on Operator's FCC Forms 1200, 1210 and 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. 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. 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. The Commission's rules also provide for a refund liability deferral period, if timely requested by Operator, beginning May 15, 1994 and ending July 14, 1994, for any overcharges resulting from Operator's calculation of a new maximum permitted rate ("MPR") on FCC Form 1200. This deferral of refund liability, however, does not apply to refund liability that may have occurred because Operator's March 31, 1994 rates for its CPST subject to regulation were higher than levels permitted under the Commission's rules in effect before May 15, 1994. Accordingly, while the liability period for Operator's overcharges associated with its FCC Form 1200 filing may not begin to run until July 15, 1994, Operator will incur refund liability between May 15, 1994 and July 14, 1994 for any CPST rates charged above the MPR approved by the Commission on Operator's FCC Form 393. 5. Upon review of Operator's FCC Form 1200, we adjusted Module A, Line A6 to reflect the corrected previous CPST MPR from our Prior Order of $9.20. We also adjusted Line A10 to exclude franchise fees. In addition, we corrected Module C, Line C2a from nine to eight to reflect the correct number of non-broadcast channels. These adjustments resulted in an MPR of $9.84 instead of $9.90. Because Operator's actual CPST rate of $9.92 exceeds its MPR, we find Operator's actual CPST rate of $9.92, effective July 14, 1994 to be unreasonable. 6. Upon review of Operator's FCC Form 1210 covering the period April 1, 1994 to December 31, 1994, we adjusted Module A, Line A1 to reflect the correct MPR from the revised FCC Form 1200, Line K1. This adjustment resulted in a corrected MPR of $11.22 instead of $11.28, effective January 1, 1995. Therefore, Operator's actual rate of $9.92 was not unreasonable, effective January 1 through January 31, 1995. However, Operator's actual CPST rate was $11.36, effective February 1, 1995, in excess of its MPR. Therefore, we find Operator's actual CPST rate of $11.36, effective February 1, 1995, to be unreasonable. 7. Upon review of Operator's FCC Form 1240 covering the Projected Period October 1, 1996 to September 30, 1997, we have adjusted Module A, Line A1 (Current Maximum Permitted Rate) to reflect the our corrected MPR of $11.22. We also adjusted Module C, Line C3 (Inflation Factor for True-Up Period 1) to the latest inflation factor from 2.96% to 2.22% and Line C5 (Current FCC Inflation Factor) to from 1.0296 to 1.0222. These adjustments resulted in a corresponding reduction in Line I9 (MPR for Projected Period). In total, our adjustments to Operator's FCC Form 1240 result in a reduction of the MPR for the Projected Period to $11.67. Therefore, we find Operator's actual CPST rate of $12.59, effective October 1, 1996, to be unreasonable. 8. 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 $9.92, effective July 14, 1994, in the community set forth above, IS UNREASONABLE. 9. 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 $9.92, effective January 1, 1995 in the community set forth above, IS NOT UNREASONABLE. 10. 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 $11.36, effective February 1, 1995, 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 $12.59, effective October 1, 1996, in the community set forth above, IS UNREASONABLE. 12. 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 $9.84 per month (plus franchise fees), plus interest to the date of the refund, for the period July 14, 1994 to December 31, 1994. 13. 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 $11.22 per month (plus franchise fees), plus interest to the date of the refund, for the period February 1, 1995 to September 30, 1996. 14. 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 $11.67 per month (plus franchise fees), plus interest to the date of the refund, for the period October 1, 1996 to the day before Operator implements the maximum permitted CPST rate of $11.67. 15. 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. 16. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that the complaints referenced herein against the rates charged by Operator in the community set forth above ARE GRANTED. 17. 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