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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 New Castle County ) CUID No. DE0011 (New Castle) d/b/a Suburban Cable TV ) ) Complaint Regarding Cable ) Programming Services Tier Rates ) and ) Petition for Reconsideration ) ORDER ON RECONSIDERATION and RATE ORDER Adopted: December 22, 1998 Released: December 28, 1998 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the July 1, 1998 rate increase of the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. We have already issued a rate order concerning Operator's prior CPST rates ("Prior Order"). On January 23, 1998, Operator filed a petition for reconsideration of our Prior Order ("Petition"). In this Order we will consider Operator's Petition as well as the above-referenced complaint. 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 Telecommunications Act of 1996 ("1996 Act") and our rules implementing the legislation ("Interim Rules"), require that a complaint against the CPST rate be filed with the Commission by a local franchising authority ("LFA") that has received more than one subscriber complaint. 3. The LFA for the franchise area referenced above filed a complaint with the Commission on October 19, 1998 against Operator's July 1, 1998 CPST rate increase from $19.46 to $20.96. The LFA verified that it received more than one subscriber complaint and that the first valid complaint was received by the LFA on July 2, 1998. The filing of a complete and timely complaint triggers an obligation upon the cable operator to file a justification of its CPST rates. The Operator has the burden of demonstrating that the CPST rates complained about are reasonable. If the Commission finds a rate to be unreasonable, it shall determine the correct rate and any refund liability. 4. Operators may justify 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. 5. In our Prior Order, we reviewed two FCC Form 1240s for the projected periods March 1, 1996 through February 28, 1997, and July 1, 1997 through June 30, 1998. As a result of our review, we revised Operator's MPR to $19.27 for the projected period July 1, 1997 through June 30, 1998, rather than Operator's calculated MPR of $20.61. Because Operator's actual CPST rate of $19.46, effective July 1, 1997, exceeded its revised MPR of $19.27, we found Operator's actual CPST rate of $19.46 to be unreasonable. In its Petition, Operator argues that it intended to file the FCC Form 1240 for the projected period July 1, 1997 through June 30, 1998 as an unregulated operator, using its actual CPST rate, in effect prior to the rate increase complained about, as its Current Maximum Permitted Rate on Line A1. Based on our review of the record, we agree that Operator did intend to file as an unregulated operator in response to the 1997 LFA complaint. As a supplement to its Petition, Operator filed an amended FCC Form 1240 for the projected period July 1, 1997 through June 30, 1998. Upon review of Operator's amended FCC Form 1240, we find that Operator has correctly calculated its MPR of $20.04. Because Operator's actual CPST rate of $19.46, effective July 1, 1997, does not exceed its revised MPR of $20.04, we find Operator's actual CPST rate of $19.46 to be reasonable. We will therefore grant Operator's Petition. 6. Upon review of the Operator's FCC Form 1240 for the projected period July 1, 1998 through June 30, 1999, we find that Operator has correctly calculated its MPR of $20.96. Because Operator's actual CPST rate of $20.96, effective July 1, 1998, does not exceed its MPR, we find Operator's actual CPST rate of $20.96 to be reasonable. 7. Accordingly, IT IS ORDERED, pursuant to Section 1.106 of the Commission's rules, 47 C.F.R. 1.106, that Operator's Petition for Reconsideration IS GRANTED. 8. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. 0.321, that In the Matter of Lenfest New Castle County d/b/a Suburban Cable TV, DA 97-2699, 13 FCC Rcd 9027 (1998), IS VACATED. 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 $19.46, charged by Operator in the franchise area referenced above, effective July 1, 1997 through June 30, 1998, IS REASONABLE. 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 $20.96, charged by Operator in the franchise area referenced above, effective July 1, 1998, IS REASONABLE. 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 Operator's July 1, 1997 and July 1, 1998 CPST rate increases in the community referenced above, ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau