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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: ) ) CONTINENTAL CABLEVISION ) Natick, Massachusetts OF MASSACHUSETTS, INC., d/b/a ) CUID No. MA0141 CONTINENTAL CABLEVISION ) File No. CSB-A-0112 ) Appeal of a Letter Ruling of the) Massachusetts Community Antenna ) Television Commission ) ) MEMORANDUM OPINION AND ORDER Adopted: July 17, 1998 Released: July 23, 1998 By the Commission: I. INTRODUCTION 1. Before the Commission is an application for review filed by Continental Cablevision of Massachusetts, Inc. d/b/a Continental Cablevision (Continental), of the action by the Cable Services Bureau (Bureau) in Continental Cablevision of Massachusetts, Inc. d/b/a/ Continental Cablevision, Order (Bureau Order), covering the above-referenced community unit. In the Bureau Order, the Bureau dismissed Continental's appeal of a letter ruling of the Massachusetts Community Antenna Television Commission (MCATC) and Continental's request for an emergency stay of the letter ruling. Having considered Continental's application for review, we conclude that the Bureau Order should be affirmed. II. BACKGROUND 2. Continental claims that in setting its rates for Natick, Massachusetts in August, l993, its personnel inadvertently listed four channels as part of the basic tier, rather than the cable programming service (CPS) tier. As a result, Continental calculated rates on FCC Form 393 which were $2.00 too high on the basic tier, and $2.00 too low on the CPS tier. Continental reasoned that since over 94% of its Natick customers subscribe to both levels of service, the error was of no consequence other than to those 433 basic-only subscribers. Continental filed its Form 393 with the MCATC, which determined on May 20, l994, that Continental issue "refunds to subscribers for that portion of previously paid rates determined by this Rate Order to be in excess of the initial permitted rates." The Rate Order stated: "[I]t is hereby ORDERED: 1) That Continental adjust its rates to make them consistent with those stated under the Rate Determination section and; 2) That Continental issue a refund to subscribers as of September 1, l993. 47 C.F.R.  76.942 (c); 207 CMR 6.43." The Rate Order also instructed Continental to submit a refund plan prior to August l5, l994. Continental forwarded its refund proposal in correspondence of June 7 and July 27, l994. On August 4, l994, the MCATC issued a letter ruling in which it refers to its May 20, l994 order, as follows: "This Rate Order states that Continental should issue refunds as determined by the Rate Order. This would include issuing refunds to all subscribers in Natick who were charged more than the maximum permitted rate for the basic service tier." (emphasis in original) Continental filed an appeal with the Commission on September 2, l994. III. BUREAU ACTION 3. The Bureau Order held that Continental's appeal was untimely filed and that its request for emergency stay, pending resolution of its appeal, was rendered moot. The Bureau ruled that MCATC's August 4, l994 letter ruling was not a rate decision, as it neither set rates for Continental's basic service tier and associated equipment, nor ordered Continental to issue any refunds. Rather, the Bureau stated that the MCATC's May 20, l994 Local Rate Order established said rates and required Continental to issue refunds. Accordingly, the Bureau ruled that Continental's September 2, l994 filing of its appeal was untimely pursuant to Section 76.944(b) of the Commission's rules, which requires the filing of a ratemaking appeal within 30 days of the release of the text of the franchising authority's decision. IV. STANDARD OF REVIEW 4. Applications for Review must specify with particularity the factor or factors that warrant Commission consideration from among the following: (1) the action taken pursuant to delegated authority is in conflict with statute, regulation, case precedent, or established Commission policy; (2) the action involves a question of law or policy which has not previously been resolved by the Commission; (3) the action involves application of a precedent or policy which should be overturned or revised; (4) there was an erroneous finding as to an important or material question of fact, or (5) prejudicial procedural error occured. We will not grant an application for review if it relies on questions of fact or law upon which the designated authority has been afforded no opportunity to pass. Continental asserts that the Commission should entertain the application for review because the Bureau misapplied applicable law. V. DISCUSSION 5. Continental contends that MCATC's May 20, l994 Rate Order cannot be considered a final order under the Commission's rate standards until the issuance of the August 4, l994 letter ruling, which must be considered a separate and final order of the franchising authority in regard to the Commission's appeal process. Continental relies on Meredith/New Heritage Strategic Partners, L.P. (Meredith) for the proposition that a decision of the local franchising authority is not final if the cable operator is able to demonstrate that the text has been changed between the initial and last dated version of the decision. Continental argues that the August 4, l994 letter ruling modified the substance of the earlier May 20, l994 order, and consequently, the "very issue of appeal was not yet present" until August 4. 6. We need not reach the issue of whether Continental's appeal is timely. Even if we were to give credence to Continental's contentions regarding the timeliness of its appeal, petitioner would not prevail on the merits of its arguments contained therein. Continental contends that the Rate Order requires the cable operator to reduce the overcharges on the basic tier, but prohibits Continental from offsetting its loss on the CPS tier, resulting in a rate reduction that is in direct violation of the Commission's benchmark requirement. In this regard, Continental cites the Third Order on Reconsideration, arguing that the Commission in that document condemned rate policies that "result in an operator being required to make a rate reduction that is greater than the maximum reduction required under application of the benchmark approach." Continental also argues that Section 76.942 of the Commission's rules expressly incorporates offsetting basic rate overcharges against cable programming service tier rate undercharges. 7. The Commission has had occasion to consider, and reject, arguments like those made by Continental regarding the question of offsetting overcharges on one tier with undercharges on another tier. In Cencom Cable Income Partners II, L.P. (Cencom), the Commission noted the "dual regulatory structure for cable services, giving local franchising authorities jurisdiction to regulate [basic service tier] and associated equipment rates, and giving the Commission jurisdiction to regulate [cable programming service tier] rates upon filing of a valid complaint." The Commission further stated that "Section 76.942 of the Commission's Rules and the Third Order on Reconsideration direct local franchising authorities to base refunds on the amount by which aggregate actual revenues exceed aggregate permitted revenues for [basic service tier] sevice and equipment rates under their regulatory jurisdiction." The authorities cited by Continental do not provide for aggregating revenues for services and equipment costs that are subject to review by different regulatory authorities. We are not persuaded by the arguments presented to deviate from our ruling in Cencom or Section 76.942 of our rules. 8. We are likewise not persuaded by Continental's arguments regarding the timeliness of its appeal, and we affirm the Bureau's decision. We agree with the Bureau that the May 20, l994 Rate Order issued by the MCATC was a final rate order which set rates for Continental's basic service tier and ordered the cable operator to issue refunds to subscribers of that level of service. Although Continental argues that it did not understand the Rate Order until its refund plan was rejected, its interpretation of the Rate Order was not supported by the face of the Rate Order or by Commission rules or precedent. The Bureau did not err in finding untimely Continental's September 2, l994 appeal of an issue that was decided in the May 20, l994 order. In addition, although Continental alternatively asks that the Commission find "good cause" under Meredith to accept its late-filed appeal because it misunderstood the Rate Order, Continental has not provided any information as to its appeal that has any relevance to the "good cause" standard in Meredith. VI. ORDERING CLAUSE 9. For the foregoing reasons, IT IS ORDERED that the Application for Review filed by Continental Cablevision of Massachusetts, Inc. d/b/a/ Continental Cablevision IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary