******************************************************** 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 ) ) TCI Cablevision of Georgia ) CUID No. GA0011 (Valdosta) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: January 17, 1997 Released: January 23, 1997 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the rate increases of TCI Cablevision of Georgia ("TCI") for its cable programming services tier ("CPST") in Valdosta, GA, CUID No. GA0011. TCI has chosen to attempt to justify its CPST rates through benchmark showings on FCC Form 1200, FCC Forms 1210 and FCC Form 1240. This Order addresses the reasonableness of TCI's rates for the period February 28, 1995 to the present. We conclude, for the reasons discussed below, that the rate charged by TCI for the period February 28, 1995 through March 31, 1995 is unreasonable and the rates charged from April 1, 1995 to the present are reasonable. 2. The Communications Act authorizes the Federal Communications Commission ("Commission") 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") required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The Telecommunications Act of 1996 ("1996 Act") and our rules implementing the new legislation, require that complaints against the CPST rate be filed with the Commission by a local franchising authority ("LFA") that has received subscriber complaints. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rate. 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 became effective on September 1, 1993. The Commission revised its rate regulations effective May 15, 1994. Cable operators attempting to justify their rates through a benchmark showing for the period prior to May 15, 1994 must complete and file FCC Form 393. Beginning May 15, 1994, operators attempting to justify their rates through a benchmark showing must use the FCC Form 1200 series. Cable operators may file FCC Form 1210 to justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation. FCC Form 1210 must be filed at least 30 days before new rates are scheduled to go into effect when there is a pending complaint against the operator's CPST rate. 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 rate year a "true-up" mechanism is available to correct estimated costs with actual cost changes. The "true-up" requires operators to decrease their rates or alternatively permits them to increase their rates to make an adjustment for over or under estimations of these cost changes. 4. A valid complaint was filed with the Commission on February 28, 1995 against TCI's February 14, 1995 increase in the CPST rate from $11.10 to $12.46. Upon review of TCI's FCC Form 1200, FCC Forms 1210 and FCC Form 1240, we find that TCI has not correctly calculated its maximum permitted rate for the period February 28, 1995 through March 31, 1995. It is therefore appropriate to make adjustments to TCI's calculations as discussed below. 5. FCC Form 1210 Filing: To justify its February 14, 1995 increase, TCI filed an FCC Form 1210 covering the period April 1, 1994 through September 30, 1994 and setting a maximum permitted rate ("MPR") of $11.10. In a supplemental filing, TCI claimed an additional $1.20 for six channels added as of December 31, 1994 and $.16 for programming cost increases for the first quarter of 1995, for a revised MPR of $12.46. Because TCI may not increase rates based on increased costs until the end of the quarter in which they are incurred, we adjusted TCI's maximum permitted rate for the period of February 28, 1995 through March 31, 1995 to $12.30 instead of $12.46. Although TCI failed to demonstrate that its CPST rate was not unreasonable, we determine that the total overcharge per subscriber is de minimis and it would not serve the public interest to order a refund. 6. FCC Form 1240 Filing: TCI filed an FCC Form 1240 for the period beginning June 1996 through May 1997. TCI claimed an inflation factor on Lines C1-C3 of 1.0261 for both the true-up period and the projected period. Since this form was filed prior to the release of the latest inflation factor figures, we allow TCI to use the inflation factor of 1.0261 on line C1 and worksheet 1. However, for the projected period, the inflation factor will be subject to adjustment on the next FCC Form 1240 filing. 7. Notwithstanding the above, we find TCI's MPR's from April 1, 1995 through the present to be justified and reasonable. 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 charged by TCI in the City of Valdosta, GA, CUID No. GA0011 from February 28, 1995 through March 31, 1995 IS UNREASONABLE. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint against the CPST rate charged by TCI in the City of Valdosta, GA, CUID No. GA0011 IS GRANTED TO THE EXTENT DISCUSSED HEREIN. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Service Bureau