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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 ) ) Monroe Cablevision, Inc. ) CUID No. MI1239 (Frenchtown) ) Complaint Regarding ) Cable Programming Services Tier Rates) ) ORDER Adopted: July 18, 1997 Released: July 23, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a complaint about the rates charged by the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator has attempted to justify its CPST rates through benchmark justifications on FCC Form 393, FCC Form 1200 and multiple FCC Form 1210s. 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. If the Commission finds a rate to be unreasonable, it shall determine the correct rate and any refund liability. 3. A valid complaint was filed with the Commission on December 10, 1993 by the local franchising authority ("LFA") for the community referenced above against the CPST rate Operator was charging in the above-referenced community. The filing of a complete and timely complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rates. The Operator has the burden of demonstrating that its CPST rates are reasonable. 4. Operators with complete and timely 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 CPST rates were in compliance with the revised rules from May 15, 1994 forward. Operators attempting to justify CPST rates for the period prior to May 15, 1994 through a benchmark showing must complete and file FCC Form 393. To justify rates for the period beginning May 15, 1994 through a benchmark showing, operators must use the FCC Form 1200 series. Operators are permitted to make changes to their rates on a quarterly basis using FCC Form 1210. 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. 5. Upon review of Operator's FCC Form 393, we find Operator's calculated maximum permitted rate ("MPR") of $10.63 to be reasonable. Because Operator's actual CPST rate of $10.63 does not exceed its MPR, we find Operator's actual CPST rate of $10.63 to be reasonable, from the initial date of regulation, December 10, 1993, through May 14, 1994. 6. Upon review of Operator's FCC Form 1200, we find Operator's MPR of $9.91 to be reasonable. Operator's actual CPST rate in effect from May 15, 1994 through July 13, 1994 was $10.63. Operator elected to take advantage of the refund liability deferral period in accordance with the Commission's Rules. Consequently, Operator does not incur refund liability for charging in excess of the MPR calculated on its FCC Form 1200 until July 15, 1994. Because Operator's actual CPST rate of $10.63, effective May 15, 1994 through July 13, 1994 does not exceed its FCC Form 393 MPR, we find Operator's actual CPST rate of $10.63, effective May 15, 1994 through July 13, 1994, to be reasonable. 7. Upon review of Operator's FCC Form 1210 for the period April 1, 1994 through June 30, 1994, we find Operator's MPR of $10.05 to be reasonable. Because Operator's actual CPST rate of $10.05, effective July 14, 1994, does not exceed its MPR, we find Operator's actual CPST rate of $10.05, effective July 14, 1994 through December 31, 1994, to be reasonable. Pursuant to our revised channel addition rules, Operator requested a CPST rate of $10.50, effective January 1, 1995, which included the addition of one channel. Upon review of Operator's request, we find Operator's actual CPST rate of $10.50, effective January 1, 1995 through March 31, 1995 to be reasonable. 8. Upon review of Operator's FCC Form 1210 for the period January 1, 1995 through March 31, 1995, we find Operator's MPR of $11.64, effective April 1, 1995, to be reasonable. Because Operator's actual CPST rate of $11.64 does not exceed its MPR, we find Operator's actual CPST rate of $11.64, effective April 1, 1995 through December 31, 1995, to be reasonable. 9. Upon review of Operator's FCC Form 1210 for the period April 1, 1995 through December 31, 1995, we corrected Operator's Line C14 (previous per subscriber external costs) to agree with Line D9 of the previously filed FCC Form 1210. This amendment resulted in a revised MPR of $12.14 rather than Operator's MPR of $12.42. Because Operator's actual CPST rate of $12.42, effective January 1, 1996, exceeds its revised MPR, we find Operator's actual CPST rate of $12.42, effective January 1, 1996 through June 30, 1996, to be unreasonable. 10. Upon review of Operator's FCC Form 1210 for the period January 1, 1996 through June 30, 1996, we corrected Operator's Line A1 to agree with the previous revised FCC Form 1210. This amendment resulted in a revised MPR of $12.58 rather than Operator's MPR of $12.86. Because Operator's actual CPST rate of $12.86, effective July 1, 1996, exceeds its revised MPR, we find Operator's actual CPST rate of $12.86, effective July 1, 1996 through December 31, 1996, to be unreasonable. 11. Upon review of Operator's FCC Form 1210 for the period July 1, 1996 through December 31, 1996, we corrected Operator's Line A1 to agree with the previous revised FCC Form 1210. We also disallowed Operator's claim at Line F10 and F11 for a per channel adjustment of $.40 and a license fee reserve of $1.27 because Operator had previously exhausted its operator's cap and license fee reserves. We also corrected Operator's Lines I5 and J5 to reflect an inflation adjustment factor of 1.0221 rather than 1.03. These amendments resulted in a revised MPR of $13.00 rather than Operator's MPR of $15.08. Because Operator's actual CPST rate of $15.08, effective January 1, 1997, exceeds its revised MPR, we find Operator's actual CPST rate of $15.08, effective January 1, 1997, to be unreasonable. 12. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the CPST rate of $10.63, charged by Operator in the franchise area referenced above from the initial date of regulation, December 10, 1993 through July 13, 1994, IS REASONABLE. 13. 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 $10.05, charged by Operator in the franchise area referenced above effective July 14, 1994 through December 31, 1994, IS REASONABLE 14. 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 $10.50, charged by Operator in the franchise area referenced above effective January 1, 1995 through March 31, 1995, IS REASONABLE. 15. 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 $11.64, charged by Operator in the franchise area referenced above effective April 1, 1995 through December 31, 1995, IS REASONABLE. 16. 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 $12.42, charged by Operator in the franchise area referenced above effective January 1, 1996 through June 30, 1996, IS UNREASONABLE. 17. 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 $12.86, charged by Operator in the franchise area referenced above effective July 1, 1996 through December 31, 1996, IS UNREASONABLE. 18. 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 $15.06, charged by Operator in the franchise area referenced above effective January 1, 1997, IS UNREASONABLE. 19. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the community referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $12.14 per month (plus franchise fees), plus interest to the date of the refund, for the period January 1, 1996 through June 30, 1996. 20. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the community referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $12.58 per month (plus franchise fees), plus interest to the date of the refund, for the period July 1, 1996 through December 31, 1996. 21. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R.  76.961, that Operator shall refund to subscribers in the community referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $13.00 per month (plus franchise fees), plus interest to the date of the refund, for the period January 1, 1997 through the day before Operator implements the maximum permitted rate of $13.00. 22. 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. 23. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the referenced complaint IS GRANTED TO THE EXTENT DISCUSSED HEREIN. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau