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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 ) ) Telescripps Cable Company ) CUID No. KY0642 (Vine Grove) ) ) Complaint Regarding ) Cable Programming Services Tier Rates) ) ORDER Adopted: August 26, 1997 Released: August 29, 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 Forms 393, 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. 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 February 24, 1994 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. 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. Operator elected to defer refund liability pursuant to the Commission's Rules. 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. 6. Upon review of Operator's FCC Form 393, we find that Operator incorrectly calculated its maximum permitted rate ("MPR"). We recalculated the Inflation Adjustment Factor in Part II, Worksheet 1, Lines 122-127, on the basis of the most accurate data currently available for the date for which Operator filed. On Line 122 we adjusted the GNP-PI factor to 126.9 and on Line 125, we adjusted the GNP-PI time period to 15 months. These adjustments lowered the Inflation Adjustment Factor on Line 127 to 1.043 rather than Operator's 1.045. This adjustment resulted in a revised MPR of $10.03 versus Operator's MPR of $10.18. Thus, we find Operator's actual CPST rate of $10.19 for the period February 24, 1994 through June 30, 1994 to be unreasonable. 7. Upon review of Operator's FCC Form 1200, we find Operator's MPR of $10.24 to be correct. Because Operator's actual rate of $10.01 is less than its MPR of $10.24, we find Operator's actual CPST rate of $10.01, effective July 1, 1994, to be reasonable. 8. Upon review of Operator's FCC Form 1210 for the period April 1, 1994 through March 31, 1994, we find Operator's MPR of $12.00 to be reasonable. Because Operator's actual CPST rate of $11.63 effective December 31, 1995 is less than its MPR, we find Operator's actual CPST rate of $11.63 effective December 31, 1995 through March 31, 1996, to be reasonable. 9. Upon review of Operator's FCC Form 1210 for the period April 1, 1994 through March 30, 1994, we find Operator's MPR of $13.34 to be reasonable. Because Operator's actual CPST rate of $13.09 effective April 1, 1996 is less than its MPR, we find Operator's actual CPST rate of $13.09 effective April 1, 1996 through March 31, 1996 to be reasonable. 10. Upon review of Operator's FCC Form 1240 for the period April 1, 1997 through March 31, 1998, we find Operator's MPR of $14.25 to be reasonable. Because Operator's actual CPST rate of $14.25 effective April 1, 1997 is equal to its MPR, we find Operator's actual CPST rate of $14.25 effective April 1, 1997 to the present to be reasonable. 11. 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 $10.19, charged by Operator in the franchise area referenced above effective February 24, 1994 through June 30, 1994, IS UNREASONABLE. 12. 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 $10.01, charged by Operator in the franchise area referenced above effective July 1, 1994 through December 30, 1995, 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 $11.63, charged by Operator in the franchise area referenced above effective December 31, 1995 through March 31, 1996, 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 $13.09, charged by Operator in the franchise area referenced above effective April 1, 1996 through March 31, 1997, 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 $14.25, charged by Operator in the franchise area referenced above effective April 1, 1997 to the present, IS REASONABLE. 16. 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 $10.03 per month (plus franchise fees), plus interest to the date of the refund, for the period February 24, 1994 through June 30, 1994. 17. 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. 18. 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