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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 ) ) Harbor Vue Cable TV, Inc. d/b/a/ ) Adelphia Cable Communications ) CUID No. NY1433 (Town of Portland) ) Complaint Regarding a ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: September 29, 1997 Released: September 30, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the rates of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. Operator's response includes benchmark justifications filed on FCC Forms 393, 1200, 1210, and 1240. In addition, Operator has filed a response to the complaint ("Response") alleging that the complaint is defective and should be dismissed. Because Operator's Response is in the nature of a motion to dismiss, we shall treat the Response as such. This Order addresses the reasonableness of Operator's rates for the period September 1, 1993 through July 31, 1998. 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"), and our rules in effect at the time the complaints were filed, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rates. 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 took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. Cable operators with valid 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 rates were in compliance with the revised rules from May 15, 1994 forward. Cable operators attempting to justify their rates for the period prior to May 15, 1994 using a benchmark showing must complete and file FCC Form 393. Operators must use the FCC Form 1200 series to justify their rates for the period beginning May 15, 1994 using a benchmark showing. Cable operators may also justify rate increases based on the addition and deletion of channels, changes in certain external costs, and inflation, by filing FCC Form 1210. FCC Form 1210 must be filed at least 30 days before new rates are scheduled to go into effect where the Commission has found the cable programming service rate to be unreasonable less than one year prior to the filing, or where there is a pending complaint against the CPST rate. 4. In its Response, Operator maintains that the complaint does not identify the cable programming service at issue. Operator argues that "[a] complaint about the cost of Basic Service is not properly addressed through a Form 329, because it is not 'cable programming services' as defined by the FCC." [footnote added] Operator argues further that the satellite network signals its sells on a per- channel basis -- and associated equipment -- are also not the proper subjects of an FCC Form 329. Operator claims that, for these reasons, the complaint fails to state a cause of action and should be dismissed. 5. We find that, contrary to Operator's assertions, the complaint properly indicates that its subject is the CPST. Complainant's FCC Form 329 states that the monthly CPST rate at issue is $12.80. This figure is in accord with the monthly CPST rate on a rate card for the period February 24, 1994 through July 15, 1994, included by Operator as part of its FCC Form 393. We therefore deny Operator's motion to dismiss and consider the complaint. 6. Upon review of Operator's FCC Form 393, we find that Operator's maximum permitted rate ("MPR") of $14.51 was not unreasonable. Consequently, we find that Operator's actual CPST rate of $12.43, effective September 1, 1993 through July 14, 1994, was not unreasonable. 7. Upon review of Operator's FCC Form 1200, filed to justify rates as of July 15, 1994, we find that Operator's MPR of $12.36 was not unreasonable. Operator's actual CPST rate, effective July 15, 1994 through May 9, 1995, was $12.43. Because Operator's actual CPST rate exceeded its MPR, we find Operator's actual CPST rate of $12.43 to be unreasonable. 8. Upon review of Operator's first FCC Form 1210, for the period July 1, 1994 to June 30, 1995, we find that Operator's MPR of $12.33, effective July 1, 1995, was not unreasonable. Operator's actual CPST rate, effective May 10, 1995 through September 30, 1995, was $12.65. Because Operator's actual CPST rate exceeded both its FCC Form 1200 MPR, and its first FCC Form 1210 MPR, we find Operator's actual CPST rate of $12.65 to be unreasonable. 9. Upon review of Operator's second FCC Form 1210, for the period July 1, 1995 to September 30, 1995, we find that Operator claimed an Inflation Adjustment Factor of 1.0215 on Lines I5 and J5, when the inflation factor available to Operator at the time of filing was 1.0296. As a result, we increased the Inflation Adjustment Factor (Lines I5 and J5) to 1.0296. This change increased Operator's MPR on Line K9. Consequently, we find that Operator's MPR of $14.44 was not unreasonable. Because Operator's actual CPST rate of $14.41, effective October 1, 1995 through July 31, 1996, was less than its MPR, we find that Operator's CPST rate was not unreasonable. 10. Upon review of Operator's first FCC Form 1240, for the projected period August 1, 1996 to July 31, 1997, we revised Line A1 (Current MPR) to correspond to the revised MPR from Operator's second FCC Form 1210. We find that in addition to claiming an inflation factor of 2.22 percent for its seven-month true-up period of October 1, 1995 to April 30, 1996, Operator also claimed, on its Exhibit VI, previously unclaimed inflation of 1.0296 for the period July 1, 1994 through June 30, 1995. As explained above, however, the inflation factor 1.0296 was available to, and should have been used by, Operator at the time it filed its second FCC Form 1210; and we have already adjusted Operator's second FCC Form 1210 accordingly. Consequently, Operator cannot claim this additional inflation on its first FCC Form 1240. We have therefore adjusted Operator's first FCC Form 1240 at Line C1 (Inflation Factor for True-Up Period 1) to reflect the appropriate inflation factor for the true-up period, 1.0185, instead of the factor 1.0429 recorded by the Operator. This adjustment has reduced Operator's MPR from $17.98 to $17.73. However, because Operator's actual rate of $16.55, effective August 1, 1996 through July 31, 1997, was less than its revised MPR, we find that Operator's CPST rate was not unreasonable. 11. Upon review of Operator's second FCC Form 1240, for the projected period August 1, 1997 to July 31, 1998, we changed Line A1 (Current MPR) to correspond to the revised MPR from Operator's first FCC Form 1240. We also adjusted Line D6 (Current True-Up Segment) from $0.1583 to $0.0961 and Line D7 (Current Inflation Segment) from $0.1445 to $0.1423 to correspond, respectively, to revised Line I8 (True-Up Segment for Projected Period) and revised Line I5 (Inflation Segment for Projected Period) from Operator's first FCC Form 1240. In addition, we corrected Line F8 (True-Up Segment for True-Up Period 1) from $0.1285 to $0.0780 to reflect the revised amount of true-up claimed for the projected rate period on Operator's first FCC Form 1240. The revisions to Operator's second FCC Form 1240 have reduced Operator's MPR from $22.37 to $20.02. However, because Operator's actual rate of $19.13, effective August 1, 1997 through July 31, 1998, is less than its revised MPR, we find that Operator's CPST rate is not unreasonable. 12. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $12.43, effective September 1, 1993 through July 14, 1994, in the community referenced above, WAS NOT UNREASONABLE. 13. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $12.43, effective July 15, 1994 through May 9, 1995, in the community referenced above, WAS UNREASONABLE. 14. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $12.65, effective May 10, 1995 through September 30, 1995, in the community referenced above, WAS UNREASONABLE. 15. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $14.41, October 1, 1995 through July 31, 1996, in the community referenced above, WAS NOT UNREASONABLE. 16. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $16.55, effective August 1, 1996 through July 31, 1997, in the community referenced above, WAS NOT UNREASONABLE. 17. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's CPST rate of $19.13, effective August 1, 1997 through July 31, 1998, in the community referenced above, IS NOT UNREASONABLE. 18. 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 CPST rate of $12.36 per month (plus franchise fees), plus interest to the date of the refund, for the period July 15, 1994 through May 9, 1995. 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 CPST rate of $12.33 per month (plus franchise fees), plus interest to the date of the refund, for the period May 10, 1995 through September 30, 1995. 20. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator shall promptly determine the overcharges to CPST subscribers for the stated periods, and shall file, within 30 days of the release of this Order, a report with the Chief, Cable Services Bureau, stating the cumulative amounts 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. 21. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator shall revise its FCC Form 1240 for the projected period August 1, 1997 through July 31, 1998 incorporating the changes detailed in this order and shall file such amended FCC Form 1240 with the Chief, Cable Services Bureau within 30 days of the release of this Order. 22. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that Operator's motion to dismiss the complaint referenced herein against the CPST rate charged by Operator in the franchise area referenced in the caption IS DENIED. 23. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint referenced herein against the CPST rate charged by Operator in the franchise area referenced in the caption IS GRANTED TO THE EXTENT INDICATED HEREIN. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau