******************************************************** 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 ) ) Comcast Cablevision of Danbury, Inc. ) CUID Nos. CT0076 (City of Danbury) ) CT0085 (City of Bethel) ) CT0113 (City of Ridgefield) Petition for Reconsideration ) ORDER ON RECONSIDERATION Adopted: October 3, 1997 Released: October 3, 1997 By the Chief, Cable Services Bureau: 1. In this Order we consider a petition for reconsideration concerning the rates the above- captioned operator ("Operator") was charging for its cable programming services tier ("CPST") in the communities referenced above. Operator attempted to justify its CPST rates through benchmark showings on FCC Forms 1200, 1210, and 1240. We issued an order which found that the Operator's rates in effect beginning July 15, 1994 to the present were unreasonable ("Prior Order"). Operator filed a Petition for Reconsideration ("Petition") of our Prior Order on August 29, 1997. Operator also filed a Petition for Stay of our Prior Order on September 2, 1997. The Commission has received no opposition to the Petition for Reconsideration or the Petition for Stay. This Order addresses Operator's Petition for Reconsideration of our Prior Order for the communities referenced above. Accordingly, we will deny Operator's Petition for Stay as moot. 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 implementing the 1992 Cable Act, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber or local franchise authority ("LFA"). If the Commission finds the rate to be unreasonable, it shall determine the correct rate and any refund liability. The Telecommunications Act of 1996 ("1996 Act") and our rules implementing the new legislation, requires that complaints against CPST rates be filed with the Commission by a franchising authority that has received subscriber complaints. A franchising authority may not file a CPST rate complaint unless, within 90 days after such increase becomes effective, it receives more than one subscriber complaint. 3. The Commission's original rate regulations took effect on September 1, 1993. The Commission revised its rate regulations effective May 15, 1994. Operators with valid CPST complaints filed against them prior to May 15, 1994, were required to 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 prices were in compliance with the revised rules from May 15, 1994 forward. Operators attempting to justify their prices for the period prior to May 15, 1994, through a benchmark showing had to complete and file FCC Form 393. 4. Cable operators attempting to justify rates for the period beginning May 15, 1994 through a benchmark showing must use the FCC Form 1200 series. 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 CPST rate to be unreasonable less than one year prior to the filing, or where there is a pending complaint against the CPST rate. Cable 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 period under review for the Prior Order was the period beginning July 15, 1994 to the present. 5. To justify CPST rates in effect from July 15, 1994 to September 9, 1994, Operator filed an FCC Form 1200 on October 20, 1994. In our Prior Order, we revised Module A, Line A6 of Operator's FCC Form 1200 to agree with the maximum permitted rate ("MPR") of $10.01 justified in Operator's revised FCC Form 393. We explained that Operator's revised FCC Form 393 was revised pursuant to the Comcast Resolution. Our revision reduced the MPR Operator entered on FCC Form 1200, Module A, Line A6 from $11.18 to $10.01. 6. In its Petition, Operator alleges that the Bureau erred in revising its FCC Form 1200, Module A, Line A6 to agree with the MPR justified on Operator's revised FCC Form 393. Operator contends that the Comcast Resolution left the Operator's original FCC Form 393 filing unchanged. Operator asserts that the Comcast Resolution required Operator to issue refunds to subscribers in connection with FCC Form 393 for the period prior to July 14, 1994, but did not require an adjustment of the Operator's March 31, 1994 rates on Line A6 of Operator's previously filed FCC Form 1200. Operator contends that the Comcast Resolution also did not require Operator to file a revised FCC Form 1200, and that it specifically permitted Operator to adjust CPST rates in the communities referenced above. Operator states that pursuant to the Commission's December 29, 1994 Public Notice, Operator did submit an optional FCC Form 393 filing on February 7, 1995. However, Operator argues that this optional filing had no effect on either the Operator's actual March 31, 1994 rates or Line A6 of Operator's FCC Form 1200. Accordingly, Operator contends that there is no basis in the Comcast Resolution for the Bureau to have made these revisions to Operator's FCC Form 1200. The instructions for FCC Form 1200, Line A6 directed Operator to enter its standard monthly charge "in effect during the most recent whole monthly billing period ending on or before March 31, 1994." Operator contends that the rate cards attached to Operator's FCC Form 1200 demonstrate that Operator correctly entered on Line A6 its actual charge as of March 31, 1994. Consequently, Operator maintains that there was no justification for replacing Line A6 of Operator's FCC Form 1200 with a figure derived from the Operator's revised FCC Form 393, and that Line A6 should not have been adjusted. 7. Upon review of Operator's FCC Forms 393 and 1200 filings, we find that Operator correctly entered its actual March 31, 1994 rates on Line A6 of its FCC Form 1200 as required by the FCC Form 1200 instructions. Accordingly, we will grant Operator's Petition with respect to this issue. 8. In our Prior Order, we also adjusted Operator's full reduction rate (Module G, Lines G5 and G6) on its FCC Form 1200 to reflect September 30, 1992 equipment revenue and franchise fee figures reported in the revised FCC Form 393. Specifically, we changed Line G5 from $134,487.00 to $129,679.00, and Line G6 from $37,656.97 to $46,638.00. 9. In its Petition, Operator contends that the Bureau's adjustment of equipment revenue on Line G5 was incorrect because it ignored the difference between the instructions of FCC Form 393 and 1200. The instructions for FCC Form 1200, Line G5 require the entry of equipment revenue information "for the last whole monthly billing period ending on or before September 30, 1992." In contrast, the relevant instructions for FCC Form 393 direct cable operators to calculate their "monthly average equipment revenue [using] total revenues . . . earned over the last fiscal year for the community unit . . . ." Operator argues that the FCC Form 1200 requires equipment revenue information from a particular month, while the FCC Form 393 requires an annual monthly average of equipment revenue. Therefore, Operator contends that it correctly entered September 1992 equipment revenue information on Line G5, which the Bureau replaced with average annual equipment revenues derived from FCC Form 393. In addition, Operator argues that the Bureau should not have taken the franchise fee figure from FCC Form 393 and used it as a basis to adjust FCC Form 1200. As a separate issue, Operator also contends that the Bureau's adjustment to Line G6 of its FCC Form 1200 did not reflect the correct franchise fee figure. This is due to an error made by Operator. Subsequent to Operator's FCC Form 1200 filing, it "discovered a miscalculation in the franchise fee reported on FCC Form 1200." Operator admits that it should have reported a figure of $44,167 in lieu of the $37,656.97 that it reported. Operator states that this error resulted in an $0.08 differential between the rate that Operator charged and the MPR. 10. Upon consideration of Operator's Petition with respect to the adjustment of equipment revenue on Line G5 of FCC Form 1200, we find that Operator correctly followed the FCC Form 1200 instructions. Accordingly, we will grant Operator's Petition with respect to this issue and permit Operator to use the equipment revenue information that it entered on Line G5 of its FCC Form 1200. We will also grant Operator's Petition to use the original franchise fee amount that it entered on Line G6 of its FCC Form 1200. However, we will deny Operator's request to correct the error that it made in calculating the amount of the franchise fee reported. Under Commission rules, a petition for reconsideration which relies on facts not previously presented to the Commission may be granted only if these facts relate to events which have occurred or circumstances which have changed since the last opportunity to present such matters, or if these facts were unknown to petitioner until after its last opportunity to present such matters. The newly presented facts and arguments are neither newly discovered nor the result of changed circumstances, since Comcast indicates by its own admission that it was aware of this error before our Prior Order was released, but did not provide this information to the Bureau until the Petition was filed. Accordingly, we will deny Operator's Petition with respect to this issue, and accept Operator's original figure of $37,656.97 on Line G6. 11. As discussed above, we accept the figures used by Operator on Line A6, Line G5 and Line G6 of its FCC Form 1200. Because, on review, we found no apparent errors in Operator's subsequent FCC Form 1210 and 1240 filings, we will accept these forms as originally filed. Because Operator's CPST rates have not exceeded its MPRs, we find that Operator's CPST rates in the community referenced above, for the period July 15, 1994 through November 30, 1996, are not unreasonable. We also find that Operator's CPST rate of $13.80, effective December 1, 1996, is not unreasonable. 12. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rates charged by Operator in the communities referenced above, from July 15, 1994 through November 30, 1996, ARE NOT UNREASONABLE. 13. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rate of $13.80 charged by Operator in the communities referenced above, effective December 1, 1996, IS NOT UNREASONABLE. 14. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the complaints referenced in Comcast Cablevision of Danbury, Inc., DA 97- 1610 (released July 30, 1997) ARE DENIED. 15. IT IS FURTHER ORDERED, pursuant to Section 1.106 of the Commission's rules, 47 C.F.R. Section 1.106, that the Petition for Reconsideration seeking reversal of Comcast Cablevision of Danbury, Inc., DA 97-1610 (released July 30, 1997) IS GRANTED IN PART AND DENIED IN PART. 16. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that Comcast Cablevision of Danbury, Inc., DA 97-1610 (released July 30, 1997) IS VACATED. 17. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that Operator's Petition for Stay of Comcast Cablevision of Danbury, Inc., DA 97- 1610 (released July 30, 1997) IS DENIED AS MOOT. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau