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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 ) ) ) TCI Cablevision of Florida d/b/a ) Miami Tele-Communications, Inc. ) CUID No. FL0653 (Miami) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: December 23, 1997 Released: December 29, 1997 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the June 1, 1997 rate increase that the above-captioned operator ("Operator") implemented for its cable programming services tier ("CPST") in the community referenced above. Operator has attempted to justify its CPST rate increase through a benchmark showing on FCC Forms 1240. We have already issued separate orders ("Prior Orders") which resolved Operator's CPST rates from September 1, 1993 through September 15, 1995, and a rate increase effective June 1, 1996. This Order addresses Operator's CPST rate effective June 1, 1997. 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. If the Commission finds the rate unreasonable, it shall determine the correct rate and any refund liability. The Telecommunications Act of 1996 ("1996 Act"), and our rules, require that complaints against the 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. Cable operators attempting to justify their rates for the period beginning May 15, 1994 using a benchmark showing must complete and file 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 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. 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. 4. On October 3, 1997, the local franchising authority ("LFA") filed its complaint against Operator's June 1, 1997 CPST rate increase. In its complaint, the LFA asserts that it has received more than one subscriber complaint against Operator's CPST rate increase, thereby triggering the Commission's jurisdiction to review this complaint. The valid complaint from the LFA triggers an obligation on behalf of the cable operator to file a justification of its CPST rates with the LFA. Thus, in this case, Operator is required to justify the increase in its CPST rate which is the subject of the LFA's complaint. Operator filed FCC Forms 1240 with the LFA as justification for this rate increase. 5. On February 22, 1996, the Commission issued an order granting Operator a waiver (the "Waiver Order") of certain rate adjustment requirements in its initial filing of the Commission's annual rate adjustment form (FCC Form 1240). Specifically, the Waiver Order allowed Operator, in its initial FCC Form 1240 filings, to include estimated changes in costs, inflation, channels and subscriber information attributable to the period between the last date for which actual cost data was available and the effective date of the new rates. In the Waiver Order, Operator was instructed to include in its initial FCC Form 1240 filing certain calculations, such calculations to be performed on FCC Form 1240 (primarily in Module G), or off FCC Form 1240, in an alternative showing done pursuant to the Waiver Order's "General Guidelines." Operator chose to use an alternative showing pursuant to the "General Guidelines" rather than perform its calculations directly on FCC Form 1240. 6. On October 25, 1996, Operator wrote to the Commission requesting review and approval of a modified FCC Form 1240 to justify rates for the projected period from June 1, 1997 to May 31, 1998. On January 9, 1997 the Commission consented to the Operator's use of the form for such period in lieu of filings on the Commission's standard FCC Form 1240. 7. To justify its CPST rate, effective June 1, 1997, Operator submitted two FCC Forms 1240, the first for the projected period June 1, 1996 to May 31, 1997 ("First Form 1240"), and the second for the projected period June 1, 1997 to May 31, 1998 ("Second Form 1240"). Operator's First Form 1240 used Operator's alternative showing, calculated pursuant to the Waiver Order. Operator's Second Form 1240 followed the format set forth in Operator's October 25, 1996 letter. On reviewing the submitted forms, we determined that neither of the submitted forms produced identical results to filings that would have been made on the Commission's standard FCC Form 1240. 8. Accordingly, on December 2, 1997, Operator submitted new standard FCC Forms 1240, for the projected periods June 1, 1996 to May 31, 1997, and June 1, 1997 to May 31, 1998, which performed the Waiver Order's calculations directly on the standard FCC Forms 1240 as well as the calculations described in Operator's October 25, 1996 letter. Review of both forms is necessary to calculate the appropriate MPR and refund liability, if any, for the period beginning June 1, 1997. Operator also submitted a refund plan which calculated the amount of refunds owed to subscribers in the community referenced above for the duration of the one year projected period ending May 31, 1998. 9. Upon review of Operator's new FCC Form 1240, for the projected period June 1, 1996 to May 31, 1997, we find that Operator has correctly calculated its maximum permitted rate ("MPR") of $16.64. Upon review of Operator's new FCC Form 1240, for the projected period June 1, 1997 to May 31, 1998, we find that Operator has correctly calculated its MPR of $16.88. However, Operator's actual CPST rate, effective June 1, 1997, is $17.29. Operator has submitted a refund plan which calculates, with interest, the total amount of overcharges that will be collected from CPST subscribers in the community referenced above from June 2, 1997 (the date of the first subscriber complaint) to May 31, 1998. Upon review of Operator's refund plan, we find that Operator has correctly calculated, with interest, the amount of overcharges that will be received from subscribers during the projected period ending May 31, 1998. These calculations result in a total refund amount of $5.14 per CPST subscriber, including interest. We will order Operator to pay the refund amount of $5.14 to each current CPST subscriber within 60 days of the release of this order. We will also order that any rate Operator charges on and after June 1, 1998 shall be premised on Operator's use of (1) the standard FCC Form 1240 for rate calculation purposes and (2) $16.88 as Operator's Current Maximum Permitted Rate as called for on Line A1 of its FCC Form 1240 filing for the projected period beginning June 1, 1998. Contingent upon Operator's refund payment to its subscribers, we have determined that Operator's total CPST rate collections in the community referenced above, for the projected period June 1, 1997 to May 31, 1998, will be reasonable. 10. Accordingly, IT IS ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to CPST subscribers in the franchise areas referenced above the amount of $5.14 within 60 days of the release of this Order. 11. IT IS FURTHER ORDERED, pursuant to Section 76.962 of the Commission's rules, 47 C.F.R. Section 76.962, that Operator, within 90 days of the release of this Order, shall file with the Chief, Cable Services Bureau, a certification of compliance with the refund requirements of this Order, and a certification of its intent to comply with all other aspects of this Order. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that Operator shall use (1) the standard FCC Form 1240 for rate calculation purposes and (2) $16.88 as Operator's Current Maximum Permitted Rate as called for on Line A1 of its FCC Form 1240 filing for the projected period beginning June 1, 1998. 13. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the complaint referenced herein against the rates charged by Operator in the community set forth above IS GRANTED TO THE EXTENT INDICATED HEREIN. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Deputy Chief, Cable Services Bureau