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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 ) ) Viacom Cable, Inc. ) ) Final Resolution of ) Cable Programming Service ) Rate Complaints ) ORDER Adopted: February 5, 1997 Released: February 7, 1997 By the Commission: I. INTRODUCTION 1. The Commission has before it a Resolution submitted by Viacom Cable, Inc. ("Viacom") that will resolve 204 complaints filed against Viacom regarding the rates Viacom charged for cable programming services from September 1, 1993 through December 31, 1995. The Cable Services Bureau ("Bureau") issued orders in response to those complaints covering the period of September 1, 1993 through May 14, 1994, and Viacom filed appeals of each of those orders which are now pending before the Bureau. Together these cases affect service for approximately 986,000 cable programming services subscribers. For the reasons stated below, and based on our review of the record, we find that the Resolution serves the interests of Viacom subscribers by, among other things, bringing stability to cable programming service tier ("CPST") rates and improving the availability of customer programming choices. Adoption of the Resolution, as amended herein, is consistent with the Commission's responsibility under the Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act") to ensure that consumer interests are protected in the receipt of cable services and that regulated CPST rates are not unreasonable. II. BACKGROUND 2. The 1992 Cable Act gives the Commission and local franchising authorities jurisdiction over the cable programming and equipment rates of cable systems that do not face effective competition, as defined by that Act. Specifically, with respect to cable systems that are not subject to effective competition, the 1992 Cable Act provides that local franchising authorities may regulate the rates for the basic service tiers ("BSTs") pursuant to regulations established by the Commission, and the Commission may regulate the rates for the CPSTs upon the filing of a complaint. The governing standard for reviewing CPST rates is that those rates not be unreasonable. In enacting the legislation, Congress stated its intent that the 1992 Cable Act be implemented to ensure that "consumer interests are protected in the receipt of cable service." 3. On August 23, 1996, the Commission adopted an order instructing the Bureau to serve the Resolution as proposed ("Proposed Resolution") on all local franchising authorities in the benchmark and cost-of-service franchises covered by the Proposed Resolution and on any party other than a local franchising authority that filed a valid complaint. The order provided a 30-day period for comments on the proposal and a 15-day period for replies. 4. The Resolution resolves complaints regarding CPST rates in the franchise areas listed in Exhibit 1(A) for the period from September 1, 1993 through December 31, 1995. Under the Resolution, Viacom will reduce CPST rates in the communities listed in Exhibit 1(B) and will provide refunds of $855,000 plus interest in the form of one-time credits on subscribers' bills for subscribers in franchise areas listed in Exhibit 2. Viacom will make the refunds within the first monthly billing cycle beginning 60 days after release of this Order by the Commission. 5. The Resolution gives Viacom the discretion to move a maximum of any four regulated services to a single Migrated Product Tier ("MPT") in each of the communities listed in Exhibit 1(A). Viacom may not require MPT subscribers to take any programming service, except basic service, as a condition of the MPT offering, and it may not require its CPST subscribers to take the MPT. Viacom will set the initial rate for an MPT at the same level, on a per channel basis, as the rate for the regulated tiers in the same community. Viacom will not be required to re-market the MPT to existing subscribers who had been receiving the services which were migrated. Thereafter, Viacom may add any number of new services to its MPT and may increase the price for the MPT up to $0.20 plus the amount of the program license fee for each new service added. Services added to the MPT will not be considered new services for the purpose of the limit on service additions and rate increases under the Commission's going forward rules. On or after December 1, 1997, Viacom may reclassify each MPT as a new product tier ("NPT"), which will be treated like all other NPTs under the Commission's rules at the time. It may also create other NPTs or single channel offerings pursuant to the Commission's rules. 6. The Resolution allows Viacom to avail itself of existing law or regulations or of any applicable modifications of any law or regulations governing CPST-related matters. While doing so, however, Viacom must provide refunds according to the terms of the Resolution. 7. As an initial matter, we find that the Commission has authority to approve the Proposed Resolution. The Communications Act of 1934 provides the Commission with wide discretion to resolve rate cases. Section 4(i) of the Communications Act authorizes the Commission to "perform any and all acts ... not inconsistent with [the] Act, as may be necessary in the execution of its functions." Section 4(j) provides that the "Commission may conduct its proceedings in such manner as will best conduce to the proper dispatch of business and to the ends of justice..." Our action in this case is fully consistent with the 1992 Cable Act and with Congress's dual objectives of simplifying cable rate regulation and protecting consumers. Thus, as we have concluded in other recent proceedings, the Commission has authority to consider the Proposed Resolution and to determine, after review and consideration of comments, that the rates set forth in the Resolution are not unreasonable. III. COMMENTS 8. A total of 216 local franchising authorities and complainants were served with the Commission's order and the Proposed Resolution. We received only three comments in response. One comment was an endorsement from Marin County, California ("Marin"). Marin finds the terms of the Resolution, including the refund and rate reduction applicable to the Marin communities, acceptable. A second comment, filed by the City of Seattle ("Seattle"), questioned the method of refund calculations for subscribers in Seattle. Subsequent to the filing of comments by Seattle, Viacom and Seattle resolved that issue to Seattle's satisfaction. The third comment was filed on behalf of the Tri-Valley and Napa, California systems ("Tri-Valley/Napa"), which questioned the basis for the differences in maximum permitted rates calculated on Viacom's original rate forms and the rate forms submitted by Viacom to the Commission during the course of our discussions with Viacom. We explain below those differences. Viacom filed reply comments supporting adoption of the Proposed Resolution. IV. DISCUSSION 9. We find that the rates and refunds provided for in the Resolution are not unreasonable within the meaning of section 623(c)(1) of the 1992 Cable Act. The Bureau reviewed FCC Form 393s, Form 1200s, Form 1210s, and Form 1220s (i.e., the cost-of-service filings) for the 91 community units included in the Resolution. The Resolution takes into consideration the public interest benefit to consumers of resolving Viacom's appeals of Bureau orders concerning its rates in certain franchise areas and the benefit to consumers of prompt, certain relief where relief is warranted. The process of adjudicating each of the rate complaints individually and litigating those rulings through the courts -- a process that would likely take several years -- would not be in the public interest when the Resolution ensures reasonable rates and provides immediate refunds to subscribers. 10. To the extent that adoption of the Resolution requires waiver of any of our rules, we find that such a waiver is in the public interest, because the resolution will ensure the expeditious resolution of a large number of rate complaints while protecting consumers' statutory interest in CPST rates that are not unreasonable. We recognize that our rules contemplate an adjudication of each CPST rate complaint pursuant to ratemaking standards specified in the Commission's rules. We also recognize that our rules address changes in the number of channels on a CPST and the extent to which channels may be moved to a new product tier ("NPT"). To the extent that we have diverged from these rules by adopting the Resolution, we find good cause to waive these rules pursuant to section 1.3 of our rules. Specifically, we find that such a waiver furthers the purpose of the rules and advances the public interest because the Resolution will more effectively achieve the objectives of the 1992 Cable Act by ensuring the expeditious resolution of over 200 rate complaints while protecting consumers from unreasonable CPST rates through the prompt issuance of refunds. We further observe that the Commission's authority to resolve cases in an analogous manner has been affirmed in other contexts. 11. Seattle raises a question related to the calculation of the refunds proposed in the Resolution for its Viacom subscribers. Seattle states that the CPST maximum permitted rates for Viacom subscribers in Seattle, which are listed in Exhibit 1(A) of the Resolution, are lower than the maximum permitted rates Viacom had calculated previously on its rate forms and which Viacom had put into effect. Seattle questions why no refunds are provided in the Resolution to compensate subscribers for those apparent overcharges. In its reply comments, Viacom acknowledges the miscalculation, which it characterizes as unique to Seattle, and states that it supports an appropriate correction in the refund calculation. Seattle accepts the correction proposed by Viacom. The adjustment was due to an error in the accounting for a local tax and an unintentional double-count of CPST undercharges, which undercharges were used both in calculating BST refund liability by Seattle and in calculating CPST refund liability under the terms of the Resolution. The correction results in a refund for Seattle subscribers of $23,363. Viacom requests that Exhibit 2 to the Resolution be modified to reflect the corrected refund to Seattle subscribers. Accordingly, the Resolution is amended to reflect that change. 12. Tri-Valley/Napa requests an explanation for the differences between the maximum permitted rates calculated in the rate forms previously submitted by Viacom to the Tri-Valley/Napa communities and the maximum permitted rates appearing in Exhibit 1(A) which were established under the terms of the Resolution. The Exhibit 1(A) rates are as much as $0.55 higher than the original rates contained in Viacom's rate forms. The differences between the two sets of CPST rates are due to adjustments made by Viacom to its rate calculations, subsequent to the submission of its rate forms to the communities. These adjustments were made pursuant to optional procedures the Bureau authorized cable operators to use in calculating their rates. These optional procedures were authorized in a Public Notice issued on December 29, 1994 (DA 94-1556). At the time that Public Notice was released, cable operators had already filed their rate forms with both the Commission and the local franchising authorities. In Viacom's case, the Public Notice permitted Viacom to recalculate the number of channels offered pursuant to the "preponderance of use" rule stated in that Public Notice. Viacom did so and submitted that information in February, 1995 to the Commission. 13. In its Public Notice of December 29, 1994, the Commission clarified the proper method that cable operators should use in counting channels of programming in their systems. This is necessary because our rate forms require cable operators to count the number of regulated channels, satellite channels, and broadcast channels. For Example, Form 393 is the official form used to determine whether an operator's regulated rates were reasonable during the period from September 1, 1993 to May 14, 1994. In Part II of Form 393 the operator calculates its maximum permitted programming rates. Those rates are derived from converting actual aggregate revenues to a per- channel rate, which is then compared to the applicable benchmark rate. The benchmark rate is determined by reference to the Benchmark Cable Rate Table in Form 393. The benchmark rate is dependant on the number of subscribers served and the number of regulated channels and satellite channels offered by the operator. As the number of regulated channels increases, the per-channel rate decreases. As the number of satellite channels increases, however, the per-channel rate also increases. The number and type of channels offered by the operator is of critical importance in determining the benchmark rate. Form 1200 succeeded Form 393 and is used to determine the reasonableness of an operator's rates under revised benchmark rules after May 14, 1994. In the Form 1200 calculation process, the number of regulated channels and the number of broadcast channels (rather than satellite channels) are critical for determination of the benchmark rate and the maximum permitted rate 14. One of the difficulties cable operators faced in counting channels was how to characterize channels that were used for more than one type of programming. The Commission explained in the Public Notice of December 29, 1994 that a channel should be counted as regulated or as a satellite channel or as a broadcast channel, etc., if it were used for that purpose more than 50 percent of the time that the channel was in operation. For example, a channel used to provide programming service for 24 hours per day is not a regulated channel if it is used 12 hours or more per day for unregulated programming purposes. Similarly, a channel used to provide programming service for 24 hours per day, of which 12 hours or more is local broadcasting and 12 hours or less is regulated satellite programming, is not a satellite channel. Also, the Commission concluded that two channels with the same programming should be counted as a single channel for rate calculation purposes. 15. For each of the Tri-Valley/Napa communities, Viacom filed additional information with the Commission, pursuant to the Public Notice, in February, 1995. That additional information modified Viacom's channel counts. Those changes produced the differences in CPST maximum permitted rates questioned by Tri-Valley/Napa. For example, in Dublin, California (CUID CA0353), the reported channel count was reduced by two channels. The total BST and CPST channel count went from 34 to 32. This change had the effect of increasing the benchmark per-channel rate and a corresponding increase in the CPST maximum permitted rate. The per-channel rate was higher because the Benchmark Cable Rate Table authorizes higher per-channel rates in systems that offer fewer channels. The CPST rate increased because no channels were removed from the CPST. They were taken from the BST. The higher per-channel rate multiplied by the same number of CPST channels produced a higher CPST rate. Similar channel count changes were reported in Napa, California (CUID CA0407), for which Viacom reported a reduction of one channel, and San Ramon (CUID CA1115), Livermore (CUID CA0356), and Pleasanton, California (CUID CA0360), for each of which Viacom reported a reduction of two channels. All of the reductions were in the BST channel count, leaving the CPST channel count unchanged. The rate forms and additional information filings which contain those changes have been available for public inspection in the Bureau's public reference room in Washington, D.C. since release of the Proposed Resolution on August 23, 1996. 16. Tri-Valley/Napa also seeks clarification on whether the maximum permitted rate set forth in Exhibit 1(A) of the Resolution is the rate authorized on December 31, 1995 or the rate justified by fourth quarter 1995 cost increases. It is the latter. The maximum permitted rates in Exhibit 1(A) are those rates justified by the rate forms submitted by Viacom during the course of discussions. The rate forms include the Form 1210s which documented fourth quarter 1995 cost increases. The corresponding rates could have been implemented after December 31, 1995. V. CONCLUSION AND ORDERING CLAUSES 17. For the reasons discussed above, we conclude that it is in the public interest to adopt the Resolution. 18. ACCORDINGLY, IT IS ORDERED that the Resolution attached to this Order as Attachment A, IS ADOPTED as amended herein. 19. IT IS FURTHER ORDERED that all rate complaints under the jurisdiction of the Commission against Viacom Cable Inc. challenging rates in effect or based on cost increases for the period September 1, 1993 through December 31, 1995 ARE GRANTED to the extent indicated herein, and DENIED in all other respects. 20. IT IS FURTHER ORDERED that all orders issued by the Cable Services Bureau and the Commission with respect to CPST rate complaints against Viacom Cable Inc. in the communities listed in Exhibit 1(A) of the attached Resolution, for the period between September 1, 1993 and December 31,1995 ARE VACATED AND SUPERSEDED by this Resolution. 21. IT IS FURTHER ORDERED that a waiver of 47 C.F.R.  76.922 and 76.950-963, to the extent individual adjudication of CPST rate complaints is required thereby, IS GRANTED. 22. IT IS FURTHER ORDERED that a waiver of 47 C.F.R.  76.922, regarding changes in the number of channels on a regulated tier, and 47 C.F.R.  76.987(b)(2), (b)(3), prohibiting operators from dropping channels that were offered on their BSTs or CPSTs on September 30, 1994 and moving them to NPTs unless they wait at least two years from the dates the channels were dropped and requiring remarketing of the NPT, IS GRANTED. 23. IT IS FURTHER ORDERED that the Cable Services Bureau IS GIVEN delegated authority to oversee implementation of this Resolution, as adopted. 24. IT IS FURTHER ORDERED that this Order IS EFFECTIVE upon adoption. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary ATTACHMENT A Terms of Proposed Resolution I. Introduction 1. This Proposed Resolution finally resolves all cable programming services tier ("CPST") complaints pending as of December 31, 1995 against Viacom Cable and its subsidiaries. II. Background 2. Complaints have been filed with the Federal Communications Commission ("Commission") pursuant to 47 C.F.R.  76.950, concerning the CPST rates charged by Viacom in the franchises listed in Exhibit 1. Rate justifications were filed in response to such complaints. 3. The Commission's Cable Services Bureau (the "Bureau"), under delegated authority, has reviewed Viacom's rate justifications pursuant to the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992) ("1992 Cable Act"), and the Commission's cable rate regulations. As a result of that review, the Bureau has determined that certain refunds are owed to subscribers. 4. Viacom maintains that it has followed the letter and spirit of the Commission's cable rate regulations and the 1992 Cable Act in the rate justification filings, that its CPST rates do not exceed maximum permitted levels, and that no refunds are owed to subscribers. Notwithstanding its position, Viacom proposes to resolve all of its CPST rate cases filed under FCC Forms 393, 1200, 1210, and 1220 under the terms set forth below. III. Definitions 5. As used herein, the following definitions will apply: (a) "Billing Cycle" means the time period during which monthly bills are sent to subscribers, but in no event longer than 31 days. (b) "CPST" means cable programming service tier as defined in 47 C.F.R.  76.901. (c) "Commission Rules" means all Commission rules currently in effect as of December 31, 1995, as well as all subsequent clarifications, amendments, and additions thereto, including, but not limited to, changes initiated by the Commission or changes required by or made pursuant to changes in federal law. (d) "Effective Date" means the date on which the Commission issues the Resolution Order approving this Proposed Resolution. (e) "Eligible Subscribers" means CPST subscribers of record to Viacom's cable franchises listed in Exhibits 1 as of the date bills are issued reflecting Refunds. (f) "Going-Forward rules" means the Commission's rules adopted in the Sixth Order on Reconsideration, 10 FCC Rcd. 1226 (1994), including all subsequent clarifications and amendments thereto. (g) "Interest" means the Internal Revenue Service rate of interest for tax overpayments. (h) "Migrated Product Tier" or "MPT" means a tier consisting of up to four (4) services moved from existing regulated tiers and to which other services may be added, as described below in paragraph 12. (i) "Refund" means a credit on a subscriber's bills. (j) "Resolution Order" means a final order issued by the Commission regarding the terms of this Proposed Resolution. IV. Terms 6. Viacom accepts the jurisdiction of the Commission over it and the subject matter of these rate resolutions for purposes of the Resolution Order approving these terms. 7. All of Viacom's CPST rate cases filed under FCC Forms 393, 1200, 1210, and 1220 for the period through December 31, 1995, are finally resolved under the terms provided herein. 8. Viacom agrees that the terms contained in this Proposed Resolution shall be incorporated by reference in the Resolution Order. Assuming the adoption of these terms in the Resolution Order, Viacom and the Commission will each actively defend the Resolution Order against any appeal of, or other legal challenge to, the Resolution Order by any third party. Viacom and the Commission will reasonably cooperate in any such defense of these terms. 9. Assuming the adoption of these terms in the Resolution Order, Viacom agrees that any violation of the Resolution Order approving these terms shall constitute a violation of a Commission order, entitling the Commission to exercise any rights and remedies attendant to the enforcement of a Commission order. 10. These terms are for purposes of settlement only, and do not constitute an admission by Viacom of any violation of, or failure to conform to, the 1992 Cable Act, the Commission's Rules, or any other applicable law, rule, or policy. 11. The Commission will not institute, on its own motion, any proceedings against Viacom based on the information obtained during consideration of the Proposed Resolution. In addition, in the absence of additional facts, any allegations and other circumstances involved in consideration of this Proposed Resolution will not be used by any party against Viacom with respect to any future proceeding. 12. In consideration for the resolution of Viacom's CPST rate cases pending as of December 31, 1995, Viacom hereby agrees to the following terms, conditions and procedures which will facilitate a fair and expeditious resolution of those matters in a manner that serves the public interest: (a) Viacom will issue Refunds to the Eligible Subscribers in the amounts listed in Exhibit 2. This Refund includes applicable Interest through August 31, 1996. Refunds will be reflected as a one-time credit on subscriber bills. (b) Viacom will provide Refunds to Eligible Subscribers during the September 1996 billing cycle or the first monthly billing cycle beginning 60 days after the Effective Date, whichever is later. If Refunds are not included in a Billing Cycle beginning prior to September 1, 1996, Viacom will adjust the Refunds to reflect additional Interest for the period from September 1, 1996 to the date on which the Billing Cycle that includes the Refunds begins. (c) The Resolution Order issued by the Commission will find that the maximum permitted rates are as indicated for the communities listed in Exhibit 1. (d) The Commission reviewed Viacom's Forms 393, 1200, and 1210, and supporting information for the franchises on Exhibit 1. The rate indicated in Exhibit 1 is supported by this showing. In addition, the Commission reviewed Viacom's CPST cost-of-service filings (Form 1220) for Viacom's Redding, Pittsburg and Contra Costa systems. The Commission finds that the Current Rate for CPST in these systems is not unreasonable. Finally, the Commission reviewed the BST cost-of- service filing by Viacom for the Pittsburg system, which includes Antioch, CA (CUID CA0351), Pittsburg, CA (CUID CA0359), and Martinez, CA (CUID CA0365). The cost-of-service filing was referred by the LFA to the Commission for a decision. The Commission finds that the Current Rate for BST in the Pittsburg system is reasonable. (e) Viacom, at any time at its discretion, may move a maximum of any four (4) regulated services to a single "Migrated Product Tier" on each of its systems. Viacom may not require the subscription to any other tier, other than the basic service tier, as a condition to subscribing to the MPT and may not require subscription to the MPT as a condition for subscription to any other tier. The retiering of these services is permitted under 47 C.F.R.  76.981(b), does not constitute a negative option under the 1992 Cable Act, and, when the MPT is offered, Viacom will not be required to re-market that MPT to existing subscribers who previously received the services which were migrated. These actions can be taken without regard to any state or local law which may be inconsistent with the terms of this subparagraph. (f) Viacom will set the initial rate for an MPT at the same level, on a per channel basis, as is set for the applicable franchise's regulated tiers. Viacom may add any number of new services to its MPT and may increase the price for the MPT up to $0.20 plus the amount of the program license fee for each new service added. These new services shall not be considered new services added for purposes of the limit on service additions and rate increases pursuant to the Going-Forward rules as long as the MPT is not initially offered with more than the four migrated services. Viacom may also increase the price of an MPT for inflation and external costs and new services consistent with the Commission's rate regulations governing CPSTs. (g) On or after December 1, 1997, Viacom may reclassify each MPT as a New Product Tier ("NPT"), as defined in 47 C.F.R.  76.987, including subsequent clarifications or amendments thereto. These NPT's will be treated as all other NPTs under the Commission's rules. This reclassification is permitted under 47 C.F.R.  76.981(b), does not constitute a negative option under the 1992 Cable Act, and does not require Viacom to re-market the reclassified NPT to existing subscribers of the MPT. Nothing in this Proposed Resolution shall be construed to prevent Viacom from creating other NPTs and/or offering a la carte channels pursuant to the Commission's rules. These actions can be taken without regard to any state or local law which may be inconsistent with the terms of this subparagraph. (h) The terms of this Proposed Resolution will continue to apply to cable systems divested by Viacom through a system sale or trade. (i) As of the Effective Date, any Bureau orders which concern Viacom's CPST rates are vacated. This Proposed Resolution supersedes any such Bureau orders. (j) As of the Effective Date, Viacom will withdraw the Applications for Review and the Petitions for Stay of any Bureau orders filed with the Commission for the franchises listed in Exhibit 1. (k) A copy of this Proposed Resolution shall be provided to: (1) each local franchising authority ("LFA") in the franchises listed in Exhibits 1 and (2) to each party that filed a valid complaint on FCC Form 329 pursuant to 47 C.F.R.  76.950, for their comment. (l) Except as provided in paragraph (n) hereof, these terms may not be terminated or modified without the mutual written agreement of Viacom and the Commission. The Commission's consent to any such modification shall be demonstrated by an order issued by the Bureau or, at the Commission's option by the Commission itself. (m) Notwithstanding the terms hereof, Viacom may avail itself of any applicable modifications of any law or regulation governing the CPST rates charged in any Viacom franchise listed in Exhibit 1, including the adoption by the Commission of any regulation governing rates as applied to the cable industry generally. If Viacom exercises this election, the terms contained herein shall be superseded upon the effective date of such law or regulation, except that Viacom shall provide Refunds to Eligible Subscribers pursuant to the terms of this Proposed Resolution. 13. The Resolution Order shall affirmatively state that any and all waivers of the Commission's rules, and any modifications to Commission forms, necessary to effectuate these terms are deemed to be granted. Such waivers shall include Viacom's right to adjust any Form 1240 rate to reflect the final Form 1210 or 1220 rates approved by the Resolution Order, without affecting the implementation date or annual cycle elected for Form 1240 filings. The Commission will not assert in any proceeding that Viacom's compliance with the terms of this Proposed Resolution violates any Commission rule or order, and, in any proceeding before the Commission brought by a third party, a showing by Viacom that it has complied with these terms shall constitute a defense to any claim that Viacom's actions in meeting the terms constitute a violation of any applicable Commission rule or order. 14. Assuming the adoption of these terms in the Resolution Order, these terms shall become effective when the Commission issues the Resolution Order approving these terms. 15. If any provision, clause, or part of this Proposed Resolution is invalidated, the remainder of this Proposed Resolution shall not be affected thereby and shall remain in effect; provided, however, that if such invalidation is material to this Proposed Resolution, Viacom and the Commission shall attempt in good faith to reconstitute the Proposed Resolution in a form that is, to the maximum extent possible, consistent with the original intent of the Proposed Resolution. EXHIBIT 1(A) VIACOM CABLE SUMMARY OF CPST MAXIMUM PERMITTED RATE SYSTEM/FRANCHISE CUID For the 4th Quarter Ending on December 31, 1995 --TriValley-- Dublin CA-0353 $ 11.05 Livermore CA-0356 $ 12.54 Pleasanton CA-0360 $ 11.09 Alameda County-Sunol CA-0364 $ 10.84 San Ramon CA-1115 $ 10.96 --Castro Valley-- CA-0238 $ 11.78 --Pittsburg-- Antioch CA-0351 $ 12.10 Pittsbugh CA-0359 $ 12.11 Bay Point CA-0365 $ 12.10 --Pinole-- Pinole CA-0069 $ 11.96 C.C. Co-San Pablo CA-0070 $ 11.49 C.C. Co-Crockett CA-0075 $ 12.34 C.C. Co-Rodeo CA0924 $ 12.28 --Marin-- Marin JPA ALL $ 11.20 --Petaluma-- Sonoma Co.-Televue CA-0357 $ 11.46 Petaluma CA-0358 $ 11.49 --Healdsburg-- Cloverdale CA-0110 $ 12.95 Healdsburg CA-0111 $ 13.12 Sonoma Co.-H/C/G CA-0112 $ 12.96 Windsor CA-1513 $ 12.85 --Napa-- Napa City CA-0407 $ 11.85 Napa Co. CA-0408 $ 11.75 American Canyon CA-1339 $ 11.66 --San Francisco-- San Francisco CA-0245 $ 12.49 --Redding-- Anderson CA-0092 $ 13.71 Red Bluff CA-0093 $ 13.69 Tehama Co. CA-0094 $ 13.69 Shasta Co. CA-0095 $ 13.94 Redding CA-0096 $ 13.94 --Oroville-- Butte Co.-Oroville CA-0195 $ 13.38 Oroville CA-0196 $ 14.16 Colusa CA-0383 $ 12.96 Colusa Co. CA-0384 $ 12.95 Paradise CA-0512 $ 13.81 Gridley CA-0718 $ 13.09 Biggs CA-0724 $ 13.02 Butte Co.-Paradise CA-1117 $ 13.71 --Salem (Prior to Build Completion)-- Salem OR-0057 $ 13.21 Polk Co. OR-0194 $ 13.32 Marion OR-0195 $ 13.14 Keizer OR-0227 $ 13.13 Amity OR-0423 $ 13.48 --Puget North-- Oak Harbor WA-0191 $ 14.07 Island Co. WA-0264 $ 13.97 Everett WA-0091 $ 13.22 Snohomish Co.-Everett WA-0223 $ 13.39 Mukilteo WA-0013 $ 13.37 Mill Creek WA-0396 $ 13.43 Snoho.Co.-Lynnwood WA-0255 $ 13.36 Brier WA-0325 $ 13.35 Lake Stevens WA-0026 $ 13.80 Snoho. Co.-Monroe WA-0243 $ 13.75 Goldbar WA-0024 $ 14.36 --Puget Central-- Seattle (Non-Rebuild Area) WA-0112 $ 12.10 Seattle (Rebuild Area) $ 13.88 Bothell WA-0149 $ 13.21 King Co.-Vista WA-0150 $ 12.89 City of Woodinville WA-0549 $ 12.89 Redmond WA-0151 $ 12.99 Kirkland WA-0310 $ 12.65 Bellevue-Comm.Telecable WA-0076 $ 13.08 Bellevue-All Points WA-0330 $ 13.08 King Co. Comm. Telecable WA-0118 $ 12.92 Mercer Island WA-0110 $ 13.55 --Puget South-- Fircrest WA-0041 $ 14.83 Puyallup WA-0049 $ 15.04 Steilacoom WA-0245 $ 14.77 Gig Harbor WA-0227 $ 15.16 Pierce Co. WA-0180 $ 14.86 Lee Hills WA-0181 $ 15.02 Tacoma WA-0262 $ 14.83 Vashon Island WA-0413 $ 14.99 Yelm WA-0405 $ 14.98 Dupont WA-0403 $ 14.83 Roy WA-0406 $ 14.97 Bonney Lake WA-0308 $ 14.80 --Dayton-- Dayton (39 Chnl Area) OH-0453 $ 12.21 Dayton (46 Chnl Area) OH-0453 $ 12.21 Riverside OH-0961 $ 12.49 --Nashville-- Nashville (40 Chnl Area) TN-0148 $ 12.20 Nashville (56 Chnl Area) TN-0148 $ 14.37 Nashville (61 Chnl Area) TN-0148 $ 14.58 Goodlettsville (Sumner Co.) TN-0644 $ 14.32 EXHIBIT 1(B) VIACOM CABLE SUMMARY OF CPST MAXIMUM PERMITTED RATES AND REDUCTION FROM CURRENT CPST RATES Current Implemented Going Forward Reduction in System/Franchise CUID CPST Rate CPST Rate CPST Rate --Marin-- Marin JPA ALL $ 11.40 $ 11.20 $ (0.20) --Healdsburg-- Cloverdale CA-0110 $ 13.44 $ 12.95 $ (0.49) Healdsburg CA-0111 $ 13.50 $ 13.12 $ (0.38) Sonoma Co.-H/C/G CA-0112 $ 13.21 $ 12.96 $ (0.25) Windsor CA-1513 $ 13.14 $ 12.85 $ (0.29) --Oroville-- Colusa CA-0383 $ 13.23 $ 12.96 $ (0.27) Colusa Co. CA-0384 $ 13.22 $ 12.95 $ (0.27) --Puget North-- Everett WA-0091 $ 13.37 $ 13.22 $ (0.15) Mukilteo WA-0013 $ 13.58 $ 13.37 $ (0.21) Mill Creek WA-0396 $ 13.55 $ 13.43 $ (0.12) --Puget Central-- Seattle [Non-rebuild] WA-0112 $12.16 $12.10 $(0.06) Seattle [Rebuild] WA-0112 $13.96 $13.88 $(0.08) --Puget South-- Pierce County WA-0180 $14.87 $14.86 $(0.01) --Nashville-- Goodlettsville TN-0644 $14.35 $14.32 $(0.03) EXHIBIT 2 CPST REFUND LIABILITY ($000) FORM 393 & FORM 1200/1210s Franchise CUID TOTAL REFUNDS DUE Marin ALL ($236.8) Cloverdale CA-0110 ($22.6) Healdsburg CA-0111 ($32.1) Sonoma Co.-HCG CA-0112 ($54.2) Windsor CA-1513 ($51.0) Anderson CA-0092 ($ 4.0) Red Bluff CA-0093** ($ 5.7) Tehama Co. CA-0094** ($ 1.3) Shasta Co. CA-0095 ($ 4.3) Redding CA-0096 ($32.3) Butte Co.-Oroville CA-0195** ($18.0) Colusa CA-0383** ($14.4) Colusa Co. CA-0384** ($ 2.1) Paradise CA-0512** ($ 7.4) Gridley CA-0718** ($ 1.3) Biggs CA-0724** ($ 0.5) Butte Co-Paradise CA-1117** ($ 3.3) Mukilteo WA-0013 ($29.7) Everett WA-0091 ($95.3) Seattle WA-0112** ($23.4) Oak Harbor WA-0191** ($ 4.5) Mill Creek WA-0396 ($ 9.5) Nashville TN-0148 ($223.0) Goodlettsville TN-0644 ($ 2.0) ($878.6) ===== Note: **Refunds for Form 393 periods for which a final order has issued have been calculated in accordance with the terms of that order, without adjustment or compromise. Refunds for other periods have been computed with certain offsets and adjustments, including an offset to CPST refund liability for undercharges in BST.