******************************************************** 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 ) ) International Cablevision, Inc. ) CUID No. NY0747 (City of Tonawanda) d/b/a Adelphia Cable Communications) ) Complaint Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: March 25, 1998 Released: March 30, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the August 1, 1997 rate increase of the above- referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. This Order addresses only the reasonableness of Operator's August 1, 1997 CPST rate increase. 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. The Telecommunications Act of 1996 ("1996 Act") and our rules implementing the new legislation ("Interim Rules"), require that complaints against CPST rates be filed with the Commission by a local franchising authority ("LFA") that has received more than one subscriber complaint. 3. The LFA for the franchise area referenced above filed a complaint with the Commission on January 13, 1998 against Operator's August 1, 1997 CPST rate increase from $11.04 to $21.96, including franchise fees. The increase included 31 channels added after the completion of a rebuild of the system. The LFA verified that it received more than one subscriber complaint for the franchise area and that the first valid complaint was received by the LFA on August 15, 1997. The filing of a complete and timely LFA complaint triggers an obligation upon the cable operator to file a justification of its CPST rates. The Operator has the burden of demonstrating that the CPST rates complained about are reasonable. 4. 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. Operator filed FCC Forms 1200, 1210 and 1240 for its rebuilt system to justify its August 1, 1997 CPST rate increase. Upon review of Operator's FCC Forms 1200, 1210 and 1240, we find that Operator has justified its CPST rate of $21.96, including franchise fees, effective August 1, 1997. 6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that Operator's CPST rate of $21.96, including franchise fees, effective August 1, 1997, in the franchise area referenced above, IS REASONABLE. 7. 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 rates charged by Operator in the community set forth above IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau