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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 ) ) Comcast Cablevision of West Florida ) CUID No. FL0055 (Punta Gorda) ) ) Complaint Regarding ) Cable Programming Services Tier ) Rate Increase ) ORDER Adopted: February 26, 1998 Released: March 4, 1998 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a complaint against the November 1, 1997 rate increase that the above-captioned operator ("Operator") implemented for its cable programming services tier ("CPST") in the community referenced above. We also consider a complaint against Operator's "Value Pak Tier" rate increase, effective November 1, 1997. Operator has attempted to justify its CPST rate increase through a benchmark showing on FCC Form 1240. We have already released a rate order ("Prior Order") as well as an order on reconsideration ("Reconsideration Order") concerning Operator's CPST rate effective November 1, 1996. Consequently, this Order addresses Operator's CPST rate effective November 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 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 December 10, 1997, the local franchising authority ("LFA") filed its complaints against Operator's November 1, 1997 CPST and Value Pak Tier rate increases. In its complaints, the LFA asserts that it has received more than one subscriber complaint against Operator's rate increases, thereby triggering the Commission's jurisdiction to review the complaints. We have already determined that Operator's Value Pak Tier is to be treated as a new product tier ("NPT") and is therefore not currently subject to CPST rate regulation. Therefore, we will dismiss the LFA's complaint against Operator's Value Pak Tier rate increase. However, the valid complaint against Operator's CPST rates 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 Form 1240 with the LFA as justification for this rate increase. In its FCC Form 1240, Operator took into account the adjustments made in our Reconsideration Order. 5. Upon review of Operator's FCC Form 1240, for the projected period November 1, 1997 to October 31, 1998, we find that Operator has failed to use the most current FCC Inflation Factors available at the time Operator signed its FCC Form 1240. Therefore, we revised Worksheet 1 - True- Up Period Inflation which adjusted Line C3 (Inflation Factor for True-Up Period 1) to 1.0190. We also revised Line C5 (Current FCC Inflation Factor) to 1.0143. These revisions reduced Operator's maximum permitted rate ("MPR") (Line I9) to $18.22. Operator has also claimed an adjustment of $0.41, calculated pursuant to Section 76.922(f)(4) of the Commission's Rules. Section 76.922(f)(4) allows certain cable operators, who initially calculated their CPST rates on FCC Form 1200, to make an "adjustment for changes in external costs for the period September 30, 1992, and the initial date of regulation or February 28, 1994, whichever is applicable . . . ." The Commission released a methodology for the calculation of this adjustment on December 31, 1996. 6. The first complaint ever filed against Operator's CPST rates was filed on January 10, 1997 against Operator's November 1, 1996 rate increase. Operator responded to that complaint with an FCC Form 1240 for the projected period November 1, 1996 to October 31, 1997 ("1996 Form 1240"). In its 1996 Form 1240, Operator certified that it had never filed an FCC Form 1200 with either the Commission or the LFA. Because Operator was not subject to CPST rate regulation prior to January 10, 1997, and because it has never used an FCC Form 1200 to calculate its rates, Operator is not entitled to an adjustment under Section 76.922(f)(4). Therefore, we will remove Operator's adjustment of $0.41 from its proposed MPR. Consequently, we find that Operator has justified an MPR of $18.22. Because Operator is actually charging a CPST rate of $18.58, we find that Operator's CPST rate of $18.58, effective November 1, 1997, is unreasonable. 7. Accordingly, IT IS ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that Operator's CPST rate of $18.58, effective November 1, 1997, in the community set forth above, IS UNREASONABLE. 8. IT IS FURTHER ORDERED, pursuant to Section 76.961 of the Commission's rules, 47 C.F.R. Section 76.961, that Operator shall refund to subscribers in the franchise area referenced above that portion of the amount paid in excess of the maximum permitted CPST rate of $18.22 per month (plus franchise fees), plus interest to the date of the refund, for the period November 3, 1997 to the day before it reduces its rate to $18.22. 9. IT IS FURTHER ORDERED that Operator shall promptly determine the overcharges to CPST subscribers for the stated periods, and shall within 30 days of the release of this Order, file a report with the Chief, Cable Services Bureau, stating the cumulative refund 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. 10. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that the complaint referenced herein against the CPST rate charged by Operator in the community set forth above IS GRANTED. 11. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that the complaint referenced herein against the Value Pak Tier rate charged by Operator in the community set forth above IS DISMISSED. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Deputy Chief, Cable Services Bureau