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                                Before the
                     Federal Communications Commission
                          Washington, D.C. 20554

In the Matter of        )
                        )
Comcast SCH Holdings, Inc.      )        CUID No. FL0065 (City of Leesburg)       
                        )
                        )           
Complaint Regarding             )
Cable Programming Services Tier Rate             )          
 

ORDER
                         
    Adopted:  May 12, 1998      Released:  May 15, 1998  

By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau:

        1.      In this Order we consider a complaint concerning the rates of the above-captioned
operator ("Operator") for its cable programming services tier ("CPST") in the community referenced
above. Operator's response includes benchmark justifications filed on FCC Forms 1200, 1210, and 1240. 
We have already issued a separate order ("Prior Order") addressing the reasonableness of Operator's rates
for the period September 1, 1993, through May 14, 1994.  This Order addresses the reasonableness of
Operator's rates for the period after May 14, 1994, as justified on Operator's FCC Forms 1200, 1210 and
1240.  In this Order we also consider the refund plan ("1995 Refund Plan") filed in response to our Prior
Order.

        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") required the Commission to review CPST rates upon the filing of a valid
complaint by a subscriber.  If the Commission finds rates to be unreasonable, it shall determine correct
rates and any refund liability.
        
        3.      The Commission's original rate regulations became effective on September 1, 1993.  The
Commission revised its rate regulations effective May 15, 1994.  Operators must use the FCC Form 1200
series to justify their rates for the period beginning May 15, 1994 through a benchmark showing.  Cable
operators may file a FCC Form 1210 to justify rate increases based on the addition and deletion of
channels, changes in certain external costs, and inflation.  The Operator must file FCC Form 1210, 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.  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 "true-up" requires operators to decrease their
rates or alternatively permits them to increase their rates to make an adjustment for over or under
estimations of these cost changes.   

     4.    The Commission's rules also provide for a refund liability deferral period, if timely
requested by Operator, beginning May 15, 1994 and ending July 14, 1994, for any overcharges resulting
from Operator's calculation of a new maximum permitted rate ("MPR") on FCC Form 1200.  This
deferral of refund liability, however, does not apply to refund liability that may have occurred because
Operator's March 31, 1994 rates for its CPST subject to regulation were higher than levels permitted under
the Commission's rules in effect before May 15, 1994.  Accordingly, while the liability period for
Operator's overcharges associated with its FCC Form 1200 filing may not begin to run until July 15, 1994,
Operator will incur refund liability between May 15, 1994 and July 14, 1994 for any CPST rates charged
above the MPR approved by the Commission on Operator's FCC Form 393.

        5.       We first address Operator's 1995 Refund Plan.  Our review reveals that Operator makes
two fundamental mistakes.  First, although Operator's calculation of refund principal due is approximately
correct, Operator applies six percent annual interest to the entire refund principal due for one full year
through June 30, 1994.  However, Operator is only liable for refunds commencing November 22, 1993,
or for 7.3 months through June 30, 1994.  Moreover, since the refund principal due balance accrued
ratably during the refund period, Operator should calculate interest based on the average, rather than the
entire, refund principal due.  Therefore, the interest calculated by Operator through June 30, 1994 is nearly
three times the amount actually due. 

        6.       Second, Operator's interest calculations for the period July 1, 1994 through June 30, 1998
are understated by approximately one-half.  Apparently, Operator applies interest to the "average" refund
principal due during this interval.  However, because refund principal due had accrued fully by July 14,
1994, interest should instead be applied to the entire refund principal due balance.  In the aggregate, we
find that Operator's interest calculations are understated by $429.73.  Consequently, the total amount of
refund due subscribers, including interest for the period November 22, 1993 through June 30, 1998, is
$4,744.06.  We will order Operator to correct its plan and to implement its plan as corrected.

        7.       Upon review of Operator's FCC Forms 1200, 1210 and 1240, we find the Operator has
justified its CPST rates effective July 15, 1994 to March 31, 1997.  We also find that Operator has
justified its CPST rate of $17.12, effective April 1, 1997.

        8.       Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules, 47
C.F.R.  0.321, that the monthly CPST rates charged by Operator in the community referenced above,
from July 15, 1994 to March 31, 1997 ARE NOT UNREASONABLE.
        9.       IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that the complaints referenced herein against the CPST rate of $17.12 charged by Operator
in the community referenced above, effective April 1, 1997 ARE DENIED.

        10.      IT IS FURTHER ORDERED, pursuant to Section 76.962 of the Commission's rules, 47
C.F.R.  76.962, that Operator correct its refund plan as detailed herein and implement its corrected plan
within 60 days of the release of this order.

        FEDERAL COMMUNICATIONS COMMISSION 



        Elizabeth W. Beaty
        Chief, Financial Analysis and Compliance Division
                                   Cable Services Bureau