******************************************************** 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 ) ) Comcast Cablevision of Willow Grove, Inc.) CUID No. PA1251 (Abington Twp.) ) Complaints Regarding ) Cable Programming Services Tier Rates ) ORDER Adopted: July 14, 1998 Released: July 20, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint against the November 1, 1997 rate increase of the above-referenced operator ("Operator") for its cable programming services tier ("CPST") in the community referenced above. We also dismiss a complaint filed with the Federal Communications Commission ("Commission") on April 24, 1995 because the complaint does not challenge a CPST rate increase and therefore does not invoke the Commission's jurisdiction. Accordingly, this Order addresses only the reasonableness of Operator's November 1, 1997 CPST rate increase. 2. Under the Communications Act, the 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 April 24, 1998 against Operator's November 1, 1997 CPST rate increase from $17.00 to $19.10. 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 November 18, 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 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. 5. Upon review of Operator's FCC Form 1240 for the projected period November 1, 1997 through October 31, 1998, we find that Operator has not correctly calculated its maximum permitted rate ("MPR"). Operator claimed an adjustment of $0.3205 to its MPR, 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. On its FCC Form 1240, Operator certified that it had never filed an FCC Form 1200 with either the Commission or the LFA. Because Operator was not previously subject to CPST rate regulation, 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 $0.3205 from its proposed MPR. Our adjustment resulted in a revised MPR of $19.72. Because Operator's actual CPST rate of $19.10 does not exceed its revised MPR, we find Operator's actual CPST rate of $19.10, effective November 1, 1997, to be reasonable. 7. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that the CPST rate of $19.10, charged by Operator in the franchise area referenced above, effective November 1, 1997, IS REASONABLE. 8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that the April 24, 1995 complaint referenced above IS DISMISSED. 9. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. 0.321, that Operator take into account our FCC Form 1240 adjustments when calculating its maximum permitted rate and performing the true-up calculation on its next FCC Form 1240. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the April 24, 1998 complaint referenced above IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau