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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 SCH Holdings, Inc. ) CUID No. CO0280 (Lafayette) ) ) Complaints Regarding ) Cable Programming Services Tier Rates) ORDER Adopted: August 31, 1998 Released: September 3, 1998 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider complaints 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") in which we found that Operator's rates for the period September 1, 1993 through May 14, 1994 were reasonable. 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. 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. The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), and our rules in effect at the time the complaint was filed, required the Commission to review CPST rates upon the filing of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation on behalf of the cable operator to file a justification of its CPST rates. If the Commission finds the rate to be unreasonable, it shall determine the correct rate and any refund liability. 3. The Commission's original rate regulations took effect on September 1, 1993. The Commission subsequently revised its rate regulations effective May 15, 1994. Cable operators with valid CPST complaints filed against them prior to May 15, 1994 must demonstrate that their CPST rates were in compliance with the Commission's initial rules from the time the complaint was filed through May 14, 1994, and that their rates were in compliance with the revised rules from May 15, 1994 forward. Cable operators attempting to justify their rates for the period prior to May 15, 1994 using a benchmark showing must complete and file FCC Form 393. Operators must use the FCC Form 1200 series to justify their rates for the period beginning May 15, 1994 using a benchmark showing. 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. 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. Because Operator's CPST rate, effective May 15, 1995, does not exceed the MPR established by our Prior Order, we find Operator's CPST rate of $10.95, effective May 15, 1994 to July 14, 1994, to be reasonable. 5. Upon review of Operator's FCC Form 1200, filed to justify its CPST rates beginning July 15, 1994, we find Operator's MPR of $10.06 to be justified. Because Operator's actual CPST rate of $10.06 does not exceed its MPR, we find Operator's actual CPST rate of $10.06, effective July 15, 1994, to be reasonable. 6. Upon review of Operator's FCC Form 1210 covering the period April 1, 1994 to June 30, 1995, we adjusted Module I, Line I5 and Module J, Line J5 to apply the correct inflation factor of 2.15% for the period April 1994 to June 1995. This inflation factor was available to Operator when it completed this FCC Form 1210. This adjustment reduced Operator's MPR to $11.13. Because Operator's actual CPST rate of $11.30 exceeds its revised MPR, we find Operator's actual CPST rate of $11.30, effective September 1, 1995 through March 31, 1996, to be unreasonable. Upon review of Operator's second FCC Form 1210 covering the period July 1, 1995 to December 31, 1995, we find Operator's MPR of $12.47 to be justified. We adjusted Module I, Line I5 and Module J, Line J5 to apply the correct published inflation factor of 2.96%. This adjusted Operator's MPR to $12.48. Because Operator's actual CPST rate of $12.46 does not exceed its MPR, we find Operator's actual CPST rate of $12.46, effective April 1, 1996 through March 31, 1997, to be reasonable. 7. Upon review of Operator's FCC Form 1240, for the projected period April 1, 1997 to March 31, 1998, we find Operator's MPR of $13.97 to be justified. Because Operator's actual CPST rate of $13.97, does not exceed its MPR, we find Operator's actual CPST rate $13.97, effective April 1, 1997 through March 31, 1998, to be reasonable. Upon review of Operator's second FCC Form 1240, for the projected period April 1, 1998 to March 31, 1999, we adjusted Module D, Line D2 (Current External Costs Segment) to $5.0697 which was taken from Module I, Line I5 of the previous FCC Form 1240. We also adjusted Line C5 (Current FCC Inflation Factor) to 1.0114. These adjustments reduced Operator's MPR to $12.82. Because Operator's actual CPST rate of $13.14, exceeds its revised MPR, we find Operator's actual CPST rate $13.14, effective April 1, 1998, to be unreasonable 8. 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 $10.95, effective May 15, 1994 to July 14, 1994, in the community set forth above, IS REASONABLE. 9. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321 that Operator's CPST rate of $10.06, effective July 15, 1994 through August 31, 1995, in the community set forth above, IS REASONABLE. 10. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rate of $11.30, effective September 1, 1995 through March 31, 1996, IS UNREASONABLE. 11. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rate of $12.46, effective April 1, 1996 through March 31, 1997, IS REASONABLE. 12. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rate of $13.97 charged by Operator in the community referenced above, effective April 1, 1997 through March 31, 1998, IS REASONABLE. 13. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. Section 0.321, that the monthly CPST rate of $13.14 charged by Operator in the community referenced above, effective April 1, 1998, IS UNREASONABLE. 14. 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 $11.13 per month (plus franchise fees), to the date of the refund, for the period September 1, 1995 to December 31, 1995. 15. 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 $12.82 per month (plus franchise fees), to the date of the refund, for the period April 1, 1998 to the day before Operator implements the maximum permitted CPST rate of $12.82. 16. 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), describing the calculation thereof, and describing its plan to implement the refund within 60 days of Commission approval of the plan. 17. IT IS FURTHER ORDERED, pursuant to Section 0.32l of the Commission's rules, 47 C.F.R. Section 0.321, that the complaints referenced herein against the rates charged by Operator in the community set forth above ARE GRANTED. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Deputy Chief, Cable Services Bureau