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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File Nos.
CUID Nos.
) EB-02-TC-102 SC0130
(Camden)
Cencom Cable Entertainment, Inc. ) EB-02-TC-103
SC0218 (Williamston)
Cencom Cable Income Partners II, LP ) EB-02-TC-
104 SC0518 (Kershaw County)
) EB-02-TC-111 TX0803
(Angleton)
Complaints Regarding )
Cable Programming Services Tier Rates )
and Petition for Reconsideration )
ORDER
Adopted: September 30, 2002 Released: October
1, 2002
By the Chief, Enforcement Bureau:1
1. In this Order, we consider a petition for
reconsideration2 ("Petition") of Cable Services Bureau
Order, DA 95-1008 ("Prior Order"),3 filed with the Federal
Communications Commission ("Commission") by the above-
referenced operator ("Operator").4 The Prior Order resolved
complaints filed against the rates charged by Operator for
its cable programming services tier ("CPST") in the
communities referenced above. In this Order we deny
Operator's Petition in part, grant it in part, and order
refunds.
2. Under the provisions of the
Communications Act5 that were in effect at the time the
complaints were filed, 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. The Cable Television Consumer Protection and
Competition Act of 1992 ("1992 Cable Act")6 and the
Commission's rules required the Commission to review CPST
rates upon the filing of a valid complaint by a subscriber
or local franchising authority ("LFA"). The
Telecommunications Act of 1996 ("1996 Act"),7 and the
Commission's rules implementing the legislation ("Interim
Rules"),8 required that a complaint against the CPST rate be
filed with the Commission by an LFA that has received more
than one subscriber complaint. The filing of a valid
complaint triggers an obligation upon the cable operator to
file a justification of its CPST rates.9 If the Commission
finds the rate to be unreasonable, it shall determine the
correct rate and any refund liability.10
3. During the first phase of rate regulation, from
September 1, 1993 until May 15, 1994, the benchmark rate
analysis and comparison with an operator's actual rates were
calculated using the FCC Form 393.11 The benchmark formula
was revised, effective May 15, 1994.12 Systems first
becoming subject to rate regulation after May 15, 1994 were
required to justify their initial regulated rates using
forms in the FCC Form 1200 series.13 Systems against which
rate complaints were still pending when the Commission
revised its benchmark formula were required to recalculate
their benchmark rates as of May 15, 1994 using the FCC Form
1200.14 The Commission's rules provide for a refund
liability deferral period, if timely requested by an
operator, beginning May 15, 1994 and ending July 14, 1994,
for any overcharges resulting from the operator's
calculation of a new maximum permitted rate on its FCC Form
1200.15 However, an operator will incur refund liability
from May 15, 1994 through July 14, 1994 for any CPST rates
charged above the FCC Form 393 maximum permitted rate.
Cable operators may update the initial FCC Form 1200
benchmark rate calculation by filing an FCC Form 1210 to
justify quarterly rate increases based on the addition and
deletion of channels, changes in certain external costs and
inflation.16
4. In its Petition, Operator raises a number of
issues that have been addressed in previous orders. Operator
first argues that the Cable Services Bureau erred when
imputing normalized taxes to Operator's customer equipment
costs prior to unbundling those costs from Operator's
service rates. The Cable Services Bureau previously
addressed this issue at length in Suburban Cable.17 The
discussion in that case is directly on point and need not be
repeated here. The Cable Services Bureau concluded that the
benchmark rate methodology contemplates the unbundling of
normalized taxes and it would be arbitrary and inconsistent
for the Commission to build normalized taxes into the
pricing of tier offerings and only unbundle actual taxes
attributable to equipment costs. We conclude here, as the
Cable Services Bureau did in Suburban Cable, that it was not
error for the Cable Services Bureau to impute normalized
taxes to Operator's customer equipment costs prior to
unbundling those costs from Operator's service rates.
5. The remaining issues raised by Operator in its
Petition, concerning the adjustment of its inflation factor,
offsetting of overcharges, sufficiency of the explanations
of calculations and allegations of retroactive ratemaking,
were all thoroughly addressed by the Commission in Cencom
Cable Income Partners ("Cencom").18 For all the reasons
stated in that order, which we do not need to repeat here,
we reject Operator's arguments concerning these issues.
However, as in Cencom, we will allow Operator an inflation
adjustment period equal to the number of whole months from
September 1992 to the date Operator was required to file its
FCC Form 393 in each community, in accordance with the
public notice issued May 2, 1995.19
6. As a result of our adjustment, we find the total
overcharges for the CPST tier for all periods under review
to be de minimis, and it would not be in the public interest
to order refunds, in the communities of Williamston and
Angleton. For the communities of Camden and Kershaw County,
our adjustment to Operator's inflation adjustment period for
each community results in revised maximum permitted rates
("MPRs") and total CPST refund liability for all periods
under review as follows, and we modify our Prior Order
accordingly.20
Community/ Prior Re- Ac- Monthly Refund- Total
CUID No. MPR vised tual Over- 21 Refund
MPR Rate charge Period Liability
Camden/ $15.94 $15.- $17.- $1.14 10/15/9- $82,669-
SC0130 97 11 3- .00
7/14/94
Kershaw $16.67 $16.- $17.- $0.26 1/26/94- $11,455-
County/ 85 11 7/14/94 .00
SC0518
7. Our total refund liability calculations include
interest on the overcharges through October 31, 2002. Our
calculation does not include franchise fees. We order
Operator to refund this amount, plus any additional interest
accrued to the date of refund, plus franchise fees, if any,
and interest on the franchise fee principal amount, to its
CPST subscribers within 60 days of the release of this
Order.
8. Accordingly, IT IS ORDERED, pursuant to Section
1.106 of the Commission's rules, 47 C.F.R. � 1.106, that the
petition for reconsideration filed by Operator is GRANTED IN
PART AND DENIED IN PART TO THE EXTENT INDICATED HEREIN.
9. IT IS FURTHER ORDERED, pursuant to Sections 0.111
and 0.311 of the Commission's rules, 47 C.F.R. �� 0.111 and
0.311, that In the Matter of Cencom Cable Entertainment,
Inc. and Cencom Cable Income Partners II, LP, DA 95-1008, 10
FCC Rcd 8166 (CSB 1995) IS MODIFIED TO THE EXTENT INDICATED
HEREIN.
10. IT IS FURTHER ORDERED, pursuant to Section 76.961
of the Commission's rules, 47 C.F.R. � 76.961, that Operator
shall refund to subscribers in the community of Camden, SC
(CUID No. SC0130), the total amount of $82,669.00, plus any
additional interest accruing between October 31, 2002 and
the date of refund, plus franchise fees, if any, and
interest on the franchise fee principal amount within 60
days of the release of this Order.
11. IT IS FURTHER ORDERED, pursuant to Section 76.961
of the Commission's rules, 47 C.F.R. � 76.961, that Operator
shall refund to subscribers in the community of Kershaw
County, SC (CUID No. SC0518), the total amount of
$11,969.00, plus any additional interest accruing between
October 31, 2002 and the date of refund, plus franchise
fees, if any, and interest on the franchise fee principal
amount within 60 days of the release of this Order.
12. IT IS FURTHER ORDERED, pursuant to Sections 0.111,
0.311 and 76.962 of the Commission's rules, 47 C.F.R. ��
0.111, 0.311 and �76.962, that Operator file a certificate
of compliance with the Chief, Enforcement Bureau, within 90
days of the release of this Order certifying its compliance
with this Order.
13. IT IS FURTHER ORDERED, pursuant to Sections 0.111
and 0.311 of the Commission's rules, 47 C.F.R. �� 0.111 and
0.311, that the complaints against the CPST rates charged by
Operator in the communities referenced above ARE GRANTED TO
THE EXTENT INDICATED HEREIN AND DENIED IN ALL OTHER
RESPECTS.
FEDERAL COMMUNICATIONS
COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 Effective March 25, 2002, the Commission transferred
responsibility for resolving cable programming services tier
rate complaints from the former Cable Services Bureau to the
Enforcement Bureau. See Establishment of the Media Bureau,
the Wireline Competition Bureau and the Consumer and
Governmental Affairs Bureau, Reorganization of the
International Bureau and Other Organizational Changes, FCC
02-10, 17 FCC Rcd 4672 (2002).
2 Operator originally filed its petition as an application
for review. However, by letter dated August 9, 2002,
Operator requested that we treat its application as a
petition for reconsideration.
3 See In The Matter of Cencom Cable Entertainment, Inc. and
Cencom Cable Income Partners II, LP, DA 95-1008, 10 FCC Rcd
8166 (CSB 1995).
4 The term "Operator" includes Operator's successors and
predecessors in interest.
5 47 U.S.C. �543(c) (1996).
6 Pub. L. No. 102-385, 106 Stat. 1460 (1992).
7 Pub. L. No. 104-104, 110 Stat. 56 (1996).
8 See Implementation of Cable Act Reform Provisions of the
Telecommunications Act of 1996, 11 FCC Rcd 5937 1996).
9 See Section 76.956 of the Commission's rules, 47 C.F.R.
�76.956.
10 See Section 76.957 of the Commission's rules, 47 C.F.R.
�76.957.
11 See Implementation of Sections of the Cable Television
Consumer Protection and Competition Act of 1992: Rate
Regulation, 8 FCC Rcd 5631, 5755-56, 5766-67, 5881-83
(1993).
12 See Implementation of Sections of the Cable Television
Consumer Protection and Competition Act of 1992: Rate
Regulation, 9 FCC Rcd 4119 (1994).
13 See Section 76.922 of the Commission's rules, 47 C.F.R. �
76.922.
14 Id.
15 See 47 C.F.R. � 76.922(b)(6)(ii).
16 Id.
17 In the Matter of Suburban Cable TV, Inc., DA 97-2032, 13
FCC Rcd 13111 (CSB 1997). See also, In the Matter of
Charter Communications, DA 02-637 (CSB released March 20,
2002).
18 In the Matter of Cencom Cable Income Partners II, LP, FCC
97-205, 12 FCC Rcd 7948 (1997).
19 See Public Notice "Cable Services Bureau Announces Policy
Regarding Inflation Adjustment on Form 393," DA 95-999 (CSB
1995).
20 These findings are based solely on the representations of
Operator. Should information come to our attention that
these representations were materially inaccurate, we reserve
the right to take appropriate action. This Order is not to
be construed as a finding that we have accepted as correct
any specific entry, explanation or argument made by any
party to this proceeding not specifically addressed herein.
Information regarding the specific adjustments made to
Operator's FCC Forms can be found in the public files for
the above-referenced community which are available in the
FCC Reference Information Center, Portals II, 445 12th
Street, SW, Room CY-A257, Washington, DC, 20554. This
document may also be purchased from the Commission's
duplicating contractor, Qualex International, Portals II,
445 12th Street, SW, Room CY-B402, Washington, DC, 20554,
telephone 202-863-2893, facsimile 202-863-2898, or via e-
mail qualexint@aol.com.
21 The refund periods for the FCC Form 393 overcharges begin
on the date that the first valid complaint was filed with
the Commission against the CPST rates charged by Operator
for each specific community. Because Operator filed refund
deferral letters in all of these communities, the FCC Form
393 refund period ends on July 14, 1994.