*Pages 1--6 from Microsoft Word - 48124.doc* Federal Communications Commission DA 05- 1147 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of Comcast Cable Communications, LLC Orders Setting Basic Equipment Rates Petition for Emergency Stay ) ) ) ) ) ) ) ) ) File No. CSB- A- 0741 CUID Nos. (see attached Appendix) ORDER Adopted: April 25, 2005 Released: April 26, 2005 By the Deputy Chief, Policy Division, Media Bureau: 1. On April 8, 2005, Comcast Cable Communications, LLC (" Comcast") filed a Petition for Emergency Stay (" Stay Petition") requesting that the Commission stay local rate orders (" Local Orders") affecting approximately 100 communities, issued on or about March 3, 2005 through April 1, 2005. 1 All of these Local Orders concern the local franchising authorities’ (" LFAs’") review of Comcast’s 2004 national aggregated FCC Form 1205 (" Comcast 1205"), setting the maximum permitted rates that Comcast may charge for equipment used to receive the basic services tier (" BST"). The LFAs filed an opposition to the Petition on April 20, 2005. 2 Comcast previously filed a Petition for Declaratory Ruling concerning the LFAs’ review of the Comcast 1205 to which some of the LFAs responded in opposition or with comments. 3 2. The Commission evaluates petitions for stay under well settled principles. To support a stay, a petitioner must demonstrate: (1) that it is likely to prevail on the merits; (2) that it will suffer irreparable harm if a stay is not granted; (3) that other interested parties will not be harmed if a stay is granted; and (4) that the public interest favors granting a stay. 4 The likelihood of success on the merits is 1 See the attached Appendix for a list of the LFAs cited in the Petition. 2 Upon motion, we granted the LFAs an extension until April 20, 2005 to file their opposition. See Comcast Cable Communications, LLC, DA 05- 1085, __ FCC Rcd ____ (MB 2005). Comcast also filed a request for expedited consideration of its Petition which was responded to but not opposed. Because we are acting on the Petition in this Order, we find the request to be moot. 3 The Petition for Declaratory Ruling is designated as FCC file or case no. CSR- 6388- R. 4 See 47 C. F. R. § 1.43; Applications of Alvin Lou Media, Inc. and KM Communications, Inc. for New AM Broadcast Stations, 19 FCC Rcd. 806, 812 at n. 44 (2004), citing Virginia Petroleum Jobbers Ass'n. v. FPC, 259 F. 2d 921 (D. C. Cir. 1958) and Washington Metropolitan Area Transit Comm'n v. Holiday Tours, Inc., 559 F. 2d 841 (D. C. Cir. 1977). 1 Federal Communications Commission DA 05- 1147 2 an important element in a petitioner's showing. However, the degree to which a probability of success on the merits must be found will vary according to the Commission’s assessment of the other factors. 5 When confronted with a case in which other elements strongly favor interim relief, the Commission may exercise its discretion to grant a stay. 3. Based on a review of the pleadings in this matter, we find that a stay of the Local Orders, pending a review and determination of Comcast's appeals on the merits, is in the public interest. The balance of equity of the last three factors cited above weighs heavily in favor of granting a stay. In the absence of a stay, Comcast will be harmed because of its limited ability to recover refunds erroneously issued. Unlike the FCC Form 1240, which is based on a reconciliation of projected and actual costs, the FCC Form 1205 contains no true- up mechanism for incorporating equipment undercharges in subsequent filings, because the annual equipment charges are based on actual cost only. On the other hand, a stay in this matter will cause little or no harm to subscribers in that funds must be escrowed or bonded with interest. The fact that individual subscribers change over time does not increase the potential harm to subscribers because, at any point in time that refunds are calculated and remitted, the current and past subscribers might not be identical. 6 Finally, because of the large number of appeals involved, the lack of specificity in the Local Orders as to the method for calculating refunds, the necessity of consolidating the cases at the commission level, and the efficacy of having a uniform resolution imposed, it is in the public interest to have the Local Orders stayed pending resolution of the appeals. A stay will allow the final decision to be implemented efficiently and uniformly. We find that balancing the interests favors retaining the status quo while we resolve the complex issues involved in the appeals. 4. Although Comcast raises several issues in its Petition, we need only to determine the probability of success on a single issue that would require remand in order to find that a stay is warranted. Comcast raises the issue of the LFAs’ reduction of its cost allocation factor for the Hourly Service Charge (" HSC"). The cost allocation factor is found on the FCC Form 1205 "Worksheet for Calculating Permitted Equipment and Installation Charges", Step A, Line 4: Customer Equipment and Installation Percentage (attach an explanation). 7 Comcast maintains that, although there may have been some initial confusion in determining the extent of the costs included as the denominator in the allocation factor, it clarified and submitted detailed supporting data to confirm that the denominator was accurate in representing all of the costs that were necessary to be included in the denominator in order to properly calculate the cost allocation factor. The LFAs reduced the cost allocation factor by 2/ 3 because of the labeling of the data included in the denominator but do not dispute the methodology used by Comcast. Because of the possibility that the LFAs may have misconstrued the information provided by Comcast and, in fact, the data provided does indeed accurately represent the data required by the methodology which was approved, we find the issue has merit and will grant the requested stay until the matter can be more fully reviewed. We caution the parties to include complete explanations of their relative positions in the appeal pleadings. 5. In order to protect the interests of subscribers and ensure that refunds will be paid if Comcast does not prevail on the merits, we grant the stay on condition that Comcast create an escrow account. During the period of the stay, Comcast must deposit into an interest bearing escrow account the total refund amount due under each Local Order as of the date the account is opened and on an ongoing 5 See Cuomo v. NRC, 772 F. 2d 972, 974 (D. C. Cir. 1985); Wisconsin Gas Co. v. FERC, 758 F. 2d 669, 674 (D. C. Cir. 1985); Washington Metropolitan area Transit Comm'n v. Holiday Tours, Inc., 559 F. 2d 841, 843- 44 (D. C. Cir. 1977). 6 See 47 C. F. R. § 76. 942 (d) (2), allowing refunds to be paid to the class of current subscribers. 7 See FCC Form 1205 at 4. 2 Federal Communications Commission DA 05- 1147 3 basis must accumulate in the escrow account the difference between the rates ordered by each LFA and the rates charged customers during the pendency of the underlying petition for review of each Local Order. Alternatively, Comcast may elect to post a bond for the benefit of each LFA. The amount of the bond shall be the total refund amount due as of the date the bond is posted plus an estimate of the additional amount that will accumulate on the basis of the difference between the rates ordered by each LFA and the rates charged customers until Comcast's next annual rate adjustment is scheduled to take effect for each LFA, plus interest. The amount of the bond for estimated additional amounts shall be based on Comcast's subscriber counts at the time the bond is posted. The bond shall provide that, if Comcast is unable to fulfill its refund obligation for any reason, then the surety will fulfill that obligation to each of the LFAs on behalf of Comcast's subscribers. 6. Accordingly, IT IS ORDERED that the Petition for Emergency Stay IS GRANTED pending the resolution of Comcast's appeals on the merits. This stay WILL TERMINATE with respect to any of the LFAs for which the operator does not file an appeal of the local rate order within the time provided by the Commission's rules or such additional time as may be authorized. 7. IT IS FURTHER ORDERED that the Request for Expedited Consideration filed by Comcast Cable Communications, LLC, IS DISMISSED AS MOOT. 8. IT IS FURTHER ORDERED that Comcast SHALL PLACE in an interest bearing escrow account the refund amounts due under each of the LFAs' Local Orders at the time the account is opened and SHALL ACCUMULATE in this account on an ongoing basis the difference between the rates ordered by each LFA and the rates charged customers during the pendency of the underlying appeal. Alternatively, Comcast SHALL SECURE this amount by posting a bond for the benefit of each LFA for the total refund amount ordered by the LFA that is due at the time the bond is posted plus an estimate of the additional amount that will accumulate on the basis of the difference between the rates ordered by each LFA and the rates charged customers until Comcast's next annual rate adjustment for each LFA is scheduled to take effect, plus interest for the period covered by this bond at the prevailing U. S. Internal Revenue Service Rate for tax refunds and additional tax payments. Proof of Comcast's compliance with this Order SHALL BE FILED with the Commission within thirty (30) days of the release of this Order. 9. This action is taken pursuant to authority delegated by section 0. 283 of the Commission's rules, 47 C. F. R. § 0.283. FEDERAL COMMUNICATIONS COMMISSION John B. Norton Deputy Chief, Policy Division Media Bureau 3 Federal Communications Commission DA 05- 1147 4 APPENDIX LFA CUID CONSORTIUM Santa Clara, CA CA0455 Adams County, CO CO0136 Greater Metro Telecomm. Consortium Arapahoe County, CO CO0493 Greater Metro Telecomm. Consortium CO0475 Greater Metro Telecomm. Consortium CO0250 Greater Metro Telecomm. Consortium CO0478 Greater Metro Telecomm. Consortium CO0135 Greater Metro Telecomm. Consortium Arvada, CO CO0051 Greater Metro Telecomm. Consortium CO0473 Greater Metro Telecomm. Consortium Aurora, CO CO0142 Greater Metro Telecomm. Consortium CO0143 Greater Metro Telecomm. Consortium Brighton, CO CO0151 Greater Metro Telecomm. Consortium Broomfield, CO CO0155 Greater Metro Telecomm. Consortium Castle Rock, CO CO0210 Greater Metro Telecomm. Consortium Centennial, CO CO0517 Greater Metro Telecomm. Consortium Cherry Hills Village, CO CO0196 Greater Metro Telecomm. Consortium Columbine Valley, CO CO0253 Greater Metro Telecomm. Consortium Commerce, CO CO0147 Greater Metro Telecomm. Consortium Denver, CO CO0254 Greater Metro Telecomm. Consortium CO0490 Greater Metro Telecomm. Consortium Douglas County, CO CO0134 Greater Metro Telecomm. Consortium Edgewater, CO CO0225 Greater Metro Telecomm. Consortium Englewood, CO CO0138 Greater Metro Telecomm. Consortium Erie, CO CO0420 Greater Metro Telecomm. Consortium Federal Heights, CO CO0148 Greater Metro Telecomm. Consortium Glendale, CO CO0346 Greater Metro Telecomm. Consortium Golden, CO CO0161 Greater Metro Telecomm. Consortium Greenwood Village, CO CO0139 Greater Metro Telecomm. Consortium Indian Hills, CO CO0403 Greater Metro Telecomm. Consortium Jefferson County, CO CO0141 Greater Metro Telecomm. Consortium CO0154 Greater Metro Telecomm. Consortium CO0495 Greater Metro Telecomm. Consortium CO0162 Greater Metro Telecomm. Consortium CO0150 Greater Metro Telecomm. Consortium CO0455 Greater Metro Telecomm. Consortium 4 Federal Communications Commission DA 05- 1147 5 Lafayette, CO CO0280 Greater Metro Telecomm. Consortium Lakewood, CO CO0077 Greater Metro Telecomm. Consortium Littleton, CO CO0159 Greater Metro Telecomm. Consortium Lone Tree, CO CO0501 Greater Metro Telecomm. Consortium Louisville, CO CO0190 Greater Metro Telecomm. Consortium Northglenn, CO CO0264 Greater Metro Telecomm. Consortium Parker, CO CO0205 Greater Metro Telecomm. Consortium CO0482 Greater Metro Telecomm. Consortium Sheridan, CO CO0140 Greater Metro Telecomm. Consortium Thornton, CO CO0215 Greater Metro Telecomm. Consortium CO0479 Greater Metro Telecomm. Consortium Westminster, CO CO0146 Greater Metro Telecomm. Consortium CO0474 Greater Metro Telecomm. Consortium Skokie, IL IL0657 Wheaton, IL IL1050 Downers Grove, IL IL0402 Montgomery County, MD MD0236 Coon Rapids, MN MN0373 Burnsville, MN MN0439 Burnsville / Eagan Telecomm. Commission Eagan, MN MN0440 Burnsville / Eagan Telecomm. Commission Blaine, MN MN0370 North Metro Telecomm. Commission Centerville, MN MN0371 North Metro Telecomm. Commission Circle Pines, MN MN0372 North Metro Telecomm. Commission Ham Lake, MN MN0374 North Metro Telecomm. Commission Lexington, MN MN0375 North Metro Telecomm. Commission Lino Lakes, MN MN0376 North Metro Telecomm. Commission Spring Lake Park, MN MN0377 North Metro Telecomm. Commission Arden Hills, MN MN0297 North Suburban Communications Commission Falcon Heights, MN MN0298 North Suburban Communications Commission Lauderdale, MN MN0299 North Suburban Communications Commission Little Canada, MN MN0300 North Suburban Communications Commission Mounds View, MN MN0301 North Suburban Communications Commission New Brighton, MN MN0302 North Suburban Communications Commission Roseville, MN MN0304 North Suburban Communications Commission North Oaks, MN MN0303 North Suburban Communications Commission St Anthony, MN MN0305 North Suburban Communications Commission Shoreview, MN MN0306 North Suburban Communications Commission Lake Elmo, MN MN0315 Ramsey / Washington CO Suburban Cable Comm. Maplewood, MN MN0317 Ramsey / Washington CO Suburban Cable Comm. 5 Federal Communications Commission DA 05- 1147 6 North St. Paul, MN MN0318 Ramsey / Washington CO Suburban Cable Comm. Birchwood, MN MN0313 Ramsey / Washington CO Suburban Cable Comm. Dellwood, MN MN0314 Ramsey / Washington CO Suburban Cable Comm. Mahtomedi, MN MN0316 Ramsey / Washington CO Suburban Cable Comm. Vadnais Heights, MN MN0320 Ramsey / Washington CO Suburban Cable Comm. White Bear Lake, MN MN0321 Ramsey / Washington CO Suburban Cable Comm. Willernie, MN MN0322 Ramsey / Washington CO Suburban Cable Comm. Oakdale, MN MN0319 Ramsey / Washington CO Suburban Cable Comm. Grant, MN MN0323 Ramsey / Washington CO Suburban Cable Comm. White Bear, MN MN0324 Ramsey / Washington CO Suburban Cable Comm. Cottage Grove, MN MN0396 South Washington County Telecomm. Commission Newport, MN MN0397 South Washington County Telecomm. Commission St. Paul Park, MN MN0401 South Washington County Telecomm. Commission Woodbury, MN MN0395 South Washington County Telecomm. Commission Grey Cloud, MN MN0400 South Washington County Telecomm. Commission Saint Paul, MN MN0424 Albuquerque, NM NM0036 Mentor, OH OH0740 Banks, OR OR0325 Metropolitan Area Communications Commission Beaverton, OR OR0283 Metropolitan Area Communications Commission Cornelius, OR OR0318 Metropolitan Area Communications Commission Durham, OR OR0326 Metropolitan Area Communications Commission Forest Grove, OR OR0289 Metropolitan Area Communications Commission Gaston, OR OR0442 Metropolitan Area Communications Commission Hillsboro, OR OR0290 Metropolitan Area Communications Commission King City, OR OR0317 Metropolitan Area Communications Commission Lake Oswego, OR OR0064 Metropolitan Area Communications Commission OR0304 Metropolitan Area Communications Commission North Plains, OR OR0341 Metropolitan Area Communications Commission Rivergrove, OR OR0330 Metropolitan Area Communications Commission Tigard, OR OR0288 Metropolitan Area Communications Commission Tualatin, OR OR0328 Metropolitan Area Communications Commission Washington County, OR OR0333 Metropolitan Area Communications Commission OR0242 Metropolitan Area Communications Commission Murfreesboro, TN TN0082 Arlington County, VA VA0108 District of Columbia DC0002 6