DA 95-1164 Federal Communications Commission Record 10 FCC Red No. 18
Before the
Federal Communications Commission 
Washington, D.C. 20554
In the Matter of 
Western Cable TV CUID No. CA0282 
(South San Francisco)
Benchmark Filing to Support 
Cable Programming Service Price
MEMORANDUM OPINION AND ORDER 
Adopted: May 25,1995; Released: June 2,1995
By the Chief, Financial Analysis and Compliance Di 
vision, Cable Services Bureau:
1. Here we consider a complaint about the price that the 
above-captioned operator ("Operator") was charging for its 
cable programming service ("CPS") tier in the community 
referenced above. Operator has chosen to attempt to justify 
its price through a benchmark showing on FCC Form 393. 
This Order addresses the reasonableness of Operator's price 
only through May 14, 1994. At a later date we will issue a 
separate order addressing the reasonableness of the price 
after that date.1
2. Under the Cable Television Consumer Protection and 
Competition Act of 1992,2 and our. rules implementing it, 
47 C.F.R. Part 76, Subpart N, the Commission must review 
CPS prices upon the filing of a valid complaint. The filing 
of a valid complaint triggers an obligation on behalf of the 
cable operator to file a justification of its CPS prices.3 Un 
der our rules, an operator may attempt to justify its prices 
through either a benchmark showing or a cost-of-service 
showing.4 In either case, the operator has the burden of 
demonstrating that its CPS prices are not unreasonable.1
3. The Commission's original rate regulations took effect 
on September 1, 1993.6 The Commission subsequently re 
vised its rate regulations effective May 15, 1994.7 Operators 
with valid CPS complaints filed against them prior to May
15, 1994 must demonstrate that their CPS prices were in 
compliance with the Commission's initial rules from the 
time the complaint was filed through May 14, 1994, and 
that their prices were in compliance with the revised rules 
from May 15, 1994 forward.8 Operators attempting to jus 
tify their prices for the period prior to May 15, 1994 
through a benchmark showing must complete and file FCC 
Form 393.' Generally, to justify their prices for the period 
beginning May 15, 1994 through a benchmark showing, 
operators must use the FCC Form 1200 series. 10
4. The complaint in the franchise area which is the 
subject of this Order was served on Operator on February 
24, 1994 and was received by the Commission on the same 
date. Operator previously had filed an FCC Form 393 on 
November 24, 1993 in response to a complaint that was 
sent to Operator on October 27, 1993. However, we have 
no record that this October complaint was ever filed with 
the Commission. 11 Therefore, we will consider February 
24, 1994, the filing date of the first pending complaint on 
record, as the initial date of regulation for Operator's CPS 
tier. Operator also filed a supplemental Form 393 filing on 
April 11, 1995.
5. Operator asserts that its monthly CPS tier price of 
$12.70 (plus franchise fee) is justified by its benchmark 
filing because its price is lower than the maximum 
permitted charge of $12.77 per month (plus franchise fee), 
as calculated in the filing. Upon review of Operator's Form 
393 filing, we have found that it has not correctly cal 
culated its maximum permitted price, and it is therefore 
appropriate to make the following adjustments to Oper 
ator's calculations in Form 393:
a. In Part II of the Form, on Line 302 of Worksheet 
3, Operator incorrectly entered the amount it re 
ported on Line 106 of Worksheet 1 instead of the 
amount it reported on Line 206 of Worksheet 2. The 
instructions for Line 302 of FCC Form 393 state: "If 
you completed Worksheet 1 only, enter the number 
from Line 106, Column E. If you completed 
Worksheet 2, enter the number from Line 206, Col 
umn E." In this case, Operator completed Worksheet 
2 and therefore should have entered the number 
from Line 206. We therefore adjusted Line 302 to 
equal the amount reported on Line 206 in accor 
dance with the Form's instructions.
1 The findings in this Order do not in any way prejudge the 
reasonableness of the price for CPS service after May 14, 1994 
under our new rate regulations. However, to the extent Oper 
ator has sought to take advantage of the refund deferral period 
under the Second Order on Reconsideration, Fourth Report 
and Order, and Fifth Notice of Proposed Rulemaking, MM 
Docket No. 92-266, FCC 94-38, 9 FCC Red 4119 (1994) ("Second 
Order on Reconsideration"), the maximum permitted CPS price 
determined herein might also apply from May 15, 1994 until the 
date on which Operator implemented its CPS price under the 
new regulations. See para. 3, infra. Further, to the extent that 
the price as of March 31, 1994 is found to be excessive, a 
reduction in Operator's price for the period after May 14, 1994 
may be required to reflect the fact that Operator's price during 
the earlier period, which is used as the starting point to cal culate its price for the prospective period, was unreasonable. See 
47 C.F.R. § 76.922(b)(4)(C).
2 Pub. L. No. 102-385, 106 Stat. 1460 (1992); Communications 
Act, § 623(c), as amended, 47 U.S.C. § 543(c) (1993).
3 47 C.F.R. § 76.956.
4 47 C.F.R. § 76.956(b).
5 Id.
6 Order in MM Docket No. 92-266, Implementation of Sections 
of the Cable Television Consumer Protection and Competition 
Act of 1992: Rate Regulation, FCC 93-372, 58 Fed. Reg. 41042 
(Aug. 2. 1993).
7 47 C.F.R. § 76.922(b).
8 See Second Order on Reconsideration, 9 FCC Red at 4190, 
paras. 150-152. 
» Id.
10 47 C.F.R. § 76.922(b)(6); see also Second Order on Reconsi 
deration, 9 FCC Red at 4189 n.195.11 Operator filed a motion to dismiss this complaint. However, 
since we have no record that the complaint was ever filed, it is 
unnecessary to rule on this motion.
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10 FCC Red No. 18 Federal Communications Commission Record DA 95-1164
b. In its Form 393 filing, Operator calculated the 
Inflation Adjustment Factor (Line 127, Worksheet 1, 
Part II) as of the end of November 1993. However, 
the figures Operator used are not consistent with data 
on which it should have relied in calculating the 
Inflation Adjustment Factor. Operator used the Gross 
National Product Price Index ("GNP-PI") data re 
leased by the U.S. Department of Commerce on Au 
gust 31, 1993 to complete Lines 122 and 125, but 
used an outdated GNP-PI of 121.8, for the third quar 
ter of 1992 in calculating Line 123. The GNP-PI 
figure released on August 31, 1993 for the third 
quarter of 1992 was 122.5. Operator's calculation of 
the Inflation Adjustment Factor is thus incorrect.
c. Because of these errors, we conclude that Operator 
has failed to demonstrate that its price for the CPS 
tier was not unreasonable. We will therefore set a 
price for this tier, incorporating the adjustments dis 
cussed above. Since the Commission did not receive 
a complaint until February 24, 1994, we will recalcu 
late the Inflation Adjustment Factor on the basis of 
the most accurate data currently available using Feb 
ruary 1994 as the correct base date for determining 
inflation. On July 29, 1994, the U.S. Department of 
Commerce released corrected inflation data including 
GNP-PI figures of 122.3 for the third quarter of 1992 
and 126.5 for the fourth quarter of 1993. Using these 
GNP-PI figures, we calculate 1.039 as the Inflation 
Adjustment Factor through February 1994, the base 
date Operator could have chosen to use in justifying 
its rate.
9. IT IS FURTHER ORDERED that Operator shall 
place into effect, within 30 days after its submission of the 
revised Form 1200 filing required above, a price that re 
flects the reduction in the CPS rate determined in this 
Order.
FEDERAL COMMUNICATIONS COMMISSION
JoAnn Lucanik
Chief, Financial Analysis and Compliance Division
Cable Services Bureau
6. Upon review of the record herein, and having incor 
porated the adjustments discussed above, we conclude that 
Operator has failed to justify the rate it was charging 
during the period in question. Operator's showing justifies 
a maximum reasonable CPS tier price of $12.58 per month 
(plus franchise fee) for the period from February 24, 1994 
to May 14, 1994. 12 However, we further determine that the 
total overcharge per subscriber is de minimis. Therefore, it 
would not serve the public interest to order a refund.
7. Accordingly, IT IS ORDERED, pursuant to Section 
0.321 of the Commission's Rules, 47 C.F.R. § 0.321, that 
the complaint referenced herein against the cable program 
ming service price charged by Operator in the franchise 
area referenced in the caption IS GRANTED TO THE 
EXTENT INDICATED HEREIN.
8. IT IS FURTHER ORDERED, pursuant to Section 
76.922(b)(4)(C) of the Commission's Rules, 47 C.F.R. § 
76.922(b)(4)(C), that Operator shall, within 30 days of the 
release of this Order, revise its Form 1200 filing with 
respect to the franchise area referenced in the caption, for 
the period beginning May 15, 1994, to reduce the monthly 
charge per tier as of March 31, 1994 for Tier 2 (Line A6b) 
to equal the maximum permitted price of $12.58 (plus 
franchise fee).13
12 This finding is based solely on the representations of Oper 
ator and the modifications described herein. 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. 
13 We reserve the right to make further adjustments to Oper 
ator's price for the period after May 14, 1994, upon completion 
of our review of Operator's Form 1200 filing.
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