Federal Communications Commission DA 96-1486
Before the
Federal Communications Commission 
Washington, D.C. 20554
In the Matter of: )
)
TCI of Illinois, Inc. ) 
Macomb, Illinois )
) 
Petition for Reconsideration )
MEMORANDUM OPINION AND ORDER 
Adopted: September 3, 1996 Released: September 10, 1996
By the Chief, Cable Services Bureau:
INTRODUCTION
1. In this Order, we deny the Petition for Reconsideration ("Reconsideration Petition") 
of TCI of Illinois, Inc. ("TCI-I"), filed on December 7, 1995. In its Reconsideration Petition, 
TCI-I requests reconsideration of the Memorandum Opinion and Order of the Cable Services 
Bureau ("Bureau") released on November 8, 1995,1 which upheld the City of Macomb's ("the 
City") December 20,1994 local rate order approving TCI-I's proposed rate reduction for its basic 
service tier from $9.30 to $8.86 and ordering TCI-I to make refunds to its subscribers in the 
amount of $1.10 per subscriber for the period May 15, 1994 through August 1, 1994.2 The City 
based its decision on a finding that TCI-I had not met the Commission's requirements to qualify 
for a refund deferral. The City has not filed an opposition to TCI-I's Petition for 
Reconsideration.
BACKGROUND
2. Under the Commission's initial rate regulations pursuant to the Cable Act of 1992, 
regulated cable systems were required to apply a benchmark formula to determine their maximum 
permitted rates. Those systems whose rates were above the benchmark on September 30, 1992 
were required to reduce their September 30, 1992 rates by 10 percent or to the benchmark, 
whichever was less.3 This 10 percent reduction stemmed from the Commission's initial finding 
that there was, on average, a 10 percent difference (the so-called "competitive differential") 
between the rates charged by competitive and noncompetitive cable systems. Under the
'TCI of Illinois, Inc. (Macomb, IL), 10 FCC Red 12,197 (Cab. Serv. Bur. 1995) ("Macomb Order")
*See TCI-I's January 19, 1995 Appeal of Local Rate Order ("Appeal of Local Rate Order"), Attachment A.
3See Rate Order, 8 FCC Red at 5644-45.
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Federal Communications Commission DA 96-1486
Commission's revised benchmark regulations adopted on February 22, 1994, regulated cable 
systems were required to set their rates at a level equal to their September 30, 1992 rates minus 
a revised competitive differential of 17 percent.4 In order to comply with the new rules, cable 
operators were required to collect necessary rate-setting information, complete FCC Form 1200 
to determine their new permitted rates, and give 30 days notice of any rate changes to their 
subscribers and to franchising authorities.5 Systems that were not in compliance with the new 
rules by May 15, 1994 were subject to refund liability for the period May 15, 1994 through July 
14, 1994. Recognizing that many systems would have difficulty complying with the new 
regulatory scheme by May 15, 1994, the Commission gave operators the option of deferring 
refund liability for an additional 60 days after May 15, 1994 or until July 14, 1994. Operators 
wishing to take advantage of this deferral of refund liability were required to meet certain 
conditions.6 Those conditions are as follows: (1) the cable operator could not change its rates 
for any regulated service or equipment or restructure any regulated service or equipment offering 
between March 30, 1994 and July 14, 1994; (2) the operator had to give subscribers at least 30 
days' notice of any rate or service change made pursuant to the new rules; and (3) all rate and 
service restructuring must have been completed by July 14, 1994.7 Section 76.922 (b)(6)(ii) of 
our rules codifies the first and third of these prerequisites.8 Section 76.964 effectively codifies 
the second requirement because, even though this section does not refer to any prerequisites for 
qualifying for the deferral period, this section does require that an operator give 30 days' written 
notice to subscribers before implementing any rate change.9 With respect to operators such as 
TCI-I, which were "involved in proceedings concerning basic cable rates" at the time of the 
release of the Second Recon. Order, that Order imposed two additional conditions for qualifying 
for refund deferral.10 The Order required that any such operator which "elects to take advantage 
of the refund deferral period," had to notify the local franchising authority by June 14, 1994 that
'See Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate 
Regulation, Second Order on Reconsideration, Fourth Report and Order, MM Docket No. 92-266, 9 FCC Red 4119, 
4167-68 ("Second Recon. Order"). The Commission gave operators the option of submitting a cost-of-service 
showing in order to justify rates higher than those permitted under the revised benchmark approach.
'Id., 9 FCC Red at 4183-85.
"Id.
'Id.
 47 C.F.R. § 76.922(b)(6)(ii).
'47 C.F.R. § 76.964. This section also requires that, in addition to other notice requirements, a cable operator "shall 
give the relevant franchising authority a minimum of 30 days advance written notification of any changes in rates 
for cable programming service or associated equipment." The notice must state the precise amount of any rate 
change and explain the cause of the rate change. While the parties agree that appropriate notices were sent to 
subscribers they do not contend that such a notice was delivered to the local franchising authority.
''Second Recon. Order, 9 FCC Red at 4187.
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it intended to do so.11 The Order also provided that such an operator had to submit the relevant 
FCC rate justification forms to the local franchising authority no later than August 15, 1994.n
THE BUREAU'S ORDER
3. On appeal, TCI-I asserted that it complied with all of the conditions specified by 
our rules for deferring refund liability. Specifically, TCI-I alleged that it notified the City of its 
intention to defer refund liability on May 13, 1994 and that it filed its FCC Form 1200 with the 
City on August 10, 1994, thereby complying with the refund deferral rules on notice and filing 
pertaining to the local franchising authority. With respect to the remaining conditions of refund 
liability deferral, TCI-I alleged that it gave subscribers notice of impending rate changes, that it 
did not change any rate for regulated service or equipment offering between March 31,1994 and 
July 14, 1994, and that it established a permitted rate under the Commission's revised rules by 
July 14, 1994.13 Finally, TCI-I alleged that it sent bills reflecting the new restructured rates to 
its subscribers at the end of July.14 The City, in its response, did not address the refund deferral 
issue. Instead, the City mistakenly claimed that TCI-I sought to balance past overcharges for 
basic service with past undercharges from the cable programming service tier.13
4. The Bureau noted that one of the conditions operators must have met for 
exercising refund liability deferral was the provision of at least 30 days notice to subscribers of 
any rate or service change.16 Operators who completed restructuring on July 14,1994 must have 
provided notice to their subscribers by June 14, 1994, which was 30 days before the July 14, 
1994 deadline for restructuring. The Bureau found that TCI-I's notice to its subscribers of the 
restructured rates did not comply with the notice required by our rules as a condition of refund 
deferral. TCI-I, by its own admission, states that it "notified customers of the rate change at the 
end of June," not by June 14 as required.17 TCI-I's subscribers therefore did not receive the 
requisite 30 days notice before the rate changes became effective on July 14, 1994.
5.. The Bureau further noted that the Commission also required operators, as a 
condition of refund liability deferral, to complete restructuring by July 14, 1994 and considered
"Id. at 4187 n.190.
"Id.
"See Appeal of Local Rate Order at 3-4.
uld. at 4.
"TCI-I did not raise the offset issue in any of its pleadings.
"See 47 C.F.R. § 76.964(b). See also. Public Notice, Questions and Answers on Cable Television Rate Regulation, 
May 6, 1994, Question No. 5 at 3. ("May 6,1994 Questions and Answers").
"See Appeal of Local Rate Order at 3.
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Federal Communications Commission DA 96-1486
restructuring to be complete "when bills reflecting the rate and service changes ha[d] been issued 
to subscribers." 18 Operators wishing to defer refund liability should have issued subscriber bills 
reflecting the restructured rates by July 14, 1994, unless advance billing was prohibited by the 
franchising authority or the operator was using cycle billing. In this case, those exceptions are 
not applicable. In its appeal, TCI-I stated that it operated on a "once a month billing cycle." 19 
Further, in its appeal, TCI-I did not allege that the City prohibited advance billing. Instead of 
sending subscriber bills by July 14 as required, TCI-I stated that it issued subscriber bills 
reflecting the new rates "at the end of July."20 The Bureau found that, as a result of the 
untimeliness of its subscriber bills, TCI-I did not meet the requirement that all restructuring be 
completed by July 14, 1994. In order to meet this condition of refund deferral, TCI-I should 
have sent out its subscriber bills with the restructured rates by July 14, 1994. It did not. Our 
rules require that operators who wished to defer refund liability must have complied with each 
specified condition, which TCI failed to do. Therefore, the Bureau concluded that TCI did not 
qualify for deferral of refund liability for the period May 15,1994 through July 14, 1994 because 
it failed to provide subscribers with at least 30 days notice of the rate changes and because it 
failed to complete restructuring by July 14,1994. Accordingly, the Bureau denied TCI-I's appeal.
TCI-I'S PETITION FOR RECONSIDERATION
6. TCI-I, in its reconsideration petition, argues that the Bureau erroneously concluded 
that TCI-I did not comply with the established timing requirements of the Commission's refund 
deferral rule. According to TCI-I, to take advantage of the refund deferral, it did not change 
any regulated service or equipment offering between March 31, 1994 and July 14, 1994, and it 
established a permitted'rate under the Commission's rules by July 14, 1994. TCI-I alleges that 
the Commission allowed operators whose July 14 restructuring falls within the middle of a billing 
period to charge the pre-restructured rates on bills sent out before July 14 and the restructured 
rate on all bills sent from that date."21 TCI states that it was on a once a month billing cycle 
and July 14 fell in the middle of its billing cycle. Therefore, it notified customers of the rate 
change at the end of June (in their July bill) and disseminated bills reflecting restructured rates 
at the end of July (in their August bill).TCI-I argues that the Bureau's decision improperly 
suggests a regulatory difference between cable systems billing on a multiple or single cycle basis. 
Aside from claiming that the timing of the subscribers notice was directly tied to the timing of 
the underlying rate restructuring, TCI-I did not address the issue of the lack of timely notice of 
the rate change. Finally, TCI-I argues that even if the Bureau disagrees with its interpretation
"See Second Recon. Order, 9 FCC Red 4185, n.183.
"See Appeal of Local Rate Order at 3.
"See Appeal of Local Rate Order at 3.
''Reconsideration Petition at 3, citing May 6,1994 Questions and Answers No. 6 at 3.
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Federal Communications Commission DA 96-1486
of the Commission's dictates, that the Commission should not penalize TCI-I for the timing of 
its restructuring because the refund deferral rules were allegedly unclear.
DISCUSSION
7. Given the facts described above, for the following reasons, we conclude that the 
Bureau correctly denied TCI-I's appeal. First, TCI-I has not demonstrated that it complied with 
the Commission's subscriber notice requirements. Because TCI-I billed its subscribers monthly 
and did not cycle bill, it was required to provide notice to its subscribers by June 14,1994, which 
was 30 days before the July 14, 1994 deadline for restructuring.22 TCI-I failed to meet this 
requirement because it sent its subscribers notifications at the end of June. Accordingly, because 
TCI-I did not meet the subscriber notification requirements, it did not qualify for a refund 
deferral. Second, TCI-I argues that the Bureau improperly drew a regulatory difference between 
cable systems billing on a multiple or single cycle basis. However, the Commission planned for 
the Bureau to draw a regulatory distinction for those cable systems billing on a multiple or single 
cycle basis. The Commission intended that all cable operators be able to elect the full refund 
deferral period and recognized that due to cycle billing operators may not be able to meet all of 
the requirements23 Cable operators who billed monthly, and therefore could comply with the 
Commission's requirements, were required to notify subscriber by June 14,1994 and to issue bills 
reflecting their restructuring by July 14, 1994. However, cable operators who used cycle billing, 
and therefore could not comply with the Commission's requirements, were required to notify 
subscribers 30 days prior to the rate restructuring and to issue bills to all subscribers reflecting 
the restructuring by August 12, 1994. Third, TCI-I requests that we extend to it the refund 
deferral even if it did not meet the requirements necessary to qualify for the deferral. TCI-I 
claims that the refund deferral rules were unclear. However, TCI-I has failed to offer any 
evidence as to how the refund deferral rules were unclear. Therefore, we find that the 
Commission's rules were not unclear in regard to TCI-I's rate restructuring or the requirements 
needed to qualify for a refund deferral. We will not extend the refund deferral to TCI-I.24
8. In view of the foregoing considerations, we affirm the Cable Services Bureau's 
determinations in the Macomb Order and we find that reconsideration of the Cable Services
"The Commission carved out a limited exception to the June 30,1994 notification deadline for those operators who 
used cycle billing. For those,operators who used cycle billing, the Commission allowed the operator to mail out 
notices at least 30 days in advance of the rate change. May 6,1994 Questions and Answers, Question 5, at 2.
"In support of its request for an extension of refund deferral to its case, TCI argues that the Commission has 
recognized that uncertain treatment of a la carte packages warranted extending the cable operator regulatory relief. 
Comcast Cablevision, (Tallahassee, FL), 9 FCC Red 7773 (Cab. Serv. Bur. 1994) ("Comcast Cablevision"). We find 
TCI-I's reliance on Comcast Cablevision to be unjustified. In the case of Comcast Cablevision, the Commission 
found that the rules regarding a la carte were unclear. Such is not the case here.
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Federal Communications Commission DA 96-1486
Bureau's Macomb Order is not justified. We, therefore, deny TCI-I's Petition for 
Reconsideration.
ORDERING CLAUSES
9. Accordingly, IT IS ORDERED that the Petition for Reconsideration of TCI of 
Illinois, Inc. IS DENIED.
10. This action is taken by the Chief, Cable Services Bureau, pursuant to authority 
delegated by Section 0321 of the Commission's rules. 47 C.F.R. § 0.321.
FEDERAL COMMUNICATIONS COMMISSION
Meredith J. Jones
Chief, Cable Services Bureau
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