Federal Communications Commission DA 96-2118 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of TCI Cablevision of Oregon, Inc. Complaint Regarding Cable Programming Services Tier Rate Increase CUID No. OR0004 (Portland) ORDER Adopted: December 13, 1996 Released: December 18, 1996 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: 1. In this Order we consider a complaint concerning the June 1, 1996 rate increase of TCI Cablevision of Oregon, Inc. ("TCI") for its cable programming services tier ("CPST") in Portland, CUE) No. OR0004. This Order addresses only the reasonableness of TCI's rate increase of $3.28 that became effective on June 1, 1996.1 We conclude that TCI's June 1, 1996 CPST rate increase is not unreasonable. 2. The Communications Act2 authorizes the Federal Communications Commission ("Commission") to review the CPST rates of cable systems not subject to effective competition. This is to ensure that rates charged are not unreasonable. The Telecommunications Act of 19963 ("1996 Act") and our rules implementing the new legislation,4 require that complaints against the CPST rates be filed with the Commission by a local franchising authority ("LFA") that has received subscriber complaints. An LFA may not file a CPST rate complaint unless it receives more than one subscriber complaint within 90 days after such increase becomes effective. If the 1 See TCI Communications, Inc., FCC 96-187 (released April 26, 1996). 2 Section 623(c), as amended, 47 U.S.C. Section 543(c) (1996). 3 Pub. L. No. 104-104, 110 Stat 56 (February 8, 1996) 4 See Implementation of Cable Act Reform Provisions of the Telecommunications Act of 1996, 11 FCC Red 5937 (1996) ("Interim Rules"). 21562 Federal CommsamBcMnapais ComEasssioKB DA 96-2118 Commission finds the rate unreasonable, it shall determine the correct rate and any refund liability.5 3. To justify rates for the period beginning May 15, 1994 through a benchmark or cost of service showing, operators must use the FCC Form 1200 series. Operators are permitted to make changes to their rates on a quarterly basis using FCC Form 1210.6 Operators may alternatively justify adjustments to their rates on an annual basis using FCC Form 1240 to reflect reasonably certain and quantifiable changes in external costs, inflation, and the number of regulated channels that are projected for the twelve months following the rate change.7 Any incurred cost that is not projected may be accrued with interest and added to rates at a later time.8 If actual and projected costs are different during the rate year a "true-up" mechanism is available to correct estimated costs with actual cost changes.9 The "true-up" requires operators to decrease their rates or alternatively permits them to increase their rates to make an adjustment for over or under estimations of these cost changes. 10 4. The Mt. Hood Regulatory Commission ("Mt. Hood") filed a complaint on October 8, 1996 regarding the June 1, 1996 increase in TCI's CPST rate in Portland. Mt. Hood has certified that it has received subscriber complaints and has complied with the Interim Rules.11 TCI submitted FCC Form 1240 to justify the rate increase that went inito effect June 1, 1996. 5 See 47 U.S.C. Section 543(c) (1993). 6 47 C.F.R. Section 76.922(b)(6); see also Second Order on Reconsideration, 9 FCC Red at 4189 n.195. 7 See In the Matter of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, MM Docket No. 92-266, Thirteenth Order on Reconsideration ("Thirteenth Reconsideration Order"), 11 FCC Red 388, 391 (1995). 8 Id. at 392. ' Id. 10 Id. The Commission granted TCI a waiver to allow TCI, in its initial filing of FCC Form 1240, to include cost adjustments over the period of time between the last datfe for which actual cost data is available and the effective date of TCI's new rates. The cost adjustments included for this period are subject to a trae-up at the same time that the required true-up is performed on TCI's initial Form 1240 Projected Period Rates. See In the Matter of Annual Rate Adjustment System for Cable Services Rates, Request for Waiver of Requirements Contained in the Thirteenth Order on Reconsideration, 11 FCC Red at 10235 (1996). " See FCC Form 329 complaint filed by ML Hood dated September 24, 1996 to TCI. 21563 Federal Communications Commission DA 96-2118 5. Upon review of the record before us, we find that TCI has provided sufficient evidence to support a CPST rate increase of $3.2812 We conclude, therefore, that TCI's CPST rate increase of $3.28 which went into effect June 1, 1996 is justified. 6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. § 0.321, that TCI Cablevision of Oregon, Inc.'s CPST rate increase of $3.28 which went into effect on June 1, 1996, in Portland, CUID No. OR0004, IS NOT UNREASONABLE. 7. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47 C.F.R. § 0.321, that the complaint referenced herein against the June 1, 1996 CPST rate increase charged by TCI Cablevision of Oregon, Inc. in Portland, CUID No. OR0004, IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau 13 This finding is based solely on the representations of TCI. Should information come to our attention that theserepresentations 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. 21564