**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of ) )

Bresnan Communications Company ) CUID No. GA0843 (Riceboro) )

Complaint Regarding Cable Programming )

Services Tier Rates )

**ORDER**

**Adopted: September 12, 2001 Released: September 14, 2001**

By the Acting Chief, Financial Analysis and Compliance Division, Cable
Services Bureau:

Number range level0Number range level1Number range level2Number range
level3Number range level4Number range level5Number range level6Number
range level71. In this Order we consider a complaint filed against the
October 1, 1995 rate increase by the above-referenced operator
(\"Operator\")[^1] for its cable programming services tier (\"CPST\") in
the community referenced above. This Order addresses only the
reasonableness of Operator's CPST rates beginning October 25, 1995, the
date the complaint was filed with the Federal Communications Commission
(\"Commission\").

2\. Under the Communications Act,[^2] at the time the referenced
complaint was filed, the Commission was 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[^3] (\"1992 Cable Act\") required
the Commission to review CPST rates upon the filing of a valid complaint
by a subscriber or local franchising authority (\"LFA\"). The filing of
a complete and timely complaint triggers an obligation upon the cable
operator to file a justification of its CPST rates.[^4] The Operator has
the burden of demonstrating that the CPST rates complained about are
reasonable.[^5] If the Commission finds a rate to be unreasonable, it
shall determine the correct rate and any refund liability.[^6]

3\. Operators must use the FCC Form 1200 series to justify rates for the
period beginning May 15, 1994.[^7] Cable operators may justify rate
increases on a quarterly basis using FCC Form 1210, based on the
addition and deletion of channels, changes in certain external costs and
inflation.[^8] Operators may justify 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.[^9] Any incurred cost that is not projected may be accrued with
interest and added to rates at a later time.[^10]

4\. Upon review of Operator's FCC Form 1200, we find Operator's
calculated maximum permitted rate (\"MPR\") of \$3.11 for its CPST-1 and
\$10.43 for its CPST-2 to be reasonable. In its first FCC Form 1210,
covering the period April 1, 1994 through June 30, 1994, Operator claims
to have collapsed its two CPST tiers into one and sought to justify the
rate for its remaining CPST by combining its calculated rates for both
tiers. Upon review, we requested that Operator provide additional
information on the FCC Form 1210, to reflect the actual channel movement
that occurred when Operator created a single CPST. Operator filed this
information under protest, stating that it adjusted its rates in 1994
using the best information available at that time.[^11] However, our
review reveals that the CPST-1, which had three channels, was not
collapsed into the CPST-2. Rather, two of the channels were dropped and
the third channel was moved to the basic services tier (\"BST\"). The
original CPST-2, which had 10 channels, remained at 10 channels,
although Operator substituted two new channels for two existing channels
that were moved to the BST. Based on the revised FCC Form 1210
information provided by Operator, we find that Operator justified an MPR
of \$11.21 for the remaining CPST, effective July 1, 1994.

5\. Upon review of Operator's FCC Form 1210, covering the period July 1,
1994 through December 31, 1994, we adjusted the Line A2 (Previous Full
Reduction Rate) to coincide with Operator's previous revised FCC Form
1210. Our adjustment reduced Operator's MPR from \$14.58 to \$11.58,
effective January 1, 1995. Upon review of Operator's FCC Form 1210,
covering the period January 1, 1995 through March 31, 1995, we adjusted
the Line A2 (Previous Full Reduction Rate) to coincide with Operator's
previous revised FCC Form 1210. Our adjustment reduced Operator's MPR
from \$14.57 to \$11.57, effective April 1, 1995. Upon review of
Operator's FCC Form 1210, covering the period April 1, 1995 through June
30, 1995, we adjusted the Line A2 (Previous Full Reduction Rate) to
coincide with Operator's previous revised FCC Form 1210. Our adjustment
reduced Operator's MPR from \$14.95 to \$11.87, effective July 1, 1995
through March 31, 1996. Because Operator's actual CPST rate of \$14.95,
effective October 25, 1995 through March 31, 1996, exceeds its revised
MPR, we find Operator's actual CPST rate of \$14.95, effective October
25, 1995 through March 31, 1996, to be unreasonable.[^12]

6\. Upon review of Operator's FCC Form 1240 for the projected period
April 1, 1996 through March 31, 1997, we adjusted Line A1 (Current
Maximum Permitted Rate) to coincide with Operator's previous revised FCC
Form 1210, in accordance with our FCC Form 1240 Instructions. We also
adjusted the Inflation Factors at Worksheet 1 (True-Up Period Inflation)
which adjusted Line C3 (Inflation Factor for True- Up Period 1) and Line
C4 (Inflation Factor for True-Up Period 2). We adjusted Line C5 (Current
FCC Inflation Factor) to 1.0222.[^13] Our adjustments reduced Operator's
MPR to \$10.73, effective April 1, 1996 through December 31, 1996. From
January 1, 1997 through March 31, 1997, Operator's MPR increased to
\$13.41, a total of \$10.73 plus a network upgrade amount of \$2.68,
calculated by Operator on its FCC Form 1235. Because Operator's actual
CPST rate of \$16.32, effective April 1, 1996 through March 31, 1997,
exceeds its revised MPRs, we find Operator's actual CPST rate of
\$16.32, effective April 1, 1996 through March 31, 1997, to be
unreasonable. Upon review of Operator's FCC Form 1240 for the projected
period April 1, 1997 through March 31, 1998, we adjusted Line A1
(Current Maximum Permitted Rate) to coincide with Operator's previous
revised FCC Form 1240. We also adjusted Line C3 (Inflation Factor for
True- Up Period 1) and Line C5 (Current FCC Inflation Factor). We
adjusted worksheet 8 to reflect the actual CPST rates charged by
Operator during its true-up period. Our adjustments reduced Operator's
MPR to \$8.68, which, when added to the network upgrade amount of
\$2.68, resulted in a total MPR of \$11.36, effective April 1, 1997
through March 31, 1998. Because Operator's actual CPST rate of \$17.47,
effective April 1, 1997 through March 31, 1998, exceeds its revised MPR,
we find Operator's actual CPST rate of \$17.47, effective April 1, 1997
through March 31, 1998, to be unreasonable.

7\. Upon review of Operator's FCC Form 1240 for the projected period
April 1, 1998 through March 31, 1999, we adjusted Line A1 (Current
Maximum Permitted Rate) to coincide with Operator's previous revised FCC
Form 1240. We also adjusted Line C3 (Inflation Factor for True-Up
Period 1) and Line C5 (Current FCC Inflation Factor). Our adjustments
reduced Operator's MPR to \$11.15, which, when added to the network
upgrade amount of \$2.68, resulted in a total MPR of \$13.83, effective
April 1, 1998 through March 31, 1999. Because Operator's actual CPST
rate of \$19.74, effective April 1, 1998 through March 31, 1999, exceeds
its revised MPR, we find Operator's actual CPST rate of \$19.74,
effective April 1, 1998 through March 31, 1999, to be unreasonable.

8\. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the
Commission's rules, 47 C.F.R. §0.321, that the CPST rates charged by the
Operator in the community referenced above, effective October 25, 1995
through March 31, 1999, ARE UNREASONABLE.

9\. 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 referenced above that portion of the amount
paid in excess of the maximum permitted CPST rate of \$11.36 per month
(plus franchise fees), plus interest to the date of the refund, for the
period beginning December 1, 1997 through March 31, 1998.

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 referenced above that portion of the amount
paid in excess of the maximum permitted CPST rate of \$13.83 per month
(plus franchise fees), plus interest to the date of the refund, for the
period beginning April 1, 1998 through March 31,1999.

11\. IT IS FURTHER ORDERED that Operator shall promptly determine the
overcharges to CPST subscribers for the stated periods, and shall within
30 days of the release of this Order, file a report with the Chief,
Cable Services Bureau, stating the cumulative refund amount so
determined (including franchise fees and interest), describing the
calculation thereof, and describing its plan to implement the refund
within 60 days of Commission approval of the plan.

12\. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the
Commission's rules, 47 C.F.R. §0.321, that the October 25, 1995
complaint referenced herein against the rates charged by Operator in the
community referenced above, IS GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

Kathleen F. Costello, Acting Chief

Financial Analysis and Compliance Division

Cable Services Bureau

[^1]: The term \"Operator\" includes Operator's successors and
    predecessors in interest.

[^2]: Communications Act, Section 623(c), *as amended*, 47 U.S.C.
    §543(c) (1996).

[^3]: Pub. L. No. 102-385, 106 Stat. 1460 (1992).

[^4]: *See* Section 76.956 of the Commission\'s rules, 47 C.F.R.
    §76.956.

[^5]: *Id.*

[^6]: *See* Section 76.957 of the Commission\'s rules, 47 C.F.R. §
    76.957.

[^7]: *See* Section 76. 922 of the Commission\'s rules, 47 C.F.R. §
    76.922.

[^8]: *Id.*

[^9]: *Id.*

[^10]: *Id*.

[^11]: *See* letter dated October 22, 1999 from Daniel J. White,
    Director of Operations Analysis, Bresnan Communications.

[^12]: 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
    Cable Services Bureau\'s public reference room, or through the
    Commission\'s copy contractor, International Transcription Services
    (ITS), 1231 20th Street N.W., Washington, DC, 20036, or by calling
    ITS at (202) 857- 3800.

[^13]: In accordance with the FCC Form 1240 Instructions, we used the
    most recent Inflation Adjustment Factors released by the Cable
    Services Bureau for the relevant time periods. *See* Public Notice,
    DA 01-1577 (released July 3, 2001).