**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of ) CUID Nos. VA0301 (Fairfax County)

) VA0318 (Vienna)

Media General Cable of Fairfax County ) VA0326 (City of Fairfax)

) VA0327 (Falls Church)

Petition for Reconsideration ) VA0346 (Herndon)

and Refund Plan )

**ORDER ON RECONSIDERATION**

**AND REFUND PLAN ORDER**

**Adopted: January 18, 2000 Released: January 20, 2000**

By the Deputy Chief, Cable Services Bureau:

1\. In this Order we consider a Petition for Reconsideration
(\"Petition\") filed by the above- referenced operator (\"Operator\") of
our Order, DA 97-1657 (\"Prior Order\")[^1] which granted complaints
filed against the rates charged by Operator for its cable programming
services tier (\"CPST\") in the communities referenced above. On
September 4, 1997, Operator filed its Petition along with a request for
stay of our Prior Order and a refund plan ("Refund Plan") calculated in
accordance with Operator's Petition. In this Order, we consider
Operator\'s Petition as well as the request for stay and the Refund
Plan.

2\. Under the Communications Act,[^2] the Federal Communications
Commission (\"Commission\") is 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
Telecommunications Act of 1996 (\"1996 Act\")[^4] and our rules
implementing the legislation (\"Interim Rules\"),[^5] required that a
complaint against the CPST rate be filed with the Commission by an LFA
that has received more than one subscriber complaint.[^6] The filing of
a complete and timely complaint triggers an obligation upon the cable
operator to file a justification of its CPST rates.[^7] The Operator has
the burden of demonstrating that the CPST rates complained about are
reasonable.[^8] If the Commission finds a rate to be unreasonable, it
shall determine the correct rate and any refund liability.[^9]

3\. Operators must use the FCC Form 1200 series to justify rates for the
period beginning May 15, 1994.[^10] Cable operators may also justify
rate increases based on the addition and deletion of channels, changes
in certain external costs and inflation, by filing FCC Form 1210.[^11]
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.[^12] Any
incurred cost that is not projected may be accrued with interest and
added to rates at a later time.[^13]

4\. In our Prior Order, upon review of Operator\'s FCC Form 1240 for the
projected period August 1, 1996 through July 31, 1997 (\"1996 1240\"),
we recalculated Operator\'s Worksheet 1, Line 113 in accordance with FCC
Form 1240 instructions. The recalculation reduced Operator\'s inflation
factor at Line C1 to 1.0056 rather than 1.0222. This adjustment resulted
in a revised maximum permitted rate (\"MPR\") for the projected period
of \$21.21 rather than Operator\'s calculated MPR of \$21.53. Because
Operator\'s actual CPST rate of \$21.53, effective August 1, 1996,
exceeded its revised MPR, we found Operator\'s actual CPST rate of
\$21.53, effective August 1, 1996 through July 31, 1997, to be
unreasonable. Upon review of Operator\'s FCC Form 1240 for the projected
period August 1, 1997 through July 31, 1998 (\"1997 1240\"), we adjusted
Operator\'s Line A1 to reflect Operator\'s MPR of \$21.21 from its
previous revised FCC Form 1240. We also adjusted Operator\'s Modules D,
F and H to coincide with the previous revised FCC Form 1240, in
accordance with the FCC Form 1240 instructions. These adjustments
resulted in a revised MPR of \$21.31 rather than Operator\'s calculated
MPR of \$21.92. Because Operator\'s actual CPST rate of \$21.92,
effective August 1, 1997, exceeded its revised MPR, we found Operator\'s
actual CPST rate of \$21.92, effective August 1, 1997, to be
unreasonable.

5\. In its Petition, Operator admits that it incorrectly calculated its
inflation factor on Worksheet 1, Line 113 of its 1996 1240. However,
Operator argues that it was entitled to recover previously unclaimed
inflation for the period July 1, 1995 through December 31, 1995 in the
1996 1240. We will allow Operator to recover previously unclaimed
inflation for this period because Operator is entitled to the inflation
adjustment. Operator's additional requests for an increased Current
Inflation Factor are without merit and are denied.[^14] We adjusted
Operator's 1996 1240 to include the unclaimed inflation which resulted
in a revised MPR of \$21.43, effective August 1, 1996, rather than the
rate of \$21.21 prescribed in our Prior Order. Because Operator's actual
CPST rate of \$21.53 exceeds its revised MPR, we find Operator's actual
CPST rate of \$21.53 to be unreasonable, effective August 1, 1996
through July 31, 1997.[^15] We also recalculated the 1997 1240 to adjust
Line A1 to \$21.43. Our calculations resulted in a revised MPR of
\$21.74, effective August 1, 1997, rather than the rate of \$21.31
prescribed in our Prior Order. Because Operator's actual CPST rate of
\$21.92 exceeds its revised MPR, we find Operator's actual CPST rate of
\$21.92 to be unreasonable, effective August 1, 1997 through July 31,
1998. We will modify our Prior Order to reflect the reduction in
Operator's refund liability.[^16] Because Operator's Refund Plan was
calculated incorrectly, we will not accept it and will require Operator
to file a revised refund plan in accordance with this Order. Because we
resolve Operator's Petition herein, we will dismiss Operator's request
for stay as moot.

6\. Accordingly, IT IS ORDERED, pursuant to Section 1.106 of the
Commission\'s rules, 47 C.F.R. § 1.106, that Operator\'s Petition for
Reconsideration In the Matter of Media General Cable of Fairfax County,
DA 97-1657, 12 FCC Rcd 23590 (1997), IS GRANTED IN PART AND DENIED IN
PART TO THE EXTENT INDICATED HEREIN.

7\. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the
Commission\'s rules, 47 C.F.R. § 0.321, that In the Matter of Media
General Cable of Fairfax County, DA 97-1657, 12 FCC Rcd 23590 (1997), IS
AMENDED TO THE EXTENT INDICATED HEREIN.

8\. IT IS FURTHER ORDERED, pursuant to Section 1.106 of the
Commission\'s rules, 47 C.F.R. §1.106, that Operator\'s Petition for
Stay IS DISMISSED AS MOOT.

9\. IT IS FURTHER ORDERED, pursuant to Section 76.962 of the
Commission\'s rules, 47 C.F.R. § 76.962, that Operator\'s Refund Plan IS
NOT ACCEPTED.

10\. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the
Commission\'s rules, 47 C.F.R. § 0.321, that the CPST rate of \$21.53,
charged by Operator in the communities referenced above, effective
August 1, 1996 through July 31, 1997, IS UNREASONABLE.

11\. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the
Commission\'s rules, 47 C.F.R. § 0.321, that the CPST rate of \$21.92,
charged by Operator in the communities referenced above, effective
August 1, 1997 through July 31, 1998, IS UNREASONABLE.

12\. 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 communities referenced above that portion of the
amount paid in excess of the maximum permitted CPST rate of \$21.43 per
month (plus franchise fees), plus interest to the date of the refund,
for the period April 1, 1997 through July 31, 1997.

13\. 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 communities referenced above that portion of the
amount paid in excess of the maximum permitted CPST rate of \$21.74 per
month (plus franchise fees), plus interest to the date of the refund,
for the period August 1, 1997 through July 31, 1998.

14\. 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.

FEDERAL COMMUNICATIONS COMMISSION

William H. Johnson

Deputy Chief, Cable Services Bureau

[^1]: *See* In the Matter of Media General Cable of Fairfax County, DA
    97-1657, 12 FCC Rcd 23590 (1997).

[^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]: Pub. L. No. 104-104, 110 Stat. 56 (1996).

[^5]: *See* Implementation of Cable Act Reform Provisions of the
    Telecommunications Act of 1996, 11 FCC Rcd 5937 (1996).

[^6]: *See* Communications Act, Section 623(c), *as amended*, 47 U.S.C.
    Section 543(c) (1996).

[^7]: *See* Section 76.956 of the Commission\'s Rules, 47 C.F.R.
    §76.956.

[^8]: *Id.*

[^9]: *See* Section 76.957 of the Commission\'s Rules, 47 C.F.R. §
    76.957.

[^10]: *See* Section 76. 922 of the Commission\'s Rules, 47 C.F.R. §
    76.922.

[^11]: *Id.*

[^12]: *Id.*

[^13]: *Id*.

[^14]: Because we are adjusting Operator's FCC Form 1240s, we use the
    most recent Inflation Adjustment Factors released by the Cable
    Services Bureau for the relevant time periods. *See* Public Notice,
    DA 99-3032 (released December 30, 1999).

[^15]: 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.

[^16]: Because Operator's refund liability for the period from August 1,
    1996 through March 31, 1997 was trued-up in its 1997 1240, which we
    review herein, Operator is not required to separately calculate that
    refund liability as part of its refund plan.