Opinion ID: 560450
Heading Depth: 2
Heading Rank: 3

Heading: Treatment of the SATCOM F-3 Insurance Proceeds

Text: 24 After the 1979 loss of SATCOM F-3, Americom received insurance proceeds covering both the asset value of the satellite and lost revenues. Americom paid the $20.8 million proceeds representing lost revenues to its corporate parent, then RCA. The Commission found in its 1987 Order that Americom's subscribers, not its corporate parent, had paid the premiums on the SATCOM F-3 insurance policy; it concluded, therefore, that Americom should credit its 1988 fixed term transponder service customers in some manner for some portion of the insurance proceeds of SATCOM F-3. 2 FCC Rcd at 2370. The Commission requested supplemental briefing on the issue of how the customers should be credited. Id. at 2370-71. 25 In its 1989 Order, the FCC credited the $20.8 million to Americom's customers as revenue received from them over SATCOM F-3's projected useful life. The Commission reasoned that because Americom had never attained its authorized rate of return during that period, it would not order Americom to pay refunds to its customers or otherwise adjust its rates. See 4 FCC Rcd at 6598-99. 26 The cable programmers argue that the Commission's decision not to order refunds amounts to a retroactive rate increase. We reject this argument, for the simple reason that the Commission's order is not a rate increase, nor even its functional equivalent. Reply Brief for Petitioners Showtime et al. at 15. Rather, the Commission simply refused to require Americom to reduce the programmers' rates, because, as it reasonably found, even when the $20.8 million was credited as revenue received, Americom had earned far less than its authorized rate of return. 13