HomeMy WebLinkAboutRES-1998-003 Cable TV Rate Adjustment with Time Warner Resolution - 01-20-1998-5c
STATE OF NORTH CAROLINA
COUNTY OF HILLSBOROUGH
BEFORE THE BOARD OF COMMISSIONERS OF ORANGE COUNTY
1N THE MATTER OF: )
Review of FCC 1240 Annual Basic )
Service Tier Rate Adjustment Request )
filed by Time Warner Cable for )
Orange County, NC-0256 & NC- )
0276. )
Order Finding TWC's 1998
Proposed $9.04 and $8.20 Basic
Service Tier Maximum Permitted
Rates as Unreasonable and Setting
the BST MPRs at $8.84 and $8.02 for
the Carrboro and Chapel Hill Cable
Television Systems
BY THE BOARD OF COMMISSIONERS
WHEREAS, on October 1, 1997, Time Warner Cable submitted two FCC 1240 Annual
Maximum Permitted Rate filing requests for Regulated Cable Services with Orange County, one for
the Chapel Hill system, the other for the Durham system. Both filings cover external costs, inflation,
and cable system upgrade costs for the projected period of January 1 through December 31, 1998; and
above stated costs for the true up period of January 1 through December 31, 1997;
WHEREAS, Time Warner Cable is permitted, pursuant to the Social Contract, to estimate and
recover anticipated inflation, external costs, and cable system upgrade costs for the period of January
through December 31, 1998;
WHEREAS, the County received a report from its consultants stating that Time Warner's FCC
1240 rate calculations are not in compliance with Federal Communications Commission rate making
rules, and that the proposed maximum permitted BST rates of $9.04 for the Carrboro System
subscribers (NC-0256) and $8.20 for Chapel Hill System subscribers (NC-0276) are unreasonable.
WHEREAS, FCC rules grant local franchise authorities an initia190-day review period,
measured from the date of receipt of the FCC 1240 filing by the franchise authority, to review the cable
operator's rate filings. If said 90-day review period expires before the rates go into effect, the franchise
authority retains review and refund authority past the initia190-day review period as long as all
inquiries from the cable operator regarding said review are responded to in writing within 15 days of
said inquiry;
WHEREAS, Time Warner's rate filings include cost estimates for the calendar year of 1998,
and said estimates may require adjustment (true up) in the cable operator's subsequent FCC 1240 rate
filings; and,
WHEREAS, Orange County is certified with the FCC to regulate basic service tier rates,
equipment and installation services provided by Time Warner Cable in franchise.
IT IS A FINDING:
THAT Time Warner Cable did not structure its 1997 true-up charges for the second through
fourth quarter on the FCC's currently available inflation factor of 1.77%;
THAT Time Warner Cable did not structure its 1998 projected charges for the period January
through December, 1998 on the FCC's currently available inflation factor of 1.77%;
THAT Time Warner Cable has not substantiated the adjustment of its maximum permitted
Basic Service Tier rate of $9.04 for the Carrboro System subscribers, based on past inflation and
current inflation indices;
THAT Time Warner requested maximum permitted BST rate ($9.04) for the Carrboro system
subscribers is determined to be unreasonable;
THAT, Time Warner has selected to charge the Basic Service Tier rate of $9.01 for the
Carrboro System subscribers during the 1998 calendar year in Orange County which exceeds the
justified MPR of $8.84;
THAT Time Warner Cable has not substantiated the adjustment of its proposed maximum
permitted Basic Service Tier rate of $8.20 for the Chapel Hill System subscribers, based on past
inflation and current inflation costs;
THAT Time Warner requested maximum permitted BST rate ($8.20) for the Chapel Hill
System subscribers is determined to be unreasonable; and
THAT, Time Warner has selected to charge the Basic Service Tier rate of $8.18 for the Chapel
Hill System subscribers during the 1998 calendar year in Orange County which exceeds the justified
MPR of $8.02.
IT IS THEREFORE ORDERED:
THAT Time Warner Cable's Basic Service Tier rates assessed subscribers shall not exceed the
maximum permitted rate of $8.84 for the Carrboro System subscribers and $8.02 for Chapel Hill
System subscribers during 1998, subject to modifications in subsequent findings by the franchise
authority;
THAT the County retains its authority to issue refunds or rate roll backs after the initial 90-day
review period with respect to the rates set out in the FCC 1240 filings, subject to subsequent findings
by the franchise authority;
THAT Time Warner must keep a full and accurate account of all revenues and costs associated
with the aforementioned cable rate adjustments;
THAT Time Warner revise its Form 1240 for the 1997 true-up and 1998 projected periods by
applying the correct inflation values described in this Order and file an amended FCC Form 1240 with
the County within thirty (30) days of this Order; and
THAT Time Warner is directed to toll all revenues related to its proposed increase, issue
refunds and roll back BST rates to the MPRs set by this Order immediately upon the adoption of this
Order by the County.
ISSUED BY ORDER OF THE COUNTY BOARD OF COMMISSIONERS
This the 20th day of January, 1998.
ATTEST:
CHAIRMAN
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Deliver a copy of the Report and an Executed Order
via Certified U.S. Mail to: Time Warner Cable
Copy to: City of Raleigh/TJCOG