HomeMy WebLinkAboutRES-2005-036 Adoption of 2005 Rate Order for Cable Services in Unincorporated Orange County~~
ORANGE COUNTY
NORTH CAROLINA
Accepting the Rates Contained in the FCC Form 1240 and Form 1205 Filed by Time Warner Cable for
2005 and Rejecting the Form 1235 Rate Requested by Time Warner Cable Because the Form FCC1235
"Add-on" Rate No Longer Complies with the FCC's Cost of Service Rate Rules and Ordering That a
Revised Form 1235 and Financial Upgrade Cost Recovery Summary Statement Be Presented to Orange
County within 30-days from the Date of This Rate Order. Further, Orange County Adopts the Report
Prepared by Action Audits, LLC., as its Own.
WHEREAS, Orange County, North Carolina ("County") has initiated the regulation of rates and
charges for the provision ofbasic service, equipment and installation of cable television pursuant to the Cable
Television Consumer Protection and Competition Act of 1992;
WHEREAS, the County is certified by the FCC to regulate basic service tier rates and permitted to
regulate rates for basic cable service, equipment and installation;
WHEREAS, Time Warner Cable is a duly franchised cable operator for the County and whose rates
for basic service, equipment and installation are regulated by the County;
WHEREAS, on September 30, 2004 the County received the following forms: 1240, 1235; and 1205
from Time Warner Cable;
WHEREAS, the County has received and carefully considered a report from Action Audits, LLC
(hereinafter referred to as "Report") which reviewed the forms 1240, 1235, and 1205;
WHEREAS, the Report states that the form 1240 sets the regulated rate for the Basic Service Tier;
WHEREAS, the Report states that the form 1240 rate calculations properly calculate inflation,
programming, copyright fees;
WHEREAS, the form 1235 sets the regulated rate for the Monthly Network Upgrade Add-on charge;
WHEREAS, the Report states that continued reliance on the initial form 1235 rate calculation to
properly recover upgrade costs is no longer valid;
WHEREAS, the Report states that the form 1205 properly sets the regulated rate for Installation and
Equipment rates;
WHEREAS, after appropriate public notice, a public hearing was held for the purpose of allowing
the public and interested parties to comment on the rates;
WHEREAS, Time Warner Cable was given the opportunity to provide written and oral comments
to the County with respect to the rates and the draft form of this Rate Order; and
.WHEREAS, the County has carefully considered the materials, forms and statements submitted by
Time Warner Cable.
Now, Therefore, Orange County, North Carolina Makes the Following Findings of Fact and Conclusions
of Law with Respect to the Proposed Rate to be Charged Time Warner Cable Customers:
hereto;
The County incorporates by reference all of the preamble set forth above;
The County has reviewed the Report and incorporates by reference the Report, which is attached
The County fmds that Time Warner Cable's Maximum Permitted Rate for Basic Tier Service ($10.26
for NC-0276a, $13.61 for NC-0276b, and $11.30 for NC-0256) as set forth in the form 1240 does comply with
the FCC's rate regulations;
The County finds that the initial "Add-on"Rate for Basic Tier Service contained in the form1235 does
not comply with the FCC's Abbreviated Cost-of-Service Rules for system upgrades. Said rules require the
upgrade cost allocation recovery fee based on channeUservice/bandwidth allocation which set an original "Add-
on" rate of $1.81 for NC-0276a, $2.11 for NC-0276b, and $1.45 for NC-0256. Going forward, the FCC's Cost
of Service rules require the operator to ensure that regulated service subscribers do not pay for unregulated
service costs, and that the Company does not over recover the cost of its upgrade, by periodically recalculating
its "Add-on" rate to accommodate such changes as the proportion of regulated bandwidth, the current customer
count and capital cost recovery reductions attributed to accumulated depreciation;
The continued reliance on the form 123 5 rate approved 5-years earlier does not comply with the FCC's
Abbreviated Cost of Service Rules for system upgrades capital investment recovery; and
The County finds that the Installation and Equipment rates set forth in the form 1205 comply with the
FCC's rate regulations.
Now, Therefore, Be it Ordered by Orange County, North Carolina, That:
Time Warner Cable's Maximum Permitted Rate for Basic Tier Service rate contained in the form
FCC 1240 does comply with the FCC's rate regulations and is hereby accepted;
Time Warner Cable is permitted to implement its form 1240 ($10.26 for NC-0276a, $13.61 for NC-
0276b, and $11.30 for NC-0256) rate beginning January 1, 2005;
Time Warner Cable's form 1235 $1.81 for NC-0276a, $2.11 for NC-0276b, and $1.45 for NC-0256
"Add-on" rate no longer complies with the FCC's Cost of Service rules and is rejected;
Time Warner Cable is notpermitted nor authorized to recover its form 1235 $1.81 for NC-0276a, $2.11
for NC-0276b, and $1.45 for NC-0256 "Add-on" rate beginning January 1, 2005;
Time Warner Cable must submit to the County within 30-days from the date of this Rate Order for
approval a revised form 1235 that properly calculates the current Add-on rate using the FCC's Cost of Service
Rules;
Time Warner Cable is required to submit to the County within 30-days from the date of this Rate Order
a financial statement showing the original upgrade investment (cost), accumulated depreciation by year, current
residual value by year, the amount recovered to date by year, an estimate of the remaining cost recovery period
and the customer count for each year since the Add-on rate has been in effect;
Time Warner Cable's Installation and Equipment rates contained in the form 1205 comply with the
FCC's rate regulations and are accepted;
The County adopts the Report as its own;
The County reserves its rights to review and consider any new information and issue a revised Rate
Order based on that evidence;
This Rate Order will be effective immediately and provided to Time Warner Cable via US Certified
Mail; and
A copy of this Rate Order shall be released to the public.
~ ~~S"
Read, Adopted and Approved by Orange County this the ~ Day of /x
Attest:
Clerk
De]iver via Certified U.S. Mail to: Paul Baccellieri, VP Finance @ Time Warner Cabe 101 Innovation AV-, Suite 100, Morrisville, NC
27560.
File copy to: Robert F. Sepe, Action Audits, LLC @ 101 Pocono Lane, Cary, NC 27513