HomeMy WebLinkAboutNS RES-2001-016 Order Finding Time Warner Cable TV Rates Reasonable13
STATE OF NORTH CAROLINA
ORANGE COUNTY NC -0276 & NC -0256
BEFORE ORANGE COUNTY
IN THE MATTER OF:
)
Review of FCC 1240 Annual Rate
)
ORDER
Adjustment Request, FCC 1235
)
FINDING TIME WARNER
Abbreviated Cost of Service Rate Request,
CABLE'S 2001 FCC 1240 BASIC
and FCC 1205 Equipment and Installation
)
SERVICE TIER, FCC 1235 COST
Rate Request, filed by Time Warner
)
OF SERVICE, AND FCC 1205
Cable for ORANGE COUNTY
)
EQUIPMENT AND INSTALLATION
NC -0276 & NC -0256
)
RATES REASONABLE
BY ORANGE COUNTY:
WHEREAS, Time Warner Cable submitted FCC 1240 Updating Annual Maximum Permitted
Rates filings for Regulated Cable Services with the County. These filings apply to franchises NC- 0276
and NC -0256, and cover external costs, inflation, and cable system upgrade costs for the true up
period of October 1, 1999 through September 30, 2000, and the projected period of January 2001
through December, 2001;
WHEREAS, Time Warner submitted to the County in 1999 FCC 1235 Abbreviated Cost of
Service Filings for Cable Network Upgrades; these filings established the cost of service upgrade
rates for only NC -0276; and these rates were carried forward and used as the upgrade rates for 2000
and 2001; these rates were previously found to be reasonable by the County, and covered capital
expenses directly related to cable system upgrades prior to January 1, 2001;
WHEREAS, Time Warner submitted to the County in September of 2000 an FCC 1235
Abbreviated Cost of Service Filing for Cable Network Upgrades, which established the cost of
service upgrade rate for only NC -0256, and covers capital expenses directly related to cable system
upgrades prior to January 1, 2001;
WHEREAS, Time Warner Cable submitted an FCC 1205 Equipment and Installation Costs
filing with the County, covering equipment and installation costs aggregated on a state -wide basis;
WHEREAS, the County received a report from its consultant stating that Time Warner submitted
FCC 1240, FCC 1235 and FCC 1205 rate filings on or about September 29, 2000, and also
submitted FCC 1235 filings for NC -0276 in September 1999; the FCC published an updated inflation
factor on October 4, 2000; Time Warner's FCC 1240s, FCC 1235s and FCC 1205 rate calculations
comply with FCC rate - making rules, and the requested maximum permitted Basic Service Tier,
Network Upgrade Cost of Service, and Equipment and Installation rates are reasonable;
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WHEREAS, the consultant's report stated that Time Warner used in its 2001 FCC 1240 filings an
inflation factor of 3% for the second, third and fourth quarters of 2000, and for the 2001 projected
period; the FCC published the updated 2.4% inflation figure on October 4, 2000, five days after Time
Warner completed its rate filings, it would be in the public interest if Time Warner amends its FCC
1240 rate filing prior to completing its next FCC 1240 rate filing in September 2001 for 2002; and that
this amended FCC 1240 will incorporate updated inflation figures for the second, third and fourth
quarters of 2000 and the projected period of 2001;
WHEREAS, FCC rules grant local franchise authorities an initial ninety (90) day review period,
measured from the date of receipt of said filing by the franchise authority, with which to review the
cable operator's FCC 1240 rate filing. If said ninety (90) day review period expires before the rates go
into effect, the franchise authority retains review and refund authority past the initial ninety (90) day
review period as long as all inquiries from the cable operator regarding said review are responded to in
writing within fifteen (15) days of said inquiry; and
WHEREAS, the County is certified with the FCC to regulate Basic Service Tier rates provided by
Time Warner Cable in franchises NC -0276 and NC -0256.
IT IS A FINDING:
THAT Time Warner Cable's Basic Service Tier rate assessed subscribers for franchise NC -0276
shall not exceed the maximum permitted rate of $9.91 and $11.92, for the Chapel Hill and Durham
systems, respectively, and shall not exceed $10.62 for franchise NC -0256, during the projected period,
subject to modifications by subsequent findings of the cable operator or franchise authority;
THAT Time Warner's FCC 1235 add -on cost of service upgrade charge shall not exceed $1.81 and
$2.11, monthly, per subscriber, for franchise NC- 0276, Chapel Hill and Durham systems,
respectively; and Time Warner's FCC 1235 add -on cost of service upgrade charge shall not exceed
$1.45 for franchise NC -0256, during the projected period, subject to modifications by subsequent
findings of the cable operator or franchise authority;
THAT Time Warner's FCC 1205 Equipment and Installation Hourly Service Charge shall not
exceed $28.39;
THAT Time Warner Cable may charge a Basic Service Tier rate below the approved maximum
permitted rate, but not above it;
THAT Time Warner may charge a cost of service Network Upgrade Charge rate below the
approved maximum permitted upgrade rate, but not above it;
THAT Time Warner Cable has substantiated the other adjustments to its cable service rates based
on past and estimated cost elements; and
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THAT Time Warner has complied with FCC rate - making rules, and its requested maximum
permitted Basic Service Tier rates, and Cost of Service Network Upgrade Charge "add -on" rates, and
Equipment and Installation rate are found to be reasonable; and
THAT it will be in the public interest if Time Warner amends its 2001 FCC 1240 rate filings using
updated FCC inflation figures for the second, third and fourth quarters of 2000, and the projected
period of 2001, prior to completing its FCC 1240 filing for 2002.
IT IS THEREFORE ORDERED:
THAT the Maximum Permitted Basic Service Tier rate for Time Warner subscribers for the
projected period shalt not exceed $9.91, for NC-0276 Chapel Hill system; $11.92 for NC -0276,
Durham system; and $10.62 for NC -0256, the Carrboro system, per subscriber, per month,
subject to subsequent findings by the County to the contrary, during the projected period of 2001;
THAT the "add -on" Cost of Service Cable Network Upgrade charge not exceed $1.81, for NC-
0276 Chapel Hill system; $2.11 for NC -0276, Durham system; and $1.45 for NC -0256, the Carrboro
system, per subscriber, per month, subject to subsequent findings by the County to the contrary, during
the projected period of 200
THAT the Combined BST rate and Cost of Service Network Upgrade Charge rate shall not
exceed $11.72, for NC -0276. Chapel Hill system; $14.03 for NC -0276, Durham system; and $12.07
for NC -0256, the Carrboro system, per subscriber, per month, subject to subsequent findings by the
County to the contrary, during the projected period of 200
THAT the Equipment and Installation charge during the projected period of 2001 shall not exceed
$28.39;
THAT the County retains its authority to issue refunds or rate role backs after the initial ninety
(90) day review period with respect to the restructured rate set out in the FCC 1240 and FCC 1205 rate
mss; and
THAT Time Warner must keep a full and accurate account of all revenues and costs associated with
the aforementioned cable rate adjustments.
ISSUED BY ORDER OF ORANGE COUNTY
This the day of , 2001.
ATTEST:
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Deliver Report and Order via Certified U.S. Mail to: Time Warner Cable
Copy to: Action Audits