HomeMy WebLinkAboutAgenda - 12-20-94 - IX-C 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 20, 1994
SUBJECT: Cable TV Basic Service, Equipment and Installation Rate Approval
DEPARTMENT: Manager's Office PUBLIC HEARING YES: NO: X
ATTACHMENT(S): INFORMATION CONTACT: Albert Kittrell
Report and Findings TELEPHONE NUMBER-
Att I - Orange County Hillsborough -732-8181
Att II - Efland Area Chapel Hill -968-4501
Att III Durham Area Mebane -227-2031
Durham -688-7331
PURPOSE:
To approve Cable TV Basic Service, Equipment and Installation Rates.
BACKGROUND:
On September 21, 1993, the Board applied to the Federal Communications Commission
(FCC) for authorization to regulate certain cable rates. On December 5, 1994, the Board
entered into an agreement with Triangle J Council of Governments (TJCOG) to perform
Cable TV rate regulation administration on behalf of the County.
In August, 1994, Cablevision submitted Cable TV rate information for review. TJCOG
consultant, Bob Sepe, Information Services Manager, City of Raleigh, reviewed the rate
information and submitted the findings to the County. The County Cable TV Citizen
Advisory Committee met with the Consultant on December 7, 1994 to review the findings in
detail.
The Cable Committee concurred with the findings of the consultant that Cablevision's rates
are in compliance with FCC benchmark rates. The consultant's report and findings are
attached.
Please note that Orange County has three different cable rates within its franchise authority
for Cablevision. There are 5193 subscribers in the general unincorporated area; 268
subscribers in Efland; and 28 subscribers in Orange County served by Cablevision of Durham.
Attachment I is the report and finding for Orange County Proper, Attachment II-Efland Area
and Attachment III-Durham Service Area in Orange County.
2
The maximum monthly rates permitted under FCC Regulations and Cablevision's Rates
effective December 1, 1994 are:
Orange County Proper Franchise Area
Proposed and Maximum Cablevision Current Rates
FCC Rates
Basic (12 Channels )
$7.86 $7.54
Equipment
Remote Control $ .22 $ .22
Addressable Converter $2.16 $2.16
Installation:
Hourly Service Charge $20.28 $20.28
Unwired House $19.27 $19.27
Prewired House $16.22 $16.22
A/Outlet at Installation $13.59 $13.59
A/Outlet w/truck roll $16.22 $16.22
other services at HSC $20.28 $20.28
Efland Franchise Area
Proposed and Maximum Cablevision Current Rates
FCC Rates
Basic (16 Channels) $10.24 $10.05
Equipment
Remote Control $ .22 $ .22
Addressable Converter $ 2.16 $2.16
Installation:
Hourly Service Charge $20.28 $20.28
Unwired House $19.27 $19.27
Prewired House $16.22 $16.22
A/Outlet at Installation $13.59 $13.59
A/Outlet w/truck roll $16.22 $16.22
other services at HSC $20.28 $20.28
3
Durham Franchise Area
Proposed and Maximum Cablevision Current Rates
FCC Rates
Basic (19 Channels )
$9.64 *$9.67
Equipment
Remote Control #1 $ .35 $.35
Addressable Converter #1 $2.19 $2.19
Remote Control #2 $ .27 $ .27
Addressable Converter #2 $1.63 $1.63
Installation:
Hourly Service Charge $17.96 $17.96
Unwired House $17.06 $17.06
Prewired House $14.37 $14.37
A/Outlet at Installation $12.03 $12.03
A/Outlet w/truck roll $14.37 $14.37
other services at HSC $17.96 $17.96
* FCC rules allow cable operators to recover, pass through to subscribers, annual
regulatory fees charged cable operators by the FCC. The cable operator is permitted to
recover $.03 per subscriber per month.
RECOMMENDATION(S): The Manager recommends that the Board approve Cable TV
rates and authorize the Chair to sign order approving cable rates.
• 4 ATTACK ENT I
FCC-1200 Series Benchmark Rate Review Report
Time Warner Cable-County Wide
Orange County, North Carolina
BACKGROUND:
Commensurate with the Cable Act of 1992, the Federal Communications Commission
promulgated a set of rate determination rules for cable operators to apply in the absence
of a competitive environment. The rules established a first year rate structure [FCC-
393] and second year [FCC-1200 series] to determine the maximum permitted rates for
regulated programming services and equipment and certain aspects of a-la-carte
program costs.
METHODOLOGY:
Time Warner Cable's submission to the County was evaluated to determine whether or
not the operator calculated benchmark rates consistent with the procedures prescribed
by the Federal Communication Commission. Data from work sheets provided by Time
Warner Cable as its FCC-1200 series submission was entered into a computer program
prepared by the Federal Communication Commission for this purpose. Original
computations were performed and compared against those submitted by the company.
FCC-1200: Setting maximum initial permitted rates for regulated cable services pursuant
to rules adopted by the FCC on February 22, 1994.
OBSERVATIONS:
The benchmark rate for cable service was calculated by the Company in
accordance with the FCC rules.
The Company does not qualify as a small cable operator and as such this system
is one of 352 Company properties.
The basic service group of channels consists of 12 channels of which 5 are non-
broadcast services. The expanded basic service tier is composed of 6 channels;
all are non-broadcast services. The upper basic tier consists of 12 channels; all
of which are non broadcast services. As a group, non-broadcast services can
include any mix of bulletin board or character generator channels, PEG access,
local origination, and satellite program services, depending upon the operator's
preference and franchise requirements for local PEG access channel allocations.
5
The Company does offer a second FCC regulated tier service group of channels.
There is a third tier basic service. Of the 2 basic service groups, Time Warner
has a financial interest in BET and TNT.
The operator reported 5193 franchise subscribers on March 31, 1994.
The median census income household level for the franchise area reported by
the operator is $31,498. It is accepted by economists that people residing
within communities where median household incomes are higher, they generally
pay more for goods and services. The FCC benchmark rate service rules
incorporate this phenomenon. Consequently, it is possible for one cable operator
to have two different rate structures for'identical levels of service in adjoining,
but economically dissimilar communities.
The operator did not report any programming, franchise related, or external costs
associated with the first year of rate regulation.
FINDINGS:
The operator's benchmark calculation for programming are consistent with the
FCC-1200 benchmark requirements.,
The median household income reported by the US Census Bureau's 1990 File
C-A census tapes for the County is $29,968 for all households. It is important
to note that the FCC disallows values published in the C-A tapes. The
consultants used this source as a check against the value stated by the operator.
Alternately, the FCC allows the cable operator to use census data contained in File tape
3-B, which provides census income by zip code. To use this data, it must be weighted
to reflect the number of subscribers in each zip code served. Using this method, TWC
calculated a median household income of$31,498.
The discrepancy in household income data appears on the surface to be significant, it is
not. Staff recalculated the Company's benchmark using the $329,968 value, the
maximum permitted cable rate calculation was not affected. [See FCC1200a]
6
FCC-1205: Determining Regulated Equipment and Installation Costs.
OBSERVATIONS:
Time Warner Cable prepared and submitted a completed form FCC-1205. The
operator recalculated the equipment basket [converters and remote control
devices and installation ]rates. The rates are lower than the prior year's.
Time Warner Cable is a limited partnership, as such the company is an entity which
does not pay federal and North Carolina state income taxes; however, the partners pay
35% federal and 9% state rates respectively.
The operator elected to use the maximum permitted rate of return [ROI] under the
current benchmark rules of 11.25%
System wide, Time Warner Cable reported 18,498 remote control units with a
gross book value of$92,490 or$5.00 each; 25,615 converters in service with
an aggregate gross book value of$2,210,126 or an average value of$86.28
each in service.
System wide, the total number of converters [25,615] represents one converter for 1.33
subscribers. [Note: there are 19,125 TWC customers in the equipment pool.]. This is
nearly a 1:1 proportion of converters to subscribers; thus, indicating that nearly all
subscribers have a converter.
FINDINGS:
The operator's benchmark calculation for installation [labor] and equipment services
are consistent with the benchmark requirements were established under the 1994
FCC-1200 benchmark rate. Recalculation by staff using the FCC1200/12.15 rules,
TWC's and staff s calculations are as follows:
TWC Staff
Hourly Service Charge $20.28 $20.52
Remote Control-nonaddressable .22 .22
Converter-nonaddressable 2.16 2.16
The variation between the rates calculated by TWC and staff are due to data treatment
rounding differences. The rates proposed by TWC conform with the benchmark rate
rules and as such are valid.
7
Staff calculated a $3.72 per subscriber "adjusted monthly equipment and installation
value where TWC's calculation was $3.77. The difference is attributed to rounding
treatment by the algorithms used by TWC and the consultants. Regardless, the $3.39
value was entered into the FCC-1200 benchmark rate formula to determine whether if
it affected program service the rates; no material differences were detected.
FCC-1215: A-La-Cart Channel Offerings.
OBSERVATIONS:
The Company offers three a-la-carte program service, TBS, Discovery and
American Movie Classics. The 3 unit combination is available for $2.17
monthly or individually at $1.30.; The•a-la-carte viewers number 355
households. The a-la-carte group-and other premium a-la-carte services are
available individually to all classes of subscribers.
Premium service a-la-carte programs include HBO, Cinnemax, Showtime, The
Movie Channel and The Disney Channel. The monthly per service cost is
$10.95. A four package combination "deal" is not available to subscribers on
this system, unlike other TWC systems where channel capacity is greater.
Of the a-la-carte offerings, the Company reported a financial interest in four
program services, HBO, Cinemax, Turner ['IBS, CNN & TNT] and BET.
Equipment requirements are a cable ready television for basic services or a
converter decoder box for premium services like HBO, Showtime, and Disney.
The operator reported 674 subscription units to these premium services. Note
that many customers subscribe to multiple unit services, like HBO and Disney.
Although no downgrade service charges are assessed, an upgrade service charge
necessitating a truck roll based upon the Hourly Service Charge of$20.28.
Subscribers leasing a converter to view premium and pay-per-view programs,
incur a $2.00 nominal charge for service upgrades performed via computer form
the office.
FINDINGS:
The operator's a-la-carte program service rates are consistent with the
FCC-1215 reporting requirements. The rates appear reasonable in that they are
consistent with similar a-la-carte offerings by other multiple system cable
operators.
•
8
RECOMMENDATION:
Convey approval of basic, tier, a-la-carte service, equipment and installation rates.
The FCC rate regulatory rules require the franchise authority to adopt this report as its
own and issue an order, based upon a finding of fact, regarding the approval or denial
of the cable operator's FCC-1200 series rate submittal. The rules require that the
public be given an opportunity to comment; therefore, it is suggested that the public
comment period coincide with a December public meeting of the County Commission.
A rate order, conveying approval, is enclosed. The order can be executed at the
conclusion of the public hearing.
9
STATE OF NORTH CAROLINA
COUNTY OF ORANGE
BEFORE THE COUNTY OF ORANGE
IN THE MA'1'1'ER OF: )
Review of Basic Cable ) ORDER
Service, Equipment & Installation Rates )
Filed by Time Warner Cable )
BY THE COUNTY OF ORANGE: . .
On August 6, 1994, Time Warner Cable filed its forth FCC-1200/ 1205/1215,
request for cable service, equipment and installation rate approval.
On December 1, 1994 the County Manager received a report which indicated
that the Time Warner Cable is in compliance with the FCC's benchmark rate
schedules.
IT IS A FINDING:
That Time Warner Cable has justified its basic, tier, a-la-carte service,
•
equipment and installation rates.
IT IS, THEREFORE, ORDERED:
That Time Warner Cable's basic, tier, a-la-carte program, equipment and
installation rates are hereby approved as follows.
Program Service Groups:
Basic $ 7.86
Tier II [FCC regulated] $ 4.03
ATTACHMENT II
10
FCC-1200 Series Benchmark Rate Review Report
Time Warner Cable for Et land Service Area
Orange County, North Carolina
BACKGROUND:
Commensurate with the Cable Act of 1992, the Federal Communications Commission
promulgated a set of rate determination rules for cable operators to apply in the absence
of a competitive environment. The rules established a first year rate structure [FCC-
393] and second year [FCC-1200 series] to determine the maximum permitted rates for
regulated programming services and equipment and certain aspects of a-la-carte
program costs. •
METHODOLOGY:
Time Warner Cable's submission to the County was evaluated to determine whether or
not the operator calculated benchmark rates consistent with the procedures prescribed
by the Federal Communication Commission. Data from work sheets provided by Time
Warner Cable as its FCC-1200 series submission was entered into a computer program
prepared by the Federal Communication Commission for this purpose. Original
computations were performed and compared against those submitted by the company.
FCC-1200: Setting maximum initial permitted rates for regulated cable services pursuant
to rules adopted by the FCC on February 22, 1994.
OBSERVATIONS:
The benchmark rate for cable service was calculated by the Company in
accordance with the FCC rules. ."
The Company does not qualify as a small cable operator and as such this system
is one of 352 Company properties.
The basic service group of channels consists of 16 channels of which 9 are non-
broadcast services. The expanded basic service tier is composed of 14 channels;
all are non-broadcast services. There is no upper basic tier. As a group, non-
broadcast services can include any mix of bulletin board or character generator
channels, PEG access, local origination, and satellite program services,
depending upon the operator's preference and franchise requirements for local
PEG access channel allocations.
11
The Company does offer a second FCC regulated tier service group of channels.
There is a third tier basic service. Of the 2 basic service groups, Time Warner
has a financial interest in BET and TNT.
The operator reported 268 subscribers on March 31, 1994.
The median census income household level for the franchise area reported by
the operator is $26,826. It is accepted by economists that people residing
within communities where median household incomes are higher, they generally
pay more for goods and services. The FCC benchmark rate service rules
incorporate this phenomenon. Consequently, it is possible for one cable operator
to have two different rate structures for identical levels of service in adjoining,
but economically dissimilar communities:
The operator did report any programming [I-10] costs as $97.00, no franchise related
[I-12], total external costs [I-14] associated were $97.00.
FINDINGS:
The operator's benchmark calculation for programming are consistent with the
FCC-1200 benchmark requirements.
The median household income reported by the US Census Bureau's 1990 File
C-A census tapes for the County is $29,968 for all households. It is important
to note that the FCC disallows values published in. the C-A tapes. The
consultants used this source as a check against the value stated by the operator.
Alternately, the FCC allows the cable operator to use census data contained in File tape
3-B, which provides census income by zip code. To use this data, it must be weighted
to reflect the number of subscribers in each zip code served. Using this method, TWC
calculated a median household income of$26,2826 for this service group.
The discrepancy in household income data appears on the surface to be significant, it is
not. Staff recalculated the Company's benchmark using the $32,290 value, the
' maximum permitted cable rate calculation was not affected.
12
FCC-1205: Determining Regulated Equipment and Installation Costs.
OBSERVATIONS:
Time Warner Cable prepared and submitted a completed form FCC-1205. The
operator recalculated the equipment basket [converters and remote control
devices and installation ]rates. The rates are lower than the prior year's.
Time Warner Cable is a limited partnership, as such the company is an entity which
does not pay federal and North Carolina state income taxes; however, the partners pay
35% federal and 9% state rates respectively.
•
The operator elected to use the.maximum permitted rate of return [ROI] under the
current benchmark rules of 11.25%
System wide, Time Warner Cable reported 18,498 remote control units with a
gross book value of$92,490 or$5.00 each; and, 25,615 converters in service
with an aggregate gross book value of $2,210,126 or an average value of
$86.28 each in service.
System wide, the total number of converters [25,615] represents one converter for 1.33
subscribers. [Note that there are 19,125 TWC customers in the equipment pool.] This
is nearly a 1:1 proportion of converters to subscribers; thus, indicating that nearly all
subscribers have one converter in their home.
FINDINGS:
The operator's benchmark calculation for installation [labor] and equipment services
are consistent with the benchmark requirements were established under the 1994
FCC-1200.benchmark rate. Recalculation by staff using the FCC1200/1215 rules,
TWC's and staffs calculations are as follows: 1"
TWC Staff
Hourly Service Charge $20.28 $20.52
Remote Control .22 .218
Converter 2.16 2.16
The variation between the rates calculated by TWC and staff are due to data treatment
rounding differences. The rates proposed by TWC conform with the benchmark rate
rules and as such are valid.
13
Staff calculated a $3.78 per subscriber "adjusted monthly equipment and installation
value where TWC's calculation was $3.77. The difference is attributed to rounding
treatment by the algorithms used by TWC and the consultants. Regardless, the $3.78
value was entered into the FCC-1200 benchmark rate formula to determine whether if
it affected program service the rates; no material differences were detected.
FCC-1215: A-La-Cart Channel Offerings.
OBSERVATIONS:
The Company offers three a-la-carte program services, TBS, Discovery and
American Movie Classics. The 3 unit combination is available for $2.17
monthly or individually at $1.30.,:,Thea-la-carte viewers number 245
households. the a-la-carte group and other premium,a-la-carte services are
available individually to all classes of subscribers.
Premium service a-la-carte programs include HBO, Cinnemax, Showtime, The
Movie Channel and The Disney Channel. The monthly premium per service
cost is $10.95. A four package combination "deal" is not available to
subscribers on this system, unlike other TWC systems, where channel capacity
is greater.
The Company reported a financial interest in four program services, HBO,
Cinemax, Turner LIBS, CNN & TNT] and BET.
•
Equipment requirements are a cable ready television for basic services or a
converter decoder box for premium services like HBO, Showtime, and Disney.
The operator reported 261 subscription units to these premium services. Note
that many customers subscribe to multiple unit services, like HBO and Disney.
Although no downgrade service charges are assessed, an upgrade service charge
necessitating a truck roll based upon the Hourly Service Charge of$20.28. :.
Subscribers leasing a converter to view premium and pay-per-view programs,
incur a $2.00 nominal charge for service upgrades performed via computer form
the office.
FINDINGS: •
The operator's a-la-carte program service rates are consistent with the
FCC-1215 reporting requirements. The rates appear reasonable in that they are
consistent with similar a-la-carte offerings by other multiple system cable
operators.
14
RECOMMENDATION:
Convey approval of basic, tier, a-la-carte service, equipment and installation rates.
The FCC rate regulatory rules require the franchise authority to adopt this report as its
own and issue an order, based upon a finding of fact, regarding the approval or denial
of the cable operator's FCC-l200 series rate submittal. The rules require that the
public be given an opportunity to comment; therefore, it is suggested that the public
comment period coincide with a December public meeting of the County Commission.
A rate order, conveying approval, is enclosed. The order can be executed at the
conclusion of the public hearing.
15
STATE OF NORTH CAROLINA
COUNTY OF ORANGE
EFLAND SERVICE AREA
BEFORE THE COUNTY OF ORANGE
IN THE MA'f1'bR OF: )
Review of Basic Cable ) ORDER
Service, Equipment & Installation Rates )
Filed by Time Warner Cable )
BY THE COUNTY OF ORANGE:
On August 6, 1994, Time Warner Cable filed its form FCC-1200/ 1205/1215,
• request for cable service, equipment and installation rate approval.
On December 1, 1994 the County Manager received a report which indicated
that the Time Warner Cable is in compliance with the FCC's benchmark rate
schedules.
IT IS A FINDING:
That Time Warner Cable has justified its basic, tier, a-la-carte service,
equipment and installation rates.
IT IS, THEREFORE, ORDERED:
That Time Warner Cable's basic, tier, a-la-carte program, equipment and
installation rates are hereby approved as follows.
Program Service Groups:
Basic $ 10.24
Tier II [FCC regulated] $ 9.15
16
Equipment
Remote Control #1 $ .22
Addressable Converter #1 $ 2.16
Installation:
Hourly Service Charge $20.28
Unwired House $19.27
Prewired House $16.22
A/Outlet at Installation $13.59
A/Outlet w/truck roll $16.22
other services at HSC $20.28
ISSUED BY ORDER OF THE COUNTY OF ORANGE
This the day of , 1994.
ATTEST: CHAIRMAN:
Clerk
c
ATTACHMENT III 17
FCC-1200 Series Benchmark Rate Review Report
Time Warner Cable through Durham Service Area
Orange County, North Carolina
BACKGROUND:
Commensurate with the Cable Act of 1992, the Federal Communications Commission
promulgated a set of rate determination rules for cable operators to apply in the absence
of a competitive environment. The rules established a first year rate structure [FCC-
393] and second year [FCC-1200 series] to determine the maximum permitted rates for
regulated programming services and equipment and certain aspects of a-la-carte
program costs.
METHODOLOGY:
Time Warner Cable's submission to the County was evaluated to determine whether or
hot the operator calculated benchmark rates consistent with the procedures prescribed
by the Federal Communication Commission. Data from work sheets provided by Time
Warner Cable as its FCC-1200 series submission was entered into a computer program
prepared by the Federal Communication Commission for this purpose. Original
computations were performed and compared against those submitted by the company.
FCC-1200: Setting maximum initial permitted rates for regulated cable services pursuant
to rules adopted by the FCC on February 22, 1994.
OBSERVATIONS:
The benchmark rate for cable service was calculated by the Company in
accordance with the FCC rules. t
The Company does not qualify as a small cable operator and as such this system
is one of 352 Company properties.
The basic service group of channels consists of 19 channels of which 12 are
non-broadcast services. The expanded basic service tier is composed of 21
channels; all are non-broadcast services. There is no upper basic tier. As a
group, non-broadcast services can include any mix of bulletin board or character
generator channels, PEG access, local origination, and satellite program
services, depending upon the operator's preference and franchise requirements
for local PEG access channel allocations.
18
The Company does offer a second FCC regulated tier service group of channels.
There is a third tier basic service. Of the 2 basic service groups, Time Warner
has a financial interest in BET and TNT.
The operator reported 28 subscribers on March 31, 1994.
The median census income household level for the franchise area reported by
the operator is $32,290. It is accepted by economists that people residing
within communities where median household incomes are higher, they generally
pay more for goods and services. The FCC benchmark rate service rules
incorporate this phenomenon. Consequently, it is possible for one cable operator
to have two different rate structures for identical levels of service in adjoining,
but economically dissimilar communities:
The operator did not report any programming [1-10], franchise related [1-12], or
external costs [1-12] associated with the first year of rate regulation.
FINDINGS:
The operator's benchmark calculation for programming are consistent with the
FCC-1200 benchmark requirements.
The median household income reported by the US Census Bureau's 1990 File
C-A census tapes for the County is $29,968 for all households. It is important
to note that the FCC disallows values published in the C-A tapes. The
consultants used this source as a check against the value stated by the operator.
Alternately, the FCC allows the cable operator to use census data contained in File tape
3-B, which provides census income by zip code. To use this data, it must be-weighted
to reflect the number of subscribers in each zip code served. Using this method, TWC
calculated a median household income of$32,290.
The discrepancy in household income data appears on the surface to be significant, it is
not. Staff recalculated the Company's benchmark using the $32,290 value, the
maximum permitted cable rate calculation was not affected. [See FCC1200a]
19
FCC-1205: Determining Regulated Equipment and Installation Costs.
OBSERVATIONS:
Time Warner Cable prepared and submitted a completed form FCC-1205. The
operator recalculated the equipment basket [converters and remote control
devices and installation ]rates. The rates are lower than the prior year's.
Time Warner Cable is a limited partnership, as such the company is an entity which
does not pay federal and North Carolina state income taxes; however, the partners pay
35% federal and 9% state rates respectively.
The operator elected to use the maximum permitted rate of return [ROI] under the
current benchmark rules of 11.25%
System wide, Time Warner Cable reported 5,631 remote #1 control units with a
gross book value of$68,392 or $12.14 each; 7024 remote #2 control units with
a gross book value of$88,279 or $12.56 each; 6,538 converter #ls in service
with an aggregate gross book value of $814,452 or an average value of
$124.57 each in service; and, 14,470 converter #2s in service with an
aggregate gross book value of $777,283 or an average value of$53.71 each in
service.
System wide, the total number of converters [21,008] represents one converter for 2.49
subscribers. [Note: there are 52,369 TWC customers in the equipment pool.] This is
nearly a 2.5:1 proportion of converters to subscribers; thus, indicating that nearly all
subscribers have multiple converters in their homes.
•
FINDINGS:
The operator's benchmark calculation for installation [labor] and equipment services
are consistent with the benchmark requirements were established under the 1994
FCC-1200 benchmark rate. Recalculation by staff using the FCC1200/1215 rules,
TWC's and staff's calculations are as follows:
TWC Staff
Hourly Service Charge $17.96 $17.58
Remote Control #1 .35 .346
Converter #1 2.19 2.17
20
The variation between the rates calculated by TWC and staff are due to data treatment
rounding differences.. The rates proposed by TWC conform with the benchmark rate
rules and as such are valid.
Staff calculated a $1.64 per subscriber "adjusted monthly equipment and installation
value where TWC's calculation was $1.43. The difference is attributed to rounding
treatment by the algorithms used by TWC and the consultants. Regardless, the $1.43
value was entered into the FCC-1200 benchmark rate formula to determine whether if
it affected program service the rates; no material differences were detected.
FCC-1215: A-La-Cart Channel Offerings.
OBSERVATIONS:
The Company offers four premium a-la-carte program services, HBO,
Cinemax, Showtime and The Disney Channel. The premium a-la-carte services
are available individually to all classes of subscribers.
The monthly per service cost is $11.50. A four package combination "deal" is
not available to subscribers on this system, unlike other TWC systems, where
channel capacity is greater.
The Company reported a financial interest in four program services, HBO,
Cinemax, Turner [TBS, CNN & TNT] and BET.
Equipment requirements are a cable ready television for basic services or a
converter decoder box for premium services like HBO, Showtime, and Disney.
The operator reported 21 subscription units to these premium services. Note
that many customers subscribe to multiple unit services, like HBO and Disney.
Although no downgrade service charges are assessed, an upgrade service charge
necessitating a truck roll based upon the Hourly Service Charge of$17.96.
Subscribers leasing a converter to view premium and pay-per-view programs,
incur a $2.00 nominal charge for service upgrades performed via computer form
the office.
FINDINGS:
The operator's a-la-carte program service rates are consistent with the
FCC-1215 reporting requirements. The rates appear reasonable in that they are
consistent with similar a-la-carte offerings by other multiple system cable
operators.
21
RECOMMENDATION:
Convey approval of basic, tier, a-la-carte service, equipment and installation rates.
The FCC rate regulatory rules require the franchise authority to adopt this report as its
own and issue an order, based upon a finding of fact, regarding the approval or denial
of the cable operator's FCC-1200 series rate submittal. The rules require that the
public be given an opportunity to comment; therefore, it is suggested that the public
comment period coincide with a December public meeting of the County Commission.
A rate order, conveying approval, is enclosed. The order can be executed at the
conclusion of the public hearing.
•
22 '
STATE OF NORTH CAROLINA
COUNTY OF ORANGE
DURHAM SERVICE AREA
BEFORE THE COUNTY OF ORANGE
IN THE MATTER OF: )
Review of Basic Cable ) ORDER
Service, Equipment & Installation Rates )
Filed by Time Warner Cable )
BY THE COUNTY OF ORANGE:
On August 6, 1994, Time Warner Cable filed its form FCC-1200/ 1205/1215,
request for cable service, equipment and installation rate approval.
On December 1, 1994 the County Manager received a report which indicated
that the Time Warner Cable is in compliance with the FCC's benchmark rate
schedules.
IT IS A FINDING:
•
That Time Warner Cable has justified its basic, tier, a-la-carte service,
equipment and installation rates.
IT IS, THEREFORE, ORDERED:
That Time Warner Cable's basic, tier, a-la-carte program, equipment and
installation rates are hereby approved as follows. t .
Program Service Groups:
Basic $ 9.64
Tier II [FCC regulated] $ 10.65
23
Equipment
Remote Control #1 $ .35
Addressable Converter #1 $ 2.19
Remote Control #2 $ .27 .
Addressable Converter #2 $ 1.63
Installation:
Hourly Service Charge $17.96
Unwired House $17.06
Prewired House $14.37
A/Outlet at Installation $12.03
A/Outlet w/truck roll $14.37
other services at HSC $17.96
ISSUED BY ORDER OF THE COUNTY OF ORANGE
This the day of , 1994.
•
ATTEST: CHAIRMAN:
• t
Clerk