HomeMy WebLinkAboutAgenda - 02-20-2001-5cORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 20, 2001
Action Agenda
Item No.
SUBJECT: Cable TV Rate Adjustment-Time Warner
DEPARTMENT: Manager's Office
PUBLIC HEARING: (YIN) No
ATTACHMENT(S): INFORMATION CONTACT:
Resolution/Order Albert Kittrell, Assistant County Manager
Corintha Barber, ext 2300
TELEPHONE NUMBERS:
Hillsborough 245-2300
Chapel Hill 968-4501
Durham .688-7331
Mebane 336-227-2031
PURPOSE: To adopt a resolution/order setting Maximum Permitted Rates for Basic Cable TV
Service and the capital investment recapture "add-on" charge for Orange County residents
served by Time Warner Cable.
BACKGROUND: In September 2000 Time Warner Cable submitted three sets of FCC forms
1240 and 1234 requesting adjustments to the Maximum Permitted Rate for basic cable
television service and setting "add-on" charge to recapture the Company's investment to
upgrade the cable system serving County residents. Under FCC regulations cable companies
are permitted to request rate adjustments based on inflation and actual expenses plus a
11.25% rate of return.
Triangle J Council of Governments Cable TV Consultant, Bob Sepe, has reviewed Time. Warner
documents on behalf of the County and determined the rate should be adjusted as requested
by Time Warner. The Board must either approve or deny Time Warner's rate request, finding
the rate to be either reasonable, or not reasonable. This determination must be based upon a
finding of fact. The consultant's report is attached, and the County Cable TV Citizen Advisory
Committee concurs with TJCOG review.
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Michael Patrick, Chair of the County Cable TV Committee will present the resolution and
information to the Board. The rate adjustments for basic cable service are as follows:
Customers Old Basic New Basic Add-on New Max Selected
Rate Rates Charge Rate Rate
Chapel Hill System
(most of the customers in the 5992 $8.18 $9.91 $1.81 $11.72 $11.10
unincorporated area of the Count
Carrboro Systems
(Customers just outside of the town 812 $9.01 $10.62 $1.45 $12.07 $11.10
limits of Carrboro and Hillsborough)
Durham System
(Customer in Orange County 30 $10.65 $11.92 $2.11 $14.03 $13.70
receiving cable services from Time
Warner of Durham
Total Customers in unincorporated 6834
Orange Count
FINANCIAL IMPACT: Although the maximum permitted rate has increased, Time Warner has
chosen to charge a lesser rate. Most cable subscribers will pay $2.92 more monthly in 2001
than during 2000. TWC will collect $210,240 more from the 6000 subscribes in Orange County
plus an additional $10,512 in franchise fees, which are paid to the County.
RECOMMENDATION(S): The Manager recommends the Board adopt a Resolution/Order
setting Time Warner's 2001 Basic Service Tier Maximum Permitted Rates at $11.72, $12.07
and $13.70 for the Chapel Hill, Carrboro and Durham Cable TV Systems in the unincorporated
areas of the Orange County.
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Action Audits, LLC
Orange County, NC-0276, NC-0256
Review of Time Warner Cable
FCC 1240 Rate Filing
for 2001
February 7, 2001
REPORT
TO: John Link, county manager
FROM: Robert Sepe, Action Audits
RE: Review of Time Warner Cable's FCC 1240 123 5 and 1205 rate Slip s
The consultant bas reviewed Time Warner Cable's FCC 1240, 1235 and 1205 filings, and
supporting documentation furnished by the cable operator, and have conducted fact-finding
discussions with the cable operator and Federal Communications Commission representatives and
documents. The values stated in the filing are the responsibility of the cable operator's
management. .
Supplied data were reviewed to determine whether the operator calculated "updated" rates
consistent with the procedures prescribed by the FCC in accordance with the 13th Order on
Reconsideration, the Time Warner Social Contract, and the Telecommunications Act of 1996.
Original computations were performed and compared with information provided by Time Warner
Cable. The consultant believes that the data submitted by the cable operator is free of material
misstatements, and the accompanying report provides a reasonable basis for the following
recommendation.
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L SUMMARY
A. Introduction
1. The consultant evaluated the data Time Warner supplied in its rate filings, entered the
data into electronic spreadsheets, and performed independent calculations. Time
Warner serves unincorporated areas of Orange County through two franchises, NC-
0276 (Chapel Kill and Durham systems) and NC-0256 (Carrboro system).
B. Franchise NC-0276. Subscribers in this ftanchise are split into two groups, those served
by Time Warner's Chapel Hill system, and those served by the Durham systems. Time
Warner completed its. FCC 1240 and FCC 1205 rate filings for these systems on
September 29, 2000. Time Warner completed its FCC 1235 for the Network Upgrade
Charge in 1999. The rate established in that filing is carried forward into the present rate
structure.
1. NC-0276 Chapel Hill System
a. These subscribers will be charged a Combined selected monthly rate of $11.10
for the Basic Service Tier (BST) in 2001. This combined rate includes the. BST
charge of $9.29 plus the "add-on" cost of service Network Upgrade Charge of '
$1.51. The maximum permitted combined monthly rate is $9.83 for Basic plus the
$1.81 add-on charge, a $11.64 total NTR. Time Warner is charging 54-cents
less than the maximum rate permitted by the FCC.
b. Subscribers receiving only BST programming will- see their BST rate increase by
$.53, an increase of 6% over the 2000 BST rate of $8.76. Time Warner estimates
it will have 6,255 BST subscribers in 2001, about a 5% increase over last year's
count of 5,992. It is estimated that Time Warner will realized approximately
$39,973 in additional BST revenue in 2001.'
2. NC-0276 Durham System
a. There are very few subscribers in this system. These subscribers will be charged a
Combined selected monthly rate of $13.70 for the Basic Service Tier (BST) in
2001. This combined rate includes the BST charge of $11.59 plus the "add-on"
cost of service Network Upgrade Charge of $2.11. The maximum permitted
combined monthly rate is $13.70 for Basic plus the $2.11 add-on charge, a $13.70
'$.53 x 6,285 subscribers * 12 months = $39,973.
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total M R. Time Warner is charging 33-cents less than the maximum rate
permitted by the FCC.
b. Subscribers receiving only BST programming will see their BST rate increase by
$1.02, an increase of about 10% over the 2000 BST rate of $10.57. Time Warner
estimates it will have 31 BST subscribers in 2001, compared to 30 in 2000. It is
estimated that Time Warner will realized approximately $379 in additional BST
revenue in 20012
C. Franchise NC-0256: Carrboro system. Subscribers in this franchise are served through
the Carrboro system. Time Wainer completed FCC 1240, FCC 1235 and FCC 1205 rate
filings for this franchise, which was most recently operated by CVI, Inc. Time Warner
acquired CVI in the 1990s.
These subscribers will be charged a Combined selected monthly rate of $11.10 for
the Basic Service Tier (BST) in 2001. This combined rate includes the BST charge
of $9.65 plus the "add-on" cost of service Network Upgrade Charge of $1.45, a
$12.07 total NW& The maximum permitted combined monthly rate is $10.62 for
Basic plus the $1.45 add-on charge. Time Warner is charging 97-cents less than
the maximum rate permitted by the FCC.
2. Subscribers receiving only SST programming will see their BST rate increase by $.90,
an increase of about 10.5°x6 over the 2000 BST rate of $8.75. Time Warner estimates
it will have 351 BST subscribers in 2001, about a 50/9 increase over last year's count
of 312. It is estimated that Time Warner will realized approximately $9,190 in
additional BST revenue in 2000
D. All Systems
1. Mation Adjustments
a. In its FCC 1240 rate filing, Time Warner used an inflation factor of 3% for the
last three quarters of 2000 of the true up period, because that was the most
current rate published by the FCC when Time Warner completed its FCC 1240
form. On October 4, 2000, the FCC released the official inflation figure of 2.4%,
which Time Warner did not include in its calculations. If Time Warner had used
2$1.02 x 31 subscribers * 12 months = $379.
3$.90 x 851 subscribers * 12 months = $9,190.
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the lower inflation rate, its maximum permitted BST rates would have been slightly
lower. However, the company's selected rate would have remained unchanged in
both systems because they fall below the recalculated maximum rates.
2. FCC 1205 Equipment & Installation Rates
a. Time Warner calculated FCC 1205 maximum permitted equipment and
installation rates by aggregating its costs on a state-wide basis, which is allowed by
the FCC and Social Contract.` Time Warner calculated a maximum installation
service charge of $23.39.
11L REPORT
A. Background
1. In September 19995, the FCC adopted the 13th Report and Order, which, among other
things,. allowed cable operators to adjust their rates on an annual basis using the FCC
1240, taking into consideration past and anticipated future external costs.
2. In November 1995, the FCC adopted the Time Warner Social Contract, which
resolved hundreds of cable complaints against Time Warner Cable. Provisions of the
Social Contract permit Time Warner to aggregate its leased subscriber equipment
costs on a regional basis (using regional FCC 1205 filings) and assess uniform
equipment rates based on these data. Also, Time Warner is allowed to include in its
annual programming service rate filing (FCC 1240) past and.f rture (estimated) costs,
along with future costs attributable to cable system upgrades.
3. The 13th Order requires Time Warner and other cable operators to submit their FCC
1240 filings ninety (90) days before the date of rate implementation. During this
period, the franchise authority may review the reasonableness of the basic service tier
rates and issue an order to either approve or deny the rates. After ninety (90) days,
the franchise authority retains refund authority as long as it responds within 15 days to
any inquiries from the cable operator regarding its review of the company's FCC 1240
documents.
4North Carolina is treated as a single region. TWC files a single FCC 12o5 for North Carolina to establish
uniform state-wide rates for equipment and installation.
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4. Time Warner's FCC 1240 rate adjustments reflect the following external cost
elements:
a. External costs for True-up Period
h. External costs for Projected Period
c. Inflation from True-up Period
d. Inflation for Projected Period
e. Franchise related costs (PEG) from True-up Period
f. Franchise related costs (PEG) for Projected Period
5. CPST Rate Regulation Expiration, A sunset provision within the
Telecommunications Act of 1996 established March 31, 1999 as the date which rate
regulation for the upper cable service tiers ended, Thereafter, the cable operator is
allowed to change upper service tier rates at will upon 30 days notice to the franchise
authority and subscribers.
B. Rate Adjustment Analysis
1. External Costs. The rate adjustments reflect multiple external cost elements. An
external cost is an expense a cable operator incurs during the normal course of
business and may be included in rate calculations. External cost categories include:
state and local taxes; franchise fees; costs of complying with franchise requirements,
including costs of providing public, educational, and governmental access channels;
retransmission consent fees and copyright fees incurred for the carriage of broadcast
signals; other programming costs; FCC regulatory fees; and costs associated with
channel additions.
a. True Up and Projected Periods. The FCC 1240 Form must be filed with the
local franchise authority ninety (90) days before the rates are scheduled to take
eflbct, and may be filed no more frequently than annually. The FCC 1240
represents a departure from the quarterly method of updating cable rates, in that it
allows cable operators to estimate their fitture costs over a 12-month period: this is
referred to as the projected periods The FCC 1240 also allows operators to
recover expenses that occurred during a specified prior period of time, referred to
as the true up period. If a cable operator incorrectly estimates its costs for a
projected period, it must correct those estimates by using the true up segment of
the next FCC 1240 rate filing.
SFCC 1210 Forms allow for the recovery of past costs, only, not future costs. Future costs are recoverable
through the use of the FCC 1240 Form only.
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(1) Time Wamer's projected period covers the 12-month period of January 11)
2001 to December 31, 2001. The operator's true up period covers the 12-
month period of October 1, 1999 through September 30, 2000.
2. Franchise Related Costs: Public Access Television
a. Time Warner Cable reported no franchise related expenses for 2001. Franchise
related costs may include expenses for such items as public, government and
education access facilities and equipment, signal transportation and headend
accommodations.
3. Programming Costs
a. NC-0276 Chapel Hill and Durham Systems. Time Warner will collect during
the 2001 projected period, $1.39 and $1.40 monthly, per subscriber, from Chapel
Hill and Durham system subscribers, respectfully, to cover anticipated BST
external costs. Most BST external costs are attributable to programming costs.
Time Warner representatives state that program service providers customarily
increase service fees annually. Time Warner attributes its programming cost
changes to what it must pay for each service offered. However, this amount is
relatively low compared to upper cable service programming costs. Most of the
channels on Time Warner's BST are obtained without cost to the company.
b. NC-0256 Carrboro System. Time Warner will collect during the 2001 projected
period $1.37 monthly, per subscriber, from Cantoro system subscribers, to cover
anticipated BST external costs. Most of this external cost is attributed to
programming costs.
4. Inflation
a. Time Warner is claiming in all three system rate filings inflation adjustments for the
true up period of January 2000 through December 31, 2000, and the projected
period of January 2001 through December, 2001. The company used the true up
inflation figure of 3% for the last three quarters of 2000. Official inflation
figures for the last three quarters of 2000 were not published by the FCC when
Time Warner completed its FCC 1240 Tate filing in September 2000. Time
Warner used the FCC published 3% first quarter inflation figure for the last three
quarters of 2000 because the FCC 2.4% second quarter inflation figure was not
published when Time Warner completed its rate filings.
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b. On October 4, 2000, the FCC released the 2000 second quarter inflation figure of
2.4% for April through June, 2000. Pursuant to FCC rules, Time Warner was not
required to use this rate. It was required only to use the most recently published
rate of 3% when it completed its FCC 1240 filing. As stated in a recent FCC
Order, the FCC "does not find a rate unreasonable solely because more accurate
inflation data has become available by the time it [or local franchising authority]
makes its review" of the rate filing. ' Thus, Time Warner is correct to use the
earlier, higher inflation figure.
c. Recalculation of Inflation Adjustments
(1) The consultant recalculated Time Warner's rate filings using the 2.4%
inflation factor for the last three quarters of the 2000 true up period, and
also for the entire 12-month 2001 projected period. This resulted in a
maximum permitted rate decrease of $.08 for Chapel Hill system subscribers
($9.91- $9.83); and $.09 ($9.92 - $9.83) for Durham subscribers.
(2) The same recalculation for franchise NC-0256, Carrboro system subscribers,
resulted in a decrease of the maximum permitted rate by $.09 ($10.62 -
$10.53).
d. The company's selected rates would remain unchanged even with the
recalculations in all three systems, because Time Warner's "selected" rates fall
below the consultant's recalculated ma;dmum permitted rates. Nonetheless, it
would be in the public interest if Tune Warner (prior to submitting in September
2001 its FCC 1240 filing for 2002) amended its 2001 FCC 1240 rate filing by
"refreshing" the inflation figures so they correspond with the more recent FCC
published inflation figures.
e. Local governments that choose to regulate cable rates are charged. with protecting
subscribers from paying unreasonable BST rates, while also providing system
operators with a fair return. The County can only compel Time Warner to refresh
its inflation adjustments if Time Warner is required to recalculate its FCC 1240 to
address other issues. Absent these issues, the County cannot compel Time
Warner to amend the rate filing in 2001 to account for updated inflation data, but
it can request the company to do so.
''In the Matter of BmLW-amff C le Petiti n for Reconsid do CUID No. NC -0065,
Town of Clayton (June 4, 1999).
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5. Cable System Upgrade Costs
a.. Add-on Charge
(1) Time Warner Cable submitted FCC 1235 Abbreviate Cost of Service Filing
for Cable Network Upgrades forms for both franchises. Though the FCC
1235 form applicable to NC-0276 was submitted in 1999, the rates established
in those FCC 1235 filings were carried forward and used in 2000 and 2001 rate
calculations.
(2) In September of 2000, Time Warner submitted an updated FCC 1235 for 2001
covering franchise NC 0256. Under the FCC's rules, cable operators are
allowed to recover their system upgrade investments from subscribers on a
tier-by-tier basis. FCC rules allow capital upgrade costs to be apportioned
among the cable tiers, e.g., BST; cable prow-ran-nn- service tier (CPST), new
product tiers (NPT), etc.
(3) Time Warner's add-on cost of service upgrade rates are $1.81, $2.11, and
$1,45, per subscriber, per month, for NC-0276 Chapel Hill system; NC-0276
Durham system; and NC-0256,. Carrboro system subscribers, respectively.
These charges are added to the BST selected rate to create the combined rate
subscribers will pay.' None of the upgrade, cost is being apportioned to the
upper cable tiers. Subscribers will be charged a combined rate, which includes
the add-on cost, plus the BST rate.
b. Rate of Return
(1) Time Warner used a Rate of Return of 13.22% for franchise NC-0256, as
opposed to 11.25%, which was used in franchise NC-0276. The 11.251/o is
presumed by the FCC to provide a "reasonable" rate of return on the cable
operator's investment. The burden of proof is on the cable operator to
substantiate a rate of return higher than the FCC's presumptive unitary rate of
11.25% a To this end, the consultant requested additional documentation and
explanation from Time Warner to substantiate the higher rate of return. Time
'This does not include franchise fees and applicable taxes.
CC Second ort and order-First Qrder on Reconsid 'o and F rther tice of
Pro osed Ruiemakinu, MR, MATHESON Docket No. 93-215 (Zan. 26, 1996).
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Warner responded by stating that the 13.22% is the grossed-up rate of return,
which takes into account income tax allowances not included elsewhere on the
FCC 1235 form. Thus, in Time Warner FCC 1235 filings that use the lower
11.25% rate of return, a separate income tax allowance is included in Part H
(3a - 3h) of the form. But where Part II income tax allowances are omitted,
Time Warner grossed-up the rate of return to 13.22%, compensating for the
omission. Time Warner's treatment of the income tax allowances appears to
be substantiated and allowable under FCC rules.
6. Effects of Competition
a. In 1999, the FCC Cable Services Bureau examined a number of communities
where the incumbent cable operator faced head-to-head competition from a.single
video program provider. Incumbent cable operators responded to the competitive
challenge in a number of ways: lowering cable rates, providing additional channels
at the same monthly rate, improving customer service, or adding new services,
including high speed Internet and telephone services.
b. In the sampled communities, the incumbent cable operator was declared by the
FCC to be facing "effective competition," or a petition requesting such a
declaration was pending.' Cable competition offers great benefits to subscribers.
In competitive situations, the incumbent cable operator usually responds by
improving customer service, offering promotional discounts, lowering or
stabilizing cable rates, adding channels and Internet services, and in some cases,
offering new digital services,
C. Recommendation
1. The consultant recommends that the County find the FCC 1240 maximum permitted
BST rates, the FCC 1235 "add-on" razes, and the FCC 1205 equipment and
installation rate, submitted by Time Warner Cable, to be reasonable and be approved.
2. It is requested that Time Warner submit amended 2001 FCC 1240 forms in September
2001, when it submits FCC 1240 forms for 2002. The amended FCC 1240. forms will
utilize updated FCC inflation figures from the 2000 true up period, and the projected
period. The resulting rates derived from the amended filings will carry forward into
!Tn the Matter of Annual Assessment the Status of Co ' 'on in Markets for the
PeIhM of x
1 Law- pp. VJ
(January 14, 2000).
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calculations in the 2002 FCC 1240 filing. This will prevent fixture BST maximum rates
from being over inflated.
D. Proceeding
1. The franchise authority must either approve or deny the operator's FCC 1240 BST
maximum permitted rate request, finding the rate to be either reasonable, or not
reasonable. This determination must be based upon a finding of fact. The franchise
authority should adopt the consultant's report as its own, and the public must be .
granted an opportunity to offer comment on the matter. It is suggested that a public
comment period on the matter coincide with a regular public meeting.
2. A rate order, conveying approval is attached. To be valid, the order must be executed
following the conclusion of
a. A public meeting where the County grants interested parties an opportunity to
comment; and
b. Adoption by the County of the report as its own - required by FCC rules (this
requires a motion to adopt, and a vote).
I. It is appropriate for public comment to be heard, as related to BST rate issues, at the
time the County meets to deliberate upon this matter. A statutory public hearing is
not required. It is customary to call for a public comment in these matters. The
comment period may be publicized by issuing a press release to the print and electronic
media. It may also be announced in other appropriate ways. The company must be
notified of the public meeting and advised to have a representative present to offer
comment.
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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 T01E 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 shall 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) dray review period with respect to the restructured rate set out in the FCC 1240 and FCC 1205 rate
filings; 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 72001.
ATTEST:
Deliver Report and Order via Certified U.S. Mail to: Time Warner Cable
Copq to: Action Audits
16
Exhibit I
Recalculated FCC Filings
TJ-COG CATV Regula
17
FCC FORM 1240
UPDATING MAXIMUM PERMITTED RATES FOR REGULATED CABLE SERVICES
Cable Operator:
1. Dorn this Ming Involve a single Aunddse auawrity and a single consnuWty ui dt? YES NO
If yam, comPlete the fisnc}uise auihurity information
below and ever the dated cum mamba here: 256
YES
x
2. Does this Oft Involve a single fr&W ise auflmrity but =Mpk conurandty uWb' NO
If yes, envier to associates CUIDs below and complek the f enchise authority mf ken at to bottom of this page:
ORANGE, 256
3. Does this Oft involve muttlple franchise attiitorldes4
If yak attach a separate sheet for each fimtchi= authority and include the followim>g fianchm authority mgmaatien wilt
its associated CLW(s):
Franchise Authority Informatlo ;
4. For what purpose b this Form 1240 being Mod? Please put an "X" in the appropriate be&
a Original Form 1240 for Basic Tier
x
b. Amended Farm 1240 for Basic Tier
c. Original Form 1240 for CPS Tier
d. Amended Fotm 1240 for CPS Tier
TO
5. Indk*W the am year thin period for which you are setting rat (an Projww Period] oiffiv 001 12r31R0o1 (mm/yy)
TO
6. hulleate the thne period for which yon an performing a uve-up. 1OV01/99 o9/30N0 (mm/yy)
7. Status of ftevloaa Filing of FCC Form 1240 (miter an "x" to the apprpptiate box)
YW NO
a h this the first FCC Fmm 1240 filed in any,imisdictionp r
b. Has an FCC Fofm 1240 been filed previously with the FCC? x
If yes, eater the data of fibs most repeat filing: 04/16/199tl (mm/d&yy)
YES NO
c. Has an FCC Form 1240 been filed previcusly with the Fmdd i g Authority? Y
If yes, eater the date of the most recent filing: 09/3W1999 (mm/dd/yy)
Page 1 FCC Four 1240, July 15
TJ-CMG CATV Regulatic
& Status of Previous Filing or FCC Form 1210 (enter an -ill hi Ow a"r%wfw1e box) 18
ns NO
a. Has an FCC Form 1210 beau previously filed with the FCC? x
If yes, cQW the date of the most recent filing; (ntm/dd/yy)
YES NO
b. Has an FCC Form 1210 been previously filed with the Franchising Authority? X
If yes, eater the dale of the most recent filing: 05as/1994 (mm/dd/yy)
9. Status of FCC Form 1200 Fag (enter an "x't in the approprkte box)
s Has an FCC Farm 1200 been previously filed with the FCC? YES NO
x
If yes, cuter the data filed: (min/dd/yy)
YES NO
b. Has an FCC Form 1200 been previously filed with the Franchising Authority? X
If yes, enter the date filed: OOJOS/1994 (mrrt/dd/yy)
10. Cable Programming Services Complaint Status (eater an "x^ In the appropriate bax)
YES NO
a. Is ibis form being tiled in response to an FCC Form 329 complaint4
x
If yes, enter the date of file complaint (mm/dd/yy)
11. h FCC Form 120513eittg Inducted With This Flfmg YES NO
12. Selection of "Going' Forward". Chamrd Addhioa MaWelogy (enter. an "x" In the appropriate box)
Check hate if you are using the original rules [MARKUP METHOD].
a Check here if you are using the new, altermtive rules [CAPS METHOD].
If using *a CAPS METHOD, have you elected to revise recovery far YES No
channels added during the period May 15, 1994 to Dec. 31, 1994?
13. Headcud Upgrade Medmiolo®
+gdOTB.• OpsratataRAW-r* to the Comomwon thareksg4fivia use dots upvn* medwdokv (aid attach an agtdpment der and deptamatton saheduk
Check here if you are a qualifying small system using the streamlined headend upgrade methodology.
Part I: Preliminary Information
Module A: Maximum Permitted Rate From Previous Filing
1999 MPR TWC AM c d e
7dde Basle T1er 2 Tier 3 Tier 4 T1: 5
Al Crarerrt Mwdrn= Penmttod Rde C4 7511
BI Aventge Subsctibership For True-Up Period l 812
82 Avernge Subscribe shop For True-Up Period 2
B3 Esomiated Average Subscribership For Projected Period 851
C:
LIM . i. n. r?..1Anea ice: n??r.rrr_n
C1 Unclaimed Inflation: Ope<rmer Switching From 1210 To 1240
C2 Unclaimed Lfflation: Umegabled Operator Responding to Rate Conplaira
Inflation Factor For True-Up Period I [Wks 1]
Inflation Factor For True-Up Period 2 [Wks 1]
Cunemt FCC Inflation Factor
Page 2 FCC Form 1240, July 199E
TJ-COG CATV Regulatic
19
Module D: Calculating the Base Rate
a b c d e
Line Line Descri 'on Basic Tier 2 Tier 3 Tier 4 Tkr 5
Dl Current Headend Upgrade Segment
DZ Curre[R Farerrnal Costs Segment $0.1126
D3 current Caps Method scgneat
D4 Current Markup Method Segment
D5 Current Channel Movement and Deletion Segment
D6 Current True-Up Segment ($0.1122
D7 Current Inflation Segmat $0.1378
D8 Base Ratc [Al-DI-D24)3-D4-D5-D6-D7] $8.6151
Part II; True-Un Period
Module E: Timing Information
Line Llne Descrlptlon
El What Type of Tnte-Up Is Being PQfamted7 (Answer -I'. "2', or "3'. See insmxd= for a desmiomn ofthece types.)
If"I", go to Module L If"2", = wer E2 and E3. If "3", aunswer E3, E3, E4, rend BS.
E.2 Number afMacths in the True-Up Period 1
E3 Number ofManths between the end of True-Up Period 1 and the end of the most recent Projected Period
E4 Number of Months in True-Up Period 2 Eligible for Interest
Fs5 Number afManths True-Up Period 2Incloble for Interest
Module F: Maximum Permitted Rate For True-Up Period I
¦ b c d e
um Line Description L. Tier 2 Tier 3 Tier 4 Tier 5
F1 Caps Method Segneat Far Trur-Up Period 1 [Wks 2]
F2 Markup Method Segment For True-Up Period 1 [Wks 3]
F3 Chan Mvmot Delete Segment For True-Up Period 1 [Wks' 4/5]
F4 True-Up Period I Rate Eligible For Inflation [D8+F1+F2+F3] $8.6151
F5 Taflatian Segment for True-Up Period 1 [(F4*0)-F4] $0.2361
F6 Hw dmnd Upgradc Scut For Ttua-Up Period 1 [Wks 61
F7 &deraal Costs Segment For True-Up Period 1 [Wks 7] $0.1136
FS True-Up Segment For True-Up Period I (30.1564
F9 Max Perm Rate for True-Up Period 1 [F4+F5+F(r+F7+F8] $8.81184
Module G: Maximum Permitted Rate For True-Up Period 2
¦ b c d e
Line Lino Dearri en Bask Tkr 2 Tier 3 Tler 4 Tlr 5
GI Caps Method Segment Par True-Up period 2 [Wks 21
G2 Markup MetbW Segment For Tune-Up Period 2 [Wks 31
G3 Chan Mvmnt Delete Seg c t For True-Up Period 2 [Wks 4/5]
04 TU Period 2 Rate Eligible For Inflation [DS+F5+01+02+03]
05 Inflation segment for True-up Period 2 [(04")434]
G6 Headend Upgrade Segment For True-Up Period 2 [Wks 6]
GI External Casts Segmcnt For Truo-Up period 2 [Wks 7]
GS True-Up Segment For TYuc-Up Period 2
G9 Max Penn Rate for True-Up Period 2 [G4+GSG6+G7+G8]
Page 3
FCC Form 1240, July 191
'J-COG
Module H: True-Up Adiustment Calculation
CAN Regulation
20
Hl Rci=ue From Period 1 $84,543.2000
H2 Revenue Fro rn Max Permitted Rate for Period 1 $95,794,3807
H3 True-Up Period 1 Adjushnent [H2-Hl] 53,251.1807
H4 Interest an Period I Adjustmerd $107.5478
Adjustment For True-Up Period 2
135 Revenue From Period 2 Bligtble for Interest
H6 Revenue From Max Perm Rate for Period 2 Eligible For Interest
97 Period 2 Adustment Eligible Far lnterest [HC>-IIS]
Fa . Interest on Period 2 Adjustaiart (Sec instructions for formula)
H9 Revenue From Period 2 Ineligible for Interest
H10 Revenue Fmm Max Pert Rata for Period 2Ineligible for Interest
HI I Period 2 Adjusnned Ineligible For Interest CHI NIV]
Tetttl True-Up Adjustment
H12 Previous Retaining True-Up Adjustment
H13 Total Tme-Up AdjwWm t gB+H4+H7+H8+HI1+H12] $1,358,7185
H14 Amount of True-Up Qa=ed Fm This Projected period $1358.7285
H15 Remaining True-Up Adjuamtcot [11X3-H14] $0.0000
Part III: Proiected Period
Module I: New Maximum Permitted Rate
¦ b d
l i ne Lne DesMntion Basle Tier 2 m:,.3 Tier 4 Tkr 5
Il Caps Method Segm For Projected Period [Wits 2]
12 Markup 11th nod Segment For projected Period [Wks 31
a Chan Mvmnt Delete Segcnmt For Projected Period [Wks 4(5)
14 Proj. Period Rate Eligible For Inflation PS+F5+G5+I1+12+y3] $8.8512
15 Infletian Segment for Projected Period 1(I4*C5).I4] 50.2655
16 H-dend Upgrade Segment For Projected Period [Wks 6]
17 External Casts Segment For Projected Period [Wks 71 $1.3701
IS True-Up Segment For Projeeied Period $0,1330
19 Max Pemtitted Rau for projected Period [I4+I5+I6+I7+I8] $10.6197
no Operator Selected Rate For Projected Period $9.6500
UN* M inflation figures
MPR 1240 $10.62
BM 1235A $1.45
Combined Maximum Permitted Rate $12.07
Combined TWC Selected Rate $11.10
differonae $0.97
saga 4 FCC Form 1240, July 1996
TJ-COG
CAN Regulat
21
Worksheet 1- True-Up Period Inflation
For irsm.wtiorm sea Appcvtdix A of Instmctiats For FCC Form 1740
Line Perm FCC Inflation Factor
101 Month 1 1.960/9
102 Month 2 1.965A
103 Month3 196%
104 Mamh4 3.00%
105 Month 5 3.00%
106 Month 6 3,00%
107 Month 7 3.00%
109 Month S 3.00%
109 Month 9 3.0096
110 Month 10 3.00%
111 Month 11 3.00%
112 Month 12 3.00%
113 Avc"V Inflation Fearer for TraaUp
Period 1 1.0274
114 Month 13
115 Mouth 14
116 Month 15
117 Month 16
118 Muth 17
119 Mach IS
120 Month 19
121 Month 20
122 Marsh 21
123 Month=
124 March 23
175 Month 24
126 Average Inflation Factor for Tnte-Up
Period2
Refreshed FCC Inflation Fech
ran 100 196%
Feb 1.96%
lvla 196%
Aw 240%
WaY 240%
Tune 2,40%
MY 2.40%
August 240%
September TWC film 1240 2.40%
Ddnber-FCC relcases 2.4% 24 Q 2.40%
November 140%
December 2.40%
1.0229
Page 1 FCC Form 1240, July 1t
rJ-COG
CAN Regulatioi
22
Worksheet 7 - External Costs
True-Up Period
For instxuotinrrm, sae Appendix A of htadnetiom For FCC Form 1240
Questim 1. For which tone period my you Ming out this workatoc 1 (Put anw in rife app opdata box]
Question 2. How long is the feat period, in mondts, for which rates aro being set with this wmbbeet4
Question 3. How tog is the second period, in mantha, for which rates ate being set with this worksheet?
Tnte•Up Period Projected Period
X
12
a c e
Line Line Dwflptlon Basle Tier 2 "W 3 Tler 4 Tier 5
Period 1
External Costs Eligible for Markup
Cost of Prop mtmrg For Channels Added
701 Prior to 5/15/94 or After 5/15/94 Using
Markup Method For Period
$268.82
702 Retr>tmntission Consort Fees For Period
703 Copyright Fees For Period $761.06
704 External Costs Eligible For 7.5%u Markup $1,029.88
705 Marked Up External Comet $1,107.1210
Exterdal Costs Not Elipib for Markup
706 Cable Specific Taxes For Period
707 Franchise Related Costs For Period
708 Cotomi ion Regulatory Few For Period
709 Total ExtemA Coats For Period $1,107.1210
710 Monthly, Per-SWsxtlxr Exterad Costa For
Period 1 $0.1136
Period 2
External Costs Elieible for Markup
Cost of Progiamuke For Chnnob Added
711 Prior to 5/15/94 or After 5/15/94 Using
Madcap Method For Period
712 RsInmtdssiun Consent Fees For Period
713 Copyright Fees For Period
714 Exremal Costs Eligible For 7.5% Markup
.715 Marked Up External Costs
External Costs Not E ' ble for Markup
716 Cable Speoa,&e Taxes For Period
717 Franchise Related Costa For Period
718 Cmmtdssion Regulatory Fear For Period
719 Totat$xtemal Costs For Period
720 Period Morft, Pa-Subscriber Extand Costa For
Page 1 FCC Form 1240, July 1991
Ti-COG
CAN Regular
23
Worksheet 7 - External Costs
Projected Period
For ieeshnct mL% see Appendix A of lnshuvfwm For FCC Form 1240
Question 1. For which 6me period am you filling out Ibis wodwhwO [Pot an "X" in the appropriate box.]
Quaslian 2. How long is the Seat period, in maedhs, for wbieh rdw are b ft ad with tars wari®hcct?
QmWIcn 3. How kmg is dw second pariad, in mon4 fnor wbich rates are being set m ft 66 wmkoheW
Truc-Up POW ProiccW period
X
12
0
¦ c e
Lim _ Line Description Rzaic T¦ r 2 .. Tier 3 Tier 4 Tier 5
Period 1
External Costs E ' ble for Markup
Cost of Prong For Chameels Added
701 Prior to 5/15/94 or Atter 5/15/94 Using
Mmknp Metiwd For Period
$12,216.58
702 Rchamarimm Consent Few For Period
703 Cepyri& Fees For Period $798.27
704 Eternal CosW ErWble For 7.5%Mukup $13,014.85
705 Mocked Up Enaaaat Coat 513,990.9638
External Costs Not El ble for Markn
706 Cable Specific Taxes For Period
707 Fran nw Related Costa For Period
708 Como is ion Rowdatmy Fear For Period $0,00
709 Total External Code For Period $13,990.91338
710 Montlrty, PerSulyseaiber Exw" costs For
Period 1 $1.3701
Page 2 FCC Farm 1240, July 1C
TJ-COG
CAN Regulatior
24
For instructions, sae Appendix A of Instructions For FCC Farm 1240
Question 1. How long is the True-Up period 1, in months?
Question I How long is the True-Up Pariod 2, in months?
12
b c d a
Une Line Description Ba k Pier 2 Tier ,3 Tier 4 Tier 5
801 Month 1 $9.9100
802 Month 2 $9.9100
803 Month 3 $9.9100
804 Mcmth4 $10.7800,
805 Month 5 $10.7800
806 Month 6 $10.7800
807 Month 7 $10.7800
808 Month 8 $10.7800
809 Manth 9 $10.7800
810 Month ]0 $10.7800
811 Month I l $10.7800
812 Month 12 $10.7800
813 Period 1 Average Rate $10.5625
814 Month 13
815 Month 14
816 Month 15
817 Month 16
818 Month 17
819 Month 18
820 Month 19
821 Month 20
822 Month 21
823 Month 22
824 Month 23
825 Mmtth 24
826 period 2 Average Rate
Page 1 FCC Form 1240, July 1991
Ti-COG
CATV Regulati
FCC FORM 120,
UPDATING MAXMIUM PERMITTED RATES FOR REGULATED CABLE SERVICES
Cable Operator:
Name of Cable Operator
Tune Warner Cable
Mailing Address of Cable Operator
City State ZIP Code
NC
YES NO
L Dom this M kg Mvolve a mlugie tksahcidse authority and a d n* wmtm mitt' w*? X
below Pe;?to fimchise asocintad authority 2762 30 SUBS
YES NO
2. Does this Ming MWIve a single franchin autthotity but mdtiple comnnuthy mitt? x
If yes, enter the associated CUIDs below and c;omPleie the fanchise authority information at dhe bottom of this page:
ORANGE, 276,30 SUBS
3. Does this Ehig Involve Multiple franchise suthorlties?
If yes, attach a separate sheet for each fivmchiae authority and include the following fanchise authority information with
its associated CU1D(s):
Franchise Authority Wormathom:
Name of Local Franchising Authority
ORANGE, 276,30 SUBS
Mailing Address of Local Franchising Authority
City State ZIP Code
Telephone number Fax Numicr
4. For what purpose Is this Farm 1248 behg MW? Please put an "X" in the appropriate boa.
a. Original Farm 1740 for Basic Tier x
b. Amended Form 1240 for Basic Tier
c. Original Form 1240 for CPS Tier
d. Amemdcd Form 1230 for CPS Tier
TO
S hadicate the are year time period for which you are settug rates (the Projected Period} 01101/2001 ":a3 M001
TO
C Indicate the time perlod for which you are perfoiaft a hme.mp. !0!01/99 09/3W00
7. Sm a of Previous Filing of FCC Form 1240 (enter an "z" in the appropriate boz)
YES NO
a. Is dris the fast FCC Form 1230 filed in anyjarisdicdom7
b. Has an FCC Farm 1240 been filed previously with the FCC?
If ycs, enter the date of the most recur fling: W64M (mm/dd/yy)
YES NO
c. Has an FCC Farm 1240 been filed previously with the Franchising Auilwrity7 x
If yes, enter the date of the most recent filing: 09/30/1999 (mm/dd/yy)
25
(MMIYY)
(mm?YY)
Page 1 FCC Form 1240, July 1S
N-COG
& Status of Prevlous Piling of FCC Form 1210 (enter an "x" In the appmprlate box)
YES NO
a. Has an FCC Form 1210 been previously filed with the FCC? X
If yos, enter the date of the most recent fling: (mm/dd/yy)
YES NO
b. Has an FCC Form 1210 been previously filed with the Franchising Authority? ;
If yes, enter the dale of the most recent filing:. 05125/1994 (mm/dd/yy)
9. Status of FCC Form 1200 Ffg (enter an "x" In the appropriate box)
YES No
a. Has an FCC Form 1200 been previously filed with the FCC?
z
If yes, enter the date filed: (mm/dd/yy)
YES NO
b. Has an FCC Form 1200 been previously filed with the Franchising Au iority? g
If yes, enter the date filed: 0$/05/1994 (mm/dd/yy)
10. Cable Progra oming 5erviaes Complaint Status (enter an "x" in the appropriate box)
. YES NO
a. Is this form being filed in response to an FCC Form 329 complain? x
If yes, artier the dote ofthe compWnt (nult/dd/yy)
YES NO
11. Is FCC Form 1205 Being Included With This Filing
U. Seledicn of "Going Forward" Channd Addition Methodology (enter an "x" In the appropriate bar)
Check here if you are using the original rules [MARKUP METHOD].
Check bete if you are using the new, alternative rules [CAPS METHOD].
26
Musing the CAPS METHOD, have you elected to revise recovery for YES NO
chamtels added during the period May 15, 1994 to Dec. 317 1994?
13. Headeard Upgrade Mallmdoloo
W07V. Operat=nxWGw#5y to the Comminio" detr elt Il d#y W an this upgrade methodology mrd attach an equipment Ed and depmaiWon xawc k
Check bere if you are a qualifying small system using the sttaamlined headand upgrade methodology.
Part 1: Preliminary Information
Module A: Maximum Permitted Rate From Previous Riling
1999 Um TWC UM e d e
Line Line Description Ards T1er 2 Tier 3 Tier 4 Tier 5
Al Currant Ma;dM=Pcm%ittedRate $10.5737
Module B: Subsciribershiq --
• b c d e
rlnw TI-T....4.#1 .. II..G TIr..R Ti..14 Tiwd 'fiefs
B1 Average Subsanbeeabip Far True-Up Period 1 30
'in AvcaV Subs=baft ForTrue-Up Period 2
B3 . Estimated Average SWxmb=Wp Far Projected Period 31
CI Undaimod Inflation: Operamr Switching From 1210 To 1740
C2 Unclaimed Inflation: Ubreplated 0ptaatorResponding to Rate Complaint
C3 Inflation Factor For Tau-Up Period 1 Mb 11
C4 hnflation Footer For T ua-Up Period 2 Mks 1]
C5 Cuncot FCC hfllation Fa;w
CAN Regulation
?age 2 FCC Form. 1240, July 1996
TJ-COG CAN Regulatih
27
Module D: Calculating the Base Rate
a. b c d e
Line Line Description Basic Tier 2 Tier 3 Tier 4 Tier 5
Dl Curran Headend Upgrade Segment
02 Current E#emal Casts Scgrter>t. $0.6543
D3 Cu=nt Caps Method SWnet
D4 Curseot Markup Method Segtnemt
D5 Current Chmmel MovemwR and Deletion Segment
D6 Current True-Up Segment ($0.062
D7 Corneal lmtlatiott Segment $0.1572
IDS EweRate[AI-Dl-D2-D3-D4-D5-D6-D7] 39AU9
a b c d e
LIM Lbne Desui on Bank Tler 2 Tier 3 Tler 4 Tier 5
Fl. Caps Method Segmeatt For True-Up Period 1 Rb 21
F2 Marimp Method Segment For True-Up Period 1 Nnm 3]
F3 Chen Mvgmt Deletn Segment For Tnro-Up Period 1 [Wks' 4r5]
F4 Thm-Up Period 1 Rato Eligible For 1n41atm [D8+F1+F2+F3] $9.8249
F5 b "an Segmera for Tnw-Up Period 1 [(F4*c3)-F4] $0.2692
F6 Headend Upgrade Sgpnd For True-Up Period 1 [When 6]
F7 Mammal Casts Scpmmt For True-Up Period 1 [Wis 7] $0.6150
F8 True-Up SVn=d For Tmo-Up Period 1 ($0-0588
F9 Max Penn Rate for True-Up Period 1 [F4+F5+F6+F7+F8] $1016503
Module G: Maximum Permitted Rate For True-Up Period 2
a b c d e
Line Linn on Bask Tie 2 Tier 3 Tier 4 Mors
GI Caps Mstbod Scpncm For True-Up Period 2 [W]d 21
G2 Metkup Method Segment For Truo-Up Period 2 [Wks 3]
G3 Chan Mvn= Deleta Sepneat For TnwUp Period 2 [Wlta 4/5]
G4 TU Period 2 Rate Eligible For In laban [DB+FS+G1+G2+G3]
05 Ltflation Segment for Tine-Up Penrod 2 [(G4+C4)-G4]
G6 Hradmtd Upgrade SWnwl For True-Up Pwad 2 [Wlca 6]
G7 Mammal Costs Segment For True-Up Period 2 [Wks 71
G8 True-Up Segotant For Tru -Up Period 2
09 Max Perm Kato for True-Up Period 2 [G4+G5+G6+G7+G8]
Page 3
FCC Form 1240, July 19
rJ-COG
Module H: True-Up Adjaatment Calculation
CATV Regulation
28
a b c d e
I ape line Description Seale Tier 2 Tier 3 Tier 4 Tier S
Adjustment For True-Up Period 1
Hl Revenue From Period1 $3,779.4500
E2 Revenue From Max Permitted Rate for Period 1 $3,820.7691
H3 True,-Up Period 1 Adjustmemt [H2.H1] $41.3191
H4 Merest an Period 1 Adjustmart $3.5517
Adjustment For True-Up Period 2
H5 Revenue From Period 2 Eligible for bterest
H6 Revenue From Max Perm Rate for Period 2 Eligible For Interest
117 Period 2 Adjustmdrt Eligible For Interest [H6.H5]
HS Iztlt aW on Period 2 Adjustmert (See i structions for formula)
H9 Revenue From Period 2 Ineligible for interest
1R0 Revenue From Max Pam Rate for Period 2 Ineligible for Interest.
HI I Period 2 Adju I .: Ineligible For Interest [Ii10•H93
Total True-Up Ad ,Jaen .
H12 Pmvious R=mning Tiue.Up Ac wtmest
H13 Total True-Up Adjustment [P13+H4kH7+H8+H11+H12] $44.8708
H14 Amount of TAX-Up Claimed For This Projected Period $44.8708
IRIS Remaining Taus-Up A4-fteot [H13-H14] $0.0000
. Part M: Proiected Period
Module I: New Maximum Permitted Rate
a b c d e
Lirw Line Descri en Sasie Tier 2 Tier 3 Tier 4 Tier 5
Il Caps Method Segtnmc For Projected Period [Wks 2]
12 Markup Method Segment For Projected Period [Wks 31
13 Chan Mvnmt Dddri Segment For Projected Period [Wks 4/5]
14 Prof. Period Rate Eligible For Inflation [DS+F5+G5+I1+12+13] $10.0941
I5 hftstion Segment far Projected Period [(14eC5)-I4] $0.3028
16 Headend Upgrade Segment For Projected Period [Wk3 61
V Fattetnal Casts SegmeM For Projected Period [Wks 7] $1.4185
I8 Thic-UP SW=t For Projected Period $0.1193
19 Max Permitted Rate for, Projected Period [I4+I5+I6+i7+I8] $11,93471 1
110 Operator Selected Rate For Projected Period 511.5900
Using TVA inflation fun=
MPR 1240 $11.92
An% 12352 $1.11
Combined MPR $14.03
Combined TWC Selected Rate $13.70
d]ffe<w= $0.33
Page 4 FCC Form 1240, July 1996
TJ-COG
CAN Regulal
29
Worksheet 1- True-Up Period Inflation
For i smucto s, sae Appendix A oflnatructions For FCC Farm 1240
Line Period FCC lnfhalon Factor
101 Month 1 1.96%
102 Month 2 1.96%
103 Month 3 1.96%
104 Month 4 3.00%
105 McWh 5 3.000A
106 Month 6 3.00%
107 Month 7 3.00%
108 Month 8 3.00%
109 Month 9 3,00%
110 Molrth 10 3.00%
III MM& 11 3.00%
112 Month 12 100%
113 Average Irdl Fador for Trva-Up
Period 1 1.0274
114 Myth 13
115 Math 14
116 Month 15
117 Mooth 16
118 Month 17
119 Madh 18
120 Month 19
121 Month 20
122 Month 21
123 Mouth 22
124 Mabth 23
125 Month 2,4
126 Average Inflshon Factor for Trae•Up
Petiad 2
Jan 100 1.96%
Feb 1.96%
MW 1.96%
Aw 2.40%
ft 2.40%
Juno 240%
July 2.40%
August 2.40%
8eptamber TWC files 1240 2.40%
7etaber- FCC rdeasas 24% 2d Q 2.401A
November 2.40%
2.40%
1.0229
Page 1 FCC Form 1240, July 19
TJ-COG
CATV Regulator
30
Worksheet 7 - Externs! Costs
True-Up Period
For uratt , ace Appardix A of haWactiom For FCC Form 1240
Qualim 1. For width daw period am you Oft not dds wmiabme [Pig an W in the appropiiato bme.l
Qw" I How long is dw Tact Period, in mmom for which rates m being set wilt aria wmbbeet7
Queadm 3. How long b dto second period, m nmWbp% for which rates see being set with thh worlaheet7
True-Up Paiod Projected Period
x
12
a c e
Line Line 17mcription Htaic Tler 2 Tier 3 7114 Tlar 5
Period I
External Costae El' ble far Marko
Coat of Programm tg For Cbatmcb Added
701 Pour to 5/15/94 of Aft 5/15/94 Using
Maalwp Method For Period
$172.11
702 Rch m offs" Caasem Few Far Period
703 Copyright Fees For Period 533.85
704 Eganal Cost E halo For 7.5% Madcap $205.96
705 Mmlced Up External Costs $221.4070
External Costs Not Eligible for Marko
706 Cable Spserric Tmm For Period
707 Francbiw Raiated Costs For Period
708 C.=ms= Regulatory Foal For Period
709 Total Eternal Coss For Period 5221.4070
710 Mmft 1, Pa4ubecnber External Coss For
Period $0.6150
Period 2
External Costs Eligible for Marko
Coat of Pmgeammmg For Charmch Added
711 Prior to 5115/94 or After 5/15/94 Using
Markup Method For Period
712 Rouamseusd m Conowd Fos For Period
713 Copyright Pea For Period
714 Ext=A Carta Etigiblo For 7.5% Matup
715 Mastd Up Extelml Coss
External Costs Not El` 'file for Markup
716 Cable Specific Taxes For Period
717 Frrncbisc Rclawd Coss For Period
719 Comwiniou RegWAmy Fees For Period
719 Totai External Cass For Period
720 Monthly, Per-5ubacnber Extemal Costa For
Period 2
Page 1 FCC Form 1240, July 199E
TJ-COG
CATV Regulal
31
Worksheet. 7 - External Costs
Projected Period
For inmucriorm, s= App radix A of 3n traction For FCC Form 1740
Question 1. For which time pmiod am you Siting out this wort d=V [Put = "X" in flue appropriate box.]
Qucmm 2. How bmg is dw imt pdiod, in mmdbs, for which etas am being sat with this wmtahaat7
Qu mdm 3. How brag is the second period, iu mmdha, for which ralm are b ft ant wbh ibis wwk6W?
Tma•Up Period Projected Patiod
X
12
8
c e
Lhm Line Description Basic Tler 2 Tier 3 Tier 4 Tur 5
Period 1
E=ternal Costs El' 'ble for Marko
Cost of Programming For Cpaanale Added
701 Prior to 5/15/94 or Attu 5/15/94 Using
Maimp Magwd For Period
$455.36
702 Rao on Canal Foes For Period
703 Copyright Faor For Period $35.51
704 Extunal Casts Eli No For 7.5% Markup 5490.87
705 Marked Up ExIm ai Coals 8557.6853
External Costs Not El ble for Markup
706 Cable Specific Tmxcs For Period
707 Franchise Related Coats For Period
708 Commission Regulatory Fees For Period $0.00
709 Total Enmi al Coals For Period 5627.6853
710 P 1 Pm•SubsmIm Exte? Costs For gL4185
Page 2 FCC Form 1240, July 1
TJ-COG
CAN Regula#ioi
32
For inaftuct om seo Appendix A of lnswctiaaa For FCC Fatm 1240
Question 1. How long is the Tmo•Up Period 1, im manths7
Quextiat 2. Haw long is the TmaUp Period 2, in manth?7
12
a h t d e
IJae Une Deacrl on Hoek Tier 2 Tier 3 Tier 4 Tier 5
801 Month 1 $9.9100
802 Month 2 $9.9100
803 Month 3 59,9100
804 Month4 $10.7800
805 March 3 $10.7800
806 Month 6 $10.7800
807 Month 7 $10,7800
BOB Month 8 $10.7800
809 Month 9 $10.7800
810 Month 10 $10.7800
811 Month 11 510.7800
812 Month 12 $10.7800
813 Period 1 Average Rate $10.5625
$14 Month 13
815 Month 14
816 Month 15
817 Month 16
818 Month 17
819 Month 18
820 Month 19
821 Month 20
822 Month 21
823 Mash 22
$24 Month 23
825 Month 14
826 P rind 2 Averega Rate
Page 1 FCC Form 1240, July 199E
TJ-COG
CAN Regulati
FCC FORM 1740
UPDATING MAXIMUM PERMITTED RATES FOR REGULATED CABLE SERVICES
Cable Operater.
Name of Cable Operator
Time Warner Cable
Mailing Address of Cable Operator
City State ZIP Code
NC
YES NO
1. Does this BWig hwdve a sbrgle 6mddee authority and a single ossnunamity unit? x
belowa d associated CUM mm heee: 276, 5992 SUBS
YES NO
2. Dan this flhg bwdve a single *sucMw nuthoft bus mutdple osunaafy mdM? x
If yes, otter the associated CUIDS below and compleft the fiandim authority information at the beam of Ns page:
3. Does this filing Mnvahre nmlthple kmdd o mdlwdhies?
If yes, attach a separate sheet for each ftuncbm authmity and ioefude the following fiandm authority iut?otmat n wi@r
its associated CUID(s):
Franchise Authority Wornmdan:
Name of Local Franchising Authority
ORANGE 276 5992 SUBS
Mailing Address of Local Franchising Authority
City State zip Coda
Telephone number Fax Number
4. For what purpose is this Form 1248 being 1Bed? Please put ad "X" in the appreprhft bar.
a. Original Farm 1240 for Basic Tier x
b. Amended Form 1240 for Basle Tier
c. Original Form 1240 for CPS Tier
d. Amended Form 1240 for CPS Ties
TO
S lrudlcede the one year Woe period for wlrtch you are setting rates (the Proms Perletl} ovoUZ801 ll?J31/Z001
TO
* Indicate dw that period for which yea are performing a t n"P. 1:0U99 89130M
7. Status of Previous Fling of FCC Form 1248 (erg an "z" in the appr+epeata box)
YIIS NO
a. Is this the first FCC Form 1240 tiled in any jmisdufion?
z
b. Has an FCC Form 1240 been filed previously witty the FCC?
z
If yes, enter the date f&, most recent fiftng: 006111998 (rma/dd/yy)
YES NO
c. Has an FCC Farm 1240 been filed previously wily th a Franchising AuflrorW I
If yea, cow the data of the most recent filing: 09/3:1999 (mWdd/yy)
33
(=R/YY)
(MM/YY)
Page 1 FCC Form 1240, July 1:
TJ-COG
& Stains of Previm Filing of FCC Form 1210 (gftr an the apprep td a be*
YES NO
a. Has an FCC Form 1210 been previously filed with the FCC?
X 7771
If yes, enter the dale of the most recent fling,: (=Wdd/yy)
YES NO
b. Has an FCC Form 1210 been previously filed with the Franchising Authority? x
if yes, enter the date of the most recent Sling: 05iZ5C1994 (mm/dd/yy)
9. Status of FCC Form 1200 Flft (enter an "x" in the appropriate box)
YMS No
e Has an FCC Form 1200 been previously filed with Ole FCC?
X
If yes, eater the date fled: (nnn/dd/yy)
YES No
b. Has an FCC Form 1200 been previously fled with fm Franchising Authority?
If yes, eater the date filed: 08/05/1994 (mm/dd/yy)
10. Cable Frogmiraming Services Complaint Status (enter an "x" in the appropriato boa[)
YES NO
a. Is Ibis form being filed in response to an FCC Form 329 complaint.? x
If yes, enter the data of Ihe complaint: (mm/dd/yy)
YES NO
11, ht FCC Farm 1205 Being hmWed With Ibis Filing L- I =1
1L Selectim of "Going Forward" Channel Addlitlm Metlu xlelogy (ender an "x" In the anrepriate box)
Check here if you are using the original rules [MARKUP METHOD].
Check here if you are using the new, alternative rules [CAPS METHOD].
34
Ifusng the CAPS METHOD, have you elected to revise recovery for YES NO
channels added during the period May 15, 1994 to Dec. 31, 1994?
13. Headed Upgrade MethodolgU
'"NOTE,* Operators now on* to the Coma mon thanehgiNfitr to un this upgrade mathwkdov and aftch an egrdpment Boland deppaoi om sohedulR
Check bare if you are a qualifying small System using the Sireapalined headend upgrade methodology.
Part I: Preliminary Information
Module A: Maximum Permitted Rate From Previous Filing
1999 MPR TWC MPR c d e
rJne Une Dexui on Heale Tler 2 TL 3 Tier 4 Tier 5
Al CwftMlodmumPeoguedRate 58.76781 1
• 6 c d e
T A- A- WS
.0 71 BI Average Subsoribmstdp Far True-Up Period 1 5,992
in Average Subseriberabip For True-Up Period 2
133 Estimated Average Subserib-Mp For PmJected Period 6.285
1nnanou 1n1ormation
Cl Unclaimed bfhW= Opp SwkchittgFr=1210 To 1240
C2 Unclauaed lafiat mt Umtgtda W Operator Responding to Rate Compkits
C3 bftoa Factor For True-Up Period 1 [Wks 1]
C4 lnft=FWWFarTnie-Up Period2 PAgm 1]
C5 Ctt.W FCC In W-u Factor
1.02341
CAN Regulation
Page 2 FCC Form 1240, July 199e
TJ-COG CAN Regulat
35
Module D: Calculating the Base Rate
¦ b c d e
I3ne Line Descri on Bask Tier 2 Tkr 3 Tkr 4 Tier 5
Dl Current Hesdend Ups Segmart
172 Cumrat EMema1 Costs Segment
D3 Current Caps Method Segment
$0-6005
D4 Current Mmikup Method Segment
D5 Cuamat Charnel Movement end Deletion Segment
D6 Current True-Up Segment $0.2767
177 Gurneet Inflation ScFacrit $0.1243
D8 BmRato[A]-D1.D&D3-D4-D5-I76-D7] $7.763
Part H: True-Up Period
Module E: Timing Information
Litre
Fl Caps Method SegmcraFor True-Up Pariod 1 Mks 21
F2 Markup Method Segment For Tbz-Up Period 1 [Wks 31
F3 Chan Mvnmt Delam Se$mcnt For True-Up Period 1 [Wks' 4(5]
F4 True-Up Period I Rate Eligible For Inflation [D8+F1+F2+F3] $7.7663
F5 Inflation Segment for Truo-Up Period 1 [(F4+C3)-F4] $0.1817
F6 H wiend Upgade Segment For True-Up Period 1 [talcs 61
P7 External Costs Segment For True-Up Period 1 [Wks 71 $0.6000
F8 True-Up Segment For True-Up Period 1 $02824
F9 Max Perm Rate for True-Up Period 1 [F4+F5+F6+F7+Fg] $8,8304
une on
¦ b c
B¦sle TIWZ T1r3
d e
Tier 4 Tier 5
Module G: Maximum Permitted Rate For True-Up Period 2
¦ Is e d e
X3ae Llae Description B¦ak Tkr 2 Tier 3 Tkr 4 M:5
Gl Caps3ufethad Segment For True-up Period 2 [Wks 2]
G2 Markup Method Segment For True-Up Period 2 [Wks 3]
G3 Chan Mvmnt Delta Segmertt For True-Up Period 2 VM& 4/51
G4 TU Period 2 Rate Eligsble For lnflatica [D8+F5+G1+G2+G3]
G5 hfieticm Segment for Truo-Up Period 2 [(G4*C4KA]
G6 Headend Upgrade Segment For T-Up Period 2 [Wks 61
G7 External Costs Scgmeat For True-Up Period 2 [Wks 71
G8 Tnre-Up Segment For Tr-Up Period 2
G9 Mme Pam Rate for True-Up Period 2 [G+Wh+G6+G7+Gg]
Page 3
FCC Farm 1240, July 19
TJ-COG
Module H: True-Up Adjamtment Calculation
CAN Regulation
36
• b t d e
l dne Ilne Description Hanslc Tier 2 Tier 3 Tier 4 Tier S
Adjustment For True-Up Period 1
Hl Revenue From Period 1 $615,892.0200
H2 Revcu= From Max Permitted Rate for Period 1 $637,212,6275
H3 T-Up Period I Adjustment Vi&EIl] $21,320.6075
H4 Blest on Period 1 Adjustment 51,832.6561
Adjustment For True-Up Period 2
H5 Revenue Fran Period 2 Eligible for Interest
H6 Revenue From Max Perm Rate for Period 2 Eligible Farlaterast
H7 Period 2 A4ptmeut Eligible For Interest WHS]
HS htm= on Period 2 Adjustment (See insttuctioug for fomuia)
H9 Revenue Froze Period 2Ineligible for Interest
H10 Rom we From Max Perm Rate for Period 3 hv.4 gjble for Interest
Hi I Period 2 A4wtmew Ineligible For Interest [HI04 9]
ToW True-Up Adjustment
H12 Previous Remaining True-Up AdjQftxxft
H13 ToW Tice-Up Adjustment [H3+H4+H7+M+H11+H12] $23,153.2636
H14 Amomd afTrur Up Claimed For This Projected Period $23,153.2636
HIS RemainingThv,-UpAdjustment [M3-HI4] $0.0000
Part III: Projected Period
MWWe I: New Maximum Permitted Rate
a Is c d e
Line line Desert en Bask T1r2 Tiers Tier 4 Tian S
II Caps Method Segment For Projected Period [Wks 2]
12 Markup Method Segment For Projected Period [Wks 31
13 Chen Wang Delete Segment For Projected Period [Wks 41S]
14 Rej.PeriodRateEligible17orlafladan[D8+F5+G5+Il+I2+I3] $7.9480
15 Inflation Segment for Projected Period [(I4+C5).I4] $0.1908
16 Headend Upgrade Segment For Projected Period [Wks 6]
I7 Exterud Costa Segment For Projected Period [Wks 7] $1.3853
I8 True-Up Segment For Projected Period $0.3070
119 Max Permitted Rate for Projected Period [I4+I5+I6+r7+I8] $9.8311
I10 Operator Selected Rite For Pmjeoted Period $9.2900
Using Tws inlation fipm
AIPR 12M $9.83
AIEPB.123Sa $1.21
Combined MPR $11.64
Combined TWC Selected Rate $11.10
duce $0.54
Page 4 FCC Farm 1240, July 199E
TJ-COG
CAN Regula
37
Worksheet 1- True-Up Period inflation
For tomatimM see Appendix A of lastt Mow Far FCC Form 1240
Line Perled FCC 7nAation Factor
101 Month 1 1.96%
102 Month2 1.96%
103 Month3 1-96%
104 Mcmth 4 100%
105 Month 5 240%
106 Month 6 2.4096
107 Month 7 240%
108 Month 8 2.40%
109 Mmtth 9 240%
110 Month 10 240%
111 Month 11 24096
112 Mouth 12 2409x,
113 Averse Wkwan Factor for Tme-up
Pcaiod 1
1.0234
114 Mouth 13
115 Month 14
116 Month 15
117 Month 16
118 Month 17
119 Month 18
120 Mph 19
121 Month 20
122 Month 21
123 Mm%22
124' Month 23
12S Month 24
126 AveragelnfishanFactor farThe-Up
Pedod2
yen 100 1.96%
Feb 1.96%
Mar 1-96%
Apr 2.40%
MW 240%
Toren 2.40%
w 2.40%
p 2.40%
SepWdwTWCSIrs 1240 2.40%
Odober-FCC Meam 2.4% 2d Q 2.40%
November 240%
2.40%
1.0229
Page 1 FCC Form 1244, July 1E
TJ-COG
CATV Regulator
38
Worksheet 7 - External Costs
True-Up Period
For imn damn, see Appendix A of bmhnctiam For FCC Farm 1740
Question 1. For which tmm period are you fi tg out this worlabcet? [Pat an X" in the MmTdaae box,]
Quastiou 2. How long is the fist period, in months, for which n tea are being sat wilh this wadmbeet?
Question 3. Huw kft is tlrc smand period, ins man&% for which rates are bmtg set with this watirdwW
Tme•Up Period Pmjectcd Period
X
12
x c e
Line Liao l? Bxsie Tbrr 2 Mw 3 Tier 4 Tier 5
Period 1
External Costs Eligible for Marko
Cost of"Pmgnomnmg For Channels Added
701 Prior to 5/15/94 ar After 5/15/94 Using
. Markup Mothod For Period
$34,506.25
702 Rebaosmiss m Cwwcnt Fees For Period
703 Copyr& Fees For Period $5,625.13
704 FjUrnd Costa MW v For 7.5% Markup 540,131,38
705 Marked Up External Cosh 543,141.2335
Erternal Costs Not Eligible for Markup
706 Cable Specific Taxes For Period
707 Franchise Rdmd Costa For Period
708 Commission Regt90M Fees For Period
709 Talxl Extnral Cents For Period $43,141.7335
710 1, Pa-suhamber Encrust Comu For
Period $0.6000
Period 2
External Costs Eligible for Mur4p
Cost of Pmw mm For Chamda Added
711 Prior to 5115/94 or After $115/94 Using
Markup Modiod For Period
712 RehaosmisAm Cansat Fees For Period
713 Copyright Fees For Period
714 FxtmW COO Eligible For 7.5% Mat*
715 Marked Up Exte ud Cosh
External Costa Not Eligible for Markup
716 Cable 5pveffia Taros 'For Period
717 Frnnalrim Related Cash For Period
718 Commission Regulatory Fees For Period
719 Total Extamd Casts For Period
Mamthly, Per-Subscriber Ex nLd Costs For
720 Period 2
Page 1 FCC Form 1240, July 1991
TJ-COG
CAN Regulai
39
Worksheet 7 - External Costs
Projected Period
For indnicdame, we Appeada A of loskuctiom For FCC Form 1740
Question 1. For which thne period arc you filling out dtis wmimheet? [Pot an "X" in the epp upd to box.]
Quesfim 2. How htgg is die fiM period, m motes, for which rates am being set wifit thin woticelmn
Quesfim 3. Flow Iwo is der second paiod, in motes, for which rates are belt set v ft this wmltsb xt?
Thm-Up Paned Projected Period
X
12
0
C
Llne - - - l hta DmcHpttoo, ,. _ Fbute 1Y 2 Tler 3..• - Z4 . _Tler 5
Period i
External Coats Eligible for Marko
Cost of Programming For Channels Added
701 Prior to 5115/94 or ASa 5115/94 Using
Markup Modmd For Pariod .
$91,293.13
702 Robattmumm Conscut Fear For Pmwd
703 Copyright Fees For Period $5,900.17
704 External Casts Mole For 7.5% Markup 597,193.30
705 larked Up Eacimmf Costs S104,482.7975
External Costa Not Eligible for Marko
706 Cable Specific Tames For Penned
707 Franchise Relafcd Casts Far Period
708 Commission Regulatory Fels For Period $0.00
709 Total F,xuanal Costs For Period 5104,4x2.7975
710 Mondtiy, Pet-Subscriber Fattetual Casts For
Paiod 1 $1.3853
Page 2 FCC Fort 1240, July 19
Ti-COG
CATV Regulation
40
For hWW" ons, sae Appcndix A cf 1nsWcions For FCC Form 1240
Que cn 1. How long is the Thu Up PaaW 1, in months?
Qucs ion 2 Haw long is the Tm -Up PaW 2. in months?
12
• b c d a
Upe Una Demri on Bulc Tier 2 Tier 3 Tier 4 T1: S
801 Month 1 $9.9100
802 Month 2 59.9100
803 Munch 3 $9.9100
804 Month4 $10,7800
805 Month 5 $10,7800
806 Month 6 $10,7800
S07 Month 7 $10.7800
BOB Month S $10.7800
809 Month 9 $10.7800
8l0 Month 10 $10.7800
811 Month I1 $10,7800
812 Month 12 510.7800
813 Pericd 1 Average Rate $10.5625
814 Month 13
815 Morph 14
816 Month 1$
817 Month 16
818 Month 17
819 Month 18
820 Month 19
821 March 20
82Z Month 21
823 Month 22
824 Month 23
825 Month 24
826 Period 2 Average Rate
Page 1 FCC Form 1240, July 199