HomeMy WebLinkAboutAgenda - 04-01-2003-9bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 1, 2003
Action Agee
Item No.
SUBJECT: Acceptance of Report by Action Audits, LLC and adoption of 2003 Rate Order
for Cable Services in Unincorporated Orange County.
DEPARTMENT: PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
(Under Separate Cover)
Review of Time Warner Cable's
FCC1240 and 1205 Rate Filings,
Prepared by Action Audits, LLC
INFORMATION CONTACT:
Gwen Harvey, 245 -2300
Michael Patrick, Chair, Cable Advisory
Committee
Robert Sepe, Action Audits, LLC
2003 Rate Order TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 336-227-2031
PURPOSE: To consider approval of the cable consultant's review of a request by TimeWarner
Cable to increase rates charged for basic cable television service., installation, and equipment
rental for 2003, and adoption of a rate order based on that review.
BACKGROUND: In October 2002, per the Federal Communication Commission's rules,
TimeWarner Cable petitioned the County for permission to increase cable television rates for
2003. The County is authorized to review the material basis for the rate increases and whether
such increases comply with the FCC rate-making rules, then issue an order to approve or deny
any such increase. Bob Sepe, the County's cable consultant, as part of the Triangle J Cable
Consortium, has evaluated the rate forms submitted by the cable company to the County. Mr.
Sepe has determined that the increases comply with the FCC rate rules and recent FCC
decisions regarding rate matters. The consultant's report and the recommended rate order are
attached.
Orange County is composed of two federally identified cable television districts - NC 0276(a)
and NC-0276(b), which serve 30 and 5642 cable customers respectively, and NC 0256, which
serves another 702 cable households. Under the recommended rate order, the approved
Maximum Permitted Rate (MPR) for the Basic Service Tier (BST) NC-0276a customers is
$12.55 per month, and $10.40 per month for NC 0276(b) customers, and $11.74 monthly for
NC-0256 customers. To each of these rates the appropriate FCC1235 "Add-on" fee is
collected. The Add-On fee is the cable system up-grade cost recovery fee that was approved in
2001 and remains unchanged.
Additionally, the recommended rate order amends the 2002 rate order previously adopted by
the BOCC that denied TimeWarner's (TW) 2002 Hourly Service Charge (installation fee). The
Board found the TW 2002 26% rate increase unreasonable and denied the rate increase. TW
appealed the action to the FCC. The FCC issued a decision (Smithfield) that stated that the
Local Franchise Authority could not deem a rate increase unreasonable by its magnitude alone.
Therefore, the 2002 26% rate increase and subsequent 2003 increase are permissible. As a
result, it is necessary for the BOCC to amend the earlier action and find the 2002 rates for cable
equipment, installation, and hourly service charges to be in compliance with federal regulations.
The Rate Order preserves County regulatory authority and upon the discovery of new evidence
or a subsequent FCC ruling that reverses the FCC's Smithfield decision, the County has the
ability to reach back and order a rate reduction and refund. Should the Board decide not to
approve the Rate Order, the TW proposed 2003 rates become effective by default and the
County forfeits its future refund authority.
FINANCIAL IMPACT: There is no financial impact to the County in the approval of the
consultant's report and adoption of the proposed rate order.
RECOMMENDATION(S): The Manager recommends that the Board accept the consultant's
report and adopt the 2003 rate order for cable services in unincorporated Orange County.
3
Action Audits, LLC
Orange County, NC-0256 and NC-0276
Review of Time Warner Cable
FCC1240 & FCC1205 Rate Filings
for- 2003
March 19, 2003
REPORT
TO: John Link, County Manager
.e~ --~
FROM: Robert Sepe, President
~; Review of Time Warner Cable's FCC1240 and 1205 rate filings
We have reviewed Time Warner Cable's FCC1240 and FCC1205 filings, documents gathered by
the County and consulted related FCC rules, regulations and publications. The values stated in
the Company's FCC rate requests is the responsibility of the cable operator.
Supplied data were reviewed to determine whether the cable operator calculated "updated" rates
consistent with the procedures prescribed by the FCC in accordance with the FCC's 13th Report
and Order, and the FCC's Cable Rate Regulation rules §76.900 - §76.990 and the
Telecommunications Act of 1996.
Original computations were performed and compared with information provided by Time
Warner Cable. The accompanying report provides a reasonable basis for the opinions expressed
herein.
Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration
101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868
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5
Time Warner Cable Rate Report
A Review of Time Warner Cable's
2003 FCC1240, FCC1235
& FCC1205 Rate Filings
for Orange County, NC
Federal Community Unit Identification Numbers:
NC-0256a, NC-0256b and NC-0276
Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration
101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868
SUMMARY
On October 1, 2002, Time Warner Cable submitted a FCC1240-Basic Cable Service Tier and
FCC 1205-Equipment and Installation charges to seek an upward adjustment in the rate charged
for basic cable television service, installation and equipment rental for the year. The consultant
evaluated the information Time Warner Cable (TWC) submitted, requested and received
supplemental information and evaluate ndent alcalat~ons to venfy the propos d rate tructure
rules. The Consultant performed mdepe
sought.
Orange County is composed of two federally identified cable television districts, NC-0276a,
NC0276b and a third federal district identified as NC-0256. The smallest federal district, NC-
0276, has 30 cable households and the other 5642 cable households. NC-0256 has 702 cable
households.
a. NC-0256a cable subscribers will be charged a "selected" monthly rate of $14.25
for the Basic Service Tier (BST) in 2003. This rate includes the BST "selected"
charge of $10.40 plus the "Add-on" Cost of Service Network Upgrade Charge of
$2.11.
b. NC-0256b cable customers will be charged a "selected" monthly rate of $12.15
for the Basic Service Tier (BST) in 2003. This rate includes the BST "selected"
charge of $10.34 plus the "Add-on" Cost of Service Network Upgrade Charge of
$1.81. For these customers, the "selected" rate is the Maximum Permitted
Combined Rate.
NC-0256 TWC cable households will be charged a "selected" monthly rate of
$11.74 for the Basic Service Tier (BST) in 2003. This rate includes the BST
"selected" charge of $11.70 plus the "Add-on" Cost of Service Network Upgrade
Charge of $1.45. For these customers, the "selected" rate is the Maximum
Permitted Combined Rate.
Time Warner customarily sets the monthly fee slightly less than the maximum permitted
combined rate. Time Warner set its selected 2003 "combined" rate slightly below or at the
Maximum Permitted "Combined" Rate for BST cable service.'
1 See Exhibit I, page 4 of each set of Federal CUID recalculations by Action Audits.
Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration
101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868
in the Maximum Permitted Rate (MPR) for the Basic Service Tier
hift
s
These tables show s
ber that the FCC1235 "add-on" capital investment system upgrade recovery fee is
R
emem
(BST).
added to each BST rate to determine the "combined MPR for the `skinny" basic cable service.
NC-0276a Histo
Year MpR +/_ % increase
2000 $8.75
2001 $11.91 $3.16 36.11%
2002 $11.70 $-0.21 -1.76%
2003 $12.55 $0.85 7.27%
Plus the FCC1235 fee of $2.11
NC-0276b Histo
~,e~ MpR +/- % increase
2000 $8.76
2001 $9.91 $1.15 13.13%
2002 $9.62 $-0.29 -2.93%
2003 $10.40 $0.78 8.11%
Plus the FCC1235 fee of $1.81
NC-0256 Histo
year MpR +/- % increase
2000 $8.75
2001 $10.62 $1.87 21.37%
2002 $10.95 $0.33 3.11%
2003 $11.74 $0.79 7.21%
Plus the FCC1235 fee of $1.45
Inflation Adjustment
In its FCC1240 rate filing, Time Warner used an inflation factor of 1.21% for the last nine
months of the 2002 true-up period, because that was the official rate published by the FCC. On
October 4, 2002, the FCC revised the official inflation figure for the last two quarters of the 2002
true-up period to 1.24%. Time Warner was not able to use this new value in its calculations for
the FCC1240 submitted October 1, because the FCC requires cable operators to use the "then
current" rate prior to the issuance of revised inflation figures.
Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration
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8
Had TWC used the new inflation rates, Time Warner's Maximum Permitted BST rate would
have increased ever so slightly. Refreshment would not alter the rate paid by Time Warner's
customers.
Time Warner was correct to use the 1.21% in the October filing. The Franchise Authority cannot
compel the cable operator to submit a revised FCC 1240 with a refreshed BST MPR and use that
refreshed rate as the basis for preparing the FCC1240 rate filing for 2003. TWC should be
encouraged to refresh the 2003 rate in the interest of good business and consumer practices by
increasing the Maximum Permitted Rate for 2004. Rate refreshment allows the MPR to
accurately track the inflation rate.
Equipment & Installation Rates
Time Warner calculated the FCC1205 maximum permitted equipment2 and installation3 rates by
aggregating its costs on a national basis. The prior year costs were aggregated on a regional
basis. a
In 2001, Time Warner's North Carolina maximum installation Hourly Service Charge, (HSC)
was $28.39. For 2002, Company-wide expense aggregation increased the HSC $7.44 to $35.83,
a 26% boost. For 2003, the Company is requesting authority to raise the HSC $1.79 to $37.62.
Because TWC did not show that its averaging methodology produced a reasonable HSC rates for
2002 the Consultant recommended that the FCC 1205 form filed by Time Warner should be
disallowed because TWC was unable to demonstrate that it's national aggregation process
produces "just and reasonable rates." Time Warner submitted a letters to the County requesting
the County delay action on the Ron th same matteranOn January 23W2003, the FCC slued a
Smithfield, NC local Rate Order
z§76.923 (c)(1) Costs of customer equipment maybe aggregated, on a franchise, system, regional, or
company level. When submitting its equipment costs based on average charges, the cable operator must provide a
general description of the averaging methodology employed and a justification that its averaging methodology
produces reasonable equipment rates.
3§76.923 (c)(3) Installation costs maybe aggregated, on a franchise, system, regional, or company level.
When submitting its installation costs based on average charges, the cable operator must provide a general
description of the averaging methodology employed and a justification that its averaging methodology produces
reasonable equipment rates.
4Time Warner is treated as a single company for FCC 1205 rate-making purposes. TWC files a single FCC
1205 throughout the United States with over 30001oca1 franchise authorities, LFAs, to establish uniform rates for
equipment and installation charges.
SBrad Phillips' February 20021etter to the County
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-1
decision on the Smithfield matter which reversed the me Warner'sOight fo d increase in the
decision, the FCC concluded that the magnitude of T
proposed 2002 HSC could not be the sole basis for judging iss ble~easonable. Therefore, based
on the FCC's logic, TW's FCC1205 national rates are perm
It is the Consultant's opinion that this FCC has chosen to ignore federal lawb by failing to
consider whether the proposed national rate structure yields prices that are comparable to those
found in competitive environments . Lexington (1`1 ete head to head for cable televn lion where
Lexcom Cablevision and Time Warner Cable comp
customers. Lexcom's HSC is $10 and a remote controUconverterpackage is $1.25 monthly.
Given the FCC's decision in Smithfield, it would be prudent for the Co b ect tophe availability
proposed FCC1205 rates, yet reserve the right to update the rate orders ~
of new information or changed circumstances.
Recommendation
Find the FCC1240/1235/1205 rate-making forms and proposed rates as compliant with the FCC's
interpretation of its rate regulation rules and subject the conditions set forth herein.
6The 1992 Cable Act (§ 623(b)(1), 47 U.S.C. § 543(b)(1)) required the Commission to prescribe rate
regulations that protect subscribers from having to pay unreasonable rates by ensuring that rates for regulated
services do not exceed rates that would be charged in the presence of effective competition. For a system that is not
subject to effective competition, the Commission is obligated to ensure the reasonableness of rates charged for the
basic service tier ("BST").
The FCC wrote in "In the Matter of IMPLEMENTATION OF SECTION OF THE CABLE
TELEVISION CONSUMER PROTECTION AND COMPETITION ACT OF 1992 RATE REGULATION, MM
Docket 92-266, that... "The priority established in the Act is clearly to protect the interests of subscribers. An
important focus for both basic tier and cable programming service rates, consistent with providing system operators
a fair return, is the establishment of rate levels equivalent to rates that would be charged in the presence of effective
competition."
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io
RATE REPORT
Background
In September 1995, the FCC adopted the 13th Report and Osrdeusing the FCC1240, taking into
allowed cable operators to adjust their rates on an ann
consideration past and anticipated future external costs.
The 13th Order requires Time Warner and other cable operators to submit their FCC1240 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. The franchise authority retains refund authority as long as it responds
within fifteen (15) days to any inquiries from the cable operator regarding its review of the
Company's FCC1240 documents.
The Telecommunications Act of 1996 deregulated the upper tiers of cable television service by
taking the Federal Communications Commission out of the cable-regulation business. The theory
behind the law was that if competition were allowed to develop in the cable industry through the
free market, the cable industry would be more responsive to consumer needs. The competition
Congress envisioned has not materialized, except in a few communities. In most locales, cable
operators have a defacto monopoly and appear to be taking advantage of that opportunity to
racket cable rates upward.
Only recently has competition from an aggressive satellite television industry begun to modulate
that upward pressure. In a report to Congress s on the status of competition in the cable industry,
the FCC stated that competition is forcing cable operators to respond by lowering prices or
adding channels without raising monthly rates. Yet in that same report, it concluded that cable
remained the dominant video-programming provider despite inroads made by the DBS industry.
Nevertheless, leading to cable rates, which are rising faster than inflation.
Recent TWC Events
Low Company earnings and poor stock performance motivated Steve Case, AOL-TW Chairman,
resigned his position effective May 2003.
Randy Fraser, the former president of the Raleigh-Durham Division, resigned that position to
become Time Warner's vice president of government affairs for North Carolina. The new
Division President is Tom Adams who formerly headed the Rochester (NY) division.
s EIGHTH ANNUAL REPORT, Annual Asse Docket No. O1 t12 s of Competition in the Market for the
Delivery of Video Programming. January 14, 2002, CS
Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration
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The Charlotte Observer on July 28 reported that Time Warner Cable was planning to create a
campus of 1,100 employees in Charlotte. The story sai oval of the incenrive program and hat
employees to Charlotte depended upon legislative app
Time Warner could reap as much as $55 million in incentives over several years.
The move would relocate TWC's Stamford (Connecticut) and Denver offices and create up to
1100 jobs to the Charlotte area o9 er time. To facilitate the move and to facilitate jobs, the NC
State Senate Finance Committee may enter into contracts with selected companies to rebate as
much as 75 percent of the state withholding taxes paid by the company's employees. The
incentive program is limited to 15 companies per year with $10 million in initial grants per year,
and with the grants continuing for up to 12 years.lo
The "stimulus" grants are intended to persuade companies to locate or expand in North Carolina
and create or preserve jobs that otherwise might be "lost."
FCC1240 Regulated BST Rates
An Analysis of the proposed Rate Adjustments
Time Warner's FCC1240 rate adjustments reflect the following external cost elements:
1) External costs for True-up Period, 2) External costs for Projected Period,
3) Inflation from True-up Period, 4) Inflation for Projected Period,
5) Franchise related (PEG) expenses, and 6) FCC regulatory cost exclusion treatment.
External Costs
Time Warner's Form FCC1240 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 are 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.
9The Economic Stimulus and Job Creation Act, passed in the waning days of the 2002 short session, gives
a five-person Economic Investment Committee, controlled by the governor, unprecedented discretionary power to
offer selected companies cash grants. The program is called the Job Development Investment Grant Program.
loCarolina Journal, Economic Stimulus Bill: NC's version of insider Trading?, November 2002, pl.
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~a
True-Up and Projected Periods
The FCC1240 Form must be filed with the local franchise authority ninety (90) days before the
rates are scheduled to take effect and maybe filed no om th equ~erly mmethod of updat ng cable
Form 1240 rate filing method represents a departure fr q
rates, in that it allows cable operators t o estimate their future costs over a 12-month period: this
is referred to as the projected period. The FCC1240 form allows operators to recover prior
period expenses, 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 process in the
next FCC1240 rate filing.
Time Warner's projected period covers the 12-month period of January 1, 2003 to December 31,
2003. The operator's true-up period covers the 12-month period of October 2001 through
September 2002.
Franchise Related Costs: Public Access Television
Time Warner Cable reported no franchise related expenses for the past year. Franchise related
costs incurred by the operator may include such expenses as public, government and education
access facilities and equipment, signal transportation, headend accommodations as well as
Institutional Network related expenses.
Commission Regulatory Fees
In August 2002, the Federal Communications Commission hiked the regulatory fee 8.2% charged
cable operators to fund the FCC which is passed on to subscribers. The hike is intended to cover
the FCC's $245 million budget. Cable operators will now pay 53 cents per subscriber, up 8.2%
over last year's 50 cents per subscriber fee. It is interesting to observe that the FCC's regulatory
fees are rising faster than retail cable rates.
The FCC permits cable operators to internalize or externalize the regulatory fee. The fee
(~$.53/year) is collected incrementally (~$.04 -.07/month) from it cable television subscribers.
These revenues are not subject to franchise fees or other taxes and must be remitted to the federal
government to compensate the FCC for Comcast cus omersdet rmbned the feeB ext rnal to the
examination of the monthly bills sent to
monthly BST rate, hence it is excluded from the rate treatment process.
Orange County cable television subscribers served by Time Warner will contribute more than
1 IFCC 1210 Forms allow for the recovery of past costs, only, not future costs. Future costs are recoverable
through the use of the FCC1240 Form only.
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13
$337812 in regulatory fees to the Federal government during the projected period!
As a point of note, there are 67 million cable television subsenb This amo Tts to $35 5 million
pay an annua153-cent regulatory fee to the Federal governor
annually to fund the FCC's cable television regulato hree wears itsBe tremely doubtful able~er
responsiveness by the FCC observed dunng the last y
television subscribers in this country receive $35.Smillion inould ei beer be resc nded or paidCo
on an annual basis. It is the auditor's opinion that this fee sh
the local government to fund regulatory activities.
Programming Costs
Time Warner will collect for the projected period about $ n00 0 ~S t Various cab a operBators have
external costs, most of which is attributable to progr g
advised that program service providers customarily ust e a e fo each servic a offered. Ho e ~er
attributes its programming cost changes to what rt m p y
this amount is relatively low compared to upper cable tier service programming costs. Most of
the channels on Time Warner's BST are obtained without cost to the company.
Inflation
Time Warner is claiming inflation adjustments for the true-up period of October 2000 through
September 2001, and the projected period of January 2001 through December 2001. The
company used the 1.21%true-up inflation rate for the last three quarters of the 2002 true-up
period, because it was the then current FCC-PUBLISH sed new infl do figures of 1.24 % fordthe
initial FCC1240 form. In October 2002, the FCC relea
period April through September 2002.
Time Warner did not use the revised factors to calco~ Teteuired t use4this rateittThOCompany
2002. Pursuant to FCC rules, Time Warner was n q
must use the most recently published rate (1.21 %). As stated in a recent FCC Order, the FCC
"does not find a rate unreasonable solely because more accurate inflation data have become „13
available when the FCC or the local franchising authoe tinflation figure m its October filmlgng.
Time Warner did not have authority to apply the high
Had TWC used the new inflation rates, Time Warner's Maximum Permitted BST rate would
126374* $.53 = $3378
13TH the Matter of Time Warner Cable, Petition for Reconsideration, CUID No. NC -0065, Town of
Clayton (June 4, 1999).
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have increased ever so slightly. Refreshment would not alter the rate paid by Time Warner's
customers.
It is in the public interest for Time Warner (prior to submitting in Septetmeenflariontfigures1to40
filing for 2004) to amend its ublished f1240 sat~cli~ngoV rnmentslthat choose to regulate cable
incorporate the more recent p ~ a n unreasonable BST rates, while also
rates are charged with protecting subscribers from p yi g
providing system operators with a fair return. A loc of an amended FCC 240 prompted by ator
to refresh its inflation adjustments upon submission should make a
material defect in the original filing. In the interest of fairness, the Company
practice of "refreshing" its FCC1240 filings so they accurately track inflation data.
Upper Tier CPST Rate Regulation Expiration
A sunset provision within the Telecommunications able o lerator i allowed to change upper e
tier regulation on March 31, 1999. Since then, the c p
service tier rates at will upon thirty (30) days notice to the franchise authority and subscribers.
FCC1235 Cable System Upgrade Costs
Time Warner Cable submitted in 2000 an abbreviated FCocf Service rate. This feelisn Addedaone
Network Upgrades for BST services to establish a Cost
to the BST rate to recover system upgrade outlaye able tiers etg r BST, cable program service
capital upgrade costs to be apportioned among th
tier (CPST), new product tiers (NPT), etc.
Time Warner seeks to charge a monthly fee to reco ee sFa d d to tNhe ST-Se egrcted rate tofcreate
2002; an amount APPROVED last year. The charg
the combined rate subscribers pay. Subscribers will be charged a combined rate which includes
the "Add-on" and BST rates.
FCC 1205 Equipment and Installation Rates
The following table chronicles FCC1205 equipment and iesation1OAlthough there0has been a ing
in 2002, Time Warner's rates were based on national aggr g
laSince 1995, pursuant to the Social Contract, Time Warner collected substantial pre-capitalization upgrade
fees amounting to several dollars monthly from CPST subscribers. The FCC has ruled that these funds cannot be
applied to off-set that portion of ~e Warnerps able'tocrectoverfo d is BST cast me eonlyVthe cost of the network
BST services. Consequently, Tune
upgrade associated with the distribution of BST cable services.
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slight decrease in equipment charges, the HSC rate increased dramatically.
TW FCC1205 National E ui ment &HSC rates
FCC1205 2001 2002 2003 Delta
regional national national
HSC $28.39 $35.83 $37.62 $1.79
Remote Control $0.28 $0.35 $0.35 $0.00
Addressable 1 $4.26 $8.49 $7.34 ($1.15)
Non-addressable 2 $0.93 $0.68 $0.59 ($0.09)
Time Warner aggregated its equipment and installation expenses on a national basis to establish a
uniform rate structure in its 3000 franchises. In additi~ ble list lthe differetncesin the amount of
installation services are tied to the HSC rate. The next _
time required to install cable service in 2001 versus 2002~aecS oed~eg nt North Carol na "regionals
Schedule D. The 2001 installation average insta~ldaeian tie ated measurements.
values where as the 2002 values are Company- g~' g
Schedule D: Avera
Activity 2001
FCC1205 NC
regional
Average Hours per Unwired 0.96
Home Installation
Average Hours per Pre-wired
Home Installation
Average Hours per Additional
Connection at time of
Installation
Average Hours per Additional
Connection Requiring
Separate Installation
0.84
0.55
0.73
Hours*
2002
FCC 1205
company
1.20
Installation
2003
FCC1205
company
1.22
0.85 0.85
0.54 0.53
0.85 ~ 0.84
*time in hours is expressed as decimal equivalents
Delta % change
+/-
0.02 2.08%
0.00 0.00%
-0.01 -1.82%
-0.01 ~ -1.37%
Time Warner did not provide documentation to support the basis for Total Maintenance Hours
(Schedule C(B)), the average time required to wire a home (Schedule D(A)), time required to
complete a "pre-wire" (Schedule D(B), extra average time required to install an additional outlet
simultaneously with a primary installation (Schedule D(C), average time required to install an
additional outlet subsequent to the primary installation (Schedule D(D)), average time to perform
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a hard disconnection (Schedule D(E), average time to perform a tier change, and the average time
to perform an "apartment" installation (Schedule D(F)).
It is the Consultant's opinion that regional FCC Form 1205 filings makbe idsee sebetwe n dvisions
of rate base/rate of return regulation. A regional filing limits cross su
where regional economic and geographic differences are significant. The concept of cross-
subsidy in a company FCC 1205 filing is important because resultant equipment and installation
rates are dependent on underlying regional costs.
The unintended consequence of the FCC's decision tc ~' anc fil ng is the resulting cross ~
consolidate their balance sheets for the purpose of a p Y
subsidization problem. "Super" MSOs serve diverse ge gran~FCC 1205 filingrcosts are shifted
they aggregate their balance sheets to create a single co p y
from high cost centers to low-cost areas creating rate increases which exceed the CPI.
FCC §76.92315 requires the cable operator to provide a general des~p roduces reasonablegates
methodology employed and to justify that its averaging methodolo p
when it submits its FCC1205 rate filing. Without campeltheg`reasonableness°' testts~Reasonable
proposed $37.62 FCC1205 rate does not appear to s fy
is defined being as neither immoderate nor excessive, but equitable and fair.lb
Time Warner contends, in its appeal of the SmithfieldH iew of BSOTrratesh In ` acatuallty both'Time
accuracy is the fundamental guideline governing the r
Warner and the FCC have chosen to ignore the actual gs to ensurecrelasonable rates,9(~e., rates
Act and the Commission's rate regulation rules which i _
one would see in a competitive market). Spee11992 Cable Atl) required the Commis is on to
Protection and Competition Act of 1992 (`th unreasonable rates by ensuring
"prescribe rate regulations that protect subscribers from paying
that basic service tier and related services and equipment do not exceed rates that would be
charged in the presence of effective competition.
is declares, in part, an operator electing to aggregate and average Company-wide
FCC §76.923 (c)(3) methodolo and justify that its
expenses and installation time must provide a general description of the averaging gY
averaging methodology produces reasonable rates.
16Black's Law Dictionary, Sixth Edition.
17The law specifies that the Commissiect t of f ct escomperi'tionefro~merates for the basgoservi ertier thag
subscribers of any cable system that is not subs
exceed the rates that would be charged for the basic service tier if such cable system were subject to effective
§ 623(b)(1), 47 U.S.C. § 543(b)(1).
competition. Communications Act,
Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration
101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868
i~
Subscriber Trend
Time Warner predicts it will have 6374 subscribers by t e ~~ et share is affec ed by directe data
in the chart indicate a mature stable customer base wher
competition with other cable TV providers (satellite herelthe least costly cable service provider
competition overshadows customer growth or loss w
attracts the greatest market segment.
7000
6000
5000
4000
3000
2000
1000
C
Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration
101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868
2000 2001 2002 2003
18
Recommendation
The Consultant recommends the County:
Approve the FCC1240 maximum permitted BST rate and the FCC1235 "Add-on" rate
applications and FCC 1205 Equipment and Installation rates submitted by Time Warner
Cable as compliant with FCC rate regulations and approved subject to conditions.
Marketplace Competition
Cable television service rates in the United States increased more than 6 percent last year, while
the number of new subscribers declined said the Federal Communications Commission in the
Ninth Annual Video Competition Report released December 31, 2002. Meanwhile Cable TV's
direct-broadcast satellite principal challenger EchoStar Communications will hike monthly Dish
Network fees by $2 starting February 1, 200318.
The FCC reported that about 69 million people subscribed to television service through a cable
operator like the Time Warner, Charter Communications or Mediacom. Meanwhile, satellite
companies have expanded their reach to about 18 million customers. But cable operators signed
up only 250,000 new subscribers during the 12-month period ending June 2002, compared with
1.1 million new subscribers the year before. Satellite services added two million subscribers in
the same period.
Proceeding
The franchise authority must either approve or deny the operator's FCC1240 BST, FCC1235
Upgrade "Add-on" charge and FCC 1205 Equipment and Installation charges by finding the rates
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.
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
18Multichannel News, Karen Brown 1/9/2003
Action Audits, LLC Cable Rate, Franchise Fee, Utility Tax Auditing & Telecommunication Administration
101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868
~~
b. adoption by the County of the report as its own -required by FCC rules (this
requires a motion to adopt, and a vote).
It is appropriate for public comment to be heard, as related to the various rate issues, at the time
the County Board meets to deliberate this matter. Although a statutory public hearing is not
required, it is customary to call for public comment in these matters. The comment period maybe
publicized by issuing a press release to the print and electronic media or announced in other
appropriate ways. The Company must be notified of the public meeting and advised to have a
representative present to respond to County officials, the public and otherwise offer comment.
Action Audits, LLC Cable Rate, Franchise Fee, Utility Tax Auditing & Telecommunication Administration
101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868
~O
Exhibit I
Recalculated TWC
FCC 1240 and FCC 1205 Rate Forms
Attached
rJ-coc
Cable Operator.
CAN Regulation
`~:.:/
FCC FORM 1240
UPDATWG MAXIlb1UM PERMITTED RATES FOR REGULATED CABLE SERVICES
TLne Warner Cable
NC
YES NO
1. Does this wing involve a irandAte a~hority and a single commurdty urdt? Z
~Y~ ~mpie~ rite fiaa~hise authority information NC-0256.2
below and eator the associated CUID mrmber here:
YES NO
2. Does thfh 1Qing htvolve a single inwchi:e authority but multlpk commwdty wilts?
x
If yes, eatex the associated CUIDs below and complete the franchise authority information at the bottom of this page:
Recalculatlon of ?WC's 2002 October 1, 2001 rate fiNsrg for calendar year 2002
Orange Comrty, NC-0256.2
30 subscribers
3. Does this 1~g involve multiple L~anddse aathoritia?
If yes, attach a separate sheet fa each fianchise authority and irtciude the following fimchise authority information with
its associated CU1D(s):
Franchise .~nthorNy Wormation:
Name of Local Franchising Authority
Oran a Coun NC-0256.2 30 subscribers
Mailing Address of Local Franchising Authority
City State ZIP Code
Telephone member Fax Number
4. For what pnrpoae is this Form 1240 bring 16kd? Please pat an "X" in the appropriate boz
s. Original Form 1240 far Basic Tier x
b. Ame~ed Form 1240 fa Basic Tier
c. Original Form 1240 for CPS Tier
d. Amended Form 1240 for CPS Tier
TO
S. Irrdicate fhe one year tlme period for which you are aettlng rata (tile Projected Period). 01/01/2002 111312002
TO
6. Lulicate the three period for which yon are performing a tnu-up• 1Q/012000 09/30/2001
?. States of Previous Ftibrg of FCC Form 1240 (enter an "t" ht the appropriate boz)
YES NO
a. Is ilris 81e first FCC Farm 1240 filed in say jurisdiction? _
b. Has sa FCC Foam 1240 bum filed previously with the FCC? _
if Yes, enter 61e date of the most r+oczat filing: 12C22/1~ (mm/dd/yy)
YES NO
c. Has an FCC Form 1240 been filed previously with the Franchising AuWority7 =
If yes, eater the date of the most recent filing: 09/30/2000 (mm/dd/yy)
(~YY)
(~YY)
Page 1 FCC Form 1240, July 1996
"J-COG
S. Status of Previous Filing of FCC Form 1210 (enter an "z" hr the appropriate boz)
CATV Re ulation
as
YES NO
a. Has an FCC Form 1210 been previously Sled with the FCCT z
If yes, enter the date of the most recent filing: (mm/ddlyy)
YES NO
b. Has an FCC Form 1210 been previously filed with the Franchising Authority? z
If yes, enter the date of the most recent Sling: 05125]1994 (mm/dd/yy)
9. Status of FCC Form 1200 Fitlng (enter an "z" in the appropriate boz)
YES NO
a_ Has an FCC Form 1200 been previously Slod with the FCC? z
If yes, euUer the date Sled: (mm/dd/yy)
YES NO
b. Has an FCC Form 1200 been previously Sled with the Franchising Autharity7 X
Ifyes, enter the date Sled: ~~ (mm/dd/yy)
10. Cable Pr+ogramrrdstg 3er~lces Comphrhrt Status (enter an ":" in the appropriate boz)
YES NO
a. Ia this tam being Sled in response in an FCC Font 329 comphtint7 z
If yes, eritrr the date of the complaint (mm/ddlyy)
YES xo
il. is FCC Form 1205 Belrrg lrtrllotded With This Filing
12. Sdectlon of "Going Forward" Charmd Addition Metlrodolo® (enter an "z" ha the appropriate boz)
Check here if you are using fire original rules [MARKUP METHOD]. 20001vIPR=S 10.57
Check here if you are using the new, alive rules [CAPS METHOD]. 2001 MPR=$11.92
if using the CAPS METHOD, havo you elected ~ revise recovery far 2002 MPR=$11.70
cT>anoels added doting tlx period May 1 s, 1994 to Dec. 31, 199x?
i3. Headertd Upgrade Mefhodolo®
'NOTE: Operators mrut rxrlijy to the Conmdssion tlatireligrbiltty to use thin rpgrade metlwdology and attach an equipmem list and depreciation schednlen
Check bete if you are a qualifying small system using the sheamlined headend upgrade methodology.
Part I: Preliminary Information
Module A: Marimum Permitted Rate From Previous Filing
c d e
13oe IJae ~ Baric Tkr 2 liar 3 Tier 4 Tier 3
Al Ctataat Maximum Pemtitted Rate ti11.9189
Module B: Subscn'berslup
a b e d e
r ~.. r a. rr...~.r~.... nor.. Tier 2 Tier 3 lies 4 Tin S
Bi Average Subxaibersbip Fa Tru~Up period I 30
B2 Average Sulasca~aahip Fa True-Up period 2
B3 Estimated Average Subaen'baslrip For projected period 30
Module C: Inflation Information
Page 1 FCC Form 1240, July 1996
rJ-coc
CATV Regul tion
a3
Module D: Calculating the Base Rate
s b c d e
I3oe iJeie Ik~iMien ttseie Tter 2 77er i Tier d Tier i
Dl Currant Hcadmd Upgrade Segment
D2 Cuaent External Costs Segment S1.J026
D3 Cumsg Caps Method Segment
D4 Current Markup Method Segment
DS Current Charnel Movement and Deletion Segmad
D6 Cn~ TnwUp Segment $0.1193
D7 Cuaeot Intlaticm Scgoeot SU. ;028
D8 Base Rate [AI-Dl-D2-D3-D4D5-D6-D7] S10.0942
Part II: True-Up Period
Module E: Timing Information
r3ee IJue
a 6 c d e
Ire IJoe Deaai Beak Tkr 2 Tier 3 Tkr 4 Tier 5
FI Caps Method Far True•Up Period I [Wlm 2]
F2 Madmp Method Segment Fa Truo-Up Period 1 [Wks 3)
F3 Chan Mvnffi. Delete Segment Far Truo-Up Period 1 [Wks' 4/5]
F4 True-Up Pariad 1 Rate Eliigible For Intlati~ [D8+F1+F2+F3] 510.0942
FS Tntlatia~n Segmemt for Tnm-Up Period 1 [(F4*C3}F4] 50.2948
F6 fieadeod Upgrade Segment Fa True~Ip Period 1 [Wka 6]
F7 Extemsl Coats Segment Far True-Up Period 1 [Wlrs 7] SO.Cu~SS
F8 Tme-Up Se~eot Fa Truo-Up Period I 50.1235
F9 bluer Prim Rate fa Trtre-Up Period I [F4+FS+Fti+F7+F8] [;11.1580
Modale G: Marimom Permitted Rate For True-Un Period 2
a b e d e
I3oe IJoe Bask Tier 2 Tier 3 Tier 4 Tier 5
Gi Caps Method 3egm®t Fa Trim-Up Period 2 [Wka 2J
G2 Madatp Method Segment Fa True-Up Period 2 [Wks 3]
G3 Chan Mvmot Dek~ta Segment For Ttuo-Up Period 2 [Winf 4/5]
G4 TU Period 2 Rate Eligible Far Inflation [D8+FS+G1+G2+Cr3j
GS Inflation Segment fa Tnte•iJp Period 2 [(G4'C4}134]
Q6 Hwdeod Upgrade 3egmmt Far True~Up Period 2 [Wks 6]
G7 External Cosh Segment Fa Tme•Up Period 2 (Wla 7]
GS True-Up Segrneat Far True-Up Period 2
G9 Max Pam Rste for True-Up Period 2 [GMGS+G6+Qr7+G8J
Page 3 FCC Form 1240, July 1996
"J-COG
Module H: True-Up Adjustment Calculation
CAN R ulation
a~-
a b c d e
Ilioe Igoe Desariptlon Bssk Tkr 2 Tier 3 Tkr 4 Tier 5
Adindnrrt Aro• Tnu..rTn Peered 1
HI Revemre From Period 1 $4.117. ci9ti4
H2 Rwe®reFromMaxPamittedRataforPeriodl 54,U533>i36
H3 Tnre-Up Period 1 Adjustment [H2-Hi ] (564.3138
H4 Interest on Period 1 Adjustment (55.5282
Adjur~ment For True-Up Perkd 2
HS Ravaare From Period 2 Eligible far hrtetest
H6 Reveaooe From Moot Perm Rate fa Period 2 Eligible Fa Interest
H7 Period 2 Adjustment Eligible Fa Interest [Ii6-HS]
H8 httereat as Period 2 Adjustment (See iminrctiaos far fomaila)
H9 Revenue From Pad 2 Ineligible for Interest
HI O Revmre Frrnn Msx Pew Rate for Period 2 Ineligible far Interest
~ Hl l Period 2 Adjustnteot Ineligible For Interest [H10-H9]
Totat Truo-Up Adjawtrneot
H12 Previau Remaining Tnro-Up Adjustment
HI3 Total True-Up Adjastmeot (H3+H4+H7+H8+H11+H12J (569.8420
H14 Amamt of TroaLlp Claimed Fa This Projected Period (569.&420
H15 Remaining True-Up Adjustm~ [Ii13-H14] 50.0000
Part III: Projected Period
Mndnls• i• Nrw MAtimnm Pprmittrcl Rgte
a b e d e
IJne Ike Basie Tkr 2 Tkr 3 Tkr 4 Tkr 5
II Cape Method Seginant Far Projected Period [Wks 2]
I2 M~lwp Method Segment Fa Projected Period [talcs 3]
I3 G7rsm Mv~t Deletn Scginrat Far Projected Period [talcs 4/5]
I4 Proj. Period Rate Eligible Far Inflation [D8+FS+Cr5+I1+I2+I3] 510.3890
IS Inflation Segment for Projected Period [(I4e'CS}I4] 50.3356
I6 Headeod Upgrade Segosmt Fa Projected Period [Wlor 6J
I7 Fademal Casts Segment For Projected Period [Wks 7] 51.1848
i8 Ttue-Up Segineot Far Projected Pe,[iod (50.191 ]
I9 Max PamAted Rate far Projected Feriod [I4+IS+I6+I7+I8] 511.7182 $11.72
I10 ~m Selected Rata Far Projected Period $11.64
MPR 1240 $11.72
2001 FCC 1235 Add-on MPR $2.11
Combined Maaimtlm Permitted Rate $13.83
Combined TWC Selected Rate $13.75
Selected Rate Below MPR $0.08
Page 4 FCC Form 1240, July 1996
'J-COG
Worksheet 1-True-Up Period Inflation
Far iaas, see Appeadix A of htshuctions Far FCC Farm 1240
IJne p~~ FCC Inllatlon Factor
101 Month 1 t•~•
102 Ma~oth 2 1.99•Y•
103 Monffi 3 1.99•h
104 Month 4 3.23•/i
105 Month 5 3•~'y
106 Month 6 3.23Y•
107 Month 7 3.23%
108 Month 8 3.23•/i
109 Month 9 3Z3%
110 Month ]0 3•~%
I I l Month 11 3•~'/•
112 Month 12 3•~%
113 Aveca~ htflah~ Factor fa True-Up
Period 1 1.0292
114 Month 13
115 Month 14
116 Mnnth 15
117 Month 16
118 Month 17
119 Manih 18
120 Month 19
121 Month 20
122 Month Zi
123 Month 22
124 Month 23
125 MoNh 24
126 Average Inflati~ Factor fa True-Up
Period 2
Page 1
CAN Re ulation
a~
~CtOber
November
December
January
February
March
April
May
June
July
August
September
12 Masrth Average
FCC Inflstton Factar•
1.99•h
1.99•/.
1.99`/
3.23N•
3.23•h
3.23•~b
2.08•/.
2.08~YL
2.08•h
2.25'h
2.25•iG
2.25N•
1.0239
+' published by pCC 10/3001
TWC 1.0292
Refresh -1.0239
Delta 0.0053
FCC Form 1240, July 1996
TJ-COG
Worksheet 7 -External Costs
True-Up Period
For iota, see Appendac A of huhuctions Fa FCC Farm 1240
CATV Regulation
~..^/
Tmo-Up Period I Projected Period
Question 1. For which time period are you Elting out this waskslroct7 [Put an "X" in the appropriate box.l X
Question 2. How hmg is the Ent period, in , for which rata sro being s~ wi8t this wotl<eheal7 12
Qualion 3. How hmg is the second period, in monde, fix whidr rata aro being sd with this wakahed7
a e e
IJae %.MO Descrlptlon Basic Tier Z Tier 3 Tkr 4 Tier 5
Perind 1
Ezternal Costs E ' ble for Markq
Cost of Programming For Chatmeb Added
701 Prior to S/15f94 or ARer 5/15/94 Using
Madaip McBtod Fa Period
5180.53
702 Rehmemissian Consent Fea For Period
703 Copyright Fos Far Period 537.60
704 Exrixnal Cods EJigr'bk Fa 7.s%Matlrrp 52.18.13
705 Madcad Up External Cods 5234.4898
Ezternal Costs Not Eligible for Markup
706 Csbh: Specific Tsxa For Period
707 Fratchise Rehrted Cab Far Period
70H Commission Regulatory Fea Fa Patted
709 Total Eatetnal Cods Fa Period 5234.4898
710 Monihl); Pa-Subscn'ber External Cods Fa
Period 1 80.6514
nd 7
Ezternal Costs E 'ble for Marku
Cod of Programming Far Chatuteh Added
711 Per to 5/15!94 or After 5/15/94 Uriog
Madmp Method For Period
712 R Comrent Fees For Period
713 Copyrigt Fea Fa Period
714 External Cods Eligt'ble Fa 7.5% Mmknp
ns Marked Up Extuaal cods
Ezternal Costa Not E ' 'ble for Marku
716 Cable Specific Taxes Fa Period
717 Franchise Related Coda Fot Patted
718 Comm~aion Regulatory Fees For Peaiod
719 Total External Coat Fa Period'
.~ Montldy, Par-Subscnber Eatetnal Coda For
Period 2
Page 1 FCC Form 1240, July 1996
TJ-COG
Worksheet 7 -Ezternal Costs
Projected Period
Far inehv~ona, son Appendix A of hmEnrctions Fa FCC Form 1240
Question 1. For which time period are yon Stliog not ffiis worksheet? [Put sn "X" in the approprirte box.]
Question 2. How long is ffie fart period, m monffia, for which ratty are being eet wiffi this worksheet?
Question 3. How Lmg is ffie second period, in monffis, far which rata at+e being sot wiffi this woakaMd7
CAN Regulation
a~
Tnro-Up Period Projected Period
X
12
0
a e e
Lhx Line DeseriptNm Basic Tier 2 Tkr 3 Tier 4 Tier S
Period 1
Ezternal Costs E 'ble for Marks
Coat of Progammurg For Channels Added
701 Prior to 5/15/94 a Auer S/1 S/94 Uaiog
Markup Meffiod For Period
5358.94
702 Rehaoem~ion Conant Foes For Period
703 CopytiglU Fes For Period 537.82
704 External Costa Eligible For 7.5% Markup 53%.76
705 Marked Up Paternal Coda 5426.5170
Ezternal Costa Not E 'ble for Marku
706 Cable SpeaSc Taxes For Period
707 Fra~hiao Rehded Coat For Period
708 Commission Regulatory Fees For Period 50.00
709 Total External Coats For Period S426.5170
710 M°n9dy, Per+Subscaber External Cosh For
Period 1 51.1848
Page 2 FCC Form 1240, July 1996
TJ-COG
FCC FORM 1240
UPDATING MAXIMUM PERMITTED RATES FOR REGULATED CABLE SERVICES
Gble Operator:
CAN Re ulation
a~
Time Warner Cable
NC
jra 1VV
1. Does thb 11Wrg hrrolve a shjgle franchise authority and a single commmdty ujdtY z
If yes, complain >he fianchise authority information NC-02 5 6
below and enter the associated Ct1>D manta here:
YES NO
2. Does this flWrg involve a afngle iranchiae authority but muttlpfe cantmmtty udtaT x
If yes, the associated CUIDs below and complete the Franchise authwrity information at the bottom of this page:
Recalculation of TWC'a 2002 October 1, 2001 rate King for calendar year 2002
Orange Conrrty, NC-0256
3. Does Win i>dng involve multlpk franchise autlwrltksT
If yes, attach a separate sheet fa eacL franchise authority and i~hrde iije following fianclrise authority information with
its associated CUID(s):
Franchise Authority Wormatlwj:
Name of Local Franchising Authority
ORANGE, 256
Mailing Addtess of Local Franchising Authority
City State ZIP Gde
Tetophone mrmba Fax Number
4. For wMt purpose is thb Form 1240 being medT Please put an "X" hj the appropriate boz
a. Original Farm 1240 for Basic Tier
b. Amended Form 1240 for Basic Tier
c. Original Form 1240 for CPS Tier
d. Amended Form 1240 for CPS Tin
S Indicate the orte year time period for which yon are setthrg raffia (tire Proms Period}
6. Irrdicate the time period for widclr you are perfornrit~ a true-up.
x
TO
01/01!2002 12!312002 (~Yy)
TO
1oro12ooo o9r3o2oo1 (~yy)
7. Status of Pttvious Filing of FCC Form 1240 (errter an "z" In the appropriate boz)
ygg NO
a Is this the first FCC Form 1240 filed in any jurisdiction? z
b. Has an FCC Form 1240 boon filed previously with the FCC? :
If yes, eahx the date of the most recent filing: 1222/1995 (rmddd~YY)
yp~g NO
c. Has an FCC Form 1240 been filed proviously with the Franchising Authority? z
If yes, eater the date of the moat recent filing: 09f302000 (mm/dd/yy)
Page 1 FCC Forth 1240, July 1996
J-COG
8. Status of Previous FOing of FCC Form 1210 (ewer an "z" b the appropriate boz)
CAN Re ulation
~q
YES NO
err Has an FCC Foam 1210 been previously Sled with the FCC? z
Tf yes, enter the date of the most recent Sling: (~/~YY)
YES NO
b. Has as FCC Form 1210 been previously filed with 11te Franchising Aufllority? z
If yes, eater the date of the most recent filing: OSJ25J1994 (mm/dd/yy)
9. Status of FCC Form 1200 Flfing (enter an "z" in the appropriate boz)
YES NO
a. Has as FCC Form 1200 been previously filed with the FCC7 z •
If yes, enter the date Sled: (~~Y3')
YES NO
b. Has an FCC Form 1200 hoes previously filed with the Franchising Authority? X
Ifyes, ewer the date wed: ~/0511994 (mm/dd/yy)
10. Cabk Progtynmrring Services Complaint Status (enter an "z" ht the appropriate bo:)
YES NO
a. Is this form being wed in response to an FCC Form 329 coa-plairrt7 z
If yes, eater the date of iha cAmplairll: (~dd~YY)
YES NO
ll. is FCC Form 1205 Being Included With This Filhrg
12. 3dccHort of "Going Forward" Chamrd Addition Methodology (eater an "z" in the appropriate boz)
Check here if you are using the original rules [MARKUP METHOD]. 2000 MPR~8.75
Check here if you are using the new, alternative rules [CAPS METHOD]. 20011vIPR~9.91
If using the CAPS METHOD, have you elected m revise recovery for 2002 MPR=59.62
chamrels added during the period May 15, 1994 to Dec. 31, 1994?
13. Headend Upgrade Methodology
"NOTE: Operators m~atosrt}fy to the Commission thsireligr3ility to ass t)dr upgrade methodolog+and attoch an egedpment list and dspnxlation sclrsdals.
Cheek here if you are a quahf}7ug smell sys~m using the shnamlined headend upgrade meffiodOlogy.
Part I: Preliminary Information
Module A: Marimnm Permitted Rate From Previous Filing
e a e
Ilne Ijne Basic Tkr 2 Tla 3 Tier 4 Tkr S
Al Cumea2MaAmrmmPem»nedRata 59-9108
Module B: Sabstaribership
- a b c a
~ ~ 77..3 Tier 4 Tier 5
Lea
B1 Avasgc Subsaibas6ip Fa TrtwUp 1?eaiod 1 -
6,020
B2 AvaaBe Subscn'baship Fa Tnto-Up Period 2
B3 Estimated Avera®e St~xxibersltip Fa Projected Period (>,05$
Mnrinln (~'~ Tnflntinn infnrmai5ne
i~oe IJoe neseri
Cl Unclaimed inflation: Operate Switrhmg Fran 1210 To 12t0 1 •~
C2 Unclaimed inflation: U~rlated Operator Responding to Rate Cauplamt 1.0000
C3 Inflation Fader Far TnwUp Period 1 lurks lJ 1•~
C4 Inflation Facts For Truo-Up Period 2 (l~Vks 1]
ICS Cuaeffi FCC Inflation Fedor
Page 2 FCC Form 1240, July 1996
'J-COG CAN Re tion
3O
Module D: Calculating the Base Rate
a b c d e
Li^e Lime Desufetlon u4a.. 74_.. ~ ~_ s ~.~.~ .
D1 Cunnmt Headafd Upgrade Segment ---- -
D2 Current Etternal Costs Segmaft $1.35;3
D3 Cuaent Cain Method Segment
D~4 Current Markup Method Segment
DS Current Channel Movement and Deletion Segmprt
D6 Current True-Up Segment $0.307n
D7 CurrentInflationSegment $0,2;9.1
D8 Base Rate [Al Dl-D2-D3-D4-DS-D6D7] $7.9791
Part ll: "Prue-Up Period
Module E: Timing Information
~e Line
Module F: Ma>omum Permitted Rate For Tree-Up Period 1
^ b c d e
Li^e i ine 7lwsweinfinn Ae.M 74..9 74r s 94r ~ 74~ ~
Fl Cape Method Segineo<For Trrro-Up Period 1 [Wka 2]
F2 Madmp Method Segment Fa Trve-Up Period 1 [Wks 3]
F3 Chan Mvmot Deletn Segment For Trve-Up Period 1 [Wks' 4/5]
F4 Tnu-Up Period 1 Rate Eligible Fm Inflation [D8+Fl+F2+F3] 57.9791
FS Inflation Segment for Tnre-Up Period t [(F4eC3}F4] 50.2330
F6 Iieadead Upgrade Segment Far TruaUp Period I [Wks 6]
F7 External Costs 3egmeffi Far Tnm-Up Period 1(Wlrs 7] 50.6234
F8 True-Up Segment Fa Tree-Up Period 1 $0.3205
F9 Max Perm Rau far Teue-Up Period 1 [F4+FS+F6+F7+F8] X9.1560
Module G: Marimum Permitted Rate For Tree-Uo Period 2
a b c d e
Li^e Lc^a ^ Bm3c T1er2 Tier3 T&r4 TIerS
Gl Caps Method Segment Fa True-Up Period 2 [Rrks 2]
G2 Markup Method Segment For True-Up Period 2 [Wks 3]
G3 Chen Mvmot Della Segment Fa Tnu-Up Period 2 [Wks' 4/5]
G4 TU Period 2 Rate Eligible Fac lntlation [D8+FS+G1+Cr2+Cr3J
GS lnflatia^ Segment fa Tnro-Up Period 2 I(G4eC4}CT4]
G6 Iiadead Upgade Seginent For Truo-Up Period 2 [Wks 6]
G7 External Coats Segment Fa True-Up Period 2 [Wks 7J
G8 Truo-Up Segment Fa Truo-Up Period 2
G9 Max Perm Rau far TruaUp Period 2 [GMGS+G6+('r7+G8]
Page 3 FCC Forrn 1240, July 1996
rJ-roc
Module H: True-Up Adjustment Calculation
CAN Re ation
~I
s b e d e
Ike >~ I)escritNion Buie Tim Z Tier 3 Tier 4 Tier S
Aujustoteat For Tn~a-Up Period 1
Hl ReveaueFromPaiodl $G61,-t87.R5
H2 Revenue From Max Permitted Rau for Period 1 56G 1.351.7oG( ~
H3 Tnu-Up Period 1 Adjustmerri (HZ-Hl ] (5106.1440
H4 Interest on Period 1 Adjustment (59.1238
Adjm6oent Fer Tree-Up Period 2
HS Revenue From Period 2Eligrbie fa Interest
H6 Revemre From Max Perm Rau fa Period 2 Eligible For Interest
Ii7 Period 2 Adjuslmeat Eligrble Fm Interest (Ii6-HS]
H8 Interest on Period 2 Adjustaaent (See ir~tnrctiaas far formula)
' H9 Revenue From Period 2 Ineligible fa h>terest
H10 Revenue From Max Perm Rate far Period 2 Ineligible far Interest
HI I Period 2 Adjustment Ineligible Fa Interest [HIO-H9]
TNaI True•Up Adjaafroe~
Hit Prevleru Remaining True-Up Adjustment
Hi3 Total Tnro-Up Adjustment [H3+H4+H7+H$+Hi 1+H12] (5115.2678
H14 Amount afTrue-Up Claimed Fa This Projected Period (5115.2678
His Ramm~ing Truo-Up Adjrubneu [H13-H141 50.0000
Part III: Projected Period
Mndnle i~ Nnw Mrs~imnm Pnrmiftarl R~to
a b e d e
IJoe ~~ n Buk Tkr 2 Tier 3 Tler 4 Tier S
Ii Caper Method Segment ForProjectedPeriod [Wks 2]
I2 Madnrp Method Segment Fa Projected Period (Wks 3]
B Chao Mvm~ Della Fa Yrojated Period (Wks 4/SJ
I4 Proj. Period Rde Eligrble Fa Iotlatioa (D8+FS+GS+II+I2+i3) 58.2121
IS Inflation Segasent far Projected Period ((I4eC5}I4] 50.2653
I6 Headead Upgrade Segnect Far Projected Period [Wks 61
Tl External Costs Segment For Projected Period (Wks 7] 51.1451
I8 Ttuo-UpSegroartFarProjectedPetiod (SO.U(~16
I9 Max Pearitted Rate fa Projected Period [I4+LS+I6+I7+I8] 59.6209 $9.62
I10 Operate Selected Rate Fa Projected Period $9.59
MPR 1240 $9.62
2001 FCC 1235 Add-0tt MPR $1.89
Combined Maximum Permitted Rate $11.51
Combined TWC Selected Rate $11.40
Selected Rate Below MPR $0.1 I
Page 1 FCC Form 1240, July 1996
i J-COG
Worksheet 1-True-Up Period Inflation
For autructioos, see Appendix A of h>ahuitiom For FCC Form 1240
Iine Perbd FCC InAatloo Factor
101 Month 1 1,99•/.
102 Moth 2 1.99%
103 Month 3 199%
104 Month 4 3.23X
105 Month 5 3,23X
106 Month 6 3.23%
107 Month 7 3.23X
108 Month 8 3.23X
109 Month 9 3.23X
110 Month 10 3.23%
111 Month 11 3.23•h
112 Month 12 3.23•h
113 ``+ ~~ Fadarfa Tnu-Up
Period 1 10292
114 Month 13
115 Month 14
116 Month 15
117 Month 16
118 Month 17
119 Month 18
120 Month 19
121 Month 20
122 Month 21
123 Month 22
124 Month 23
125 Modh 24
126 AverageLrtlatianFadorforTme~Up
Period 2
CAN Re ation
3a
October
November
Decelrlber
January
February
March
April
May
June
July
August
September
12 Month Average
TWC
RefiieSll
Delta
FCC Intlatlon Fador•
1.99X
1.99X
199X
323X
3.23X
3.Z3X
2.OSX
z.08X
zosX
2.25X
zasX
2.25X
1.0239
* published by PCC 10/'!tA)]
1.0292
-1.0239
0.0053
Page 1 FCC Form 1240, July 1996
fJ-COG
True-Up Period
For ioaevctioea, see Appand'or A of lnafnrctioes For FCC Form 1240
Quaation 1. For which time period ae yon fl6og out drive worksheeCl [Put m "X" ie the appropriate box.J
Worksheet 7 -External Costs
CAN Re ulation
33
Tnre-Up Permd Projected Period
X
12
Qnalion 2. How ~g is the fart period, in months, for which rates aae being set with dris workshext'1
Question 3. How long is the second period, m , tier which tatty am bang set with dm wakshoa?
Lies Ides Deseriptbe
Basic
Pesind 1
Tier 3 Tier 4 Tier 5
E=ternal Costs E ' 'ble for Marko
Cost of Programming For l~anaeL Added
701 Prior to 5/15/94 or After 5/15/94 Using
Madmp Messed Fa Period
535,897.56
702 Region Consort Fep Fa Period
703 Copyright Few For Period 55,992.56
704 Exbemat Cosh Eligbk For 7.5% Markup 541,890.12
705 Madced Up Extomal Coat 545,031.8790
E=ternal Costs Not E ' 'ble for Markup
706 Cable apecriic Taxoa For Prod
707 Frmchise Related Coat For Pctiod
708 Coition Raguhao[y Few For Peaod
709 Total External Coat: Fa Period 545,03L8790
n0 + Per-Subacnba External Cwls For
Period 1 ~.~
E=ternal Costa E ' 'ble for Markup
Cost of Programming For Channeh Added
nl Prior to 5/ls/94 or Afta~ 5/15/94 using
Markup Mefltod Fa Period
712 Raham~on Consent Few For Period
713 Copyright Few For Period
n4 External Coat E6g~le Fa 7.5% Markup
715 Markad Up Extomal Cos4
E=ternal Costs Not E ble for Marko
716 Cable Speck Taxea For Period
717 Fraechiee RehRed Cosh For Period
718 Cron Reg~dstaty Few Fa Period
719 To1a1 External Cosb For Period
720 Monthly, Per-Subscnber External Cosb For
Period 2
Page 1 FCC Form 1240, July 1996
fJ-COG
Worksheet 7 -External Costs
Projected Period
For imtruGions, see Appead'oc A of hntrnctions Fa FCC Form 1?AO
Qoeslion 1. For which time period are you ~ out ~ cvorlaheet7 [Put m "X" in the appropriate box.]
Quwoion 2 How long is the Errt period, in moodm, for which rata ate being set wi9r drim wodudteet7
Qnation 3. How krog is the second period, is , for which rata are being set wish this workaho~t
CATV R ation
34
Tine-Up Period Projected Period
X
12
0
• c e
Lice Idae 1)aeriprtion Basie Tkr 2 Tler 3 Tier 4 Tier S
Period t
Ezternal Costa E ' 'ble for Marku
Coat of Programming For Chmnds Addod
701 Prior to 5115/94 or After 5/15194 Using
Marlnrp Method For Period
571,37253
702 Rehm-smiasion Consent Fees For Period
703 Copyright Fes For Period 56,027.86
704 External Coals Eligible For 7.5% Markup 577,400.39
705 Marked Up Eternal Cosh 583,205.4193
Ezternal Costs Not EI' 'ble for Marko
706 Gble Sped Taus For Period
707 Franchise ReLUed Coats For Period
708 Coon Regulatory Fea For Period 50.00
709 Toad External Coats For Permd 583,205.4193
710 ~ Per-Subsctrber Es<ernal Costs For
Period 1 51.1451
Page 2 FCC Form 1240, July 1996
Federal Communications Commission, Washington, D.C. 20554 APPnrv~ ~ OMB 3060-0592; F~cpires:4/30/97
35
FCC FO$M 1205
DL'f6tMImYGRERUW'IFD LQ[7IP35Fllf AND INSTALI.AlION CtiSIE
•yQFpgy„
Ca®iff [JtilldeofHia(CU®) d'w61e ~
•Nafioaal ooetolidafed assets for Tbas wvaer Cable lh~e d'Pam 9ubm~dm(mm~dNY7)
8e ber 30, 2001
N~edC~bkCOaeer
Tine warner Cable: Darbae Di.bi~
3sauroseads arcwe o,ar~
~ sure 22FCode
limit ra 25Ue dFa.oa s u: reM
TeLryheee°~~ FaNumbr
Diane of l°d Fmduios Auleordf
1(r7igAdbs a[loeel Fnaeei~bigNtlhoeiy
~ Sea 27PCode
Rate Review: 2002 Equipment and Installation Costs
I.zrrasrrer~seet leer-^~rwar.~.esee.e.wy
Iaoo~pmnionw-eFCCFam1200, PCCFa®IYLO, orPCCFam 1~2S
AWeBtlnemyleadFCCFomr 1200, FCC Fa,m 1220, rPCCPaan 1225 re0a8at af0ie fans
OR
Q L~aiderb~lOtlFf:Cmin~gaamlOSOgdtlde0am
&ralhs dremw~hirl.3eo lrefikdihieforar Il/30h000 (mm~dN79)
Note IL6 i~oiddeeShediee m whi~rhenke ht junieea, bfair0 es6erPCCFam393 rtlwgiertiS~ of0~ famr, wan b eCe0.
i Letrtla ibwwYri3eadedAerOeeiw ArOhe 6eYfereMeelMbWY~in~: 09/30/2001 (~dN9f)
bole llrie w01 i~etlw eod oPlhe 12-mooW 1iKtlY~farwei~fo0 aefilgtlm fam
1 leieee 6e ce~Feeete e1Ww efrear eMe gRes lLera "r" Ylfa aaw~Mz]
8
S Faloaiip
SebP/opeinsiifa
OWa[FlaeeeWleb6dowJ
Page 1 Lotus 4.01 Win; Version 2.0 FCC Form 1205; Mav 1994
Federal Communications Commission, Washington, D.C. 20554
Approved by: OMB 3060-0592; Fires: 4130/97
>t® ULLA CAPl1'AL CpgI80F8ffiVlCL 1NSfALLA17p1i pPID MpWIZ ryA(~iCy O! gl~pLpDil'
A
Pgoiryoeo<o4Pleo<
Vakidn
TaoY SSademro
Pa~llla OIYrL
bdaM Otlrr2.
l5t~dbkalaq
B Cror Soak Vibe 5!06,839,740.00 538,256,633.00 577,473,69!.00 530,235,362.00 5179!1,255.00
C Aeemuhled l)epation 574,452,333.00 537994.974.00 540,234,353.00 (19,504,369.00 55,127,253.00
D 7)dmsd Taxe 51,337,463.00 f3,61M,33200 (56,703,67200 (5247,125.00 (5461,56200
8 14QBaokValoe[&(CH7)J 530,539,24200 316,657,129.00 543925,OId00 511,00!,421.00 510,245,514.00
P Rte oi'Bekra
So.u~S
6 Gala~p~ Rmr
01 Fedad loemeiaBaa 50.3500
~ ~~~~ 50.0713
W IVeITaW foeame7axBel4 (Ol OIx62) 50.3963
G4 AdjaekamltoB~aaiofeell)
O4a AoLUl lalaeaAmw~ 5400,244,37200
04k
04e
04~ 7olal Tl~tim
IIreB~aamLrv~ml Amaual [(i4kxFJ
Haa4 PeROr O4dO4e TL4,260,079,047.00
51.604,255.8927573
50.2493
OS BReaiwTcBe~ Ct3 x(1.04 CCape tyro f0.2973
O6
fibs
66
(the fa'Na°"C Cppwtiios
Baae144umm10eH0~AmwR O4e
Oirrm~tllas
C'aWiOtiolr aoleueei 066 51,601,235,5927575
51.604.238.5927875
S^_21.190,000.00
50.00
Obi
O6e Amman bl4cameTac
Finau lMaoleg 8akjeamlaomeTc [O6N(i6a1 Slati,064,5927875
503621
07
H OnnadT~Ble 1/(t-0S)p4ar.17(1{(iSxO6e))
Omase611pB~e a[Btlua x 513449
50.1513
1 B~aaamlaeermnt farTaae [Bx 54,666,003.7775 52,520,2379111 56,643,891.7047 f1,664314A375 f1,3S0,ISS.0396
J ~~ SIti,406,094 SS,OU6.36S S3.'_'96,U71 53,635 2l4 51,299,919
& Amer ~ Cab Jw3J 521,072,097.7773 55,126,6239111 X9419627047 53,299,7384373 f2550,074.0396
L /.RAI'IDTOTAL w~afLaeYea6fea] __ _ - _. 547,290,499
Boa L
8pae~J~O5ar 1. Teaal6P~.0ffieeAmbR ndioe
SperBj: Olhc 2 IatoW l0poemer4
Bast
Spsa~:O14er 1. Vdiels S33,O6Z,863
p4e2 Baa'Ido~ S19a32,483
3~
Page 2 Lotus 4.01 Win; Version 2.0 FCC Form 1205; May 1994
Federal Communications Commission, Washington, D.C. 20554
>~x
Approved by: OMB 3060.0592; Fires: 7
3~
MAULED: AVERAGE HOi1R8 PTA7NSfALiA1ION
~L AvmigeHonre per Umvired Home huullation attach an e.~lanetion) i.20
H Average Houn pc Pre-Wued Homelnaullmion (sloth m~explanmionl Q85
(;. AveageHonn per Additional Co,mection inaullmion m. Tune of initial lnaullmion (much meaplanazionl OX
A Aven eHoure Additional Comation installation Requ'ving elnaallmion (atcarh an Ianmionl UO
g omerloaNlelim (byltem g
>~>;. o~
Averge Houn pc hMallalion (sloth an explanation)
tem2(8Pe~79
Avenge Houn per Iruinllation (attach an explaation)
1m 3. (8pexb~
Average Hour prr W W lation (sloth an explaoalioN
Della .,r R;; Lfiitr TUn::
o.u ,.
aos so
-0.tl ..
Page 3 t.otus 4.01 Win; Version 2.0 FCC Fonn 1205; May 1994
Federal Communications Commission, Washington, D.C. 20554
N7DStKSl~LfP012 CALCUI.ATBYG P/itSQTILD AOID iHBTALLATIOH CBAS:GL4
83'!P A Ha•~ 8rrlce
1 Tool Ca0ihl Cab dtora8etiwaodAdroteume Sche3deA, Hax1
2
iatd Aargl 1'arlmla8riao and Memlma
[Sd
d
k 547.290.499
3 ox
e
u
$Baoc2
Taal Cob eed farlmWlriaa rdMamtatoae I+Iam2 5369.039.834
4
Cuetoma Fquipmmt artd Lutallation Pacrnlage laltach an aylmution). 5416,330333
s
AuaW QMmteli4ti0uaaMai~tnatd bttlltim Cab.13¢hdSi Coals ot[.e•ed Pgotpmat[i~eSxlite4] 0.6898
6
Total I.eba Hours fa hfainletunre and instillation of Custorna Equipment end Sm~icn tatnch e~planetion) S1B7,I81,664
~
8a9s4e ~(~7(Uoe 3/lioe 8014463
533A3
arclnDD DP BIIdLVG MHtIIiSfAiJ.A1lOl~ (ptau o "z" ilhe aptaa5e6tebss)
baas8rian billed bl the boar bred oe the t~C aladtcd a l.®e ?.
I__ hudlriou bi8edraotad~deltarae
I'~F~!T
S LJ~a.fgc rareu 8.hl~iaa~~mm almen ~
9 firiruWCae
a IlewhdHomehata8rioa
at.1~C[Iioe'n S3S.83
d Avats~tioon paDaeehed tlmelob8etioa D.I~e.V
d. lhasiadl3oorhoWlrioa[al za2 I.20
543.00
b. Pta.wsedeiaa,elmtVhfSaa
h1.1~C s3s.s3
62 Roan IItawieedHamemb8rim (Sr6tldeD.lite~
b3. PrewiedHtuteLsddlfion lxb2 0.83
a AdditiaoY Commimloratlrim stTase ot'Ieitisl Ioonllriaa
el. H8C 533%3
dA Etotvs Addifiad Caemgioo tru8riaarTned lm. lotalL [8ehedisleD,I~e 034
d. Ch~epcAdd'aio0d Came~timIoblhtim tTimed ~lisl Lnts)diao [el x
81933
d. Addhiaml COmedlm3oslallttiao lobOr{op
dl. itBC S3saa
dtA Pious AddBiamlCmxdimTas~lWao SesnOrien [SeheBdeD.I~ 0.83
d3. Addtio0el Cometrimhau8uion Lrtallriae dlxd2
e.Otltsiasullutms o8dte8de0.tate
d. H8C '
533.83
dA hour bra8elimdl®t StBeAtkD,la$leml D.00
d. Iutathlim deem 1 IU x e2] S0.
al. i18C 7] 535.83
d.A Han pcLrtstl~a dlttm2 St6etitkAlise$lom2 0.00
a[ htn8etiea dltem2 elxd] ~.
e7. FiBC 533.83
eAA Han hteulhdm aftm3 1).I~e Bao3 0.00
e9. CbteBe 1Wdlrim a[lmt3 e7ze8J ~
Approved by: OMB 3060-0592; Expires: 4/30/97
38
C1. - Paa-1_n,fi~.uc
:ielec.drl i..i~~
Ddt•
50.88 .,,
af::ci=.cl r<r..
Dena
50.03 ,~_. ,_
5031 ,_.
SOAO ta8~~`
Page 4 Lotus 4.01 Win; Version 2.0 FCC Forth 1205; May 1994
Federal Communications Commission, Washington, D.C. 20554
SI7PC Cbsr{a Sskaad Ramrr
(Cakailh rpb~farese6 ~18arfb ~rert ) a b c
!0 ToW l4aio1mma0isviaeHora]COnepadiog ahrm 8aa 5deAikC
IiaB Rasskl llemk2 R®ofe3
.
I1 HSC ' 219,249 0 0
12 TaW 6faiaasnod3evix Cal lOxli0e 11 (33.8333 333.8333 533.8333
13 Amel Cob aoism from 5cbe3~kG1~eK] f7,836.4133725 50.0000 50.0000
14 TaW C
t dR 523.675.030.7660 50.0000 (0.0000
oa
mole 12+1ia 13
1S IJnmbv d[TSila is3eviee aim$am SoheYk C
Ime f33~29,446.13ffi 50.0000 50.0000
,
16 [lsil Caat 14Qme1 809067200 0.00 0.00
17 Ratepal4aah [I~el6/02)] u. M 50.0000 50.0000
50.33 50.00 50.00
a w a.arsr sssesr l:4mr4s Her -
~
b
CaloWle faeaa8 ~4M]
Camels!
Caavets2 c
Camsls3
I8 TorllYiotmoed8evioeHan[ a6®8es 8dey,k C.IiaH] 68947.00 2117610.00 966
00
19 H8C
20 Tarl3asioeCaR 18x1 533.8333 533.8333 .
535.8333
21 Asma1 C
b
h 33,470,5983920 575,882,031.1386 534,614.9686
a
co
m 8m &6edlleC.I~e6a 5821A826394 3364,912,365.1843 5101
1673423
22 TaulCaldComets 20Ft~e2l 53.2920811514 3640,794963430 .
5135
78231I1
23 14imbsdtlobk8evia a10®SOm Ba6r80eC, LiOe 403960.0000 92ffi5880000 .
13320000
K 16ilCaat ]Iioe2NJse23] (8.1094 569.6093 5101
9387
23 Raoe Mad6 21/ 12 .
S .80 A9
SIQL BsOWrLsad L4~lmsl
26 Tod Lais~d8evioeB'eae al~$ar 9drdpk C,Le 0.00
n H8C f3s.ffi
18 7rslMai~Bavioe Cae 26xI~o27J f0.00
19 AOmal Capita Cab a6me8om sdrdukGl~a 50.00
30 TaW Cal 2B+I~e SQ00
31 Dkmbsd[Tdl.bBssia ak®SomB~kGtbe 0.00
32 YJdl Car [lae3Wiirc 31]
f0.00
33 3tse lfadh 32/ OD
l~I~DD OF HQlIlYG FOA CSAN4~Yli BLIVICLTffi18 OR LQU~6ffNC ]pYa n "x" Y Iba sPIsaP46ibe box]
r a74m~a1 C1r8eR+5sthelllmial [he' 6lIise 34)
r a S7eda'm Hasi78a9iee Chsee
z rmA IheA Hamfar Seviee7ieai0ime366.
81'l~F 6r~8rMcs 2lrra ae
3< Noel Ibr 8arile7lea S2
S seas awkd rXislhebm at tlle'
03t
33 Lkilamllaaalf5aviaC6s~ da
OA
36 A [ar 8aske7kn
36s H8C 7J ffiS,ffi
366. Hom tO 8eria Tiea OA3
36e.A for Sevioe7'asa 36axIia 366 1 .1
APProved blr OMB 3060-05,92; Fires: 4/30/97
3R
Page 5 Lotus 4.01 Win; Version 2.0 FCC Form 1205; May 1994
Federal Communications Commission, Washington, D.C. 20554
APProved br OMB 3060-0592; Expires: 4/30/97
WO Yn_an.ra~ FOIi CAI.CUI.A.T1NGTdIAL LQOIPDti1P[Alm 1N81'N.I.A770N O:OSIS
1 TaW Can e[btallrioossd3dtitaseee 8ehebek4Bae 1]
2
Tat~Mml torittta8~iao aMMaoteea,re BeLednle B
Box 547,290A98.8906
3 ,
ToW MwI Cob of>dalWmaod36tiatee~oe[liael+Ime2] 5369,039,834.0000
4
CU810f11Q Equipment andiMallmion Percenta@e (attach explanation). 5416,330,3328906
3
Meal Customer ipmet Dlantatoxaodlosn8~iaa Co~R Bake Can otlesard ~~ !.0000
' 3xI~e4 541630,3328906
6 Tod Ctpittl Coen otlsae6 QdlonterEquMauot rtrhadok C.lloo03]
7
Mad Curam~ tndNenllstioa Cob S+I,ae 5391308,1A3.931A
8
FaomOpeAtoeriaOWFonehisAra (sx uaWCioea) .51,007,838378.8230
9
Alloeaoed AVUY gW~ d3otalhtim Cot[lioe7xl~e 1.0000
10
MmWt aod6tbllstim Cat 9!(I2)] SI,OW,838376.8230
ll
NuabsofHasic Eobaaabaa6Fteaohise 583.9863482332
12
sud 6tOa8sdoo Cost per 3vbavber 10/13ee 11 12,274,093
13
SAlstiau A~ot00eYFsnr SmluMSetiom] f6.8426
14 A~jetated odloseallrim Caet 9o6sv3er
9Q ll~el2 xl~o13 1.0000
56.84
y47,290A96.8906
5369,039,6M.0000
54163303328906
1.0000
S4I6330332.8906
5391308y459324
53,007,836378.8730
L0000
SI,007,838,378.8730
58395634&2332
12700,000
56.6131
1.0000
56.61
Page 6 lotus 4.01 Win; Version 20 FCC Form 1205; May 1994
Federal Communications Commission, Washington, D.C. 20554
EDl16fAAY SCF®UIH
Conti aWlada6Wa)bta FamYted Aanl
L Chop far Csbk6aviafordletiou
a lkorl~Rele A,l~e da
b A hrldltiao
1. holalltimdUawhedikmee Btep B.lioe gat 543.00 543.09
27oMalitim dl4eweadFlamea ]6teF B.I~s9h3] 530.46 .~ f30.S7
3.Iod6etim dAdBtiod CamapiaoetTom dhdtit Sattitioe g, iJae 9e3 51933 5l9?3
4. healltlmdAddtlaml Caasoatioa RarpiN56ep4rslalutall BteP l3, lia 965 530A6 510.33
S. Otltahrhgtiao( li,~i~se 9e3, 9e6, 9e9]
a
50.00
50.00
k
50.00
50.00
e
50.00
Sp,00
2 EdetW~ faIsedgmae Camob C, I.me l7, ahtme.c
YmtteCated l'ype l: 5033 50.33
ltaoteCorOW t f0.00
llmoleCahol 7: 50.00
3 [arlafedCaoretvl3osal~eOD,Iaee2S,eohoooas
Caivetallaalyye l: Non-Addle 50.68 Sp,69
Cm-ehe75m['lype2 Addressable x,90 ~.~ '
Cmva0Q11as1yPe3: Dud 7Lnv 56.49 56.49 '
4 t7vleforlsese dOWv &N E, IJoc33
Otttv~~ 50.00
3 fQ 7we(i[ F, i1oe34, 33Q36e 516.12 5200 ^
•Mwwa charged maybe Inc Wan Wem~imum Pemdtted nte.
/o5ktolaraeacm mefoilaseingll•sgnatiaoe h7P~ oX k Iheep6sopitehoz
LHwe7ae shrdadthe hhorcab aooeieted wih ea6avWcesikdmpa 6yae chop tae odhd koaWlioo?
YP!
Z 140
2lhteo3v apiaHa616e hbarcaY 4radred withaharLe ahledrapf!
YPS
NO
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aeYded othecaepul~dag0ipmotadoW Woo drg/t
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~ ~ Lotus 4.01 Win; Version 2.0 FCC Form 1205; May 1994
~~
STATE OF NORTH CAROLINA
ORANGE COUNTY
NC-0256a, NC-0256b & NC-0276
BEFORE THE COUNTY BOARD
IN THE MATTER OF: )
The Review of FCC1240 Annual Rate ) An Order Finding Time Warner Cable's 2003
FCC1240 Basic Service Tier and FCC1235 Cost of
Adjustment Request, FCC1235 ) Service Rates are Reasonable and FCC1205
Abbreviated Cost of Service Rate Request, ) Installation Rates Comply with the FCC's Rules
and FCC1205 Equipment and Installation ) and are Subject to the Conditions Stated Herein
Rate Request filed by Time Warner ) .
WHEREAS, in accordance with the provisions of the Cable Television Consumer Protection and
Competition Act of 1992 (1992 Act), the Federal Telecommunications Act of 1996 (1996 Act), the County Code,
and regulations adopted pursuant to that Code, the County Board is permitted to regulate rates for basic cable
services and associated equipment;
WHEREAS, Time Warner Cable ofRaleigh-Durham (Time Warner) submitted FCC 1240 Updating
Annual Maximum Permitted Rates filings for Regulated Cable Services with the County. Time Warner's filings
encompass external costs, inflation, and program costs for the True-up period of October 2001 through September
2002, and the projected period of January 2003 through December 2003;
WHEREAS, the County received a report from its Consultant stating that Time Warner submitted its
FCC1240 before the FCC published its October 2001 updated inflation factors; Time Warner's FCC1240 rate
calculations comply with the FCC's rate-making rules;
WHEREAS, Time Warner submitted a consolidated "Company" FCC 1205 Determining Regulated
Equipment and Installation Costs filing with the County to set the regulated rate for the Hourly Service Charge,
Installation Services and Equipment rental rates;
WHEREAS, the FCC reversed the Town of Smithfield's 2002 Local Rate Order (FCC: DA 03-177) that
found Time Warner's 2002 HSC as unreasonable because that while mathematical accuracy is a rate determinant,
the magnitude of a rate increase (26+%) alone is insufficient evidence upon which to fmd a rate unreasonable;
WHEREAS, the County had issued a 2002 Rate Order fmding TW's 2002 HSC unreasonable and the
basis for this fmding was nullified by the FCC in its Smithfield decision.
WHEREAS, the County received a report from its Consultant stating that although Time Warner was not
able to justify assumptions underlying the Hourly Service Charge ($37.62), the FCC has said that while
mathematical accuracy is a determinant, the magnitude of a rate increase (26+%) is insufficient justification to deem
a rate unreasonable;
WHEREAS, because of the FCC's ruling, The County Board rescinds that portion of its 2002 Local Rate
Order that disapproved Time Warner's 2002 HSC; and
WHEREAS, the County is certified with the FCC to regulate basic service tier rates provided by Time
Warner in the County.
43
NOW THEREFORE THE BOARD OF COUNTY COMMISSIONERS MAKES THE
FOLLOWING FINDINGS:
THAT Time Wamer's Maximum Permitted NC-0256a $12.55 Rate for Basic Tier Service is reasonable;
THAT Time Warner's NC-0256a $2.11 "Add-on" Rate for Basic Tier Service is reasonable;
THAT Time Warner's Maximum permitted NC-0256b $10.40 Rate for Basic Tier Service is reasonable;
THAT Time Warner's NC-0256b 1. 81 "Add-on" Rate for Basic Tier Service is reasonable;
THAT Time Wamer's Maximum Permitted NC-0276 $11.74 Rate for Basic Tier Service is reasonable;
THAT Time Warner's NC-076 $1.45 "Add-on" Rate for Basic Tier Service is reasonable;
THAT Time Wamer may chazge a Basic Service Tier rate below the approved combined maximum
perntted rate;
THAT Time Warner's Nationally.Aggregated $37.62 HSC complies with the FCC's rate regulation rules;
THAT Time Wamer may base its installation rates on its 2003 FCC1205 HSC rate of $37.62; S
THAT Time Wamer has substantiated adjustments to its FCC1205 equipment rates, and
THAT Time Warner has substantiated the other adjustments to its cable service rates based on past and
estimated cost elements.
IT IS THEREFORE ORDERED:
THAT Time Warner's Maximum permitted Rate for Basic Tier Service for NC-0256a ($12.55) is
reasonable, its $2.11 FCC 1235 "Add-on" is reasonable and that Time Warner may chazge a combined "selected"
BST rate below the approved maximum permitted rates, but not above it;
THAT the maximum permitted Basic Service Tier rate for Time Warner subscribers in NC-0256a for the
projected period shall not exceed $14.66 per month, subject to subsequent findings by the Boazd to the contrary;
THAT Time Warner's Maximum permitted Rate for Basic Tier Service for NC-0256b ($10.40) is
reasonable, its $1.81 FCC 1235 "Add-on" is reasonable and that Time Warner may charge a combined "selected"
BST rate below the approved maximum perntted rates, but not above it;
THAT the maximum permitted Basic Service Tier rate for Time Warner subscribers in NC-0256b for the
projected period shall not exceed $12.21 per month, subject to subsequent fmdings by the Board to the contrary;
THAT Time Wamer's Maximum permitted Rate for Basic Tier Service for NC-0276 ($11.74) is
reasonable, its $1.45 FCC1235 "Add-on" is reasonable and that Time Warner may charge a combined "selected"
BST rate below the approved maximum perntted rates, but not above it;
THAT the maximum permitted Basic Service Tier rate for Time Warner subscribers in NC-0276 for the
projected period shall not exceed $13.19 per month, subject to subsequent fmdings by the Boazd to the contrary;
THAT the County Board rescinds its 2002 Local Rate Order that found Time Warner's 2002 HSC
unreasonable;
~~
THAT Time Warner's 2003 Equipment, Installation and HSC rates comply with the FCC's rate regulation
rules;
THAT the County reserves its right to revise this Rate Order subject to subsequent contrary fmdings by the
Board, and
THAT this Rate Order will be effective immediately.
ISSUED BY ORDER OF THE BOARD OF COUNTY COMMISSIONERS
This the day of 2003.
Chair
ATTEST:
Clerk
Deliver Report and Executed Order via Certified US Mail to: Pau] Baccellieri, Time Warner Cable; 101 Innovation Av.; Morrisville, NC 27560
Copy via ordinary US Mail to: Action Audits, LLC., 101 Pocono LN., Cary, NC 27513-5316.