[Federal Register Volume 67, Number 172 (Thursday, September 5, 2002)]
[Rules and Regulations]
[Pages 56880-56881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22426]



[[Page 56879]]

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Part III





Federal Communications Commission





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47 CFR Part 76



Revisions to Cable Television Rate Regulations; Final Rule and Proposed 
Rule

  Federal Register / Vol. 67, No. 172 / Thursday, September 5, 2002 / 
Rules and Regulations  

[[Page 56880]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket No. 02-144; FCC 02-177]
RIN: 4102


Revisions to Cable Television Rate Regulations

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document clarifies how the Commission will review appeals 
of local rate orders regarding adjustments to cable television rates 
for the basic service tier pending resolution of the issues in the 
Notice of Proposed Rulemaking published elsewhere in this issue.

EFFECTIVE DATE: September 5, 2002.

FOR FURTHER INFORMATION CONTACT: John Norton, Media Bureau, 202-418-
7037 or via e-mail at [email protected]; Wanda Hardy, Media Bureau, 202-
418-2129 or via e-mail at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Media Bureau's 
Order for Interim Rate Adjustments for BST Channel Charges (``Order'') 
MB 02-144, FCC 02-177, adopted June 13, 2002 and released June 19, 
2002, as corrected by Order MB-02-144, FCC 02-228 adopted August 6, 
2002 and released August 14, 2002. The complete texts of these orders 
are available for inspection and copying during normal business hours 
in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., 
Washington, DC and may also be purchased from the Commission's copy 
contractor, Qualex International, Portals II, 445 12th Street SW., Room 
CY-B-402, Washington, DC 20554, telephone (202) 863-2893, facsimile 
(202) 863-2898, or via e-mail [email protected].

Synopsis of Order

Interim Rate Adjustments for BST Channel Changes

    1. In light of the confusion created by section 76.922(g)(8) of the 
Commission's rules and the intent expressed in the Going Forward Order 
that there be some mechanism for dealing with channel changes if the 
incentives in paragraph (g) were not renewed, we clarify how channel 
changes should be handled pending action on the Notice of Proposed Rule 
Making. See 47 CFR 76.922(g); Implementation of Sections of the Cable 
Television Consumer Protection and Competition Act of 1992: Rate 
Regulation (``Going Forward Order''), 59 FR 62614, December 6, 1994. We 
base this clarification on the provisions in paragraphs (g) and (h) and 
Forms 1210 and 1240 for the basic service tier (``BST''), which are 
understood by cable operators and franchising authorities. We also take 
into consideration the sunset of cable programming service tier 
(``CPST'') rate regulation. For rate adjustments filed with franchising 
authorities after this clarification, franchising authorities reviewing 
rates should accept rate adjustments for channels added to the BST 
using the per channel adjustment factor in Sec.  76.922(g)(2), based on 
the number of channels that would have been subject to regulation if 
CPST rate regulation had not ended. Franchising authorities should also 
accept and may require rate adjustments for channel deletions and 
substitutions consistent with Sec.  76.922(g)(4) and (g)(6), 
respectively. The calculations should be done using FCC Forms 1210 and 
1240. We will review appeals of local rate orders consistent with this 
approach. We recognize that some operators removing channels from the 
BST before this clarification may have read paragraph 98 of the Going 
Forward Order to allow BST rate adjustments based on the per channel 
adjustment factors from the table in Sec.  76.922(g)(2), and previously 
in 47 CFR 76.922(e)(1994).
    2. In reviewing any appeals of local rate orders regarding this 
methodology, we will consider an operator's use of this methodology 
before this clarification to be reasonable; provided that, for systems 
moving a substantial number of channels from the BST to a CPST, the 
resulting overall rate structure is reasonable; and further provided 
that this methodology is generally consistent with the system's 
methodology for its rate adjustments for the majority of any channels 
moved from the CPST to the BST on or after the January 1, 1998 sunset 
of paragraph (g). In reviewing appeals of local rate orders concerning 
rate adjustments for the movement of channels from the CPST to the BST, 
we will find reasonable adjustments that are consistent with Sec.  
76.922(g)(5) and the Commission's rate forms for CPST channels moved on 
or before March 31, 1999, the sunset of CPST rate regulation; provided 
that the rate adjustments are computed from CPST rates that were 
subject to rate regulation; and further provided that adjustments for 
channels moved from the BST during this same period were computed 
consistently with Sec.  76.922(g)(5) and the Commission's rate forms.
    3. The provisions in Sec.  76.922(f), (g) of the Commission's rules 
concerning external costs, including the permitted 7.5% mark-up on 
programming cost increases, continue to apply. This clarification is 
consistent with Commission rate forms, which have remained in effect 
since their adoption, and with the Commission's handling of rate 
complaints and stays of local rate appeals. Without this clarification, 
subscribers may experience a decrease or change in BST service without 
a corresponding adjustment to their rates. The clarification with 
respect to the movement of channels between tiers maintains the balance 
between regulated revenue sources, which has been a consistent part of 
our rate regulations, for the period that the CPST was subject to rate 
regulation. Because of our concern about determining the CPST residual 
from unregulated rates, we will not find franchising authority orders 
unreasonable for disallowing the movement of an unregulated residual 
amount for channels moved from the CPST to the BST after the sunset of 
CPST rate regulation. However, franchising authorities that have 
accepted such a residual movement from the CPST to the BST either in 
orders or by inaction within the period for reviewing a Form 1240 
should not change that determination in the true-up process. Our intent 
with these interim guidelines is to create some stability in the rate-
making process pending resolution of this proceeding, not to overturn 
rate adjustments previously accepted based on a good faith 
interpretation of our rules and rate forms.
    4. At the conclusion of the rulemaking proceeding, we will consider 
whether BST rates should be adjusted to conform to the structure 
adopted by the Commission. In addition, in the Order we clarify how 
operators using FCC Form 1240 and Worksheet 4 of that form may compute 
the channel residual during the interim period. The instructions for 
Worksheet 4 direct operators projecting their next maximum permitted 
rate to compute the residual using their previous average permitted 
charge, which is the charge projected in the previous rate form and 
entered on Line A1 of the current rate form. The instructions then 
direct the operator to subtract average external costs and average 
total per channel adjustments for ``Caps Method'' channels using 
figures from Line 710 of Worksheet 7 and Line 214 of Worksheet 2 for 
``the appropriate period.'' The instructions also direct the operator 
to use the average number of channels on the system for ``the 
appropriate period.'' We clarify that, when computing the

[[Page 56881]]

channel residual for the new projected period, operators may use the 
projected period from the previous Form 1240 as the appropriate period. 
In this way, the projected external costs, Caps Method per channel 
adjustment, and channel count used to calculate the permitted charge 
shown on Line 401 for the projected period would be used to adjust it 
for computing the residual.

Ordering Clause

    5. This Order is adopted pursuant to authority contained in 
sections 1, 2(a), 3, 4(i), 4(j), 303(r), 601(3), 602, and 623 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 153, 
154(i), 154(j), 303(r), 521, 522, and 543; and adopted pursuant to 
authority contained in sections 4(i) and 623 of the Communications Act 
as amended, 47 U.S.C. 154(i), and 543, and Sec.  1.108 of the 
Commission's Rules, 47 CFR 1.108.

List of Subjects in 47 CFR Part 76

    Cable television.

    Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-22426 Filed 9-4-02; 8:45 am]
BILLING CODE 6712-01-P