HomeMy WebLinkAboutItem 13 - AT&T Broadband Rate ReviewITEM# . 13 mmmmilm
MEMO TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
ROGER NELSON, CITY MANAGER
MEETING DATE: JUNE 18, 2002
SUBJECT: AT&T BROADBAND RATE REVIEW — ESTABLISH MAXIMUM
PERMITTED RATES FOR BASIC SERVICE TIER
RECOMMENDATION:
City Council consider the approval of a rate order ordinance which denies the proposed
maximum permitted rate, establishes a maximum permitted rate based on the city's
review of FCC Form 1240 and accepts the proposed operator selected rates, and denies
the Form 1235 rate included in the FCC Form 1240.
FUNDING SOURCE:
The rate order does not have a financial impact. The City will continue to collect
revenue according to our franchise agreement of 5% of gross receipts.
BACKGROUND:
The City of Grapevine received notice of AT&T's FCC filing in March of 2002.
Connie Canady, C2 Consulting, Inc., was hired to provide an analysis of FCC Form 1240
related to basic service tier rates for the next year. The final report is included in the
attached ordinance. The staff recommends three action steps based on the C2's report:
a) The City Council deny the maximum permitted rate of $10.94 requested in
FCC Form 1240 as being unreasonable;
b) The City Council establish the maximum permitted rate of $10.81 and accept
the operator selected rates of $10.32;
c) The City Council deny the Form 1235 rate of $1.45 that is included in the
filing.
The City of Grapevine retains regulatory authority only over the basic tier service level
and other equipment related charges. AT&T, upon approval of the rate order, must
comply with the new rate structure effective immediately. During this process, Ms.
Cannady worked directly with AT&T to address questions related to data and her
analysis.
June 12, 2002 (2:16PM)
It should also be noted that staff worked with C2 Consulting Services, Inc. under a joint
agreement with other cities in the metroplex (which are listed on the report memo). The
FCC Forms filed in those communities reflected the same financial justification for the
increases. Representatives from the coalition of communities will also be forwarding
recommendations to their respective City Councils based on the work completed by C2
Consulting Services.
Staff recommends approval of the rate order ordinance. The Utilities Committee and the
City Attorney have been briefed on the rate order and support the approval of the
ordinance.
M
June 12, 2002 (2:10PM)
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS ESTABLISHING THE MAXIMUM
PERMITTED BASIC SERVICE TIER RATES CHARGED BY
AT&T BROADBAND CABLE, DECLARING AN EMERGENCY
AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of Grapevine, Texas franchises cable television service for
the benefit of its citizens; and
WHEREAS, the City is the Grantor of a franchise ordinance by and between the
City of Grapevine and AT&T Broadband ("AT&T" ); and
WHEREAS, in accordance with applicable provisions of the Telecommunications
Act of 1996 (herein the "Telecom Act") and rules adopted by the Federal
Communications Commission ("FCC") and all other applicable federal and state law and
regulations, the City has undertaken all appropriate procedural steps to regulate the
equipment and installation rates; and
WHEREAS, in accordance with applicable FCC regulations the City adopted an
ordinance providing for the regulation of rates charged by cable television operators
within the City for the equipment and installation rates and related equipment and
installation charges and providing for a reasonable opportunity for interested parties to
express their views concerning basic cable regulations.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. Findings:
1. That on or about March 1, 2002, the City of Grapevine received
AT&T Broadband's FCC form 1240 filing.
2. That the City engaged the services of C2 Consulting Services, Inc.
to provide assistance in the review of AT&T's FCC form 1240 to
determine the reasonableness of the proposed basic service tier
rates, attached hereto as Exhibit "A".
3. That AT&T intends to institute a rate adjustment based on its Form
1240 filing effective July 1, 2002.
4. That based upon the information received from AT&T and
49 recommendations from C2 Consulting Services, Inc., the City
concludes that the rate proposed by AT&T for maximum permitted
service rate is not reasonable.
Section 2. Conclusions:
The City has an obligation to timely act upon the pending rate application
consistent with current FCC rules and regulations. AT&T's submittal of the FCC Form
1240 received on or about March 1, 2002, is hereby rejected, for the reason that the
proposed rate is not reasonable.
Section 3. Orders for Action:
Based on the foregoing Findings and Conclusions, the City hereby enters the
following orders:
1. AT&T's request for maximum permitted basic service rate of $10.94
included in the FCC Form 1240 filing is hereby denied.
2. Based on the information received from AT&T and recommendations from
C2 Consulting Services, Inc. which is attached hereto as Exhibit "A" and
included herein for all purposes, the maximum permitted rate for the basic
service tier is established at $10.81 effective July 1st, 2001. And, the
operator selected rate of $10.32 should be accepted since it remains
below the maximum permitted rate.
3. AT&T's proposal included the Form 1235 Rate of $1.45 which is hereby
denied (and which was denied in last rate review as unreasonable).
Section 4. The fact that the present ordinances and regulations of the City of
Grapevine, Texas, are inadequate to properly safeguard the health, safety, morals,
peace and general welfare of the public creates an emergency which requires that this
ordinance become effective from and after the date of its passage, and it is accordingly
so ordained.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 18th day of June in 2002.
AIa
ORD. NO. 2
ATTEST:
ORD. NO. 3
m
m
4:40MIMIMM
xSERVICES9 INC.
7801 Pencross Ln.
Dallas, Texas 75248
April 24, 2002
Ms. Melisa Leal
Assistant to the City Manager
City of Grapevine
PO Box 95104
Grapevine, Texas 76099
Dear Ms. Leal:
APR 2 9 2002
Tel. (972) 726-7216
Fax (972) 726-0212
C2 Consulting Services, Inc. ("C2") has completed its review of the FCC Form 1240 submitted to
the City of Grapevine, Texas (the "City") by AT&T Broadband ("AT&T" or the "Company") on
or about March 1, 2002. The following report provides a brief discussion of the issues noted
during the review and C2's recommendations regarding potential City Council actions in
response to AT&T's proposed basic service rate.
This study does not constitute an examination of the financial condition of AT&T or its parent
company. Therefore, C2 cannot and does not express any position with regard to the accuracy or
validity of the financial informatipn provided by AT&T during the course of the analyses.
OVERVIEW OF THE FILING
According to the information provided by AT&T, five channels have been added to the basic
service tier since the last filing for a total of twenty-seven (27) channels. There are no additional
changes proposed for the projected period. The current basic service rate charged by AT&T is
$9.82 as approved by the City in its 2000 review. AT&T originally proposed to increase the
maximum permitted basic service rate to $10.97, with an operator selected rate of $10.32 (a net
increase to the subscriber of $.50). The rate year has changed to June 30, 2002 through May 31,
2003.
Upon initial review of the filing, C2 noted that AT&T had "trued -up" two months that had
already been trued -up in the prior 2000 filing and informed the Company. On or about March 29,
AT&T filed an Amended Form 1240 with a proposed maximum permitted Form .1240 rate of
$10.94, with a continued operator selected rate of $10.32.
There are five major factors that explain AT&T's proposed increase in the basic service rate:
AT&T proposes to use a higher inflation factor in its current Form 1240 true -up
period than was estimated in the projected period for the 2000 filing;
Because of the change in the rate year, there are two additional months that must be
trued -up in the calculation;
Ms. Melisa Leal
April 24, 2002
Page 2
3. AT&T proposes additional programming costs related to the addition of channels to
the basic service tier;
4. The number of subscribers over which to spread the costs is declining; and
5. AT&T proposes an additional projected year of inflation in its current Form 1240 that
will be trued -up next year pursuant to FCC regulations.
ANALYSES OF THE FILINGS
Project Objectives and Activities
The project objectives are three -fold:
Assessment of the completeness of the filings with regard to the information and
documentation that must be filed with the City.
Assessment of the reasonableness of the proposed computations in light of FCC
regulations, and FCC rulings.
Assessment of the reasonableness of the proposed computations in light of City
actions resulting from analysis of the 2000 Form 1240 computations and subsequent
rate order.
Given these objectives, C2 conducted the following project activities:
1. Review of the filing to assess the completeness based on the FCC Form instructions.
2. Review of the filing . to identify any issues with respect to the data and/or
methodologies employed by AT&T.
3. Submission of follow-up data requests and subsequent review of AT&T's responses.
4. Review of FCC decisions and City orders that clearly have an impact on AT&T's
proposed methodologies.
5. Development of potential alternatives available to the City in establishing maximum
permitted basic service rates.
Summary of Findings
C2 identified five additional issues with respect to AT&T's amended Form 1240 computation.
AT&T inappropriately included programming costs that were not related to the time
Paragon owned and operated the system.
2. AT&T incorrectly computed its FCC User fees based on the FCC order.
3. AT&T made refunds for the 2000 rate review that did not incorporate the same
subscriber counts as included in this filing.
4, In conjunction with correcting the True -Up Period, the inflation factors to be applied
during both the True -Up Period and the Projected Period need to reflect the most
recent information available.
Ms. Melisa Leal
April 24, 2002
Page 3
5. It appears that AT&T proposes a total maximum permitted rate of $12.39, which
includes a Form 1235 upgrade rate of $1.45.
1. Inappropriate Programming Costs
As you recall, the system was transferred from Paragon Cable to AT&T at the end of December
2000. Also at that time, AT&T added five additional channels, with increases in programming
costs. Based on the filing, AT&T used its programming costs for the period October 2000
through December 2000. In C2's opinion, this is incorrect. The programming costs that should
be reflected are those of Paragon, as it was the operator of the system during that time. This
adjustment lowers AT&T's proposed amended rate by approximately $.03.
2. Incorrect Computation of FCC User Fees
One of the components of the external costs is the regulatory fee paid to the FCC. In the past,
AT&T has computed the amount of the FCC User fee based on the sum of monthly rates times
the number of subscribers in that month. Generally, the monthly rate has fluctuated between 5.03
and $.05 per subscriber per month.
During the review, C2 noted that AT&T was proposing an increase in the monthly rate from $.04
to 5.05. When asked to support this increase, AT&T responded that it was an estimate of the
increase anticipated from the FCC. Based on discussions with FCC representatives, C2
discovered that the FCC had, in fact, proposed an increase in an annual amount per subscriber
from the current rate of 5.49 to S.53. However, more importantly, C2 determined that the actual
payments made each September to the FCC by the cable operators are computed by multiplying
these annual rates per subscriber (not monthly) times the number of subscribers as of December
of the previous year.
More specifically, for the September 2001 payment (which is included in the true -up period),
FCC Order 01-196 established the annual payment per subscriber to be $.49. Paragraph 38 of this
order provided:
For regulatees whose fees are based upon a subscriber, unit or circuit count, the number of
regulatees' subscribers, units or circuits on December 31, 2000. will be used to calculate the
fee payment.
FCC Order 02-92 proposes to increase this annual amount to $.53 per subscriber.
In C2's opinion, the previous methodology employed by AT&T to compute FCC User fees is not
entirely accurate. The amount reported on Worksheet 7 for the true -up period should be
computed by multiplying $.49 times the December 2000 subscriber counts. Additionally, the
projected period amount should be computed by multiplying 5.53 times the December 2001
subscriber counts. The results of changing the FCC User fee computations is to reduce AT&T's
proposed MPR by less than S.O I.
3, Inconsistent Subscriber Counts
Pursuant to the 2000 review, the City ordered AT&T to make refunds for the period February-
2001 through July 2001. AT&T based these refunds on subscriber counts that were lower than
Ms. Melisa Leal
April 24, 2002
Page 4
49 those reported in this filing. Therefore, C2 has adjusted the rates noted on Worksheet 8 to take
into account the difference in these lower refunds. The impact on the proposed rate is to lower it
by approximately S.01.
4. Adjustment to Inflation Rates
The fourth issue relates to the inflation factor used for both the true -up period and the projected
period. The Form 1240 methodology allows for an inflation adjustment to be projected for each
rate year. Such projection becomes part of the true -up computation in the next rate filing. Based
on FCC regulations, a cable operator is to use the most recent information published by the FCC
concerning quarterly inflation factors to be applied.' At the time of AT&T's current Form 1240
filing, the latest published inflation factor was for the third quarter 2001. Since AT&T's true -up
period is from October 2000 through November 2001, the inflation factors used were the fourth
quarter 2000, and the first, second and third quarter 2001. The third quarter factor of 2.25%
continued to be used for the fourth quarter 2001 component of the true -up period. Additionally,
this third quarter factor was used for the entire projected period. However, on April 9, 2002,
shortly afler AT&T filed its current Form 1240, the FCC published the fourth quarter 2001 factor
of negative .11%.
Typically, if the inflation factor used is the only issue found in a franchising authority's review of
a Form 1240 filing, the FCC has found in favor of the cable operator using what was the most
recent data available at the time the filing was made. The FCC detailed this policy in the Third
Order on Reconsideration as follows:
We share National Cable, Television Association's concern that rates adopted in an effort
to comply with our rules as quickly as possible may become unreasonable solely as a
result of using later data to refresh the calculations. Operators should not be penalized
for making good faith attempts to comply with our rules in a timely manner.
When current rates are accurately justified by analysis using the old data (and that data
was accurate at the time), cable operators will not be required to change their rates...
When current rates are not justified by analysis using the old data (so that a rate
adjustment would be necessary in any event), cable operators will be required to correct
their rates pursuant to current data. In these circumstances, the resulting rates must be
based on current data.2 [emphasis added]
Clearly, if the franchising authority fords adjustments need to be made other than those
attributable to the inflation factors, the FCC has found that the inflation factors can be adjusted
with data that became available subsequent to the date of the filing. The FCC's position on this
issue is evidenced in the above cited Portland Order (DA 97-1852). In that decision, the FCC
found error with Paragon's use of estimated data in its true -up computation for CPST rates and
also made an adjustment to reflect current inflation factor data:
This adjustment required that we refresh Operator's inflation factors 3
' FCC Form 1240 Instructions, Part is Module C [Revised July 1996].
See Third Order on Reconsideration, FCC 94-40, released March 30, 1994, paragraphs 93 and 94.
3 See Order, DA 97-1852, released August 29, 1997, paragraph 10.
Ms. Melisa Leal
April 24, 2002
Page 5
Therefore, because C2 is recommending that other adjustments be made to AT&T's amended
Form 1240 computation, the true -up period inflation factor should be refreshed to include the
fourth quarter factor. With respect to the projected period, the rules state that the latest published
factor is to be used. However, in C2's opinion, it is unlikely that we will continue to have
negative inflation during the projected period. To include a decline in the rate now may result in
a significant true -up amount in the next filing, plus 11.25% interest. Therefore, in C2's opinion,
using an average factor for the last four quarters produces a more reasonable factor for the
projected period.4
The impact of making the inflation factor adjustment is to reduce AT&T's proposal Form 1240
basic service rate by approximately $.08.
5. Inappropriate Inclusion of a Form 1235 Rate
On one of the summary schedules included in this filing (not one of the Form 1240 formulae
schedules or worksheets), AT&T proposes a maximum basic service rate of $12.39. This
includes the proposed Form 1240 rate of $10.94 and a Form 1235 rate of $1.45. As you recall,
the City disallowed the Form 1235 rate in 1999. Therefore, the maximum permitted basic service
rate should only be the Form 1240 as adjusted.
SUMMARY OF RECOMMENDATIONS
Based on the above findings, C2 recommends the following adjustments be considered by the
City in determining the maximum permitted monthly basic service rate:
1. The programming costs for the fourth quarter 2000 should reflect the costs of
Paragon.
2. The FCC User fees should reflect the computation required by the FCC for payment
remittance.
3. Worksheet 8 should be adjusted to reflect the refunds made based on lower
subscriber counts than included in the filing.
4. The inflation factors should be adjusted to reflect the published factors through the
fourth quarter of 2001.
5. The inflation factor for the projected period should reflect an average over the last
four quarters.
6. The City should consider ordering a maximum permitted rate for the Form 1240
computation of $10.81 rather than the $10.94 proposed by AT&T. Since the operator
selected rate is still below the adjusted maximum permitted, the operator selected rate
of $10.32 should be accepted.
7. The City should affirm its denial of the Form 1235 rate of $1.45.
-` If the actual -.11% fourth quarter inflation factor is used for the entire projected period. the resulting rate
is $10.62; still $.30 higher that the operator selected rate of $10.32.
Ms. Melisa Leal
April 24, 2002
Page 6
C2 greatly appreciates having this opportunity to work with the City of Grapevine. If you have
any questions regarding this report, the project activities, or any of the recommendations, please
contact Ms. Connie Cannady at (972) 726-7216.
Very truly yours,
C �_ Cs� 4",
C2 Consulting Services, Inc.
Approved by OSIB 3060-0685
Federal Communications Commission
Washington, DC 20554
S. Status of Previous Fuzing of FCC Form 1210 (enter an "z" in the appropriate box) YES NO
a- Has an FCC Form 1210 been previously filed with the FCC?
If yes, enter the date of the most recent filing: —_ —7] (mjdd/Y3')
YES NO
b. Has an FCC Form 1210 been previously filed with the Franchising Authority?
If yes, enter the date of the most recent filing: [777::� (mm/dd/yy)
9. Status of FCC Form 1200 Filing (enter an "x" in the appropriate box) YES NO
EL Has an FCC Form 1200 been previously filed with the FCC?
If yes, enter the date filed E:::�� (»mijdd/yy)
YES NO
b. Has an FCC Form 1200 been previomly filed with the Franchising Authority? --}
If yes, enter the date filed �— t (.Iddjyy)
10. Cable Programming Services Complaint Status (enter an "x" in the appropriate box) YES NO
a- is this form being filed in response to an FCC Form 329 complaint?
If yes, enter the date of the complaint: �� (mm/ddlyy)
YES NO
Al. - FCC Form 1205 Being Included With This Fuzing
12. Selection of "Going Forward" Channel Addition Methodology (enter an"z" in the appropriate box)
=Check here if you are using the original Hiles [MARKUP METHOD].
=Check here if you are using the new, alternative rules [CAPS METHOD].
If using the CAPS METHOD, have you elected to revise recovery for
channels added during the period May 15, 1994 to Dec. 31, 1994?
YES NO
13. Headend Upgrade Methodology
,< -OTE, Operators mus? cetttfv to the Commi-spou the- ehoibOty to use this upo ade me/hodNWvaad allach.w equ pment GsJ and deprrciat oo schedule.
=Check here 9 you are a qualifying small system using the streamlined headend upgrade methodology.
Part I: Preliminary Information
Module A: Maximum Permitted Rate From Previous Filing
a b c
Line Description Basic Tier 2 Tier 3
d
Tier 4
e
Tier 5
Al Current Maximum Permitted Rate — ' $9.82271 J I i
Module B: Subscribership
a b c d e
Line Line Description Basic Tier 2 Tier 3 Tier 4 Tier 5
B1 Averaee Subscribership For True -Up Period 1 8'890
32 Average Subscribership For True -tip Period 2 8.197
B3 Estimated Average Subscribership For Projected Period 8,817
Module c:: inLiarlon
Line Line Description.
C i Unclaimed Inflation: Operator Switching From 1210 To 1240
C2 Unclaimed Inflation: Unregulated Operator Responding to Rate Complaint
C3 Inflation Factor For True -Up Period 1 [NVks II
C4 Inflation Factor For True -tip Period 2 [tiVks I I
Current FCC Inflation Factor
1.01
Paye , tificresoft E:cel 4.i� �ersioa July 1�'
de
a b c
Basic Tier 2 Tier 3 Tier 4 Tier 5
Line
Line Descri2tioo
D1
Current Headend Upgrade Segment
D2
Current External Costs Segment
$02430
D3
Current Caps Method Segment
$0'0000
D4
Current Markup Method Segment
$0_0000
DS
Cu:rect Channel Movement and Deiet3on Segment
saccm
D6
Current True -Up Segment
50.1934 {
FCC Form 1340
Paye , tificresoft E:cel 4.i� �ersioa July 1�'
Federal Communications Commission
Washington, DC 20554
Approved by OMB 3060-0685
D7 Current Inflation Segment $0.1831
D8 Base Rate [At-Dl-D2-D3-D4-D5-D6-D7J $9.2032
Part II: True -Up Period
Module E: Timing Information
Line
Line Description
El
What Type of True -lip Is Being Performed? (Answer "1". "2", or "3". See Instructions for a description of these types.) 3
Caps Method Segment For True -Up Period 1 [Wks 21
If "1", go to Module I. If '2", answer E2 and E3. If '3', answer E2, E3, E4, and E5.
E2
Number of Nfontbs in the True -lip Period 1 12
E3
Number of Months between the end of True -Up Period 1 and the end of the most recent Projected Period 3
IN
E4
Number of Months in True -Up Period 2 Eligible for Interest 2
ES
Number of :vionths True -Up Period 2 Ineligible for Interest 0
Module F: Maximum Permitted Rate For True -Up Period 1
Line
Line Description
a b c d e
Basic Tier 2 Tier 3 Tier 4 Tier 5
Fl
Caps Method Segment For True -Up Period 1 [Wks 21
F2
Markup Method Segment For True -Up Period I [Wks 31
$0.0000
F3
Chan Jtvmnt Deletn Segment For True -Up Period I [NVks' 4151
$0.00
F4
True -Up Period 1 Rate Eligible For Inflation [D8+F1+F2+F3]
$9.2032
F5
Inflation Segment for True -Up Period I [(F4'C3)-F4]
$0.2197
F6
Headend Upgrade Segment For True -tip Period 1 [Wks 6)
F7
External Costs Segment ForTrue-UpPeriod I[Wks 71
$0.5043
FS
True -Up Segment For True -Up Period 1
$0.1846
F9
Max Perm Rate for True -Up Period 1 [F4+F5+F6+F7+F8]
$10.1118
Module G: Maximum Permitted Rate For True -Up Period 2
Line
Line Description
a b c d e
Basic Tier 2 Tier 3 Tier 4 Tier 5
Gl
Caps Method Segment For True -Up Period 2 [Wks 21
,rl
Markup Method Segment For True -Up Period 2 [Wks 3]
emu
Chan Mvmni Delete Segment For True -Up Period 2 [Wks' 4!5]
G4
TU Period 2 Rate Eligible For Inflation [D8+FS+Gl+G2+G3]
$9.4229
G5
Inflation Segment for True -Up Period 2 [(G4'C4)-G4]
($0.0017)
G6
Headend Upgrade Segment For True -Up Period 2 [NVks 61
G7
External Costs Segment ForTrue-Up Period 2 [Wks 71
$0.5954
G8
True -Up Segment For True -Up Period 2
50.2002
G9
%tax Perm Rate forTrue-Up Period 2 (G4+G5+G6+G7+G8]
$:0.2168
FCC Form 1240
Page 3 Mk-rosck Ex;mi 4.0 Version hzlc t9co
Approved by 01,1B 3060-0685
Fedcrsl Communications Commission
R'ashingtom DC 20354
Module H: True -Up Adjustment Calculation
Line Descri tion
Basic Tier 2 Tier 3 Tier 4 Tier 5
Line
Adjusimeat Far True -Up Period i
HI Revenue From Period l
$1,031,844.4287
H2 Revenue From Max Permitted Rate for Period 1
$1.078,728.4163
H3 True -Up Period 1 Adjustment [112 -HI]
$46,883.9875
H4 Interest on Period I Adjustment
$4,030.0084
Adjustment For True -Up Period 2
H5 Revenue From Period 2 Eligible for Interest
S160,989.08
H6 Revenue From Max Perm Rate for Period 2 Eligible For Interest
$167,494.4658
H7 Period 2 Adjustment Eligible For Interest [116-H5]
$6,505.3858
H8 Interest on Period 2 Adjustment (See instructions for formula)
$60.988
H9 Revenue From Period 2 Ineligible for Interest
$0.00
1110 Revenue From %tax Perm Rate for Period 2 Ineligible for Interest
x.00
Hit Period 2 Adjustment Ineligible For Interest [H10 -H91
$0.5433
Total True -Up Adjustment
H12 Previous Remaining True -Up Adjustment
31ax Permitted Rate for Projected Period [14+I5+I6+17+18]
H13 Total True -Up Adjustment [H3+H4+H7+HS+HI 1+H 121
$07,480.3697
H14 Amount of True -Up Claimed For This Projected Period
$57,480.3697
1115 Remaining True -Up Adjustment[H13-H14]
SO'0000
Part 111: Yrojecleci Yenoo
Line
I I
1�1VU uiw
Line Description
Caps Method Segment For Projected Period [Wks 21
i
a b c d e
Basic Tier 2 Tier 3 Tier 4 Tier 5
12
Markup Method Segment For Projected Period [Wks 3]
$0.0000
I3
Chan Ifvmnt Delete Segment For Projected Period [Wks 4151
$0.00
I4
Proj. Period Rate Eligible For Inflation [D8+F5+GS+I I+I2+I3]
$9.4212
IS
Inflation Segment for Projected Period [(I4•CS)-I41
$0.1752
16
Headend Upgrade Segment For Projected Period [Wks 61
17
External Costs Segment For Projected Period [Wks 71
$0.6707
18
True -Up Segment For Projected Period
$0.5433
19
31ax Permitted Rate for Projected Period [14+I5+I6+17+18]
$10.8104
I10
Operator Selected Rate For Projected Period
,Vole: The maVM11M Fermifledr3felgures do Rot fake luto accoual aorieiundhabr7ih-rou ma v La ce. Uy'ou na reprer7ous�y'aeen crrveiru y...�..,i�uuuauvu ����••• •,--w,•---._---o ----••v ----
refunds t-ou are oolreGe ced oly'our oblga[ oa to make such re/unds a rrn / t6e/ erns //edrzte rs bfaderlLan the covlestednle cr,t our crmrnfrale.
Certification Statement
WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE AND/OR IMPRISONMENT
n r r nr: Tilt c 14 ccrrtnnt inntl aNr)/l7R FORFFiTt!RF (U.S. CODE. TITLE 47, SECTION 503).
9.
Name and Title of Person Completing this Form:
Telephone number Fax Number
FCC Form 1240
P Iz� 4 Microsoft Excel 4.0 Version ial'. 1996
Federal Communications Commission
Washington, DC 20554
Approved By OMB 3060-0685
Worksheet I - True -Up Period Inflation
(Do, instructions, see Appendix A of Instructions For FCC Form 1240
Line
Period
FCC Inflation Factor
101
102
103
104
105
106
107
108
109
110
111
112
113
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Average Inflation Factor for True -Up
Period I
1.99%
1.99%
1.99%
3.23%
3.230,0
3.23%
2.0810
2.08%
2.08° o
2.2Y o
2.25%
2.25%
1.0239
114
115
116
117
118
119
120
121
122
123
124
125
126
Month 13
Month 14
Month 15
Month 16
Month 17
Month 18
Month 19
Month 20
Month 21
Month 22
Month 23
Month 24
Average Inflation Factor for True -Up
Period 2
-0.11%
-0.11%
0.9998
FCC Form 1240
Page 1 Microsoft Excel 4.0 Version July 1996
Federal Communications Commission
Washington. DC 20554
Worksheet 7 - External Costs
True -Up Period
For instructions, see Appendix A of Instructions For FCC Form 1210
Question 1. For which time period are you filling out this worksheet? [Put an "X" in the appropriate box)
Question 2. How long is the fust period, in months, for which rates are being set with this worksheet?
Question 3. How long is the second period, in months, for which rates are being set with this worksheet?
Approved By OMB 3060-0685
True -lip Period Projected Period
X
12
2
a t e
Line Line Description _
&nit Tier 2 Tier 3 Tier 4 Tier 5
External Costs Eligible for Markup
701 Cost of Programming For Channels Added Prior to 5"15i94 or
After 5/15;94 Using Markup Method For Period
534,673.73
702
Retransmission Consent Fees For Period
SO.O
703
704
Copyright Fees For Period
External Costs Eligible For 7.5%Markup
$10,938.5
5451612.31
705 Marked Up External Costs
External Costs Not Eligible for Markup
Si9,033.2299
706
707
Cable Specific Taxes For Period
Franchise Related Costs For Period
SO.O
SO.O
708
Commission Regulatory Fees For Period
S4,764.2
709
Total External Costs For Period
553,797.4999
710
monthly. Per -Subscriber External Costs For Period I
50.5043
External Costs Eligible for Markup
711
t
Cost of Programming For Channels Added Prior to 5%15,94 or
After 5i 15:94 Using Markup Method For Period
56,693.2
712
Retransmission Consent Fees For Period
713
Copyright Fees For Period
$1,777.0
714
External Costs Eligible For 7.5% Markup
58,3703
715
\Larked Up External Costs
59,105.5328
External Costs Not Eligible for Markup
716
Cable Specific Taxes For Period
717
Franchise Rclated Costs For Period
718
Commission Regulatory Fees For Period
$655.7
719
Total E:.,lernal Costs For Period
S9,761.2528
720
monthly, Per -Subscriber External Costs For Period 2
50.5954
FCC Form 12-4'
p„p ),(icrosoft Excel 4.0 Versicu 1otY ` '
Federal Communications Commission
Washington. DC 20554
Worksheet 7 - External Costs
Projected Period
For imtructions, see Appendix A of Instructions For FCC Form 1240
Question 1. For which time period are you filling out this worksheet" [Put an `X" in the appropriate box.]
Question 2. How long is the first period, in months, for which rates are being set with this worksheet?
Question 3. How long is the second period, in months, for which rates are being set with this worksheet?
Approved By OMB 3060-0685
True -Up Period Projected Period
12
0
0
a b ee
Line Line Description Basic Tier 2 Tier 3 Tier 4 Tier 5
Period 1
External Costs Eligible for Markup
701
Cost of Programming For Channels Added Prior to 5115,94 or
After 5"15,94 UsingMarkup, Method For Period
550,575 ,37
702
Retransmission Consent Fees For Period
SO.00
703
Cop}right Fees For Period
511,469.3
704
External Costs Eligible For 7.5°5 Markup,
562,044.7
705
harked Up External Costs
566,698.0942
External Costs Not Eligible for Markup
706
Cable Specific Ta.<cs For Period
S0.0
707
Franchise Related Costs For Period
S0.0
708
Commission Regulatory Fees For Period
S-4,265.97
709
Total Externsl Costs For Period
570,964.0642
710
:Monthly, Per -Subscriber External Costs For Period 1
50.6707
tR%9i
FCC Form 1240
Pane 2 Microsoft Excel 4.0 `: ersioa July i ,96
Federal Communications Commission
Washington, DC 20554
Worksheet 8 - True -Up Rate Charged
For instructions, see Appendix A of Instructions For FCC Form 1240
Question 1. How long is the True -Up Period 1, in months?
Question 2. How long is the True -Up Period 2, in months?
E
Approved By OMB 3060-0685
ine
Line Description
a b c d c
Basic Tier 2 Tier 3 Tier 4 Tier 5
$9.8200
Di
Month 1
$9.3600
02
Month 2
$9.3600
03
Month 3
$9.3600
04
Month 4
$9.3600
05
hlonth5
$9.8343
06
Month 6
$9.8320
07
Month 7
$9.8306
�08
Month 8
$9.8381
;09
Month 9
$9.8330
t10
Month 10
$9.8200
U1
Month 11
$9.8200
312
Month 12
$9.8200
313
Period 1 Average Rate
$9.6723
314 Month 13
815 Month 14
816 Month 15
811 Month 16
8I8 Month 17
819 Month 18
820 Month 19
821 Month 20
$22 Month 21
823 Month 22
824 Month 23
325 Month 24
826 Period 2 Average Rate
$9.8200
$9.8200
$9.8200
Page 1 Microsoft Excel 4.0 Version
FCC Form 1240
July 1996