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Home My WebLink AboutO-1548-11-97ORDINANCE NO. 1548-11-97 ' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, AMENDING ARTICLE II OF APPENDIX A OF THE ALLEN CODE OF ORDINANCES BY ESTABLISHING MAXIMUM RATES THAT TCI CABLEVISION OF NORTH TEXAS, INC. MAY CHARGE ITS ALLEN CABLE TELEVISION SUBSCRIBERS FOR THE BASIC SERVICE TIER AND ASSOCIATED EQUIPMENT; ESTABLISHING A MAXIMUM HOURLY SERVICE CHARGE; ORDERING REFUNDS; AND PROVIDING A SEVERABILITY CLAUSE AND AN EFFECTIVE DATE. WHEREAS, the City of Allen, Texas (the "City") is the Grantor of a Franchise Ordinance executed on or about July 20, 1995, by and between the City of Allen and Communications Services, Inc., d/b/a TCI Cablevision of North Texas, Inc. ("TCI"); and WHEREAS, the City, pursuant to the Cable Consumer Protection and Competition Act of 1992 (the "Cable Act") and the rules and regulations adopted thereunder by the Federal Communications Commission (the "FCC"), is certified to regulate the rates for the basic cable service tier and related equipment; and WHEREAS, as local regulator of rates for the basic service tier, the City may within one year of receipt choose to make a rate ruling on the proposed rates submitted by TCI to be charged to subscribers of the basic service tier; and WHEREAS, the City has reviewed the proposed rates submitted by TCI and desires to make a rate ruling; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, THAT: SECTION 1. FINDINGS (1) The City is the Grantor of a Franchise Ordinance executed on or about July 20, 1995, by and between the City of Allen and TCI Cablevision of North Texas, Inc. ("TCI"). (2) hr accordance with applicable provisions of the Cable Consumer Protection and Competition Act of 1992 (hereinafter the "Cable Act") and rules adopted by the Federal Communications Commission ("FCC"), the City has undertaken all appropriate procedural steps to regulate the basic cable service tier and related equipment. (3) In accordance with applicable FCC regulations, on or about September 24, 1993, the City filed FCC Form 328 - Certification of Franchising Authority to Regulate Basic Cable Service Rates and initial Finding of Lack of Effective Competition - with the FCC. (4) In accordance with applicable FCC regulations, on or about February 3, 1994, the City passed and adopted Ordinance No. 1218-2-94 providing for the regulation of rates charged by cable television operators within the City for the basic service der and related equipment and installation charges and providing for a reasonable opportunity for interested parties to express views concerning basic cable regulation. (5) On or about March 1, 1997, the City received ICI's FCC Form 1240 and Form 1205. (6) The City engaged the service of C2 Consulting Services, Inc. to provide assistance to the City for review of TCI's FCC Form 1240 and Form 1205. (7) C2 Consulting Services, Inc., on behalf of the City, on or about July 2, 1997, sent a letter requesting additional information to document that the cable rates were in accord with the FCC standards. (8) C2 Consulting Services, Inc. issued a preliminary evaluations report dated July 7, 1997, identifying certain issues requiring TCI's response before a final report could be prepared. (9) On or about July 18, 1997, TCI responded to C2 Consulting Services, Inc. and the City and provided a response to the City's request for additional information. (10) On or about August 6, 1997, two (2) final reports were prepared for the City by C2 Consulting Services, Inc. detailing the findings of the review. (11) Based upon the information received from TCI, all calculations and recommendations from C2 Consulting Services, Inc., and the deliberations and advice of the Cable TV and Telecommunications Advisory Committee, the City makes the additional findings: Form 1205: The capital costs related to Schedule A and Schedule C assets inappropriately include an amount referred to as `unfunded deferred income taxes." The computation of the hourly service charge inappropriately includes: the costs and the hours related to converter retrieval, activities resulting from disconnects, the conduct of "tap audits," services regarding security devices, what the Company has termed as "self insurance," and "installation materials." • The computation of the lease rates for converters inappropriately includes: the labor costs ' related to convener retrieval, "averaging" of costs for security devices in the capital component of the convener category costs, and a $.20 per convener per month for insurance. (12) The City must act upon the pending rate request consistent with current FCC rate rules and regulations. SECTION 2. CONCLUSIONS (1) TCI's request for cable rate approval for the maximum permitted charge for hourly service (exclusive of any franchise fee) of $30.18 is denied. (2) TCI's request for cable rate approval for the permitted charges (exclusive of any franchise fee) for leased customer equipment is denied. (3) The City concludes that the maximum permitted rate for the basic service tier (exclusive of any franchise fee but inclusive of the FCC Regulatory Fee) shall be $14.51. (4) The City concludes that the maximum permitted charge for hourly service shall be $23.42. (5) The City has an obligation to act timely upon the pending rate application consistent with now current FCC rules and regulations. However, if the FCC alters the benchmark calculations resulting in a lower reasonable rate for Allen subscribers, the City has anobligation to area subscribers to reconsider the pending analysis consistent with such changes the FCC may make in its regulations. Ordinance No. 1548-11-97 Page 2 SECTION 3. ORDER FOR ACTION ' Based on the foregoing Findings and Conclusions, the City hereby enters the following orders: (1) Pursuant to current FCC regulations, from the date of the order and until further order of the City, TCI shall be permitted to charge an initial rate for the basic service Ger, inclusive of the FCC Regulatory Fee, of $14.51. (2) Pursuant to current FCC regulations, from the date of the order and until further order of the City, TCI shall be permitted to charge $23.42 as its hourly service charge. (3) Pursuant to current FCC regulations, from the date of the order and until further order of the City, the permitted charges for installation services and leased customer equipment shall be those listed in Exhibit "A," attached to this Ordinance and incorporated as if fully set forth herein. (4) The City hereby waives, for this rate order only, the requirement for 30 -day prior written notice to subscribers required by the City's Cable Communications Ordinance. (5) TCI shall immediately undertake all necessary steps, in accordance with applicable FCC regulations, to provide refunds to all subscribers who have been overcharged since June 1, 1947, based on the difference between TCI's current equipment and installation charges and the permitted equipment and installation charges approved herein. (6) TCI shall provide the City evidence that Order for Action (1), (2), (3), and (5) above have been complied with and that all refunds have been properly made in accordance with the Cable Act and applicable FCC regulations. ' (7) This Ordinance shall not be reconsidered should any further analysis pursuant to future FCC rules and regulations result in higher rates to subscribers, unless such future FCC riles and regulations mandate that the City order such an upward adjustment. SECTION 4. NO WAIVER OF RIGHTS In adopting this Ordinance, the City Council of the City of Allen is not approving or acquiescing in any way whatsoever to cost data and/or methodologies not specifically addressed in this Ordinance. Furthermore, the City Council is not waiving any rights to which it is entitled. SECTION 5. SEVERABILITY If any clause, section, other part or application of this Ordinance is held by any court of competent jurisdiction to be unconstitutional or invalid, in part or application, it shall not affect the validity of the remaining portions or applications of this Ordinance. SECTION 6. CODE AMENDMENT From and after the effective date of this Ordinance, Article II of Appendix A of the Allen Code of Ordinances is amended as set forth above. Ordinance No. 1548-11-97 Page 3 SECTION 7. EFFECTIVE DATE This Ordinance shall take effect immediately from and after its passage and publication in accordance with the provisions of the Charter of the City of Allen, and it is accordingly so ordained. DULY PASSED AND APPROVED BY THE CITY COUNCIL. OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, ON THIS THE 6TH DAY OF NOVEMBER '1997. APPROVED AS TO FORM: A. Don Crowder, ATTORNEY APPROVED: Stephen Terrell, MAYOR ATTEST: 0 el -- JW Mo n, CMC, CITY SECRETARY OrdinanceNo. 1548-11-97 Page4 I � k!) � r ) E e § , / ) ) / k ` § e �