HomeMy WebLinkAboutO-1218-2-94ORDINANCE NO.
1218-2-94
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ESTABLISHING PROCEDURES AND STANDARDS FOR THE
REGULATION OF RATES FOR BASIC CABLE SERVICE AND EQUIPMENT.
WHEREAS, the Cable Television Consumer Protection and Competition Act of 1992 authorizes franchising
authorities to regulate certain rates for cable television service and equipment; and
WHEREAS, the City of Allen, Texas, desires to regulate cable rates except to the extent that it is prohibited
from doing so by applicable law; and
WHEREAS, FCC regulations implementing the Cable Television Consumer Protection and Competition Act
of 1992 require franchising authorities to adopt regulations before rate regulation of basic service and
equipment can begin.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS THAT:
SECTION 1. SCOPE AND APPLICABILITY
A. This ordinance governs the regulation of rates for basic service and equipment within the City for any
franchisee which has been notified that (1) the City has been certified to regulate its basic service and
equipment rates; and (2) the City has adopted regulations governing regulation of basic service and
equipment rates. The provisions set forth below are intended to be consistent with all Federal
Communications Commission ("FCC") regulations governing the regulation of basic service rates and
equipment, and the City will regulate and interpret its rules so that they are consistent with FCC
regulations, as if those regulations were set forth in full herein.
B. The franchisee is prohibited from engaging in any activity it is prohibited from engaging in under
FCC rules, as if those rules were set forth in full herein. For purposes of these provisions, the term
"basic service" or "basic cable service" has the same meaning as the term "basic service" at 47
C.F.R. § 76.901 and the term "equipment" refers to all equipment and services subject to regulation
under 47 C.F.R. § 76.923.
SECTION 2. FILING AND REVIEW OF RATES
A. Initial Filings By Franchisees.
When Made. A franchisee that is notified that its basic service and equipment rates are
subject to regulation must file a submission ("the rate filing") within 30 days of the
notification, justifying its then -existing basic service and equipment rates. All rates, for all
customer classifications, must be justified. Once a franchisee has been so notified by the
City that its rates are subject to regulation, it may not thereafter increase its rates for basic
service or equipment without the prior approval of the City. This requirement applies in
all cases, including with respect to increases in rates announced prior to the date the
operator was notified its rates were subject to regulation where the increases were not
implemented prior to the date of notice. A franchisee must submit a rate filing to justify
any increase in basic service or equipment rates or any new basic service or equipment rate
(collectively referred to herein as rate increases). An "increase" occurs when there is an
increase in rates or a decrease in program or customer services. Rate filings proposing and
supporting rate increases must be tiled for review at least 30 days in advance of the
proposed effective date of the increase. This requirement does not alter or eliminate any
other notice requirement.
2. Where Made. Every rate filing must be submitted to the City Manager. A rate filing shall
be considered filed for review on the date the rate filing and all required copies are received
by the City Manager. Five (5) copies of each rate filing (including all supporting
materials) must be submitted. Information that the operator claims is proprietary under
Section 7 hereof must be clearly identified and segregated from the remainder of the tiling
and clearly marked so that the City may determine where and how the proprietary
information was used to determine rates.
3. Contents. Subject to any FCC regulations governing the burden of proof, a rate filing
submitted by a franchisee must show that the rates the franchisee proposes to charge for
basic service and equipment are reasonable. Except as inconsistent with FCC rules:
a. Every rate filing must clearly state in a covering letter whether it justifies existing
rates; or proposes an increase in rates. The covering letter must also identify any
rate that is derived in whole or in part based upon cost of service, and identify
any pages of the rate filing that contain information that the franchisee claims is
proprietary. It must state whether any part of the proposed increase is based on
an inflation adjustment or an alleged increase in external costs. The cover letter
should also contain a brief, narrative description of any proposed changes in rates
or in service.
b. The pages of each rate filing must be numbered sequentially.
C. The rate filing must contain all applicable FCC forms and these forms must be
correctly completed.
d. If different rates are proposed for basic service for different classes of customers,
the filing must show that the classifications and the differences in the rate charged
are reasonable and consistent with federal law.
4. If the franchisee seeks to support a rate based upon a cost of service, the City will establish
a rate that provides the franchisee an opportunity to recover the reasonable costs associated
with providing basic cable service, including a reasonable profit. An expense or investment
is not presumed reasonable merely because the franchisee has incurred or made it. A
franchisee is not entitled to recover monopoly rents in any form.
5. In addition to information the City requires the franchisee to provide, and unless the City
grants a waiver of this provision, a franchisee who seeks to justify all or any part of its
rates based upon its cost of service must submit a complete cost of service analysis that
shows all expenses it incurs and all revenues derived from the system, directly or indirectly
by the franchisee or any person that constitutes a cable operator of the system within the
meaning of 47 U.S.C. § 522(5). The cost of service must identify the accounting level (as
that term is used in the FCC's regulations) at which each expense or revenue identified was
aggregated and show clearly how the expense or revenue was allocated. The franchisee
may not include costs at an accounting level unless it also includes all revenues from that
same level attributable to the system or to a group of systems of which the system serving
Ordinance No. 1218-2-94 page 2
the City is a part. The replacement cost of a comparable system must be identified and
supported. The franchisee must identify the name and address of any entity with which it
has a contract, other than a programmer, which derives revenues from the system, and must
state whether and how the revenues of that entity were included in the cost of service. In
addition, the cost of service shall clearly show the derivation of a proposed charge per
channel and the application of that charge to yield a basic service rate. It must also show
and support the derivation and allocation of any amounts included in the derivation of the
rate for:
a. operation and maintenance expenses;
b. administrative and general expenses;
C. programming expenses (identifying retransmission consent costs and copyright
fees separately);
d. costs for PEG access and any institutional network;
e. franchise fee expenses;
investment in the system and associated depreciation;
g. other expenses, including federal, state and local taxes, itemized; and
h. the proposed return on equity and actual interest expense paid by the franchisee.
6. Notwithstanding the foregoing, a franchisee is not required to submit the cost of service
specified in Section 2(A)(5) for equipment rates, and instead shall complete, submit and
support the costs of equipment using applicable FCC forms and presenting any other
information the City deems necessary or appropriate, consistent with FCC regulations. Any
cost of service submitted to justify basic service rates must show that the cost of service
does not include equipment costs.
B. Initial City Review.
1. After receiving a rate filing, the City Manager promptly shall publish a notice that a tiling
has been received and that, except for those parts which may be withheld as proprietary,
it is available for public review. The notice shall state that interested parties may comment
on the filing, and shall provide interested parties seven days to submit written comments
on the filing to the City Manager. The City Manager shall submit the comments received
and its recommendations for action to the City Council and shall make those
recommendations available for public inspection. The franchisee may submit a response
to public comments or City Manager recommendations, but must do so no later than three
business days after it is notified that the comments and recommendations have been
submitted to the City Council. The response shall be filed with the City Manager, and if
submitted in a timely fashion, the City Manager shall forward a copy to the City Council.
2. Within 30 days of the date of the filing, the City Council shall issue a written order, which
may be in any lawful form, approving the proposed rate in whole or in part; denying the
proposed rate in whole or in part; or tolling the proposed rate in whole or part. If the City
Ordinance No. 1218-2-94 Page 3
Council tolls the rate in whole or in part, its written order shall explain that it requires
additional time to review the rate tiling, identify generally any then -known deficiencies in
the franchisee's filing and state that the franchisee may cure any deficiency in its filing by
submitting a supplementary filing as provided in Section 2(C). With respect to existing
rates, tolling means the rates may remain in effect, subject to refund; with respect to rate
changes, tolling means the portion of the rate change that is tolled may not go into effect.
C. Supplementary Filings.
1. If a proposed rate is tolled in whole or in part, the franchisee shall submit a supplementary
filing within 20 days from the date the tolling order issues, containing corrections, if any,
to its filing (including any required supplement to its cost of service tiling) and any
response to information filed by interested parties or to the recommendations of the Staff,
or any additional information necessary to support the proposed rate. Supplementary filings
must be filed in accordance with Section 2(A)(2).
2. A supplementary filing also must contain such information as the City directs the franchisee
to provide.
3. In addition to information the City requires the franchisee to provide, and unless the City
grants a waiver of this provision, a franchisee who claims that it is entitled to a rate in
whole or in part based upon the adjustments for inflation and external costs contemplated
by 47 C.F.R. § 76.922(d)(1)-(2) must submit the following:
a. a calculation showing how each part of the adjustment was derived.
b. a statement itemizing each external cost (as defined by FCC regulations), the
amount of that external cost for the two calendar years prior to the date of the
filing and the year-to-date in which the filing is made; and the projected amount
of the external cost for the remainder of the year in which the filing is made and
for the following calendar year. The statement must specifically show any
increases in revenues from programming services. "Revenues" include all
revenues, in whatever form received.
C. if the increase is attributable to any increase in programming service costs, the
contract for each programming service whose cost has increased; a sworn
statement identifying each programming service whose costs increased where the
programmer is an affiliate of the franchisee (as defined by FCC regulations); and,
for any contract that has been in effect less than 12 months, the prior contract for
the service.
d. a sworn statement by the franchisee's chief financial officer or an independent,
certified accountant stating that he or she has examined all external costs
(including all programming costs) and has offset against any increase claimed, the
amount of any decreases in external costs, and the amount by which any increase
in external costs was below the GNP -PI, as required by 47 C.F.R.
§ 76.922(d)(2); affirming that the franchisee has only sought to recover any
external cost to the extent that cost exceeded the GNP -PI; and affirming that the
franchisee has not attempted to recover any increase in the cost of programming
purchased by an affiliate except as provided in 47 C.F.R. § 76.922(d)(2)(vi).
Ordinance No. 1218-2-94 Page 4
4. Upon receiving the supplementary tiling, the City Manager promptly shall publish a notice
that a filing has been received and that it is available for public review (except those parts
which may be withheld as proprietary). The notice shall state that interested parties may
comment on the filing, and shall provide interested parties twenty days to submit written
comments on the tiling to the City Manager. The City Manager shall submit the comments
received and its recommendations for action to the City Council. The recommendations
shall be made available for public inspection. The franchisee may submit a response to
public comments or City Manager recommendations, but must do so no later than ten days
after it is notified that the comments and recommendations are submitted to the City
Council. The response shall be filed with the City Manager, and if submitted in a timely
fashion, the City Manager shall forward a copy to the City Council.
5. The City Council shall issue a written order, which may be in any lawful form, approving
the proposed rate in whole or in part; denying the proposed rate in whole or in part; or
allowing the rate to go into effect in whole or in part, subject to refund. If the City Council
issues an order allowing the rates to go into effect subject to refund, it shall also direct the
franchisee to maintain an accounting in accordance with 47 C.F.R. § 76.933.
6. The order specified in Section 2(C)(5) shall be issued 90 days after the tolling order for any
rate the franchisee justifies based on the FCC benchmark. The order shall be issued within
150 days of the tolling order for any rate the franchisee justifies with a cost of service
showing.
SECTION 3. PROVISIONS GENERALLY APPLICABLE TO RATE ORDERS
A. Any rate order of the City Council shall be effective on adoption, or as local law may require, noting
that tolling orders, at least, must be effective immediately. Each rate order shall be released to the
public and the franchisee. In any case where the City Council approves, denies, or tolls a rate;
orders that a rate may go into effect subject to refund; or orders refunds or establishes rates, a public
notice shall be published stating that the order has been issued and is available for review. Any such
order shall be in writing, and explain the basis for the City's decision.
B. The City Council may take any steps that it is not prohibited from taking by federal law to protect
the public interest as part of any rate order or by any other means. By way of illustration and not
limitation, it may require refunds, set rates, and impose forfeitures and penalties directly or through
its delegated representatives, and enforce refund orders. Any order prescribing a rate must explain
why the franchisee's proposed rate was unreasonable and why the prescribed rate is reasonable.
However, before prescribing a rate or ordering a refund to subscribers, the City Council shall ensure
the franchisee has had notice and opportunity to comment on the proposed rate or refunds. If the
recommendations of the City Manager propose a refund or a rate, then mailing a copy of the
recommendation to the franchisee at the time it is submitted to the City Council shall be deemed to
provide the franchisee this notice and the franchisee must comment on the refund or rate in its
response to the recommendations.
C. No order approving or setting a rate using the FCC benchmarks shall be interpreted to establish the
just and reasonable rate to subscribers. Every such rate approved or established shall be subject to
further reduction and refund to the extent permitted under applicable laws and regulations, as the
same may be amended from time to time. By way of illustration and not limitation, should the FCC
reduce the benchmarks, the City shall have the right to reduce a franchisee's rates and to require the
Ordinance No. 1218-2-94 page 5
franchisee to refund any amounts collected above the benchmark, except to the extent prohibited by
federal law.
SECTION 4. FRANCHISEES' DUTIES
A. A franchisee must implement remedial requirements, including prospective rate reductions and
refunds, within 60 days of the date the City Council issues an order mandating a remedy.
B. Within 90 days of the date an order mandating a remedy is issued, a franchisee must file a
certification, signed by an authorized representative of the cable company, stating:
1. whether the franchisee has complied fully with all provisions of the City Council's order;
and
2. describing in detail the precise measures taken to implement the City Council's Order; and
3. showing how refunds (including interest) were calculated and distributed.
C. It is each franchisee's responsibility to keep books and records of account so that it can refund any
amounts owed to subscribers.
D. It is each franchisee's duty to submit as complete a filing as possible, and knowingly withholding
information or making a filing that is incomplete under applicable law shall be treated as an evasion
of this ordinance.
E. Information Requests
1. A franchisee and any other entity that has records of revenues or expenses that are allocated
to the franchisee's system must respond to requests for information from the City by
deadlines established by the City. A franchisee is responsible for ensuring that such other
entity responds to the City's requests.
2. Because federal law limits the time available for an initial response to a tiling by a
franchisee, the franchisee must be prepared to respond within five days of the date it is
provided the information request, to any information request submitted prior to the date the
order contemplated by Section 2(B) issues. Such information requests may include a
request for the information the franchisee would be required to provide as part of any
supplementary filing.
SECTION 5. DUTIES OF CITY MANAGER
A. The City Manager shall be responsible for administering the provisions herein. Without limitation
and by way of illustration:
1. City Manager shall ensure notices are given to the public and each franchisee as required
herein and by FCC regulations.
2. City Manager may submit requests for information to the franchisee and establish deadlines
for response to them, as provided in Section 3.
Ordinance No. 1218-2-94 page 6
3. For good cause, the City Manager may waive any provision herein or extend any deadline
for tiling or response except as to such matters as are mandatory under FCC regulations.
4. City Manager shall rule on any request for confidentiality.
5. City Manager shall prepare the recommendations to the City Council contemplated by
Sections 2(B) -(C). If the City Manager recommends that any increase be denied in whole
or in part, it shall
propose a rate and explain the basis for its recommendation (it may propose that
rates remain at existing levels); and
b. recommend whether and on what basis refunds should be issued; and
notify the franchisee of its recommendation at the time it is submitted to the
Council.
SECTION 6. PENALTIES AND FORFEITURES
Except as prohibited by federal law, a franchisee shall be subject to penalties, forfeitures and any other
remedies or sanctions available under federal, state or local law, including without limitation a franchisee's
franchise with the City, and a franchisee's request for approval of a rate may be denied, if it:
A. knowingly submits false or fraudulent information to the City in connection with any rate proceeding;
B. fails to comply with any lawful order or request of the City, including, but not limited to, a request
for information or an order setting rates; or
C. evades or attempts to evade federal or local rate regulation; provided that, filing for approval of a
rate that is later determined to be unreasonable is not in and of itself an evasion of federal or local
rate regulation.
SECTION 7. PROPRIETARY INFORMATION
A. If these provisions, or any request for information, requires the production of proprietary
information, the franchisee must produce the information. However, at the time the allegedly
proprietary information is submitted, a franchisee may request that specific, identified portions of its
response be treated as confidential and withheld from public disclosure. The request must state the
reason why the information should be treated as proprietary and the facts that support those reasons.
The request for confidentiality will be granted if the City determines that the preponderance of the
evidence shows that non -disclosure is consistent with the provisions of the Freedom of Information
Act, 5 U.S.C. § 552. The City shall place in a public file for inspection any decision that results in
information being withheld. If the franchisee requests confidentiality and the request is denied, (1)
where the franchisee is proposing a rate increase, it may withdraw the proposal, in which case the
allegedly proprietary information will be returned to it; or (2) the franchisee may seek review within
five working days of the denial in any appropriate forum. Release of the information will be stayed
pending review.
B. Any interested party may file a request to inspect material withheld as proprietary with the City
Manager. The City Manager shall weigh the policy considerations favoring non -disclosure against
Ordinance No. 1218-2-94 Page 7
the reasons cited for permitting inspection in light of the facts of the particular case. It will then
promptly notify the requesting entity and the cable franchisee that submitted the information as to the
disposition of the request. It may grant, deny or condition a request. The requesting party or the
franchisee may seek review of the decision by tiling an appeal with any appropriate forum.
Disclosure will be stayed pending resolution of any appeal.
SECTION 8. PETITION FOR CHANGE IN EFFECTIVE COMPETITION STATUS
Any franchisee may petition for a change in effective competition status in accordance with 47 C.F.R.
§ 76.915, and the City shall consider that petition in accordance with 47 C.F.R. § 76.915. The petition and
five (5) copies must be filed with the City Manager.
SECTION 9. REPEAL OF CONFLICTING ORDINANCES
All prior ordinances or resolutions or parts thereof in conflict herewith are hereby repealed to the extent of
such conflict.
SECTION 10. 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 11. EFFECTIVE DATE
This Ordinance shall become effective immediately upon its passage and adoption.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ON THIS THE 3RD DAY OF FEBRUARY, 1994.
APPROVED AS TO FORM:
A. wrier, CITY ATTORNEY
APPROVED:
foe Farmer, MAYOR
ATTEST:
Juo Mor 'son, CMC, CITY SECRETARY
Ordinance No. 1218-2-94 Page 8
ATTACHMENT i
Ordinance No. 1218-2-94
116.770 Commercial leased access rates.
76.971 Commercial leased access terms and conditions.
76.975 Commercial leased access dispute resolution.
76.977 Minority and educational programming used
deregulated commercial leased access capacity.
76.980 Charges for customer changes.
76.981 Negative option billing.
76.982 Continuation of rate agreements.
76.983 Discrimination.
76.984 Geographically uniform rate structure.
76.985 Subscriber bill itemization.
Subpart N Cable Rate Regulation
76.900 Temporary freeze of cable rates.
in lieu of
(a) The average monthly subscriber bill for services provided by
cable operators subject to regulation under Section 623 of the
Communications Act shall not increase above the average monthly
subscriber bill determined under rates in effect on April 5, 1993,
for a period of 120 days.
(b) The average monthly subscriber bill shall be calculated by
determining for a monthly billing cycle the sum of all billed monthly
charges for all cable services subject to regulation under Section
623 of the Communications Act and dividing that sum by the number of
subscribers receiving any of those services. The average monthly_
subscriber bill determined under rates in effect on
Aoril 5, 1_993, shall be calculated based on customer charges for the
most recent monthly billing cycle ending prior to April 5, 1993.
0 76.90] Definitions.
(a) Basic service. The basic service tier shall, at a minimum,
include all signals of domestic television broadcast stations
provides to any subscriber (except a signal secondarily transmitted
by satellite carrier beyond the local service area of such station,
regardless of how such signal is ultimately received by the cable
system) any public, educational, and governmental programming
requires by the franchise to be carried on the basic tier, and any
additior;al video programming signals a service added to the basic
tier by the cable operator.
(b) Cable oroaramming ser -vice. Cable programming service includes
any vLc._,o programming provided over a cable system, regardless OL
service tier, including installation or -entaL of equipment used for--
the
orthe r�2cL of of such video programming, other than:
(l) .deo programming carried on Lh_, :),:is _._ service tier as defined.
Ordinance No. 1218-2-94
(2) video programming offered on a pay -per -channel or pay -per -
program basis; or
(3) A combination of multiple channels of pay -per -channel or pay -
per -program video programming offered on a multiplexed or time -
shifted basis so long as the combined service:
(i) Consists of commonly -identified video programming; and
(ii) Is not bundled with any regulated tier of service.
(c) Small system. A small system is a cable television system
that serves fewer than 1,000 subscribers. The service area of a
small system shall be determined by the number of subscribers that
are served by a system's principal headend, including any other
headends or microwave receive sites that are technically integrated
to the system's principal headend.
§ 76.905 Standards for identification of cable systems subject to
effective competition.
(a) Only the rates of cable systems that are not subject to
effective competition may be regulated.
(b) A cable system is subject to effective competition when any
one of the following conditions is met:
(1) Fewer than 30 percent of the households in its franchise area
subscribe to the cable service of a cable system.
(2) The franchise area is:
(i) Served by at least two unaffiliated multichannel video
programming distributors each of which offers comparable programming
to at least 50 percent of the households in the franchise area; and
(ii) The number of households subscribing to multichannel video
programming other than the largest multichannel video programming
distributor exceeds 15 percent of the households in the franchise
area.
(3) A multichannel video programming distributor, operated by the
franchising authority for that franchise area, offers video
programming to at least 50 percent of the households in the ff anchise
area-
(C)
rea_
(c) Each separately billed or billable customer will count as a
household subscrl_bino, to or being offered video proo::amminq services,
with the ercept>_on o! mul.:: !ole dwelling buildings 62 -Lied as single
cusr.omer. Individual uni ._, of multiple dwelling buL ldl_ncs 1. count
.s :eoara: househol:ls.
Ordinance No. 1218-2-94 ATTACHMENT II
these rules, if the initial date of regulation occurs on or after 180
days from the effective date of these rules.
(v) Changes in franchise fees shall not result in an adjustment to
permitted per channel charges, but rather shall be calculated
separately as part of the maximum monthly charge per subscriber for
a tier of regulated programming service.
(vi) Adjustments to permitted per channel charges on account of
increases in costs of programming obtained from affiliated
programmers, as defined in § 76.901 of the rules, shall be the lesser
of actual increases or the previous permitted rate level increased
by the amount of inflation.
(vii) Adjustments to permitted per channel charges on account of
increases in costs of programming shall be further adjusted to
reflect any revenues received by the operator from the programmer.
§ 76.923 Rates for equipment and installation used to receive the
basic service tier.
(a) Scone. The equipment regulated under this section consists
of all equipment in a subscriber's home that is used to receive the
basic service tier, regardless of whether such equipment is
additionally used to receive other tiers of regulated programming
service and/or unregulated service. Such equipment shall include,
but is not limited to:
(1) converter boxes;
(2) remote control units;
(3) connections for additional television receivers; and
(4) other cable home wiring.
Subscriber charges for such equipment shall not exceed charges based
on actual costs in accordance with the requirements set forth below.
(b) Unbundl no. A cable operator shall establis:: rates for remote
control units, converter boxes, other customer equipment,
installation, and additional connections separate from rates for
basic tier service. In addition, the rates for such equipment and
installations shall be unbundled one from the other.
(c) Ecruioment basket. A cable operator s: ---ll establish an
Equipment Bas''Iet, which will include all costs associated with
providing customer equipment and installation under this section.
(1) Equipment Basket costs shall be limitec to the direct:. and
indirect material and labor costs of providing, Leasing, instal_,
repairing, an: servi_c ng customer equipment, as det.ermine:a n
accordance w -, i the cost accounting and cost allocation require::,,ents
of < 76.921 _ :'`Ze Cauipment Basket. shall no*_ -nciude :;e:,eral
Ordinance No. 1218-2-94
administrative overhead including general marketing expenses. The
Equipment Basket shall include a reasonable profit.
(d) Hourly service charge. A cable operator shall establish
charges for equipment and installation using the Hourly Service
Charge (HSC) methodology. The HSC shall equal the operator's annual
Equipment Basket costs, excluding the purchase cost of customer
equipment, divided by the total person hours involved in installing,
repairing, and servicing customer equipment during the same period.
The HSC is calculated according to the following formula:
HSC = EB - CE
H
Where, EB = annual Equipment Basket Costs; CE = annual purchase cost
of all customer equipment; and H = person hours involved in
installing and repairing equipment per year. The purchase cost of
customer equipment shall include the cable operator's invoice price
plus all other costs incurred with respect to the equipment until
the time it is provided to the customer.
(e) Installation charges. Installation charges shall be either:
(i) the HSC multiplied by the actual time spent on each
individual installation; or
(ii) the HSC multiplied by the average time spent on a specific
type of installation.
(f) Remote charoes. Monthly charges for rental of a remote
control unit shall consist of the average annual unit purchase cost
of the type of remote leased, including acquisition price and
incidental costs such as sales tax, financing and storage up to the
time it is provided to the customer, added to the product of the HSC
times the average number of hours annually repairing or servicing a
remote, divided by 12 to determine the monthly lease rate for a
remote according to the following formula:
Monthly Charge = UCE + (HSC x HR)
----------------
12
Where, HR = average hours repair per year; and UCE = average annual
unit cost of remote. Separate charges shall be established for each
significantly different type of remote control unit.
(g) Other equipment charges. The monthly charges for rental of
converter boxes and other customer equipment shall be calculated in
the same manner as for remote control units. Separate charges shall
be established for each significantly different type o= converteri)ox
16
Ordinance No. 1218-2-94
and each significantly different type of other customer equipment.
(h) Additional connection charges. The costs of installation and
monthly use of additional connections shall be recovered as charges
associated with the installation and equipment cost_ categories, and
at rate levels determined by the actual cost methodology presented
in the foregoing subsections (e), (f), and (g). An operator may
recover additional programming costs and the costs of signal boosters
on the customers premises, if any, associated with the additional
connection as a separate monthly unbundled charge for additional
connections.
(i) Charges for equipment sold. A cable operator may sell
customer premises equipment to a subscriber. The equipment price
shall recover the operator's cost of the equipment, including costs
associated with storing and preparing the equipment for sale up to
the time it is sold to the customer, plus a reasonable profit. An
operator may sell service contracts for the maintenance and repair
of equipment sold to subscribers. The charge for a service contract
shall be the HSC times the estimated average number of hours for
maintenance and repair over the life of the equipment.
(j) Promotions. A cable operator may offer equipment or
installation at charges below those determined under subsections (e)
- (g), above, as long as those offerings are reasonable in scope in
relation to the operator's overall offerings in the Equipment Basket
and not unreasonablv discriminatory. Operators may not recover the
cost of a promotional offering by increasing charges for other
Equipment Basket elements, or by increasing programming service rates
above the maximum monthly charge per subscriber prescribed by these
rules. As part of a general cost -of -service showing, an operator may
include the cost of promotions in its general system overhead costs.
(k) Franchise fees. Equipment charges may include a properly
allocated portion of franchise fees.
§ 7G.924 - Cost accounting and cost allocation reauirements
(a) Applicability. The requirements of this section are
applicable to cable operators for which the basic service tier is
regulated by local franchising authorities or the Commission, or,
with respect to a cable programming services tier, for which a
complaint has been filed with the Commission. The requirements of
this section are applicable for purposes of rate adjustments on
account of external costs and for cost -of -service showings.
(b) Generally accepted accounting principles. Cable operators
shall maintain their accounts in accordance with generally accepted
accounting principles, except as otherwise dLrected by the
Commission.
17
ATTACHMENT III
Ordinance No. 1218-2-94
to video programming offered on a per channel or per program charge
basis. A cable operator may, however, require the subscription to
one or more tiers of cable programming services as a condition of
access to one or more tiers of cable programming services.
(b) A cable operator may not discriminate between subscribers to
the basic service tier and other subscribers with regard to the rates
charged for video programming offered on a per -channel or per -
program charge basis.
(c) Prior to October S, 2002, the provisions of paragraph (a) of
this section shall not apply to any cable system that lacks the
capacity to offer basic service and all programming distributed on
a per channel or per program basis without also providing other
intermediate tiers of service:
(1) By controlling subscriber access to nonbasic channels of
service through addressable equipment electronically controlled from
a central control point or
(2) Through the installation, noninstallation, or removal of
frequency filters (traps) at the premises of subscribers without
other alteration in system configuration or design and without
causing degradation in the technical quality of service provided.
(d) Any retiering of channels or services that is not undertaker:
in order to accomplish legitimate regulatory, technical, or customer
service objectives and that is intended to frustrate or has the
effect of frustrating compliance with paragraphs (a) through (c) of
this Section is prohibited. r
§ 76.922 Rates for the basic service tier and cable oroaramminc
services Tiers.
(a) Basic and cable orogramming service tier rates. Basic service
tier and cable programming service rates shall be subject tc
regulation by the Commission and by state and local author ries, as
is appropriate, in order to assure that they are in compliance wit::
the requirements of 47 U.S.C. § 543. Rates that are demonsLrated,
in accordance with these rules, not to exceed the "Initial Permitte^
Per Channel Charge" or the "Subsequent Permitted Per Channel- C:-arge"
as described below, or the equipment charges as specif_ed in
76.923, will be accepted as in compliance. The maximur. monthl-.-
charge per subscriber for a tier of regulated programming se --vices
offered by a cable system shall consist of a permitted per channe_
charge multiplied by the number of channels on the tier, olus
charge for franchise fees. The maximum monthly charges for=eculate�
programming services shall not include any charges for equ_pm2nt o_
installations. Charqes for equipment and installations
calculated separately pursuant Lo § 76.923 of these r;_;les.
12
Ordinance No. 1218-2-94
(b) Initial permitted per channel charge.
(1) The permitted per channel charge on the initial date of
regulation shall be, at the election of the cable operator, either:
(1) a charge determined pursuant to a cost -of -service proceeding; or
(2) the charge specified in subsection (i), (ii), or (iii) below,
as applicable:
(i) if the operator's per channel charge for regulated programming
services and equipment in effect on the date of initial regulation
is equal to or below the benchmark per channel charge, as adjusted
forward for inflation from September 30, 1992 to the date of initial
regulation, then the permitted per channel charge shall be the per
channel charge in effect on the date of initial regulation, adjusted
for,equipment.
(ii) if (1) the operator's per channel charge for regulated
programming services and equipment in effect on the date of initial
regulation is above the benchmark per channel charge, as adjusted
forward for inflation from September 30, 1992 to the date of initial
regulation, and (2) the operator's per channel charge for regulated
programming services and equipment in effect on September 30, 1992
was above the benchmark per channel charge, then the permitted per
channel charge is nine -tenths of the per channel charge in effect on
September 30, 1992, but no lower than the benchmark per channel
charge, additionally adjusted for inflation from September 30, 1992
to the initial date of regulation, for equipment, and for any
changes in the number of channels offered on all regulated tiers.
(iii) if (1) the operator's per channel charge for regulated
programming services and equipment in effect on the date of initial
regulation is above the benchmark per channel charge, as adjusted
forward for inflation from September 30, 1992 until the initial date
of regulation, and (2) the operator's per channel charge for
regulated programming services and equipment in effect on September
30, 1992 was below the benchmark per channel charge, then the
permitted per channel charge is the benchmark rate per channel
adjusted for inflation from September 30, 1992 to the initial date
of regulation, for equipment, and for any changes in the number of
channels offered on all regulated tiers.
(2) For purposes of this section, the initial date of regulation
for the basic service tier shall be the date on which local notice
is given pursuant to § 76.910 of our rules, that the provision o=
the basic service tier is subject to regulation. For a cable
programming services tier, the initial date of regulation shall be
the first date on which a complaint on the appropL7iate form is filed
with the Commission concerning rates charged for the cable
programming services tier.
13
Ordinance 1218-2-94
(3) For purposes of this section, rates in effect on the initial
date of regulation or on September 30, 1992 shall be the rates
charged to subscribers for service received on that date.
(c) Subsequent permitted per channel charge. After the initial
date of regulation, the permitted per channel charge for regulated
programming services shall be, at the election of the cable operator,
either: (1) a per channel rate determined pursuant. to a cost -of -
service showing, or (2) the prior permitted per channel charge
previously approved by a regulatory authority, adjusted for inflation
and external costs in accordance with the price cap requirements set
forth in subsection (d) below.
(d) Price cap requirements.
(1) Inflation adjustments. Permitted per channel charges for
regulated programming services may be adjusted periodically on
account of inflation. Adjustments to permitted per channel charges
on account of inflation shall be based on changes in the Gross
National Product Price Index published by the Bureau of Economic
Analysis of the United States Department of Commerce.
(2) External costs. Permitted per channel charges for regulated
programming services may also be adjusted for changes in external
costs measured on a per channel per subscriber basis. To the extent
external cost increases are greater or less than the GNP -PI for the
relevant period, the per -channel charge will be adjusted accordingly.
Per channel charges may not be increased if external costs increase
at a rate less than inflation. Permitted per channel charges also
shall be decreased on account of external costs to the extent such
costs decrease from previous levels.
(i) Categories. External Costs shall consist of costs the
following categories: (1) state and local taxes applicable to
provision of cable television service; (2) franchise fees; (3) costs
of complying with franchise requirements, including costs of
providing public, educational, and governmental access channel's as
required by the franchising authority; (4) retransmission consent
fees; and (S) programming costs.
(ii) The permitted per channel charge for a tier of regulated
programming services shall be adjusted on account of orocra=inc
costs and retransmission consent fees only for programming or
broadcast signals offered on that tier.
(iii) The permitted oer channel charge shall not be adjusted for
costs of retransmission consent fees or changes in those fees
incurred prior to October 6, 1994.
(iv) The starting date for adustments on account of external costs
for a tier of regulated programm_ng service shall be the
of regular ion of one ie:_ o:_ )0 da,, s
Ordinance No. 1218-2-94
these rules, if the initial date of regulation occurs on or after 180
days from the effective date of these rules.
(v) Changes in franchise fees shall not result in an adjustment to
permitted per channel charges, but rather shall be calculated
separately as part of the maximum monthly charge per subscriber for
a tier of regulated programming service.
(vi) Adjustments to permitted per channel charges on account of
increases in costs of programming obtained from affiliated
programmers, as defined in § 76.901 of the rules, shall be the lesser
of actual increases or the previous permitted rate level increased
by the amount of inflation.
(vii) Adjustments to permitted per channel charges on account of
increases in costs of programming shall be further adjusted to
reflect any revenues received by the operator from the programmer.
§ 76.923 Rates for eauipment and installation used to receive the
basic service tier.
(a) Scone. The equipment regulated under this section consists
of all equipment in a subscriber's home that is used to receive the
basic service tier, regardless of whether such equipment is
additionally used to receive other tiers of regulated programming
service and/or unregulated service. Such equipment shall include,
but is not limited to:
(1) converter boxes;
(2) remote control units;
(3) connections for additional television receivers; and
(4) other cable home wiring.
Subscriber charges for such equipment shall not exceed charges based
on actual costs in accordance with the requirements set forth below.
(b) Unbundlina. A cable operator shall establish rates for remote
control units, converter boxes, other customer equipment,
installation, and additional connections separate from rates for
basic tier service. In addition, the rates for such equipment and
installations shall be unbundled one from the other.
(c) Earuipment basket. A cable operator shall establish an
Equipment Basket, -.-ihich will include all costs associated with
providing customer equipment and installation under this section.
(1) Equipment Basket costs shall be limited to the direct and
indirect material and labor costs of providing, leas -ng, installing,
repairing, and servicing customer equipment, as determined _n
accordance with the cost accounting and cost alloca:.-on requ cements
of § 76.921. The Equipment Basket shall not -include general
15
ATTACHMENT IV
Ordinance No. 1218-2-94
certified by the Commission to regulate rates for the basic service
tier_
§ 76.931 Notification of basic tier availability_
A cable operator shall provide written notification to subscribers
of the availability of basic tier service by September 19, 1993, or
three billing cycles from June 21, 1993, and to new subscribers at
the time of installation. This notification shall include the
following information:
(1) That basic tier service is available;
(2) The cost per month for basic tier service;
(3) A list of all services included in the basic service tier.
§ 76.932 Notification of proposed rate increase.
A cable operator shall provide written notice to a subscriber of
any increase in the price to be charged for the basic service tier
or associated equipment at least 30 days before any proposed increase
is effective. The notice should include the name and address of the
local franchising authority.
§ 76.933 Franchising authority review of basic cable rates and
ecauioment costs.
(a) After a cable operator has submitted for review its exisLing
rates for the basic service tier and associated equipment costs, or
a proposed increase in these rates (including increases in the
baseline channel change that results from reductions in the number
of channels in a tier), the existing rates will remain in effect= or
the proposed rates will become effective after 30 days from the mate
of submission; provided, however, that the franchising author -".--v mall
Loll this 30 -day deadline for an additional time by issuing a Brie`
written order as described in paragraph (b) within 30 days of the
rate submission explaining that it needs additional time to review
the rates.
(b) If the franchising authority is unable to determine,
upon the material submitted by the cable operator, that the e:;_stina
or proposed rates are within the Commission's permitted basic ser: -Ice
tier charge or actual cost of equipment as defined in §§ 76.:22 and
76.923, or if a cable operator has submitted a cost -of -se -.-ice
shOWing pursuant to §§ 76. 937 (c) and 76 . 924, seeking to just _ a
rate above the Commission's basic service tier charge as def_ne.'. in
§§ 76.922 and 76.923, the franchising authority may Loll the 3C -±a
dnac,!. n in paragr-.:nh (a) of this secr_ion Lo recuest and/or ccs. ie=
addlt!.Oaa! lnform�ii=10n Or tci COnSl :�Che cotnm•ent.s -From 1nC' c; tom'
S a.f; LO Ow:,
Ordinance No. 1218-2-94
(1) For an additional 90 days in cases not involving cost -of -
service showings; or
(2) For an additional 150 days in cases involving cost -of -service
showings.
(c) If a franchising authority has availed itself of the
additional 90 or 150 days permitted in paragraph (b) of this section,
and has taken no action within these additional time periods, then
the proposed rates will go into effect at the end of the 90 or 150
day periods, or existing rates will remain in effect at such times,
subject to refunds if the franchising authority subsequently issues
a written decision disapproving any portion of such rates, provided,
however, that in order to order refunds, a franchising authority must
have issued a brief written order to the cable operator by the end
of the 90 or 150 -day period permitted in paragraph (b) of this
section directing the operator to keep an accurate account of all
amounts received by reason of the rate in issue and on whose behalf
such amounts were paid.
§ 76.934 Small systems.
A franchising authority that has been certified, pursuant to §
76.910 to regulate rates for basic service and associated equipment
may permit a small system as defined in section 75.901 to certify
that the small system's rates for basic service and associated
equipment comply with § 76.922, the Commission's substantive rate
regulations.
§ 76.935 Participation of interested parties.
In order to regulate basic tier rates or associated equipment
costs, a franchising authority must have procedural laws or
regulations applicable to rate regulation proceed_ngs that provide
a reasonable opportunity for consideration of the vLews of interested
parties. Such rules must take into account the 30, 120, or 180 -day
time periods that franchising authorities have to ::eview rates under
§ 76.933.
§ 76.936 written decision.
(a) A franchising authority must issue a writ�.n decision in a
ratemaking proceeding whenever it disapproves an _nitial rate for
the basic service tier or associated equipment in .::ole or in part,
disapproves a request for a rate increase Ln aho_ or in oart, or
approves a recuest for an increase in whole or part over the
objections of LnC_erested parties. A franchis!nc -uthority is not
requ red to issue-'. a written decision that a:�pr �s an unopposed
existing or rate for the basic servi-c:.1 t. _ li7 or associated
equipment.
2.1
ATTACHMENT V
Ordinance -No. 1218-2-94
and regulations do not conform to the Commission's rate regulations
governing cable rates, §§ 76.922 through 76.925.
(2) After being given an opportunity to cure the defect, a
franchising authority fails to fulfill one of the three conditions
for certification, set forth in 47 U.S.C. § 543(a)(3), or any of the
provisions of §§ 76.910(b).
(b) In all cases of revocation, the Commission will assume
jurisdiction over basic service rates until an authority becomes
recertified. The Commission will also notify the franchising
authority regarding the corrective action that may be taken.
(c) A petition for revocation must be served on the franchising
authority and contain a statement that service was made. The
franchising authority may file an opposition within 30 days of filing
of the petition. A reply may be filed within 15 days of filing of
the opposition.
(d) While a petition for revocation is pending, and absent grant
of a stay, the franchising authority may continue to regulate the
basic service rates of its franchisees.
§ 76.915 Change in status of cable ooerator.
(a) A cable operator that becomes subject to effective
competition, may petition the franchising authority for change in
its regulatory status. The operator bears the burden of proving the
existence of effective competition. Oppositions may be filed within
15 days of public notice of the filing of the petition, and must be
served on the operator. Cable operators may reply within 7 days of
filing of oppositions.
(b) Franchising authority decisions on petitions for change in
status must be made within 30 days after the pleading cycle set forth
in paragraph (a) of this section closes. Franchising authorities
must notify the Commission within ten days of any decision changine
status. Unless the Commission receives an opposition to such change
in status, the decision will become final 30 days after adoption by
the franchising authority.
(c) After an initial determination of the franchising authority
that effective competition exists becomes final, the franchisinc
authority will then cease regulating basic cable service rates, anc
the Commission's regulatory authority over cable programming services
Ear the system in the franchise area will also cease.
(d) A cable operator and a franchising authority may submit J.
joint statement that effective co�oetition e::ists. The point
statement. must ;'.Lpulate which of the three statutory tests o_
eiieci:ly compet'_'_Lon has been filet and -2::plaln h;w the test has oee:'
ScIt1S'. LC't Ti-!ese joint stateme[lts :)ecome ff:: caL decisions '.•_ h1
out
Ordinance No. 1218-2-94
30 days of filing with the Commission, unless challenged by an
interested party.
(e) Cable operators denied a change in status by a franchising
authority may seek review of that finding at the Commission by filing
a petition for revocation.
(f) In cases where a local franchising authority has not been
certified to regulate rates, a cable operator may petition the
Commission for change in its regulatory status. The time periods in
paragraph (a) of this section will apply to oppositions and replies
concerning these petitions.
§ 76.916 Petition for recertification.
(a) After its request for certification has been denied or its
existing certification has been revoked, a franchising authority
wishing to assume jurisdiction to regulate basic service and
associated equipment rates must file a "Petition for Recertification"
accompanied by a copy of the earlier decision denying or revoking
certification_
(b) The petition must:
(1) Meet the requirements set forth in 47 U.S.C. § 543 (a) (3) ;
(2) State that the cable system is not subject to effective
competition; and
(3) Contain a clear showing, supported by either objectively
verifiable data such as a state statute, or by affidavit, that the
reasons for the earlier denial or revocation no longer pertain.
(c) The petition must be served on the cable operator and on
any interested party that participated in the proceeding denying or
revoking the original certification.
(d) Oppositions may be filed within 15 days after the petition
is filed, and must be served on the petitioner. Replies may be filed
within seven days of filing of oppositions, and must be served on the
opposing party(ies).
76.920 Composition of the basic tier.
Every subscriber of a cable system must subscribe to the basic
tier in order to subscribe to any other tier of video programming or
to purchase any other video programming.
g 76.921 Buv-throuah of otijer tiers prohibited.
(a) No cable sysLern oper-ator may require the subscri.pt:on --o any
tier Other than Che bass -C: s'; -vice tier as a condition o1 moi::. C' _JtLOn
it
AFFIDAVIT AND PROOF OF PUBLICATION
THE STATE OF TEXAS
COUNTY OF COLLIN
BEFORE ME, the undersigned authority, on this day personally
appeared DEBBIE TACKETT, who having been by me duly sworn, on oath
deposes and says:
That she is the General Manager of THE ALLEN AMERICAN, a
newspaper published in COLLIN COUNTY, TEXAS, not less frequently than once
a week, having a general circulation in said county, and having been published
regularly and oontinously for more than twelve (12) months prior to publishing
Ordinance #1218-2-94
of which the attached is a true and written copy, and which was published in THE
ALLEN AMERICAN on Wed. , Feb. 9 * Sun. , Feb. 13, 1 9 94
and which was issued on February 9 , 1994
by City of Allen of COLLIN COUNTY,TEXAS
A printed copy of said publication is attached hereto.
SUBSCRIBED AND SWORN to before me this / day of �'/ `�'� .A.D 19 9Y
V. A. TODD
MY COMAMSSION EXPIRES
December 5, 1998
Publisher's fee $ 2 0 . 2 6
r
PUBLIC in and for COLLIN COUNTY, TEXAS
`( CITY OF ALLEN \
PUBLIC NOTICE
Notice is hereby given that the Allen City
Council adoptedthe following ordinance at '
their regular meeting held on Thursday,
February 3, 1994 (Title only):
Ordinance No. 1218-2-94' An Ordinance
of the City Council of the City of Allen,
Collin County, Texas, Establishing Proce !
dures and Standardards for the Regulation
of Rates for Basic Cable Service and -
Equipment. I
A copy of this ordinance may be read or
�
purchased in the office of the City Secret -1
ary, City of Allen, One Butler Circle, Allen„
Texas 75002.
/s/ Judy Morrison I
City Secretary