O-1604-5-98ORDINANCE NO. 1604-5-98
' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, AMENDING ARTICLE H OF APPENDIX A OF THE ALLEN
CODE OF ORDINANCES BY ESTABLISHING MAIDMUM 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. ("TCP').
(2) In 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. 1211-2-94 providing for the regulation of rates charged by cable television operators
within the City for the basic service tier 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, 1998, the City received TCI'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 April 14, 1998, sent a letter
requesting additional information to document that the cable rates were in accord with the FCC standards.
(8) On or about April 24, 1998, TCI responded to C2 Consulting Services, hie. and the City and
provided a response to the City's request for additional information.
(9) On or about May 2, 1998, two (2) final reports were prepared for the City by C2 Consulting
Services, Inc. detailing the findings of the review.
(10) 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 1240:
• TCI's calculation of the base rate on Line D8 does not reflect the appropriate base rate for
purposes of "true -up" in this year's Form 1240 filing.
• TCI has not supported its treatment of certain costs that the Company terms as "franchise
related."
' Form 1205:
• The computations of the HSC and the converter lease rates inappropriately include the costs
and hours related to converter retrieval.
• The computation of the HSC inappropriately includes the costs related to activities for
disconnects.
• The computation of the HSC inappropriately includes the costs related to "tap audits."
• The computations of the HSC and the converter lease rates inappropriately include the asset
and operating costs related to security devices.
• The computation of the HSC within the forty sample systems inappropriately includes certain
self insurance related costs.
• The computations of the HSC in several of the forty sample systems and several of the digital
systems include inappropriate levels of certain state and local taxes.
• TCI's proposed Schedule "C" capital costs for remotes are not reflective of the supporting
documentation.
• TCI's proposed development of a "Field Collection Charge" is inappropriate.
(11) 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.
Ordinance No. 1604-5-9R Page 2
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(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 $14.08.
(4) The City concludes that the maximum permitted charge for hourly service shall be $27.40.
(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 an obligation to area subscribers to reconsider the pending
analysis consistent with such changes the FCC may make in its regulations.
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 tier, inclusive of the FCC Regulatory Fee,
of $14.08.
(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 $27.40 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 below.
Service Maximum Permitted Rate
Hourly Service Charge $27.40
Install - Unwired Home
40.99
Install — Prewired Home
21.92
Install — Additional Connection Initial
12.78
Install — Additional Connection Separate
20.37
Move Outlet
19.64
Up/Downgrade
1.99
Upgrade Non -Addressable
26.22
Downgrade Non -Addressable
8.61
Changing Tiers
26.22
Connect VCR Initial
6.26
Connect VCR Separate
13.30
Field Collection Charge
N/A
Lease Rates
Remotes
$.34
Basic Only Converter
1.97
Non -Basic Only Converter
3.16
Ordinance No. 1604-5-98 Page 3
(4) 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, 1998, based on the difference
between TCI's current equipment and installation charges and the permitted equipment and installation charges
approved herein.
(5) TCI shall provide the City evidence that Order for Action (1), (2), (3), and (4) above have been
complied with and that all refunds have been properly made in accordance with the Cable Act and applicable
FCC regulations.
(6) 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 rules 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.
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 21ST DAY OF MAY , 1998.
APPROVED:
Stephen Terrell, MAYOR
ATTEST:
d yMo ion, C�CrrYECRETARY
Ordinance No. 1604-5-98 Page 4