O-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
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