R-9386
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ATTACHNENT A
CM KKV ckl\f cmanager\cable\reso413 doc
Santa Monica, California
RESOLUTION NO 9386
(City Council Senes)
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA
ADOPTING A RATE ORDER REGARDING
THE BASIC CABLE SERVICE TIER AND
THE EQUIPMENT AND INSTALLATION RATES FOR
CENTURY SOUTHWEST CABLE TELEVISION, INC
WHEREAS, the City of Santa MOnica (the "City") became certified to
regulate baSIC cable service rates and associated charges as of October 7, 1993,
and has followed regulations prescnbed by the Federal Communications
CommiSSion ("FCC") for the regulation of the baSIC service tier and associated
equipment, Installation, services and charges (the "FCC Rules"), and
WHEREAS, Century Southwest Cable TeleVISion, Inc (the "Company")
submitted FCC Forms 1240 and 1205 to the City on May 1, 1998 for the baSIC
cable service tier and equipment and Installation (collectively, the "Rate FIlings"),
and
WHEREAS, the Company, as permitted under the FCC Rules,
Implemented ItS baSIC servIce tier, eqUipment and Installation rates In accordance
With the Rate Flings on August 1, 1998, subject to the City's nght to adopt a rate
order and order rate refunds, and
WHEREAS, the City Issued a public notice seeking wntten comments
from Interested parties on the Company's proposed rates, and the Rate FIlings
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were made available for public Inspection In order to obtain comment from any
Interested party, and
WHEREAS, the City staff has made a recommendation to the City
Council ("Councll") regarding the Company's rates based on (a) Information
contained In the Rate Filings, (b) the assumed accuracy of that Information, (c)
comments, eVidence and Information from Interested parties, (d) the draft rate
report prepared by the City's financial consultant, (e) the Company's comments
on the draft rate report, and (f) the financial consultant's final rate report ("Final
Report"), and
WHEREAS, the Company has the burden of proving by a
preponderance of eVidence that Its rates for the basIc service tier, equipment and
Installations are reasonable under the FCC Rules, 47 C F R 976 937(a), and
WHEREAS, FCC Rules permit a franchising authonty to establish
maximum permitted rates for eqUipment and Installations based on the "best
rnformatlon available" where a cable operator falls to meet ItS burden of proving
that Its proposed rates are reasonable, 47 C F R 976 937(c), and
WHEREAS, the Company's rate card states that It Will charge
subscnbers "time and matenals for all non-standard or custom work", and
WHEREAS, FCC Rules require that a cable operator Include In the
equipment basket on the FCC Form 1205 all the "direct and IndIrect matenal and
labor costs of Installing customer equipment," 47 C FRS 76 923(c)
(emphasIs added), and
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WHEREAS, the cost of materials for drops are either "capitalized as
distribution plant or separately chargeable to customers In equipment prices," In re
Implementation of Sections of the Cable TelevIsion Consumer Protection and
Competition Act of 1992 Rate Regulation, 9 FCC Rcd 1164 at 1169 (1993), and
WHEREAS, the FCC regulations state that an operator may charge for
installations based on either the hourly service charge "multiplied by the actual time
spent on each IndiVidual installation, or the hourly service charge "multIplied by the
average time spent on a specific type of Installation," 47 C FRS 76 923(e), and
WHEREAS, for nonstandard and custom installations, the Council
concludes that the FCC Rules permit the Company to charge the Hourly Service
Charge of $2959 multiplied by the actual time spent on a specific type of
Installation, and
WHEREAS, the Company states that "based on preliminary testing and
technical and operational diSCUSSions with other cable operators, the Company has
determined that the 4 hour average used In the FCC Form 1205 filing
conservatively approximates the time It takes to perform a dIgital Installation" , and
WHEREAS, the Company did not proVide the results of such preliminary
testing, nor proVide any time studies or other documentation demonstrating the
average time It takes to complete such an Installation, and
WHEREAS, the CounCil finds that the Company has failed to meet Its
burden of establishIng an average time of four (4) hours for digital Installations, and
WHEREAS, the FCC Rules would permit the Company to charge Its
Hourly Service Charge for digital Installations, and
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WHERAS, the Council concludes that the Hourly Service Charge of
$2959 set forth below IS a reasonable per hour charge for digital Installations, and
WHEREAS, the Company Indicates that It has not yet provided
subscribers Its digital converter and digital remote control device, and
WHEREAS, the Company has provided cost estimates for the digital
converter and digital remote control device, but has not demonstrated that It has
actually purchased the eqUipment at such pnces, and
WHEREAS, the Council has consIdered the City staffs
recommendations and the reasons therefore, has received and considered
comments from the publiC, has reviewed and hereby adopts (and by this
reference Incorporates herein), as appropriate and to the extent not Inconsistent
with thIS Rate Order, the findings, assumpttons and other Information set forth In
the financial consultant's Final Report,
NOW, THEREFORE, the City Council of the City of Santa MOnica does
ordain as follows
1 The maximum permitted rates on and after August 1, 1998 for the
baSIC service tier and the eqUipment and Installation charges set forth below are
as follows
MaXimum Permitted Rate 1
1 All rates hsted in thIS Rate Order exclude franchIse fees
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BasIc Service Tier
$2407
Equipment & Installation
Hourly Service Charge
(inclUSive of installation matenals)
Unwlred Homes
Prewlred Homes
Digital InstallatIOn
Additional Outlet (Initial tnp)
Additional Outlet (separate tnp)
Changing Tier (Addressable)
Remote Control Device (BaSIC)
Remote Control Device (Universal)
Converter Box (Non-Addressable)
Converter Box (Addressable)
$29 59/per hour
4616
2722
29 59/per hour
1627
2604
1 99
24
98
68
225
The Council hereby tentatively approves the follOWing maximum permitted rates
for digital converters and digital remote control devices as of and after August 1.
1998, subject to the Company submitting documentation acceptable to the City
that It purchased such equipment at the costs set forth m Its Form 1205
Maximum Permitted Rate
Digital Converter
Digital Remote Control Device
$978
$073
The Council reserves the nght to modify the rates for the digital converter or the
digital remote control device If the City determines that the Company purchased
such equipment at a cost that differs from that set forth In the Form 1205 The
equipment and Installation rates set forth In thiS Paragraph shall remain In effect
until the date In 1999 the Company IS permitted by the FCC Rules to adjust such
rates pursuant to ItS next FCC Form 1240 and Form 1205 rate fihngs
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2 The Company shall refund that portion of the rates (plus Interest)
paid by subscnbers for the basIc service tier and eqUipment and installations
descnbed In Paragraph 1 to the extent such rates exceed the rates approved m
Paragraph 1 The Company shall not offset refunds by the amount of any
discounts provided to subscribers on the baSIC service tier, eqUipment and
Installation rates subject to this Rate Order The refund penod shall run from the
date the Company Implements the refunds required by this Rate Order back to
August 1, 1998 With respect to each affected subscriber entitled to a refund, the
Company shall Implement the refunds wlthm sixty (60) days after the date of this
Rate Order
3 Within five (5) days after the date of this Rate Order, the Company
shall submit a written plan to the City Manager WhiCh, at a minimum, shall set
forth the Company's method of providing refunds to subscnbers (plus Interest)
pursuant to Paragraphs 1 and 2, Identifies the baSIS for the calculation of the
amount of refunds, Identifies the amount of the refund, Identifies the applicable
Interest rate and explainS how It was calculated, proVides the actual rates
charged subscnbers for eqUipment and Installations each month dUring the
refund penod, and explains how the rate refunds ordered herein shall be
Implemented Such plan IS subject to the City Manager's review and approval
The Company's obligation to submit such plan shall not affect the Company's
obligation to Implement rate refunds, as set forth In Paragraphs 1 and 2
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4 The Company shall adjust Its current rates for equipment and
installation to the levels set forth In Paragraph 1 within 60 days after the date of
this Order
5 The Company may not Increase the rates for any of the Items listed
In Paragraph 1, nor may the Company mstltute new charges for other types of
service, equipment or Installations associated with the baSIC service tier which
are not listed In said Paragraph, without first complYing with applicable law or
regulation, mcludlng the FCC Rules
6 The Council reserves the nght to modify this Rate Order If, at any
time, It determines that Information the Company provided to the City IS Incorrect
In any matenal manner
7 The City Manager IS directed to mall a copy of this Rate Order to the
Company, proVide appropriate public notice of this Rate Order, and make a copy
of this Rate Order available to any person upon request
8 The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be In full force and effect
APPROVED AS TO FORM
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Marsh~~ Moutne
City Attorney
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Adopted and approved this 13th of April, 1999
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~m ~.'~onnor, Mayor
I. Mana M Stewart, City Clerk of the City of Santa MOnica, do hereby certify that
the foregoing Resolution 9386 (CCS) was duly adopted at a meeting of the Santa
MOnica City Council held on the 23rd of March, 1999 by the following vote
Ayes Councllmembers
FeInstein, Genser, Holbrook, McKeown,
O'Connor, Rosenstein
Noes Councllmembers
None
Abstain Councllmembers
None
Absent Councllmembers
None
ATTEST
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Marla M Stewart, City Clerk