R-9235
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ACMO KV SG F \CMGR\STFRPRTS\RA TEORDR WPD
January 27, 1998 Santa MOnica, CA
RESOLUTION NO 9235 (CCS)
(City Council Senes)
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA
ADOPTING A RATE ORDER REGARDING
THE EQUIPMENT AND INSTALLATION RATES
FOR CENTURY SOUTHWEST CABLE TELEVISION, INC
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS
FOLLOWS
WHEREAS, the City of Santa MOnica (the "Cltyll) 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
an FCC Form 1205 to the City on February 3, 1997 (the "Rate Fllmg") for eq ulpment and
Installation, and
WHEREAS, the Company was permItted under the FCC Rules to Implement ItS
equipment and installation rates m accordance With the February 3,1997 FCC Form 1205
on May 4, 1997, subject to the City's ng ht to adopt a rate order and order rate refunds, and
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WHEREAS, the City Issued a public notice seeking written comments from
Interested parties on the Company's proposed rates, and the Rate FIling was 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
("Council") regarding the Company's rates based on (a) Information contained In the Rate
Filing, (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, (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 eqUipment and Installations are reasonable under the FCC
Rules, 47 C F R 976 937(a), and
WHEREAS, FCC Rules permit a franchising authority to establish maximum
permitted rates for equipment and Installations based on the "best mformatlon available"
where a cable operator falls to meet Its burden of proving that Its proposed rates are
reasonable, 47 C FRS 76 937(c), and
WHEREAS, the Company claims that the hourly contract labor rate for installations
IS $60 90, and
WHEREAS, the Company failed to provide inVOices or other appropriate
documentation to support such rate, and
WH EREAS, the financial consultant, uSing the best available information, computed
a contract labor rate of $39 58, and
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WHEREAS, the City finds $39 58 to be a reasonable contract labor hour rate for
installations, based on the best available informatIon, and
WHEREAS, the Company established one year as the useful life for the universal
remote, but provided no support for such figure, and
WHEREAS, the Company notes that eXlstmg universal remote control devices have
been In service for 2 years, which such penod exceeds a one year useful life, and
WHEREAS, the Company uses a three year useful life for the basIc remote control
devices, and
WHEREAS, thefmanclal consultant, based on pastexpenence In reviewing the rate
filings of other cable operators, notes that the useful life for remote control devices IS
generally from 3 to 5 years, and
WHEREAS, the City finds a three year useful life for universal remote control
devices to be reasonable, based on the best available Information, and
WHEREAS, the Council has consIdered the City staff's recommendations and the
reasons therefore, has received and considered comments from the public, has reviewed
and hereby adopts (and by this reference Incorporates herem), as appropriate and to the
extent not inconsistent With this Rate Order, the findings, assumptions and other
Information set forth In the financial consultant's Fmal Report,
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NOW, THEREFORE, IT IS ORDERED THAT
1 The maximum permitted rates for equipment and installation charges
from May 4, 1997 forward are set forth below
Maximum Permitted Rate 1
EqUipment & Installation
Hourly ServIce Charge
Unwlred Homes
Prewlred Homes
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)
$28 46/per hour
4440
2618
1565
2504
1 99
26
70
44
220
The equipment and installation rates set forth In thiS Paragraph shall remain In effect until
the date In 1998 the Company IS permitted by the FCC Rules to adjust such rates pursuant
to Its next FCC Form 1205 filing
2 The Company shall refund that portion of the rates (plus Interest) paid by
subscribers for the equipment and Installations descnbed In Parag raph 1 to the extent such
rates exceed the rates approved In Paragraph 1 The Company shall not offset refunds
by the amount of any discounts provided to subscnbers on the 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 Order back to May 3, 1997 With respect to each
affected subscnber entitled to a refund, the Company shall Implement the refunds Within
1 All rates listed In the column entitled "MaXimum Permitted Rate" exclude only
franchise fees
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sixty (60) days after the date of this 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
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 institute 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, Includmg 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 mcorrect In any material
manner
7 The City Manager IS ordered to mall a copy of thiS Rate Order to the Company,
prOVide appropnate public notIce of thiS Rate Order, and make a copy of thiS Rate Order
available to any person upon request
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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
fJ(JtUJ~LfUJA,~
Marsha Jo,dbs Moutne
City Attorney
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Adopted and approved this 27th of January, 1998
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Robert Holbrook, Mayor
I, Marla M Stewart, City Clerk of the City of Santa MOnica, do hereby certify that
the foregoing ResolutIon 9235 (CCS) was duly adopted at a meeting of the City Council
held on the 27th of January, 1998 by the follOWing vote
Ayes Councllmembers Ebner, Feinstein, Genser, Greenberg, Holbrook,
O'Connor, Rosenstem
Noes Councllmembers None
Abstam Councllmembers None
Absent Councllmembers None
ATTEST
LflhM YIl ~l71A~;;J
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Mana M Stewart, City Clerk