R-8873
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RESOLUTION NO, 8873
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA ADOPTING A RATE ORDER
REGARDING ADDITIONAL REFUNDS OF BASIC SERVICE
RATES BY 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 "Cl.ty") became
certified to regulate baS1C cable serVlce rates and associated
charges as of October 7, 1993, and has followed regulations
prescribed by the Federal Communicatlons Commission (" FCC") for the
regulatl.on of the basic service tier and assoclated equlpment,
installation, services and charges (the "FCC Rulesl1), and
WHEREAS, the City adopted a rate order on July 19, 1994
(Resolution No. 8781(CCS) ("Rate Order") that, among other thlngs,
ordered Century to refund the amount of $3 94 to subscribers for
basl.c service tier rate overcharges, subject to offsets for any
undercharges for equipment and installation, for the perl.od from
September I, 1993 to July 14, 1994, and
WHEREAS, the Cable SerVl.ces Bureau of the FCC recently denied
the Company's appeal of the City's Rate Order, see In re Century
Southwest Cable Television, Santa Monica, California, Order, DA 95-
123 (C S.B January 31, 1995); and
WHEREAS, in the Rate Order, the City noted that lithe net
lmpact of the Company's service changes on April I, 1994 (including
restructurl.ng A & E
and VH-l [from Century Select] lnto a 2
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channel cable programming service tler and adding a broadcast
channel to the basic serVlce tier) would be to increase the number
of channels on the cable system on service tlers subj ect to
regulation by three (3), or from 43 to 46 channels" (Rate Order at
p . 7), and
WHEREAS, the Clty further noted that the "FCC Rules do not
appear to permit the Clty to take into account the serv~ce changes
made by the Company on April I, 1994" (Rate Order at p.7); and
WHEREAS, the City further noted that "subscribers to the basic
serVlce tler durlng the perlod from April I, 1994 to July 14, 1994
would be entitled to a larger refund for that time per~od lf the
Clty could take into account the Company's Aprll 1 serVlce changes
in calculating refunds" (Rate Order at p.8); and
WHEREAS, the City's financial consultant concluded that if the
C~ty could take into account the April 1 service changes, "the
maximum proposed charge for BaSlC Service would decrease from
$18.20 to $17.84,11 see Letter from James C. Atklnson, Price
Waterhouse, to Patrick J. Grant, Esq (July 13, 1994) ("Financial
Consultant's Report"), which would result in an addltlonal $0.36
refund per month to subscribers for the time period between April
1, 1994 and July 14, 1994; and
WHEREAS, the Company had an opportunlty to provlde comments on
the draft of the financial consultant's Report; and
WHEREAS, in the Rate Order the City Council Ilreserve[d] the
right to order additional refunds for the period from Aprll 1, 1994
to July 14, 1994 to account for service changes made by the Company
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on April 1, 1994, in the event the FCC clarifles that the City
Council has the right to take into account such service changes in
establishing the maximum permitted baS1C rate for that tlme perlod"
(Rate Order at p 12); and
WHEREAS, on July 26, 1994, the C~ty requested that lithe
Commission clarify the right of a franchising authority to take
into account channel additions that occur after the init~al date of
regulation, but prior to a rate decision, in establishing the
inltial permitted rate and rate refunds for the baS1C service
tier, II see Letter from John Jalili, City Manager, Clty of Santa
Monica, to Meredith J. Jones, Chlef, Cable Services Bureau, FCC
(July 26, 1994); and
WHEREAS, al though the FCC has not responded to the City's
letter, the Commission ln a recent rate order clar~f~ed that
additions or deletions to channel llne-ups of regulated tiers after
the lnitial date of regulation, but before the lssuance of a rate
order, should be taken into account in determining the max~mum
permltted rate after the date of such service changes, see In re
Warner Cable Communications, Milwaukee, Wlsconsin, DA 94-1285, at
5,~ 9 (C.S.B. Nov. 18, 1994); and
WHEREAS, therefore, the City believes the FCC Rules permit the
City to take into account the April I, 1994 services changes by the
Company and to order addltlonal rate refunds, and
WHEREAS, the City believes that 45 days ~s a sufficient amount
of time for the Company to implement rate refunds since the Company
prevlously agreed to implement rate refunds pursuant to the Rate
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Order within 45 days of the order by the FCC's Cable Services
Bureau affirming the Rate Order, see Letter Agreement between John
Jalili, City Manager, City of Santa Monica, Californ~a to Scott N.
Schneider, Senior Vice President, Century Southwest Cable
Television, III (Aug. 22, 1994) quoting (nCentury agrees that it
wlll commence implementation of lts refund plan ordered pursuant to
the [Rate Order] to Santa Monica subscribers wlthin 45 days after
a decision by the [Cable Services] Bureau affirming, in whole or in
part, the [Rate Order]U);
NOW, THEREFORE, IT IS ORDERED THAT:
1. The Company shall refund to subscribers, ln addition to
such amounts refunded pursuant to the Rate Order, an additlonal
$0.36 per month for basic service tier overcharges for the perlod
commenclng on April 1, 994 and ending on July 14, 1994, With
respect to each affected subscriber entitled to a refund, the
Company shall implement the rate refunds ordered in this Paragraph
1 wlthin 45 days after the effective date of this Rate Order
2. Withln ten (10) days after the effectlve date of this Rate
Order, the Company shall submlt a written plan to the City Manager
which, at a minimum, sets forth the Company's method of providing
refunds to subscribers (plus lnterest) ordered in Paragraph 1;
identlfies the basis for the calculation of the amount of refunds;
ldentifies the applicable interest rate and explains how it was
calculated, and explains how the rate refunds ordered herein shall
be lmplemented. Such plan is subject to the City Manager's review
and approval. The Company's obligation to submit such plan shall
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not affect the Company/s obligation to implement rate refunds, as
set forth in Paragraph 1.
3. The Council reserves the right to modify this Order if I at
any timel it determines that information the Company provided to
the City is incorrect in any material manner.
4. The Clty Manager is ordered to mall a copy of this Order
to the Company I provide appropriate public notice of this Order,
and make a copy of this Order available to any person upon request.
5. The Cl.ty Clerk shall certify to the adoptlon of thl.S
Resolution, and thenceforth and thereafter the same shall be in
full force and effect.
APPROVED AS TO FORM:
~h!;{::-/~~
Clty Attorney
(f \cmanager\cable\rreso)
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Adopted and approved thIs 28th of February, 1995
u~
Mayor
I hereby certIfy that the foregomg ResolutIOn 8873 (CCS) was duly adopted at a
meetIng of the CIty CouncIl held on the 28th of February, 1995 by the following vote
Ayes
Councllmembers
Abdo, O'Connor, Greenberg, Holbrook, Genser
Rosenstem,
Noes
Councllmembers.
None
Abstam
CouncIlmembers
None
Absent
CouncIlmembers
Ebner
ATTEST
v1t;tikc~
''/ U
CIty Clerk