City Council Meeting:2/2796             Santa Monica, CA

TO:       Mayor and City Council

FROM:     City Staff

SUBJECT:  Recommendation to Approve a Resolution Issuing an
          Accounting Order Regarding Equipment and Installation
          Charges of Century Southwest Cable Television, Inc.

INTRODUCTION
This report recommends that the City Council issue, by
resolution, an "accounting order" to Century Southwest Cable
Television, Inc. ("Century") which will provide additional time
for City staff to review information from Century in support of
its charges for equipment and installation as shown in its Annual
FCC Form 1205, and which will preserve the City's right to order
refunds in the event the City determines that Century's proposed
charges are unreasonable.

BACKGROUND
The City has been certified by the Federal Communications
Commission (FCC) to regulate basic cable television rates (which
includes the "basic cable" tier and charges for associated
equipment, installation and services) consistent with FCC
regulations.  Pursuant to these regulations, a cable company must
justify its charges as reasonable in accordance with federally-devised formulas.  The City serves as the implementing agency for
determining compliance with federal regulations.

The FCC has set forth specific procedures for franchising
authorities and cable companies to follow in the period
commencing after July 14, 1994.  Under those procedures, Century
must justify its charges, and increases in its charges, by filing
the appropriate FCC Form 1200 Series form.  The City and Century
have been proceeding in accordance with these procedures.

Because basic threshold issues regarding Century Select rates are
already on appeal before the FCC, the City and Century have
entered into an agreement to defer further review of certain of
Century's FCC Form 1200 series rate filings pending completion of
current appeals before the FCC, and judicial review if any, and
to extend Century's refund liability during that period.  This
agreement preserves the City's right to order refunds if rates
subject to those rate filings are found unreasonable but
minimizes further costs to the City in the interim.  However, the
deferral affected by this agreement does not apply to Century's
annual equipment and installation rate filings.

The FCC requires that Century submit the FCC Form 1205 annually
to justify its charges for equipment and installation  associated
with the basic service tier.  On November 6, 1995, the City
received Century's FCC Form 1205 rate filing.  Presently, the
City is reviewing the rate filing from Century and will request
additional information:  (1) to cure any deficiencies in
Century's completion of the rate filing; (2) to verify the
information the Company submitted; and (3) to complete review by
the City of the Company's rate filing.

The City needs additional time to review Century's annual FCC
rate filing for equipment and installation.  City staff believes
that the City should issue an accounting order to preserve the
City's right to order refunds in the event the City determines
that the Company's proposed charges for equipment and
installation are unreasonable.

BUDGET IMPACT
There is no City budgetary impact resulting from the issuance of
this accounting order.

RECOMMENDATION
City Staff recommends that City Council adopt the attached
resolution issuing an accounting order to preserve the City's
right to order rate refunds in the event the City determines that
the rates proposed by Century for charges for equipment and
installation on its annual FCC Form 1205 are unreasonable.

Prepared by:   Kathryn Vernez, Senior Management Analyst
               Linda A. Mills-Coyne,Deputy City Attorney
               Robin Gee, Cable TV Manager

Attachment:    Resolution