City Council Meeting: January 22, 2002                                                               Santa Monica, CA

 

 

To:               Mayor and City Council

 

From:           City Staff

 

Subject:        Public Hearing and Resolution Regarding a Rate Order for Basic Cable Television Service, Equipment and Installation Rates.

 

 

Introduction

This report recommends that the City Council adopt a resolution issuing a rate order to Century-TCI California, L.P., d/b/a Adelphia Communications Corporation (“Cable Company”).  The rate order establishes basic cable service, equipment and installation rates and orders the Cable Company to issue refunds as appropriate.

 

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 rates for associated equipment, installation and services).  Pursuant to FCC regulations, a cable company must justify the rates it charges as reasonable in accordance with federally devised formulas. The City serves as the implementing agency for determining the Cable Company’s compliance with the federal regulations.

 

The FCC sets forth specific procedures for franchising authorities and cable companies to follow in establishing rates.  The City has followed these procedures.

 

The Cable Company submitted its rate justification to the City on February 22, 2001.  The City reviewed the rate filings to: (1) uncover deficiencies in the Cable Company’s completion of the rate filings; and (2) verify the information the Cable Company submitted.  A supplemental request for information was sent to the Cable Company during June 2001.  The Company responded on July 22, 2001.

 

Public comments were solicited and notification of the upcoming hearing was provided.

 

Based on the financial consultant’s report and the FCC’s rate regulations, the recommended maximum permitted rates are set forth below.  For comparison purposes only, the rates published on the Cable Company’s rate card are also set forth below.

 

RECOMMENDED RATES

 

 

Adelphia Rate Card Rates

FCC Maximum Permitted Rates

 

Basic Service Tier

 

$25.24

 

$29.02

 

 

 

Equipment & Installation:

 

 

Hourly Service Charge

Unwired Homes

Prewired Homes

Underground Burial

Relocate Service

Trip Charge

Downgrade to Basic (Nonaddressable)

Additional Connection (initial trip)

Additional Connection (separate trip)

Changing Tier (addressable)

Transfer

Non-Pay Reconnect

Remote Control Device (Addressable)

Remote Control Device (Universal)

Remote Control Device (Digital)

Converter Box (Addressable)

Converter Box (Non-Addressable)

Converter Box (Digital)

Lease of Additional Outlets

N/A

$44.00

33.00

75.00

33.00

29.00

29.00

22.00

33.00

2.00

33.00

28.00

.25

.79

.25

3.25

.95

3.25

N/A

$44.66

44.66

33.50

78.16

33.50

29.92

29.92

22.33

33.50

2.00

33.50

33.50

.35

.35

.35

4.65

.97

4.65

0.00

 

The Company has informed the City that the $0.79 rate on the rate card for the universal remote is a mistake, and the Company has indicated that it charges only $0.25 for the universal remote, which is $0.10 less than the maximum permitted rate of $0.35.

 

The City recommends a rate of $0.00 for the lease of additional outlets at this time since the Company failed to demonstrate the reasonableness of the proposed rate of $0.90 included in the Company’s form 1205.  The Company does not include a rate for lease of additional outlets on its rate card, and the Company informed the City it does not charge the rate in Santa Monica.  The proposed resolution would permit the Company to file a supplemental rate filing to justify the rate.

 

The City proposes a maximum permitted rate of $29.92 for downgrade to basic since the Company did not establish the reasonableness of its proposed maximum permitted rate of $44.66.  The maximum permitted rate of $29.92 is higher than the $29.00 rate on the Company’s rate card for downgrade to basic.

 

The basic service tier, equipment and installation rates recommended by the City as the franchising authority will remain in effect until the date in 2002 that the Cable Company is permitted by the FCC rate regulations to again adjust its rates in the prescribed Forms.

 

The City Council reserves the right to modify the Rate Order if, at any time, it determines that information the Company provided to the City is incorrect in any material manner.

 

Budget Impact

No City budgetary impact results from the issuance of this rate order.

 

Recommendation

Staff recommends that City Council adopt the attached resolution issuing a rate order to establish the maximum permitted rates for basic cable service, equipment and installation charges during the period under review.

 

Prepared by:      Kathryn Vernez, Assistant to City Manager for Government Relations

Joseph Lawrence, Assistant City Attorney

Robin Gee, Cable Manager

 

 

Attachments:      Attachment A: Resolution

Attachment B: Financial Report