(A) Initial filings by franchisees.
(1) Filings; when made. A franchisee that is notified that its basic service and equipment rates are subject to regulation must file a submission ("the rate filing") within 30 days of the notification, justifying its then-existing basic service and equipment rates. All rates, for all customer classifications, must be justified. Once a franchisee has been so notified by the county that its rates are subject to regulation, it may not thereafter increase its rates for basic service or equipment without the prior approval of the Telecommunications Commission. This requirement applies in all cases, including with respect to increases in rates announced prior to the date the operator was notified its rates were subject to regulation where the increases were not implemented prior to the date of notice. A franchisee must submit a rate filing to justify any increase in basic service or equipment rates or any new basic service or equipment rate (collectively referred to herein as rate increases). An "increase" occurs when there is an increase in rates or a decrease in program or customer services. Rate filings proposing and supporting rate increases must be filed for review at least 30 days in advance of the proposed effective date of the increase. This requirement does not alter or eliminate any other notice requirement.
(2) Filings; where made. Every rate filing must be submitted to the Telecommunications Commission. A rate filing shall be considered filed for review on the date the rate filing and all required copies are received by the Telecommunications Commission. Five copies of each rate filing (including all supporting materials) must be submitted.
(3) Filings; contents. Subject to any FCC regulations governing the burden of proof, a rate filing submitted by a franchisee must show that the rates the franchisee proposes to charge for basic service and equipment are reasonable. Except as inconsistent with FCC rules:
(a) Every rate filing must clearly state in a covering letter whether it justifies existing rates; or proposes an increase in rates. The covering letter must also identify any rate that is derived in whole or in part based upon cost of service and identify any pages of the rate filing that contain information that the franchisee claims is proprietary. It must state whether any part of the proposed increase is based on an inflation adjustment or an alleged increase in external costs. The cover letter should also contain a brief, narrative description of any proposed changes in rates or in service;
(b) The pages of each rate filing must be numbered sequentially;
(c) The rate filing must contain all applicable FCC forms and these forms must be correctly completed; and
(d) If different rates are proposed for basic service for different classes of customers, the filing must show that the classifications and the differences in the rate charged are reasonable and consistent with federal law.
(4) Reasonable cost recovery. If the franchisee seeks to support a rate based upon a cost of service, the Telecommunications Commission will establish a rate that provides the franchisee an opportunity to recover the reasonable costs associated with providing basic cable service, including a reasonable profit. An expense or investment is not presumed reasonable merely because the franchisee has incurred or made it. A franchisee is not entitled to recover monopoly rents in any form.
(5) Complete analysis. In addition to information the Telecommunications Commission requires the franchisee to provide, and unless the Telecommunications Commission grants a waiver of this provision, a franchisee who seeks to justify all or any part of its rates based upon its cost of service must submit a complete analysis that shows all expenses it incurs and all revenues derived from the system, directly or indirectly by the franchisee or any person that constitutes a cable operator of the system within the meaning of 47 U.S.C. § 522(4). The cost of service must identify the accounting level (as that term is used in the FCC's regulations) at which each expense or revenue identified was aggregated and show clearly how the expense or revenue was allocated. The franchisee may not include costs at an accounting level unless it also includes all revenues from that same level attributable to the system or to a group of systems of which the system serving the county is a part. The replacement cost of a comparable system must be identified and supported. The franchisee must identify the name and address of any entity with which it has a contract, other than a programmer, which derives revenues from the system, and must state whether and how the revenues of that entity were included in the cost of service. In addition, the cost of service shall clearly show the derivation of a proposed charge per channel and the application of that charge to yield a basic service rate. It must also show and support the derivation and allocation of any amounts included in the derivation of the rate for:
(a) Operation and maintenance expenses;
(b) Administrative and general expenses;
(c) Programming expenses (identifying retransmission consent costs and copyright fees separately);
(d) Costs for PEG access and any institutional network;
(e) Franchise fee expense;
(f) Investment in the system and associated depreciation;
(g) Other expenses, including federal, state and local taxes, itemized; and
(h) The proposed return on equity and actual interest expense paid by the franchisee.
(6) Applicable forms. Notwithstanding the foregoing, a franchisee is not required to submit the cost of service specified herein for equipment rates, and instead initially shall complete, submit and support the costs of equipment using applicable FCC forms. Any cost-of-service filing submitted to justify basic service rates must show that the cost of service does not include equipment costs.
(B) Initial Telecommunications Commission review.
(1) After receiving a rate filing, the Telecommunications Commission shall promptly cause to be published a notice that a filing has been received and that, except for those parts which may be withheld as proprietary, it is available for public review. The notice shall state that interested parties may comment on the filing and shall provide interested parties seven days to submit written comments on the filing to the Telecommunications Commission. Any comments received and any recommendations for action by the Telecommunications Commission staff shall be made available for public inspection no later than 20 days after the filing. The franchisee may submit a response to public comments or staff recommendations, but must do so no later than three business days after the staff recommendations are made available for public inspection. The response shall be filed with the Telecommunications Commission.
(2) Within 30 days of the date of the filing, the Telecommunications Commission shall issue a written order, which may be in any lawful form, approving the proposed rate in whole or in part; denying the proposed rate in whole or in part; or tolling the proposed rate in whole or part. If the Telecommunications Commission tolls the rate in whole or in part, its written order shall explain that it requires additional time to review the rate filing, identify generally any then-known deficiencies in the franchisee's filing and state that the franchisee may cure any deficiency in its filing by submitting a supplementary filing as provided herein. With respect to existing rates, TOLLING means the rates may remain in effect, subject to refund; with respect to rate changes, tolling means the portion of the rate change that is tolled may not go into effect.
(C) Supplementary filings.
(1) If a proposed rate is tolled in whole or in part, the franchisee shall submit a supplementary filing 20 days from the date the tolling order issues, containing corrections, if any, to its filing (including any required supplement to its cost of service filing) and any response to information filed by interested parties or to the recommendations of the Telecommunications Commission staff, or any additional information necessary to support the proposed rate. Supplementary filings must be filed in accordance with division (A)(2) above.
(2) A supplementary filing also must contain information as the Telecommunications Commission directs the franchisee to provide.
(3) In addition to information the Telecommunications Commission requires the franchisee to provide, and unless the Telecommunications Commission grants a waiver of this provision, a franchisee who claims that it is entitled to a rate in whole or in part based upon the adjustments for inflation and external costs contemplated by 47 C.F.R. § 76.922(d)(1) and (2) must submit the following:
(a) A calculation showing how each part of the adjustment was derived;
(b) A statement itemizing each external cost (as defined by FCC regulations), the amount of that external costs for the two calendar years prior to the date of the filing and the year-to-date in which the filing is made; and the projected amount of the external cost for the remainder of the year in which the filing is made and for the following calendar year. The statement must specifically show any increases in revenues from programming services. REVENUES include all revenues, in whatever form received;
(c) If the increase is attributable to any increase in programming service costs, the contract for each programming service whose cost has increased; a sworn statement identifying each programming service whose costs increased where the programmer is an affiliate of the franchisee (as defined by FCC regulations); and, for any contract that has been in effect less than 12 months, the prior contract for the service; and
(d) A sworn statement by the franchisee's chief financial officer or an independent, certified accountant stating that he or she has examined all external costs (including all programming costs) and has offset against any increase claimed, the amount of any decreases in external costs, and the amount by which any increase in external costs was below the GNP-PI, as required by 47 C.F.R. § 76.922(d)(2); affirming that the franchisee has only sought to recover any external cost to the extent that cost exceeded the GNP-PI; and affirming that the franchisee has not attempted to recover any increase in the cost of programming purchased by an affiliate except as provided in 47 C.F.R. § 76.922(d)(2)(vi).
(4) Upon receiving the supplementary filing, the Telecommunications Commission shall promptly cause to be published a notice that a filing has been received and that it is available for public review (except those parts which may be withheld as proprietary). The notice shall state that interested parties may comment on the filing, and shall provide interested parties 20 days to submit written comments on the filing to the Telecommunications Commission. Any comments received and any recommendations for action by the Telecommunications Commission staff shall be made available for public inspection no later than 30 days prior to the date the Telecommunications Commission must act under division (C)(6) below. The franchisee may submit a response to public comments or the Telecommunications Commission staff's recommendations, but must do so no later than ten days after those recommendations are made available for public inspection. The response shall be filed with the Telecommunications Commission.
(5) The Telecommunications Commission shall issue a written order, which may be in any lawful form, approving the proposed rate in whole or in part; denying the proposed rate in whole or in part; or allowing the rate to go into effect in whole or in part, subject to refund. If the Telecommunications Commission issues an order allowing the rates to go into effect subject to refund, it shall also direct the franchisee to maintain an accounting in accordance with 47 C.F.R. § 76.933.
(6) The order specified in division (C)(5) above shall be issued 90 days after the tolling order for any rate the franchisee justifies based on the FCC benchmark. The order shall be issued within 150 days of the tolling order for any rate the franchisee justified with a cost-of-service showing.
(Prior Code, § 3-100) (Ord. 1993-15, passed 11-1-1993)