Upon review of Cablevision's Forms 1200, 1205 and 1220, and information submitted by staff and the public, the city finds as follows regarding rates for Cablevision's basic service tier in the city:
(a) Cablevision has established that its cost of service pursuant to the rules of the FCC for the proposed basic service tier is at least $34.31 for 50 basic tier channels.
(b) The establishment of a single tier of basic service will serve the public interest by placing all regulated services under the jurisdiction of the city, and will improve the level and quality of service that Cablevision can deliver to its subscribers. Moreover, the establishment of a single basic tier will permit Cablevision to offer rate discounts to senior citizens as described herein.
(c) Because the basic tier rate justified by Cablevision's cost of service showing is substantially higher than the rate currently charged for the channels today, the city hereby approves an initial basic tier rate, effective April 1, 1995, and subsequent rate increases to be phased in on an annual basis between April 1, 1996 and March 31, 1999. Based on Cablevision's cost of service showing, commencing April 1, 1995, the basic service tier rate shall be $29.06. The city also approves annual rate increases in the amount of the greater of $1.50, $1.75 and $2.00 effective no earlier than April 1, 1996, 1997 and 1998 respectively, or the sum of the Consumer Price Index change plus external costs (excluding franchise fees and other FCC or governmental imposed fees) in each immediately preceding calendar year. For example, the April 1, 1996 increase will be the greater of $1.50 or the sum of the 1995 Consumer Price Index change plus Cablevision's 1995 increase in external costs (excluding franchise fees and other FCC or governmental imposed fees), plus any reset provided under division (f) of this section.
(d) Because the rates identified in division (c) above are below Cablevision's cost of providing service as indicated in division (a) above and Cablevision's cost of service showing, Cablevision shall, at the request of the city, report annually to the city the amount by which its revenues for basic broadcast tier services falls short of the cost of providing the services. These shortfalls shall be included as a rate base asset in any subsequent analysis of its basic broadcast tier rates.
(e) Commencing April 1, 1995, the Company shall charge senior citizens (65 years or older) $27.06 for the basic tier rate.
(1) A discounted rate is available only for households where the head of such household is 65 years or older. Eligible households shall be identified by the city in writing to Cablevision.
(f) (1) Basic tier rates charged for the 12 months ending March 31, 1996, 1997, 1998 and 1999 for all categories of subscribers shall result in Cablevision receiving a “blended rate” as of any reset date in each of the years of 1996, 1997, 1998 and 1999 equal to $28.53 plus increases set forth in division (c) above. The standard basic tier rates and the discounted senior citizen basic tier rates set forth in divisions (c) and (e) above are based upon projections of the number of senior citizens that will take advantage of the basic tier rate in division (e). These projections are derived from currently available census data for the city.
(2) Notwithstanding the basic tier rate set forth in division (e) above and, in order that Cablevision receives the applicable blended rate, Cablevision shall be entitled to reset the discounted basic tier rate charged to senior citizens no more frequently than semiannually in accordance with the following formula should the initial projections prove to be inaccurate:
(i) If more subscribers are eligible for and take advantage of the discounts than anticipated, then an adjustment will be made to the amount of the discount for seniors such that Cablevision is able to receive the blended basic tier rate.
(ii) If fewer subscribers are eligible for and take advantage of the discounts, an adjustment will be made to the standard basic tier rate by reducing the amount of the next scheduled standard basic tier rate increase in order that Cablevision will be receiving no more than the appropriate blended basic service tier rate.
(iii) To illustrate this resetting mechanism, § 20.00 of the Fee Schedule (Appendix I of this Code) sets forth examples of how the process of resetting will be implemented under various scenarios.
(Ord. 2-95-1, passed 2-8-95)