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Jan-11-gg og:4t~A Centraltna COG 704-347-4710 P.04 CABLE TELEVISION RATE REVIEW FINDINGS SUMMARY Prepared by Central/ha Council of Governments Franchise: Cable Operator: Tier: Number of Channels: Date Prepared: CABARRUS COUNTY TIME WARNER- METROLINA CPS TIER - 1999 35 1-6-99 CPS TIER DEREGULATED AS OF 3-31-99: Congress, in the 1996 Telecommunications Act adopted a sunset provision for cable programming service tier r~gulation. Under the leg/slation and implementing FCC regulations, regulation of thc CPS Tier (A&E, Discovery, ESPN, crc.) will end on March 31, 1999, andno franchising authority ina)' r~vicw complaints filed by subscriber~ regarding the CPS tier rate increases after that date. . Until 3-31-99, cable operators are still subject to cable programming service rate regulafon by the FCC if their rates arc deemed unreasonable. COMMENTS AND EXPLANATIONS: The Cable Programming Service Tier consists of 35 channels, regulated by the Federal Communication Commission (FCC) until 3-31-99, when the sunset provision takes effect ending cvcn FCC rate r~gulati0n of this tier. Ifa sufficient number ofcompla/nts have been submitted to the Franch/sc Author/ly, a compk~int can be filed with the FCC, for the rate increase initiated on 1-1-99, and nmn/ng through 3-31-99. Thc Social Contract negotiated between Time Warner and the FCC docs, however, set guidelines in the amount that can bc charged per year for this tier, up until thc 3-31-99 deadline. Thc new, higher rate is due entirely to adjustments allowed through the Social Contract. These adjustments include inflation, additional programming costs, a 7.5% mark-up fee allowed by the FCG, and a $l.00 adjustment allowed for upgrades to the overall system. Thc changes are summarized below: TIER 1998 ACTUAL RATE 1999 ACTUAL RATE DIFFERENCE BETWEEN 1998 (without franchise fee) (without franchise fee) and 1999 ACTUAL RATE (without franchise fee) 'Cps $23.90 $25.q5 ' '+$1.65 Thc actual rate set in 1998 was $23.90 compared to $25.55 for 1999, which r~pr~scnts an actual increase of $1.65 per month for subscribers (excluding thc franchise fee). But note that the number of channels has increased to 35, up from 34. No action is needed by thc Franchise Authority, since this tier is regulated by thc FCC until 3-31-99. However, the Franchise Author/ty may determine ifa "sufficient number" of complaints about this tier have been submitted by subscribers, to warrant filing a complaint with thc FCC about thc rate on this tier.