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CABLE TELEVISION RATE REVIEW FINDINGS SUMMARY <br /> Prepared by Centralina Council of Governments <br /> <br />Franchise: CABARRUS COUNTY <br />Cable Operator: TIME WARNER - METROLINA <br /> <br />Tier Reviewed: CPS TIER - 1998 <br />Number of Channels: 34 <br />Average Number of Subscribers 1998: 34,494 on entire headend serving 8 communities and counties <br />Date Findings Prepared: 1-19-98 <br /> <br />SUMMARY REVIEW STATEMENT: <br /> <br /> The Cable Programming Service (CPS) Tier Pate has been reviewed and is ACCEPTABLE under <br /> required Federal Communications Commission guidelines. Comments follow. <br /> <br />COMMENTS AND EXPLANATIONS: <br /> <br />The Cable Programming Service Tier consists of 34 channels. The Social Contract negotiated between <br />Time Warner and the FCC sets guidelines in the amount that can be charged per year for this tier. <br />Although the Franchise Authority does not regulate this tier, information is provided. The new, <br />adjusted CPS tier rate goes into effect on January 1, 1998. <br /> <br />A review of the FCC Form 1240 for the year 1998 establishes the revised maxamum permitted CPS tier <br />rate at $24.86 (excluding the franchise fee), compared to $21.74 which is the new revised rate for 1997. <br />The new, higher rate is due entirely to adjustments allowed through the Social Contract. These <br />adjustments include inflation, additional programming costs, a 7.5% mark-up fee allowed by the FCC, <br />and a $1.00 adjustment allowed for upgrades to the overall system. The changes are' summarized below: <br /> <br />TIER 1997 1997 1998 1998 DIFFERENCE DIFFERENCE <br /> REVISED ACTUAL MAXIMUM ACTUAL BETWEEN BETWEEN 1997 <br /> MAXIMUM RATE RATE RATE 1998 ACTUAL RATE <br /> RATE (without (without (without MAXIMUM AND 1998 <br /> (without franchise franchise fee) franchise RATE AND ACTUAL RATE <br /> franchise fee) fee) 1998 ACTUAL (without <br /> fee) RATE (without franchise fee) <br /> franchise fee) <br />CPS $21.74 $21.05 $24.86 $23.90 -$0.96 +$2.85 <br /> <br />Even though Time Warner is allowed to charge subscribers in 1998 as much as $23.90 for the 34 CPS <br />channels, they chose to set the rate $0.96 lower than that permitted through the Social Contract. <br /> <br />The actual rate set in 1997 was $21.05 compared to $23.90 for 1998, which represents an actual <br />increase of $2.85 per month for subscribers (excluding the franchise fee). <br /> <br />Centralina Council of Governments concludes that Time Warner has set its CPS rate to be lower than the <br />maximum allowable rate as set in the Social Contract with the FCC. No action is needed by the Franchise <br /> <br /> <br />