AG 1996 05 02 - Laserfiche WebLink

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04/24/96 17:J5 ~ 70~ 347 ¢710 Centpalina COG P.04 The Social Contrac~ between Time Warner and the Federal Communications Commission (FCC), which was published 8-3-95, details a five (5) year plan to provide rate stability for customers, increase the quality of service to subscribers, and provide upgrade ince~tives for Time Warner. The Social Contract resolved over 900 rate complaint cases and provided refunds of approximately $41,358, plus interest, to the Metrolina system, which includes China (}rove, City of Concord, Town of Harrisburg, City of Kannapolis, Town of Landis, Rowan County, Town of Mount Pleasant, and Cabarrus County. These refunds were issued in January, 1996, as a one-time credit of $1.34 to each customer who subscribed to both tiers. In reviewing the FCC Form 1240, certain modifications to the form were needed to hlcorporate the reims of the Social Contract. Time Warner made these modifications to account for the rate related provisions of the Time Warner Social Contract, as per the document modifications agreed upon by both Time Warner and the FCC. Cenlralina's review of the statistical and financial information provided in the FCC Form 1240 supports Time Warner's adjusiment for the Basic Tier, and the Cable Programming Service Tier. A summary of the Basic Service Tier rate changes are shown on the table below: BASIC MAXIMUM TIME COST PERCENT SERVICE PERMITTED WARNER DIFFERENCE CHANGE TIER RATE RATE ADJUSTED BETWEEN UP UNTIL CALCULATED BASIC PRR. VIOUS 12.31-95 IN FCC 1240 SERVICE BASIC RATE FORM TIER RATE AND NEW FROM 1-1-96 RATE TO 12-31-96 $5.50 $5.35 $5,20 $-0.30 -5.45% The decrease seen in the above table is directly attributable to the Social Contract, which requires Time Warner to create a "lifeline basic tier", priced to enhance the affordability of the Basic Service Tier. Time Warner was required to reduce the price on the Basic tier by 10%, with a revenue neutral increase allowed in the Cable Programming Service Tier rates. Besides the 10% reduction (-$0.55) to the Basic Service Tier as required by the Social Contract, Time Warner adjusted its rates to account for inflation, increases in external costs, and channel restructuring. Please note that although Time Warner was eligible to charge as much as $5.35 for the Basic Service Tier, they cheese to charge $5.20, which represents a 5.45% decrease in the Basic rates from last year. The table below shows the changes to the Cable Programming Service tier rates: