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<br />EXECLfTIVE SU1I+IlVIA.RY <br />Ti>~e Warner seeks approval from the County to adjust its m~xfmurn,rnPrmitted rnte R) Basic <br />Service Tier programming rates for 1998 in the Hillsborough systems. Those rates are listed in <br />the table below: <br />System 1997 l2PR Proposed 1998 Chan;e <br />Basic Rate Basic yIPR Rate <br />Carrboro System $8.81 59.03 $0.22 <br />NC-0256 <br />Chapel Hill System $7.88 58.20 $0.32 <br />NC-0276 <br />The County's consultants have reviewed Time Warner Cable's rate calculations and <br />accompanying information, and recommend that only the justified maxirntan permitted rate for <br />basic service be approved as shown below. <br />System Proposed 1998 JustiIIable Regulated Rate <br /> Basic MPR Rate Basic 1~iPR Rate Chan e <br />Carrboro System $9.03 $8.84 ($0.19) <br />NC-0256 <br />Chapel Hill System $8.20 $8.02 ($0.18) <br />NC-0276 <br />Had Time Warner's FCC 1240 rate filings incorporated the true up inflation factor for the second <br />quarter of 1997 released by the Commission on October 10, 1997 the Maximum Permitted BST, <br />CPST and Standard service rates would have been lower. Although the FCC's 1240 rules <br />provide a "true-up" process to rectify over and under charges in subsequent years, it is the <br />consultant's opinion that prudent public policy acts to eliminate potential over charges as <br />opposed to providing "credit" adjustments later. <br />Time Warner Cable (TWC) is likely to appeal= the County's rate order to the FCC. In this event, <br />TWC can continue to collect the `higher" rags until such time that the FCC's Cable Bureau rules <br />on the appeal [likeiy in Au;ust, 1998]. Given the FCC's historical action in matters, the FCC is <br />Iikeiy to rule in favor of the County or remand the iss;:e back to the County to resolve. Should <br />this occur, the inflation rates shall be known and it wilt be an easy mater to promulgate new <br />Maximum Permtted Rates for BST, CPST and Standard cable services and issue subscriber <br />refunds. <br />IThc consultant conversed with a TWC rcpreseatative regarding this matter. No information was provided <br />with rtspect to the action that TWC might pursue. The Consultant did offer TWC aa_opportuniry to refile its <br />FCC 1240 to incorporate the latest inflation values. A decision in this regard by TWC has not yet beet: forthcoming. <br />1anw~ry 13,19980:\WPDOCS\TlCOG~ORe~NGE\1240\I998~OEtGE-40.RP'i' <br />