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REPORT <br />On October 1, 1997, Time Warner Cable (TWC) notified Osage County that the company will <br />adjust its cable service rates and equipment and installation service rates on January I, 1998. <br />The County administers two franchises, the Carrboro (NC-025G) cable system and Cablevision <br />of Chapel Hill (NC-027, each is a separate franchise with cost centers and separate subscriber <br />bases. It is the County's responsibility to verify that TWC correctly applied Federal <br />Communications Commission rate making rules when determining Basic Service Tia cable <br />rates. <br />The County~has direct regulatory control over the Basic Service Tier, but has only an oversight <br />role over the upper tiers (i.e., Tier Service, Standard Service) of cable service. However, if the <br />County determines that the cable operator incorrectly applied FCC rate making rules in <br />determining upper tier cable rates, then it may file a formal rate complaint with the FCC, which <br />will trigger an investigation into the rate making process used by the cable operator. <br />CARRBORO SYSTEM SUBSCRIBERS ~ YC-OZS6 <br />Time Warner's proposed rate structure is adopted, subscribers receiving the Basic Service <br />Tier (BST) will see their monthly BST rate increase 536, from 58.65 to 59.01, though the <br />proposed maximum permitted rates (11~'R) would increase from 58.81 to 59.03. Time Warner <br />has chosen to charge a rate below the proposed MPR <br />Tier Service subscn'bers would see their monthly Tier Service rate increase by $196 from <br />518.95 to $20.91, though the proposed maximum permitted rates (1~R) will increase to 52096. <br />Time Warner has chosen to charge a rate blow the proposed MPR <br />Because of the inflation data discrepancy in Mme Warner's FCC 1240 f=ling for <br />1998 (see Discrepancies section), the l~Ia,simum Permitted Rate which can be justt; Fred for the <br />Basic Service Tier (BST) is 58.84 and 520.67 for the Cabla Programming Service Tier (CPST). <br />Time Warner's BST and CPST Selected Rates of S9.01 and S20.91 are not acceptable in that <br />they exceed Maximum Permitted Rate which can reasonably be justified. <br />Table A <br />Basic Rate Overtile~v <br />Carrboro Svstem: ~iC-026 <br />Cable 1997 1998 Proposed 1993 1998 <br />Service Seiected Selected liar Justified <br />Tier TWC TtiVC Permitted l~1PR <br /> Rate Rate Rate <br />BST 53.65 59.01 59.0 $$.$:l <br />CPST 518.95 520.91 520.96 S20.67 <br />lanuuy 13,19980t1WPDOCS\TJCOG\ORANGE\1240\199810RGE-40.RPT <br />