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9 <br />True Up and Projected Periods <br />Thy FCC 1240 Foan must be filed with the Iocat franchise authority 90 days before the rates are <br />scheduled to take effect; it can be filed no more fiequently than annually. The FCC 1240 form <br />allows cable operators to adjust their rates but once a year, minimizing the impact on subscribers, <br />and administrative burden on cable operators and franchise authorities. <br />The FCC 1240 form permits operators to estimate their future costs over a I2-month period: this <br />is referred to as the projected periods The FCC 1240 also allows operators to recover costs that <br />have already occurred during a specified period of time, referred to as the true np period If a <br />cable operator incorrectly estimates its costs for a projected period, it must correct those <br />estimates by using the true up segment of the next FCC 1240 rate filing. <br />Time Warner's projected period for NC-0256 & NC-0276 encompasses the 12 months of 1998, <br />jrvrn January 1 to December 31. The operator's true np period includes all 12 months of 1997, <br />from January 1 to December 31. . <br />Franchise Related Costs <br />Time Warner did not attribute any expenses to franchise related costs, such as public, education <br />or public (PEG) access activities. In the future, should the County direct Time Warner to <br />participate in PEG activities, for example in 1999 - 2000, then these modest expenses will <br />become part of the rate base. <br />Programming Cots <br />Programming costs for the BST during 1998 are projected to be approximately 5.1135 monthhy, <br />per subscriber. This compares to 5.1631 monthly, per subscriber, during 1997. Time Warner <br />representatives state that program service providers customarily change their fee situciure <br />annually. Time Warner attnbutes the bulk of its BST programming costs to copyright fees paid <br />to the Copyright Tribunal and fees for carriage of super stations, like WGN. The company did <br />not claim any retransmission consent costs for either period. <br />Programmin; costs for the Tier Service during 1998 are projected to be approximately 54.84 <br />monthly, per subscriber. This compares to 53.93 monthly, per subscriber, during 1997. In <br />addition to these programming costs. Added to this cost is the cable system upgrade cost, which <br />arrcounts to S3.40 per subscriber, per month, in 1998. Time Warner is allowed to pass through <br />this cast prior to the rebuild of the cable system, pursuant to the Social Contract between the <br />company and the FCC. <br />SFCC I2 t 0 Forms allow for the recovery of past costs, only, not future costs. Future cosy are recoverable <br />through the usa of the FCC 1240 Form, only. <br />Janwvy t3, I998D:\WPtx)CS\TlCQG10ltANGE\i240\1998\OItGH-40.RPT <br />