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10 <br /> True Up and Projected Periods <br /> The FCC 1240 Form must be filed with the local franchise authority 90 days before the rates are <br /> scheduled to take effect; it can be filed no more frequently than annually. The FCC 1240 form <br /> represents a departure from the quarterly(FCC 12 10)option of updating cable rates, and allows cable <br /> operators to adjust their rates but once a year,minimizing the impact on subscribers. The FCC 1240 <br /> permits operators to estimate their future costs over a 12-month period: this is referred to as the <br /> projected period.' The FCC 1240 also allows operators to recover costs that have already occurred <br /> during a specified period of time,referred to as the true up period. If a cable operator incorrectly <br /> estimates its costs for a projected period, it must correct those estimates by using the true up segrr,,nt <br /> of the next FCC 1240 rate filing. <br /> Time Warner's projected period for NC-0276 covers the 12 months of 1997,from January 1 to <br /> December 31. The operator's true up period covers the 12 months of 1996,from January 1 to <br /> December 31. <br /> Time Warner's projected period for NC-0256(CVI/Alert)covers the 12 months of 1997,from <br /> January 1 to December 31. The operator's true up period covers 11 months of 1996,from <br /> February 1 to December 31. <br /> Programming Costs <br /> Chapel Hill System;NC-0276 <br /> Programming costs for the BST during 1997 are projected to be approximately$.1474 monthly,per <br /> subscriber. This compares to$1454 monthly,per subscriber,during 1996. Time Warner <br /> representatives state that program service providers customarily increase service fees annually. Time <br /> Warner attributes the bulk of its BST programming costs to copyright fees paid to the Copyright <br /> Royalty Tribunal,and fees for carriage of WGN. The company did not claim any retransmission <br /> consent costs for either period <br /> Programming costs for the Tier Service during 1997 are projected to be approximately$3.7964 <br /> monthly,per subscriber. This compares to$2.6944 monthly,per subscriber,during 1996. Included <br /> in this cost is the cable system upgrade cost,which amounts to $2.00 per subscriber,per month, in <br /> 1997. Time Wunar is allowed to pass through this cost prior to the rebuild of the cable system, <br /> pursuant to th Social Contract between the company and the FCC. <br /> Programming costs for the Standard Service during 1997 are projected to be approximately$1.9828 <br /> monthly,per subscriber. This compares to$1.8974 monthly,per subscriber,during 1996. In addition <br /> to these programming costs. <br /> 'FCC 1210 Forms allow for the recovery of past costs, only,not future costs. Future costs are <br /> recoverable through the use of the FCC 1240 Form,only. <br /> 7 <br />