Agenda - 06-26-1995 - V-D - Laserfiche WebLink

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T FINDINGS: In the recently completed round of FCC-1220 rate making proceedings, CVI used return on investment which exceeded the 11.25% benchmark rate. The program service rate proposed by the company incorporated rate of return of 15.0%. Cablevision Industries is organized as a C-corporation; its federal and state income tax rates are 35% and 7.82% respectively. Cablevision Industries is organized as a C-corporation; its federal and state income tax rates are 35% and 7.82% respectively. When Time Warner filed benchmark rate submissions with the local franchise authority it chose to limit its rate of return to the maximum allowable under the FCC benchmark rules, 11.25%. Present and future subscribers to the CVI system in the Town may realize a reduction in equipment and installation rates as a result of Time Warner's acquisition of the company. Time Warner's Hourly Service Charges for some services are less than those charged by Cablevision Industries. Under present consideration by the Town is CVI's FCC-1205, reflecting equipment and installation costs realized in fiscal year 1994 (each FCC-1205 filing reflects the previous year's costs). These rates will remain in effect for a period of 12 months, until August 1996. At that time, TWI(not CVI)will file an FCC-1205 reflecting costs realized during the 1995 fiscal year. This filing may reflect the lower Hourly Service Rates TWI has been charging in other franchises. Also, though Time Warner would not be allowed to exceed the maximum permitted rates as set out in the FCC-1205 calculations, it could charge less. The FCC-1205 filing cycle would continue in August 1997, when TWI would file another FCC- 1205, reflecting costs from 1996 when CVI was under full control by TWI. The full benefit of TWI's lower service charges could be realized by the Town's subscribers by this time. See the following chart for a comparison of TWC and CVI installation rates.