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Agenda - 05-03-2005-5j
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Agenda - 05-03-2005-5j
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9/2/2008 12:03:16 AM
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BOCC
Date
5/3/2005
Document Type
Agenda
Agenda Item
5j
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RES-2005-036 Adoption of 2005 Rate Order for Cable Services in Unincorporated Orange County
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-5 <br />-12- <br />The Commission also clarifies that plant in service must be <br />allocated beriveen regulated and unregulated services based on <br />a reasonable measure of the current usage of that plant,24 ... <br />Accordingly, for our final rules, we will make this point explicit <br />and will amend the interim rule to specify that tangible plant must <br />be used and useful in the provision of regulated cable services <br />in order to be included in the rate base. This will ensure that <br />the rate base for regulated cable service only includes plant <br />used for such regulated cable service, and that subscribers to <br />regulated tiers are not forced to subsidize plant that is used <br />solely for premium services.'S <br />In addition, we recognize that what constitutes a reasonable <br />measure of current usage of the tangible plant depends on the <br />circumstances, We believe that in many cases a reasonable <br />measure would be a straight channel ratio, In other words, if any <br />operator provides programming over a total of 40 channels, 32 of <br />which aze BST and CPST channels and eight of which are <br />premium and pay-per-view channels, the operator must allocate <br />80% of its plant to regulated cable service and 20% to unregulated <br />service.'-6 <br />TWC proposes to continue to charge the same $1.81 for NC-0276a, $2.,11 for NC-0276b, and <br />$1.45 for NC-0256 monthly fee set five yeazs earlier on form 12.35 to recover Network Upgrade <br />costs, The "upgrade" chazge is added to the BST-MPR to create the combined Maximum <br />Permitted BST regulated rate (See Table 2). Cable operators, such as TWC, believe that once the <br />initial rate is set, it never changes nor is ever adjusted, for example, to reflect customer growth <br />during the intervening 5-years.. <br />There is nothing in the FCC's cost of service rules, rulemakings, or the 1235 instructions, which <br />state that the form 1235 is filed "only once" and that the "add-on" rate calculated at that point in <br />time continues in perpetuity. In fact, such action conttadicts the FCC's general cost of service <br />rules which proceed on the basis of annualized revenues and expenses and require revaluations <br />for accumulated depreciation, The "only" item which is filed once is the final cost of the upgrade. <br />The FCC's cost of service rules require that this capital expense become the starting point for the <br />recovery of these costs, and that going forwazd the factors which vary include the proportion of <br />cable system bandwidth used for regulated and unregulated services, and the customer count, <br />The principle underlying the cost of service rules is to ensure that regulated cable service <br />zald at ¶37. <br />zs~d <br />'-bld a! ¶38 <br />
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