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I7 <br />-14- <br />part of its 2005 rate filing, TWC must file this form consistent with the FCC's cost of service <br />rules. These rules assume the cable plant will be properly revalued for accumulated depreciation, <br />and that projected operational costs, bandwidth allocations, and number of regulated service <br />subscribers reflect the operator's most recently completed fiscal yeaz. <br />For this reason, the consultant has concluded that the upgrade capita] expense recovery chazge <br />proposed by TWC does not comply with the FCC's cost of service rules and the ratemaking <br />process for regulated rates. <br />FCC1205 Equipment & Installation Rates <br />Time Warner calculated the form1205 maximum permitted equipment35 and installation36 rates <br />by aggregating its costs across all TWC systems in the USA; this type national filing is permitted <br />by the FCC. The 2001 year costs were aggregated on a regional basis. 37 <br />Table 4 <br />Year HSG +/- <br />2001 $28.39 <br />2002 $35.8338 $7.44 26.21% <br />2003 $37.62 $1.79 5,00% <br />2004 $37.50 $-0.12 -0..32% <br />2005 $37.81 $0..31 0.83% <br />3e§76..923 (c)(I) Costs of customer equipment may be aggregated, on a franchise, system, regional, or <br />company level. When submitting its equipment costs based on average chazges, the cable operator must provide a <br />general description of the averaging methodology employed and a,justification that its averaging methodology <br />produces reasonable equipment rates.. <br />3e§76.923 (c)(3) Installation costs maybe aggregated, on a franchise, system, regional, or company level. <br />When submitting its installation costs based on average chazges, the cable operator must provide a genera] <br />description of the averaging methodology employed and a justification that its averaging methodology produces <br />reasonable equipment rates. <br />37Zime Warner is treated as a single company for FCC 1205 rate-making purposes. TWC files a single FCC <br />1205 throughout the United States with over 30001ocal franchise authorities, LFAs, to establish uniform rates for <br />equipment and installation chazges.. <br />3BCompany-wide national USA aggregation _ 3000 franchises <br />