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290 Harbor Dri,~e <br />:Stamford. CT 0690? <br />Pe1203-338-?86S <br />Faz 203-351-?2.54 <br />ga p~.-mar @ nocabl e. com <br />CABLE <br />December 15, 2004 <br />Mr, John M. Link <br />County Manager <br />Orange County <br />200 South Cameron Street <br />Hillsborough NG 27278 <br />Dear Mr, Link: <br />Gnq' R. 7/nlz <br />SBce President and Qiief Coansel, Regularoq~ <br />as <br />D L~C~C~~IA[~ <br />~EC 2 ~ 2~0+ <br />Via: First Class Mail <br />We are in receipt of a copy of a report prepared by the County's rate consultant, Action <br />Audits, LLC, ("AA") recommending that the County reject Time Warner Cable's ("TWC") <br />inclusion of its previously approved Form 1235 network upgrade add-on charge to the <br />Basic Service tier ("BST") rate beginning January 1, 2005, Unfortunately, this is the <br />latest instance in which AA has recommended a course of action that is plainly at odds <br />with the rules and regulations of the Federal Communications Commission, <br />We strongly urge the County to ignore the unsupported recommendation of AA and <br />instead approve the proposed BST rates for 2005. Any rate order adopted by the <br />County, and based upon the recommendation of AA, will result in an appeal to the FCG. <br />Such an appeal is an unfortunate diversion of the time and resources for all of us. <br />Perhaps more importantly, such a rate order will be reversed by the FCG just as all <br />previous TWC rate orders recommended by AA have been reversed. <br />Background <br />On or around October 1, 2004, vde filed with the County a set of FCC forms justifying <br />our BST, equipment, and installation rates to become effective January 1, 2005. <br />Specifically, we submitted a Form 1240 ("annual update form") and a copy of the Form <br />1235 network upgrade add-on calculation that the County had approved in 1999, Under <br />the FCC's rules, the maximum rate that we are permitted to charge for the BST is the <br />sum of the Form 1240 rate and the previously approved Form 1235 rate, <br />In its report and associated draft rate order, AA finds that our Form 1240 calculation <br />complies with the FCC's rules, but recommends that the County deny TWC the right to <br />include the previously approved Form 1235 network upgrade charge, According to AA, <br />our Form 1235 does not comply with FCC rules because it has not been updated to <br />reflect certain operational changes occurring since the form's initial filing and approval in <br />1999, AA cites changes such as changes in the number of subscribers and/or the <br />proportion of the system's bandwidth used for regulated and unregulated services. <br />