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acs <br />Discussion <br />The County is legally obligated to fallow the FCC's rules and decisions governing the <br />calculation of these rates. Here, there is no question that if the County rejects our <br />previously approved Form 1235 add-on charge and requires the calculation of an <br />"updated" Form 1235 rate, it will be faking an action that is simply inconsistent with the <br />FCC's rules and decisions. <br />Form 1235 allows TWC to recover costs incurred in connection with "significant" <br />upgrades of our cable television system over the life of the upgrade. The network <br />upgrade add-on charge calculated under Form 1235 is intended to supplement the <br />Form 1240 "annual update form" calculation, The Form 1240 does not account for <br />upgrade costs, but rather is used by TWC to make yearly adjustments to our rates to <br />reflect the addition, deietian, or movement of regulated chanriels, and increases or <br />decreases in certain "external" costs such as inflation, programming costs and FCG <br />regulatory fees. <br />The Form 1240 is typically prepared, filed and reviewed every year. AA would similarly <br />require the Form 1235 to be updated and reviewed annually. But the FCC has made it <br />quite clear that the preparation, filing and review of Form 1235 is a one-time event <br />based on a "snapshot" of the system at the time the upgrade was completed. In this <br />regard, we direct your attention to the following: <br />• The recent decision in Time Warner Cable (Durham, lVC), 19 FCC Rcd 14851 <br />(MB, 2004), where the Commission expressly noted that the Form 1235 network <br />upgrade add-on charge "is not recomputed or re-approved each year that it is <br />available," ~ <br />• FCC decisions in which the FCC itself relied on previously ap~roved Form 1235 <br />filings in resolving cable programming service tier complaints <br />• FCC decisions holding that "only one FCC Farm 1235 is to be filed following the <br />completion of the upgrade project"3 <br />• FCC decisions referring to that filing as the "final" Farm 1235"" <br />• FCC decisions rejectin~ a cable operator's use of updated ctastomer data in its <br />Form 1235 calculation. <br />This clear directive by itself illustrates that AA is simply wrong. We don't know how the FCC could be <br />anymore clear. <br />z See, e.g., Bresnan Communicafions Company (Riceboro, GA), 16 FCC Rcd 16460, 16462 (CSB, 2001).. <br />s Marcus Cable Associates, L,P. (Fort Worth, 7X), 14 FCC Rcd 7124, 7126 n.15 (CSB, 1999). <br />Marcus Cable Associates, L.P. Glendale, CA), 13 FCC Rcd 22314, 22316 n,15 (CSB, 1996). <br />2, <br />