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4 <br />-1- <br />L SUMMARY <br />A. Introduction <br />1. The consultant evaluated the data Time Warner supplied in its rate filings, entered the <br />data into electronic spreadsheets, and performed independent calculations. Time <br />Warner serves unincorporated areas of Orange County through two franchises, NC- <br />0276 (Chapel Kill and Durham systems) and NC-0256 (Carrboro system). <br />B. Franchise NC-0276. Subscribers in this ftanchise are split into two groups, those served <br />by Time Warner's Chapel Hill system, and those served by the Durham systems. Time <br />Warner completed its. FCC 1240 and FCC 1205 rate filings for these systems on <br />September 29, 2000. Time Warner completed its FCC 1235 for the Network Upgrade <br />Charge in 1999. The rate established in that filing is carried forward into the present rate <br />structure. <br />1. NC-0276 Chapel Hill System <br />a. These subscribers will be charged a Combined selected monthly rate of $11.10 <br />for the Basic Service Tier (BST) in 2001. This combined rate includes the. BST <br />charge of $9.29 plus the "add-on" cost of service Network Upgrade Charge of ' <br />$1.51. The maximum permitted combined monthly rate is $9.83 for Basic plus the <br />$1.81 add-on charge, a $11.64 total NTR. Time Warner is charging 54-cents <br />less than the maximum rate permitted by the FCC. <br />b. Subscribers receiving only BST programming will- see their BST rate increase by <br />$.53, an increase of 6% over the 2000 BST rate of $8.76. Time Warner estimates <br />it will have 6,255 BST subscribers in 2001, about a 5% increase over last year's <br />count of 5,992. It is estimated that Time Warner will realized approximately <br />$39,973 in additional BST revenue in 2001.' <br />2. NC-0276 Durham System <br />a. There are very few subscribers in this system. These subscribers will be charged a <br />Combined selected monthly rate of $13.70 for the Basic Service Tier (BST) in <br />2001. This combined rate includes the BST charge of $11.59 plus the "add-on" <br />cost of service Network Upgrade Charge of $2.11. The maximum permitted <br />combined monthly rate is $13.70 for Basic plus the $2.11 add-on charge, a $13.70 <br />'$.53 x 6,285 subscribers * 12 months = $39,973. <br />Action Audits LLC Franchise Fee U-Tax 62gLun & Telecommunication +nisqration <br />101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868