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<br />-5- <br />(1) Time Wamer's projected period covers the 12-month period of January 11) <br />2001 to December 31, 2001. The operator's true up period covers the 12- <br />month period of October 1, 1999 through September 30, 2000. <br />2. Franchise Related Costs: Public Access Television <br />a. Time Warner Cable reported no franchise related expenses for 2001. Franchise <br />related costs may include expenses for such items as public, government and <br />education access facilities and equipment, signal transportation and headend <br />accommodations. <br />3. Programming Costs <br />a. NC-0276 Chapel Hill and Durham Systems. Time Warner will collect during <br />the 2001 projected period, $1.39 and $1.40 monthly, per subscriber, from Chapel <br />Hill and Durham system subscribers, respectfully, to cover anticipated BST <br />external costs. Most BST external costs are attributable to programming costs. <br />Time Warner representatives state that program service providers customarily <br />increase service fees annually. Time Warner attributes its programming cost <br />changes to what it must pay for each service offered. However, this amount is <br />relatively low compared to upper cable service programming costs. Most of the <br />channels on Time Warner's BST are obtained without cost to the company. <br />b. NC-0256 Carrboro System. Time Warner will collect during the 2001 projected <br />period $1.37 monthly, per subscriber, from Cantoro system subscribers, to cover <br />anticipated BST external costs. Most of this external cost is attributed to <br />programming costs. <br />4. Inflation <br />a. Time Warner is claiming in all three system rate filings inflation adjustments for the <br />true up period of January 2000 through December 31, 2000, and the projected <br />period of January 2001 through December, 2001. The company used the true up <br />inflation figure of 3% for the last three quarters of 2000. Official inflation <br />figures for the last three quarters of 2000 were not published by the FCC when <br />Time Warner completed its FCC 1240 Tate filing in September 2000. Time <br />Warner used the FCC published 3% first quarter inflation figure for the last three <br />quarters of 2000 because the FCC 2.4% second quarter inflation figure was not <br />published when Time Warner completed its rate filings. <br />Action Audits, LLC Franchise Fee U-Tax & tin & Telecommunication Administration <br />101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax 0 919.460.6868