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12 <br />found in a competitive head-to-head wireline and no longer satisfies federal law.18 It fails to <br />consider whether the FCC's formulas yield rates that are cemparahfe to those found in <br />competitive environments.'v Lexington (NC) is such a competitive environment where Lexcom <br />Cablevision and Time Wamer Cable compete head-to-head for cable television customers. <br />Upper Tier CPST Rate Regulation Expiration <br />A sunset provision within the Teleconununications Act of 1996 terminated upper cable service <br />tier regulation on March 31, 1999. Since then, the cable operator' is allowed to change upper <br />service tier rates at will upon thirty (30) days notice to the franchise authority and subscribers. <br />Subscriber Trend <br />Time Warner predicts it will have 6506 subscribers by the end of the Projected Period, an <br />increase of 95 customers, <br />2004 <br />2003 <br />2002 <br />2001 <br />2000 <br />18The 1992 Cable Act (§ 623(b)(I), 47 U S.G ys 543(6)(1)) required the Commission [o prescribe rate <br />regulations that protect subscribers from having to pay unreasonable rotes by ensuring that rates for regulated <br />services do not exceed rates that would be charged in the presence of effective competition For a system that is not <br />subject to effective competition, the Commission is obligated to ensure the reasonableness of rates charged for the <br />basic service tier ("BST"). <br />19The FCC wrote in "In the Matter of IM PLEMENTAT[ON OF SECTION OP TI{E CABLE <br />TELEVISION CONSUMER PROTECTION AND COMPETITION ACT OP 1992 RATE REGULATION, MM <br />Docket 92-266, that. "The priority established in the Act is clearly to protect the interests of subscribers. An <br />important focus for both basic tier and cable programming service rates, consistent with providing system operators a <br />fair return, is the establishment of rate levels equivalent to rotes that would be charged in the presence of effective <br />competition " <br />Action Audits, LLC Cable Rate, Franchise Fee, Utility Tax Auditing & Telecommunication Administration <br />101 Pocono Lane, Cary, North Cnmlina 27513-5316 Voice ,. 919 467.5392 Fax ,f 919 460 6868 <br />0 1000 2000 3000 4000 5000 6000 7000 <br />