Agenda - 04-01-2003-9b - Laserfiche WebLink

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io RATE REPORT Background In September 1995, the FCC adopted the 13th Report and Osrdeusing the FCC1240, taking into allowed cable operators to adjust their rates on an ann consideration past and anticipated future external costs. The 13th Order requires Time Warner and other cable operators to submit their FCC1240 filings ninety (90) days before the date of rate implementation. During this period, the franchise authority may review the reasonableness of the basic service tier rates and issue an order to either approve or deny the rates. The franchise authority retains refund authority as long as it responds within fifteen (15) days to any inquiries from the cable operator regarding its review of the Company's FCC1240 documents. The Telecommunications Act of 1996 deregulated the upper tiers of cable television service by taking the Federal Communications Commission out of the cable-regulation business. The theory behind the law was that if competition were allowed to develop in the cable industry through the free market, the cable industry would be more responsive to consumer needs. The competition Congress envisioned has not materialized, except in a few communities. In most locales, cable operators have a defacto monopoly and appear to be taking advantage of that opportunity to racket cable rates upward. Only recently has competition from an aggressive satellite television industry begun to modulate that upward pressure. In a report to Congress s on the status of competition in the cable industry, the FCC stated that competition is forcing cable operators to respond by lowering prices or adding channels without raising monthly rates. Yet in that same report, it concluded that cable remained the dominant video-programming provider despite inroads made by the DBS industry. Nevertheless, leading to cable rates, which are rising faster than inflation. Recent TWC Events Low Company earnings and poor stock performance motivated Steve Case, AOL-TW Chairman, resigned his position effective May 2003. Randy Fraser, the former president of the Raleigh-Durham Division, resigned that position to become Time Warner's vice president of government affairs for North Carolina. The new Division President is Tom Adams who formerly headed the Rochester (NY) division. s EIGHTH ANNUAL REPORT, Annual Asse Docket No. O1 t12 s of Competition in the Market for the Delivery of Video Programming. January 14, 2002, CS Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration 101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868