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-1 <br />decision on the Smithfield matter which reversed the me Warner'sOight fo d increase in the <br />decision, the FCC concluded that the magnitude of T <br />proposed 2002 HSC could not be the sole basis for judging iss ble~easonable. Therefore, based <br />on the FCC's logic, TW's FCC1205 national rates are perm <br />It is the Consultant's opinion that this FCC has chosen to ignore federal lawb by failing to <br />consider whether the proposed national rate structure yields prices that are comparable to those <br />found in competitive environments . Lexington (1`1 ete head to head for cable televn lion where <br />Lexcom Cablevision and Time Warner Cable comp <br />customers. Lexcom's HSC is $10 and a remote controUconverterpackage is $1.25 monthly. <br />Given the FCC's decision in Smithfield, it would be prudent for the Co b ect tophe availability <br />proposed FCC1205 rates, yet reserve the right to update the rate orders ~ <br />of new information or changed circumstances. <br />Recommendation <br />Find the FCC1240/1235/1205 rate-making forms and proposed rates as compliant with the FCC's <br />interpretation of its rate regulation rules and subject the conditions set forth herein. <br />6The 1992 Cable Act (§ 623(b)(1), 47 U.S.C. § 543(b)(1)) required the Commission to prescribe rate <br />regulations that protect subscribers from having to pay unreasonable rates 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 />The FCC wrote in "In the Matter of IMPLEMENTATION OF SECTION OF THE CABLE <br />TELEVISION CONSUMER PROTECTION AND COMPETITION ACT OF 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 <br />a fair return, is the establishment of rate levels equivalent to rates that would be charged in the presence of effective <br />competition." <br />Action Audits, LLC Cable Rate, Franchise Fee, Utili Tax Auditin & Telecommunication Administration <br />101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868 <br />