Sec. 76.933  Franchising authority review of basic cable rates and 
          equipment costs.

    (a) After a cable operator has submitted for review its existing 
rates for the basic service tier and associated equipment costs, or a 
proposed increase in these rates (including increases in the baseline 
channel change that results from reductions in the number of channels in 
a tier) under the quarterly rate adjustment system pursuant to Section 
76.922(d), the existing rates will remain in effect or the proposed 
rates will become effective after 30 days from the date of submission; 
Provided, however, that the franchising authority may toll this 30-day 
deadline for an additional time by issuing a brief written order as 
described in paragraph (b) within 30 days of the rate submission 
explaining that it needs additional time to review the rates.
    (b) If the franchising authority is unable to determine, based upon 
the material submitted by the cable operator, that the existing, or 
proposed rates under the quarterly adjustment system pursuant to Section 
76.922(d), are within the Commission's permitted basic service tier 
charge or actual cost of equipment as defined in Secs. 76.922 and 
76.923, or if a cable operator has submitted a cost-of-service showing 
pursuant Secs. 76.937(c) and 76.924, seeking to justify a rate above the 
Commission's basic service tier charge as defined in Secs. 76.922 and 
76.923, the franchising authority may toll the 30-day deadline in 
paragraph (a) of this section to request and/or consider additional 
information or to consider the comments from interested parties as 
follows:
    (1) For an additional 90 days in cases not involving cost-of-service 
showings; or
    (2) For an additional 150 days in cases involving cost-of-service 
showings.
    (c) If a franchising authority has availed itself of the additional 
90 or 150 days permitted in paragraph (b) of this section, and has taken 
no action within these additional time periods, then the proposed rates 
will go into effect at the end of the 90 or 150 day periods, or existing 
rates will remain in effect at such times, subject to refunds if the 
franchising authority subsequently issues a written decision 
disapproving any portion of such rates: Provided, however, That in order 
to order refunds, a franchising authority must have issued a brief 
written order to the cable operator by the end of the 90 or 150-day 
period permitted in paragraph (b) of this section directing the operator 
to keep an accurate account of all amounts received by reason of the 
rate in issue and on whose behalf such amounts were paid.
    (d) A franchising authority may request, pursuant to a petition for 
special relief under Sec. 76.7, that the Commission examine a cable 
operator's cost-of-service showing, submitted to the franchising 
authority as justification of basic tier rates, within 30 days of 
receipt of a cost-of-service showing. In its petition, the franchising 
authority shall document its reasons for seeking Commission assistance. 
The franchising authority shall issue an order stating that it is 
seeking Commission assistance and serve a copy before the 30-day 
deadline on the cable operator submitting the cost showing. The cable 
operator shall deliver a copy of the cost showing, together with all 
relevant attachments, to the Commission within 15 days of receipt of the 
local authority's notice to seek Commission assistance. The Commission 
shall notify the local franchising authority and the cable operator of 
its ruling and of the basic tier rate, as established by the Commission. 
The rate shall take effect upon implementation by the franchising 
authority of such ruling and refund liability shall be governed thereon. 
The Commission's ruling shall be binding on the franchising authority

[[Page 591]]

and the cable operator. A cable operator or franchising authority may 
seek reconsideration of the ruling pursuant to Sec. 1.106(a)(1) of this 
chapter or review by the Commission pursuant to Sec. 1.115(a) of this 
chapter.
    (e) Notwithstanding paragraphs (a) through (d) of this section, when 
the franchising authority is regulating basic service tier rates, a 
cable operator that sets its rates pursuant to the quarterly rate 
adjustment system pursuant to Sec. 76.922(d) may increase its rates for 
basic service to reflect the imposition of, or increase in, franchise 
fees or Commission cable television system regulatory fees imposed 
pursuant to 47 U.S.C. 159. For the purposes of paragraphs (a) through 
(c) of this section, the increased rate attributable to Commission 
regulatory fees or franchise fees shall be treated as an ``existing 
rate'', subject to subsequent review and refund if the franchising 
authority determines that the increase in basic tier rates exceeds the 
increase in regulatory fees or in franchise fees allocable to the basic 
tier. This determination shall be appealable to the Commission pursuant 
to Sec. 76.944. When the Commission is regulating basic service tier 
rates pursuant to Sec. 76.945 or cable programming service rates 
pursuant to Sec. 76.960, an increase in those rates resulting from 
franchise fees or Commission regulatory fees shall be reviewed by the 
Commission pursuant to the mechanisms set forth in Sec. 76.945. A cable 
operator must adjust its rates to reflect decreases in franchise fees or 
Commission regulatory fees within the periods set forth in 
Sec. 76.922(d)(3)(i),(iii).
    (f) For an operator that sets its rates pursuant to the quarterly 
rate adjustment system pursuant to Section 76.922(d), cable television 
system regulatory fees assessed by the Commission pursuant to 47 U.S.C. 
Sec. 159 shall be recovered in monthly installments during the fiscal 
year following the year for which the payment was imposed. Payments 
shall be collected in equal monthly installments, except that for so 
many months as may be necessary to avoid fractional payments, an 
additional $0.01 payment per month may be collected. All such additional 
payments shall be collected in the last month or months of the fiscal 
year, so that once collections of such payments begin there shall be no 
month remaining in the year in which the operator is not entitled to 
such an additional payment. Operators may not assess interest. Operators 
may provide notice of the entire fiscal year's regulatory fee pass-
through in a single notice.
    (g) A cable operator that submits for review a proposed change in 
its existing rates for the basic service tier and associated equipment 
costs using the annual filing system pursuant to Section 76.922(e) shall 
do so no later than 90 days from the effective date of the proposed 
rates. The franchising authority will have 90 days from the date of the 
filing to review it. However, if the franchising authority or its 
designee concludes that the operator has submitted a facially incomplete 
filing, the franchising authority's deadline for issuing a decision, the 
date on which rates may go into effect if no decision is issued, and the 
period for which refunds are payable will be tolled while the 
franchising authority is waiting for this information, provided that, in 
order to toll these effective dates, the franchising authority or its 
designee must notify the operator of the incomplete filing within 45 
days of the date the filing is made.
    (1) If there is a material change in an operator's circumstances 
during the 90-day review period and the change affects the operator's 
rate change filing, the operator may file an amendment to its Form 1240 
prior to the end of the 90-day review period. If the operator files such 
an amendment, the franchising authority will have at least 30 days to 
review the filing. Therefore, if the amendment is filed more than 60 
days after the operator made its initial filing, the operator's proposed 
rate change may not go into effect any earlier than 30 days after the 
filing of its amendment. However, if the operator files its amended 
application on or prior to the sixtieth day of the 90-day review period, 
the operator may implement its proposed rate adjustment, as modified by 
the amendment, 90 days after its initial filing.
    (2) If a franchising authority has taken no action within the 90-day 
review period, then the proposed rates

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may go into effect at the end of the review period, subject to a 
prospective rate reduction and refund if the franchising authority 
subsequently issues a written decision disapproving any portion of such 
rates, provided, however, that in order to order a prospective rate 
reduction and refund, if an operator inquires as to whether the 
franchising authority intends to issue a rate order after the initial 
review period, the franchising authority or its designee must notify the 
operator of its intent in this regard within 15 days of the operator's 
inquiry. If a proposed rate goes into effect before the franchising 
authority issues its rate order, the franchising authority will have 12 
months from the date the operator filed for the rate adjustment to issue 
its rate order. In the event that the franchising authority does not act 
within this 12-month period, it may not at a later date order a refund 
or a prospective rate reduction with respect to the rate filing.
    (3) At the time an operator files its rates with the franchising 
authority, the operator may give customers notice of the proposed rate 
changes. Such notice should state that the proposed rate change is 
subject to approval by the franchising authority. If the operator is 
only permitted a smaller increase than was provided for in the notice, 
the operator must provide an explanation to subscribers on the bill in 
which the rate adjustment is implemented. If the operator is not 
permitted to implement any of the rate increase that was provided for in 
the notice, the operator must provide an explanation to subscribers 
within 60 days of the date of the franchising authority's decision. 
Additional advance notice is only required in the unlikely event that 
the rate exceeds the previously noticed rate.
    (4) If an operator files for a rate adjustment under Section 
76.922(e)(2)(iii)(B) for the addition of required channels to the basic 
service tier that the operator is required by federal or local law to 
carry, or, if a single-tier operator files for a rate adjustment based 
on a mid-year channel addition allowed under Section 
76.922(e)(2)(iii)(C), the franchising authority has 60 days to review 
the requested rate. The proposed rate shall take effect at the end of 
this 60-day period unless the franchising authority rejects the proposed 
rate as unreasonable. In order to order refunds and prospective rate 
reductions, the franchising authority shall be subject to the 
requirements described in paragraph (g)(1) of this section.
    (5) Notwithstanding paragraphs (a) through (f) of this section, when 
the franchising authority is regulating basic service tier rates, a 
cable operator may increase its rates for basic service to reflect the 
imposition of, or increase in, franchise fees. The increased rate 
attributable to Commission regulatory fees or franchise fees shall be 
subject to subsequent review and refund if the franchising authority 
determines that the increase in basic tier rates exceeds the increase in 
regulatory fees or in franchise fees allocable to the basic tier. This 
determination shall be appealable to the Commission pursuant to 
Sec. 76.944. When the Commission is regulating basic service tier rates 
pursuant to Sec. 76.945 or cable programming service rates pursuant to 
Sec. 76.960, an increase in those rates resulting from franchise fees or 
Commission regulatory fees shall be reviewed by the Commission pursuant 
to the mechanisms set forth in Sec. 76.945.
    (h) If an operator files an FCC Form 1205 for the purpose of setting 
the rate for a new type of equipment under Section 76.923(o), the 
franchising authority has 60 days to review the requested rate. The 
proposed rate shall take effect at the end of this 60-day period unless 
the franchising authority rejects the proposed rate as unreasonable.
    (1) If the operator's most recent rate filing was based on the 
system that enables them to file up to once per quarter found at Section 
76.922(d), the franchising authority must issue an accounting order 
before the end of the 60-day period in order to order refunds and 
prospective rate reductions.
    (2) If the operator's most recent rate filing was based on the 
annual rate system at Section 76.922(e), in order to order refunds and 
prospective rate reductions, the franchising authority

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shall be subject to the requirements described in paragraph (g)(1) of 
this section.

[ 58 FR 29753 , May 21, 1993, as amended at  59 FR 17973 , Apr. 15, 1994;  59 FR 53115 , Oct. 21, 1994;  60 FR 52119 , Oct. 5, 1995;  61 FR 18978 , Apr. 
30, 1996]

    Effective Date Note: At  60 FR 52119 , Oct. 5, 1995, in Sec. 76.933, 
paragraphs (a), (b), (e), and (f) were revised; (g) and (h) were added. 
This amendment contains information collection and recordkeeping 
requirements and will not become effective until 30 days after approval 
has been given by the Office of Management and Budget.