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Resolution No. 454047 RESOLUTION NO. 4540 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS ESTABLISHING MAXIMUM PERMITTED RATES FOR REGULATED BASIC CABLE SERVICES AND EQUIPMENT, ORDERING REFUNDS FOR EXCESSIVE RATES AND APPROVING A REFUND PLAN FOR PAST RATE OVERCHARGES. WHEREAS, the City of Cypress (the "City ") was certified to regulate rates for basic cable service and equipment pursuant to the Cable Television Consumer Protection and Competition Act of 1992. WHEREAS, Copley /Colony Cablevision of Cypress, Inc., ( "Copley /Colony ") holds a franchise to operate a cable television system within the City. WHEREAS, on or about August 15, 1994, Copley /Colony filed its Forms 1200 and 1205 and a second form 1205, which was provided to the City on or about September 1, 1995 (collectively the "Forms ") with the City seeking approval of its Maximum Permitted Rates for regulated services and equipment. WHEREAS, the City has retained Telecommunications Management Corp. ( "TMC ") to review the Forms and any additional information submitted by Copley /Colony related to rates. On June 12, 1995 and August 11, 1995, TMC provided written evaluations of the Forms as well as the additional information provided. TMS's reports, the City's correspondence, and Copley /Colony's supplemental information are hereby incorporated into this Resolution by this reference, copies of which are on file in the City Clerk's office. WHEREAS, the City promptly sent Copley /Colony copies of each TMC report and requested clarification or responses on each issue that the City found required additional clarification or response. WHEREAS, the City timely sent Copley /Colony an Accounting Order that is allowed pursuant to Section 76.933(c) of the FCC Rules and Regulations. This reserved any right and remedies for which the City may possess in relation to rates and charges for the Basic Service Tier and associated equipment which are found to be in excess of the amounts authorized by the Rules and Regulations of the FCC. WHEREAS, on September 25, 1995, the Council held a duly noticed public hearing to determine if Copley /Colony's rates were in accordance with the second round of FCC rate regulations. The Council considered TMC's reports, Copley /Colony's responses, and all of the evidence and testimony presented at the September 25, 1995 meeting and all other written and oral evidence received in connection with this matter. WHEREAS, based upon the evidence submitted, including, but not limited to, the Forms submitted by Copley /Colony, the staff and consultant reports and all other written and oral evidence received in connection with this matter, the Council hereby finds that the Maximum Permitted Rates for the Basic Service Tier shall be those rates set forth as the ordered rates in Figure 1 to this Resolution, and the Maximum Permitted Rates for the Hourly Service Charge and equipment shall be those rates set forth as the ordered rates indicated on Figure 2, both of which are attached hereto and incorporated herein. NOW, THEREFORE, BE IT HEREBY RESOLVED that the City Council of the City of Cypress: Section 1. The Council hereby resolves that pursuant to the FCC regulations effective on July 15, 1994, the rates listed as ordered rates in Figures 1 and 2 are the Maximum Permitted Rates Copley /Colony may charge for the Basic Service Tier and the hourly service charge and equipment and orders that the rates set forth in Figures 1 and 2 (with the exception of the rates for Tier 2 which are listed for informational purposes only) shall be the 48 established rates for the Basic Service Tier and related service and equipment charges. The Council orders Copley /Colony to establish and implement, within sixty days of the date of this Resolution, a new rate schedule conforming to those rates contained in Figures 1 and 2. The Council orders Copley /Colony to maintain the ordered rates with any future increases to be in accordance with the provisions of the FCC regulations. Section 2. The Council further orders Copley /Colony to refund all charges since July 15, 1994, in excess of those prescribed in this Resolution to the affected subscribers within the City of Cypress, with interest in accordance with FCC regulations, within sixty days of the date of this Resolution. Section 3. Copley /Colony, in its discretion, may implement the refund required in Section 2 in the following manner: (A) By returning overcharges to those subscribers who actually paid the overcharges, either through direct payment or as a specifically identified credit to those subscribers' bill, or (B) By means of a prospective percentage reduction in the rates for the Basic Service Tier or associated equipment to cover the cumulative overcharge. This shall be reflected as a specifically identified, one -time credit on prospective bills to the class of subscribers that currently subscribe to the cable system. Section 4. All refunds required pursuant to Section 2 shall include interest computed at the same rate as established by the United States Internal Revenue Service for tax refunds and additional tax payments. Section 5. At least ten (10) days prior to implementing any refunds, Copley /Colony shall notify the City how it intends to implement the refund order and how it calculated the amount of the refund. Section 6. Copley /Colony shall notify the City of the gross amount of the refund owing subscribers and the amount of the refund upon which Copley /Colony paid any franchise fee to the City. Within thirty (30) days of receiving the statement from Copley /Colony, the City shall refund to Copley /Colony that portion of the franchise fee that was paid on refunds actually made to subscribers. Section 7. The Refund Plan submitted in relation to Copley /Colony's FCC Form 393 attached as Figure 3 is hereby deemed approved and ordered to be implemented. PASSED AND ADOPTED by the City Council of the City of Cypress at a regular meeting held on the 25th day of September, 1995. ATTEST: CITY CL$RK OF HE CITY OF CYPRESS - 2 - Ael! •'• OF THE CITY OF C P 'ESS STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS 49 I, DARRELL ESSEX, City Clerk of the City of Cypress, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted at a regular meeting of the said City Council held on the 25th day of September, 1995, by the following roll call vote: AYES : 5 COUNCIL MEMBERS : Bowman, Carroll, Jones, Kerry and Age NOES: 0 COUNCIL MEMBERS: None ABSENT: 0 COUNCIL MEMBERS: None CITY iS Y OF CYPRESS 3 50 FIGURE 1 FORM 1200 Premium Plus (for subscribers with only "a la carte" services on additional outlets) Actual Rate Permitted Rate Difference Basic Service $ 10.67 $ 10.58 - 0.09 Tier 2 6.91 6.86 - 0.05 Total $ 17.58 $ 17.44 - 0.14 Premium Plus (for subscribers with only "a la carte" services on additional outlets) $ 2.00 0.00 - 2.00 All rates include a possessory interest tax of zero ($0.00) since Colony has failed to document this item despite repeated requests. Where the permitted rate exceeds current or actual rates, a " +" is indicated in the "Difference" column. Where the permitted rate is less than current or actual rates, a " -" is indicated in the "Difference" column. Tier 2 is subject to regulation by the FCC. EXHIBIT "A" 51 FIGURE 2 Hourly Service and Equipment Rates Period Commencing July 14, 1994 (First Form 1205) Period Commencing Upon Approval of Proposed Rates (Second Form 1205) Actual Rate Permitted Rate Difference Installation Unwired Home Aerial $ 33.00 $ 41.85 + 8.85 Unwired Home Underground 53.00 53.48 + 0.48 Prewired Home 20.00 20.59 + 0.59 Add'l Outlet Same Time 20.00 20.59 + 0.59 Add'l Outlet Later 33.00 33.43 + 0.43 Tier Change 2.00 2.00 -0- Remote Control 0.22 0.22 -0- Converter #1 1.53 1.58 + 0.05 Period Commencing Upon Approval of Proposed Rates (Second Form 1205) Where the permitted rate exceeds current or actual rates, a " +" is indicated in the "Difference" column. Actual Rate Permitted Rate Difference Installation Unwired Home $ 53.00 $ 89.50 + 36.50 Prewired Home 20.00 34.46 + 14.46 Add'l Outlet Same Time 20.00 33.56 + 13.56 Add'l Outlet Later 33.00 55.94 + 22.94 Tier Change 2.00 2.00 -0- Remote Control 0.22 0.38 + 0.16 Converter #1 1.53 2.08 + 0.55 Where the permitted rate exceeds current or actual rates, a " +" is indicated in the "Difference" column.