Goto Section: 76.923 | 76.925 | Table of Contents
FCC 76.924
Revised as of October 1, 2011
Goto Year:2010 |
2012
§ 76.924 Allocation to service cost categories.
(a) Applicability. The requirements of this section are applicable to
cable operators for which the basic service tier is regulated by local
franchising authorities or the Commission, or, with respect to a cable
programming services tier, for which a complaint has been filed with
the Commission. The requirements of this section are applicable for
purposes of rate adjustments on account of external costs and for
cost-of-service showings.
(b) Accounting requirements. Cable operators electing cost-of-service
regulation or seeking rate adjustments due to changes in external costs
shall maintain their accounts:
(1) in accordance with generally accepted accounting principles; and
(2) in a manner that will enable identification of appropriate
investments, revenues, and expenses.
(c) Accounts level. Except to the extent indicated below, cable
operators electing cost of service regulation or seeking adjustments
due to changes in external costs shall identify investments, expenses
and revenues at the franchise, system, regional, and/or company
level(s) in a manner consistent with the accounting practices of the
operator on April 3, 1993. However, in all events, cable operators
shall identify at the franchise level their costs of franchise
requirements, franchise fees, local taxes and local programming.
(d) Summary accounts. (1) Cable operators filing for cost-of-service
regulation, other than small systems owned by small cable companies,
shall report all investments, expenses, and revenue and income
adjustments accounted for at the franchise, system, regional and/or
company level(s) to the summary accounts listed below.
Ratebase
Net Working Capital
Headend
Trunk and Distribution Facilities
Drops
Customer Premises Equipment
Construction/Maintenance Facilities and Equipment
Programming Production Facilities and Equipment
Business Offices Facilities and Equipment
Other Tangible Assets
Accumulated Depreciation
Plant Under Construction
Organization and Franchise Costs
Subscriber Lists
Capitalized Start-up Losses
Goodwill
Other Intangibles
Accumulated Amortization
Deferred Taxes
Operating Expenses
Cable Plant Employee Payroll
Cable Plant Power Expense
Pole Rental, Duct, Other Rental for Cable Plant
Cable Plant Depreciation Expense
Cable Plant Expenses--Other
Plant Support Employee Payroll Expense
Plant Support Depreciation Expense
Plant Support Expense--Other
Programming Activities Employee Payroll
Programming Acquisition Expense
Programming Activities Depreciation Expense
Programming Expense--Other
Customer Services Expense
Advertising Activities Expense
Management Fees
General and Administrative Expenses
Selling General and Administrative Depreciation Expenses
Selling General and Administrative Expenses--Other
Amortization Expense--Franchise and Organizational Costs
Amortization Expense--Customer Lists
Amortization Expense--Capitalized Start-up Loss
Amortization Expense--Goodwill
Amortization Expense--Other Intangibles
Operating Taxes
Other Expenses (Excluding Franchise Fees)
Franchise Fees
Interest on Funded Debt
Interest on Capital Leases
Other Interest Expenses
Revenue and Income Adjustments
Advertising Revenues
Other Cable Revenue Offsets
Gains and Losses on Sale of Assets
Extraordinary Items
Other Adjustments
(2) Except as provided in § 76.934(h), small systems owned by small
cable companies that file for cost-of-service regulation shall report
all investments, expenses, and revenue and income adjustments accounted
for at the franchise, system, regional and/or company level(s) to the
following summary accounts:
Ratebase
Net Working Capital
Headend, Trunk and Distribution System and Support Facilities and
Equipment
Drops
Customer Premises Equipment
Production and Office Facilities, Furniture and Equipment
Other Tangible Assets
Accumulated Depreciation
Plant Under Construction
Goodwill
Other Intangibles
Accumulated Amortization
Deferred Taxes
Operating Expenses
Cable Plant Maintenance, Support and Operations Expense
Programming Production and Acquisition Expense
Customer Services Expense
Advertising Activities Expense
Management Fees
Selling, General and Administrative Expenses
Depreciation Expense
Amortization Expense--Goodwill
Amortization Expense--Other Intangibles
Other Operating Expense (Excluding Franchise Fees)
Franchise Fees
Interest Expense
Revenue and Income Adjustments
Advertising Revenues
Other Cable Revenue Offsets
Gains and Losses on Sale of Assets
Extraordinary Items
Other Adjustments
(e) Allocation to service cost categories. (1) For cable operators
electing cost-of-service regulation, investments, expenses, and
revenues contained in the summary accounts identified in paragraph (d)
of this section shall be allocated among the Equipment Basket, as
specified in § 76.923, and the following service cost categories:
(i) Basic service cost category. The basic service category, shall
include the cost of providing basic service as defined by § 76.901(a).
The basic service cost category may only include allowable costs as
defined by § § 76.922(g) through 76.922(k).
(ii) Cable programming services cost category. The cable programming
services category shall include the cost of providing cable programming
services as defined by § 76.901(b). This service cost category shall
contain subcategories that represent each programming tier that is
offered as a part of the operator's cable programming services. All
costs that are allocated to the cable programming service cost cateogry
shall be further allocated among the programming tiers in this
category. The cable programming service cost category may include only
allowable costs as defined in § 76.922(g) through 76.922(k).
(iii) All other services cost category. The all other services cost
category shall include the costs of providing all other services that
are not included the basic service or a cable programming services cost
categories as defined in paragraphs (e)(1)(i) and (ii) of this section.
(2) Cable operators seeking an adjustment due to changes in external
costs identified in FCC Form 1210 shall allocate such costs among the
equipment basket, as specified in § 76.923, and the following service
cost categories:
(i) The basic service category as defined by paragraph (e)(1)(i) of
this section;
(ii) The cable programming services category as defined by paragraph
(e)(1)(ii) of this section;
(iii) The all other services cost category as defined by paragraph
(e)(1)(iii) of this section.
(f) Cost allocation requirements. (1) Allocations of investments,
expenses and revenues among the service cost categories and the
equipment basket shall be made at the organizational level in which
such costs and revenues have been identified for accounting purposes
pursuant to § 76.924(c).
(2) Costs of programming and retransmission consent fees shall be
directly assigned or allocated only to the service cost category in
which the programming or broadcast signal at issue is offered.
(3) Costs of franchise fees shall be allocated among the equipment
basket and the service cost categories in a manner that is most
consistent with the methodology of assessment of franchise fees by
local authorities.
(4) Costs of public, educational, and governmental access channels
carried on the basic tier shall be directly assigned to the basic tier
where possible.
(5) Commission cable television system regulatory fees imposed pursuant
to 47 U.S.C. 159 shall be directly assigned to the basic service tier.
(6) All other costs that are incurred exclusively to support the
equipment basket or a specific service cost category shall be directly
assigned to that service cost category or the equipment basket where
possible.
(7) Costs that are not directly assigned shall be allocated to the
service cost categories in accordance with the following allocation
procedures:
(i) Wherever possible, common costs for which no allocator has been
specified by the Commission are to be allocated among the service cost
categories and the equipment basket based on direct analysis of the
origin of the costs.
(ii) Where allocation based on direct analysis is not possible, common
costs for which no allocator has been specified by the Commission
shall, if possible, be allocated among the service costs categories and
the equipment basket based on indirect, cost-causative linkage to other
costs directly assigned or allocated to the service cost categories and
the equipment basket.
(iii) Where neither direct nor indirect measures of cost allocation can
be found, common costs shall be allocated to each service cost category
based on the ratio of all other costs directly assigned and attributed
to a service cost category over total costs directly or indirectly
assigned and directly or indirectly attributable.
(g) Cost identification at the franchise level. After costs have been
directly assigned to and allocated among the service cost categories
and the equipment basket, cable operators that have aggregated costs at
a higher level than the franchise level must identify all applicable
costs at the franchise level in the following manner:
(1) Recoverable costs that have been identified at the highest
organizational level at which costs have been identified shall be
allocated to the next (lower) organizational level at which recoverable
costs have been identified on the basis of the ratio of the total
number of subscribers served at the lower level to the total number of
subscribers served at the higher level.
(2) Cable operators shall repeat the procedure specified in paragraph
(g)(1) of this section at every organizational level at which
recoverable costs have been identified until such costs have been
allocated to the franchise level.
(h) Part-time channels. In situations where a single channel is divided
on a part-time basis and is used to deliver service associated with
different tiers or with pay per channel or pay per view service, a
reasonable and documented allocation of that channel between services
shall be required along with the associated revenues and costs.
(i) Transactions and affiliates. Adjustments on account of external
costs and rates set on a cost-of-service basis shall exclude any
amounts not calculated in accordance with the following:
(1) Charges for assets purchased by or transferred to the regulated
activity of a cable operator from affiliates shall equal the invoice
price if that price is determined by a prevailing company price. The
invoice price is the prevailing company price if the affiliate has sold
a substantial number of like assets to nonaffiliates. If a prevailing
company price for the assets received by the regulated activity is not
available, the changes for such assets shall be the lower of their cost
to the originating activity of the affiliated group less all applicable
valuation reserves, or their fair market value.
(2) The proceeds from assets sold or transferred from the regulated
activity of the cable operator to affiliates shall equal the prevailing
company price if the cable operator has sold a substantial number of
like assets to nonaffiliates. If a prevailing company price is not
available, the proceeds from such sales shall be determined at the
higher of cost less all applicable valuation reserves, or estimated
fair market value of the asset.
(3) Charges for services provided to the regulated activity of a cable
operator by an affiliate shall equal the invoice price if that price is
determined by a prevailing company price. The invoice price is the
prevailing company price if the affiliate has sold like services to a
substantial number of nonaffiliates. If a prevailing company price for
the services received by the regulated activity is not available, the
charges of such services shall be at cost.
(4) The proceeds from services sold or transferred from the regulated
activity of the cable operator to affiliates shall equal the prevailing
company price if the cable operator has sold like services to a
substantial number of nonaffiliates. If a prevailing company price is
not available, the proceeds from such sales shall be determined at
cost.
(5) For purposes of § 76.924(i)(1) through 76.924(i)(4), costs shall be
determined in accordance with the standards and procedures specified in
§ 76.922 and paragraphs (b) and (d) of this section.
(6) For purposes of this section, entities are affiliated if either
entity has an attributable interest in the other or if a third party
has an attributable interest in both entities.
(7) Attributable interest shall be defined by reference to the criteria
set forth in Notes 1 through 5 to § 76.501 provided, however, that:
(i) The limited partner and LLC/LLP/RLLP insulation provisions of Note
2(f) shall not apply; and
(ii) The provisions of Note 2(a) regarding five (5) percent interests
shall include all voting or nonvoting stock or limited partnership
equity interests of five (5) percent or more.
(j) Unrelated expenses and revenues. Cable operators shall exclude from
cost categories used to develop rates for the provision of regulated
cable service, equipment, and leased commercial access, any direct or
indirect expenses and revenues not related to the provision of such
services. Common costs of providing regulated cable service, equipment,
and leased commercial access and unrelated activities shall be
allocated between them in accordance with paragraph (f) of this
section.
[ 58 FR 29753 , May 21, 1993, as amended at 59 FR 17990 , Apr. 15, 1994;
59 FR 53115 , Oct. 21, 1994; 60 FR 35865 , July 12, 1995; 61 FR 9367 ,
Mar. 8, 1996; 64 FR 67197 , Dec. 1, 1999]
Goto Section: 76.923 | 76.925
Goto Year: 2010 |
2012
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