Goto Section: 76.923 | 76.925 | Table of Contents
FCC 76.924
Revised as of October 2, 2015
Goto Year:2014 |
2016
§ 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]
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Goto Section: 76.923 | 76.925
Goto Year: 2014 |
2016
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