§ 76.942   Refunds.

   (a) A franchising authority (or the Commission, pursuant to § 76.945) may
   order a cable operator to refund to subscribers that portion of previously
   paid rates determined to be in excess of the permitted tier charge or above
   the  actual  cost  of  equipment,  unless the operator has submitted a
   cost-of-service showing which justifies the rate charged as reasonable. An
   operator's liability for refunds shall be based on the difference between
   the old bundled rates and the sum of the new unbundled program service
   charge(s) and the new unbundled equipment charge(s). Where an operator was
   charging separately for program services and equipment but the rates were
   not  in  compliance with the Commission's rules, the operator's refund
   liability  shall be based on the difference between the sum of the old
   charges and the sum of the new, unbundled program service and equipment
   charges. Before ordering a cable operator to refund previously paid rates to
   subscribers, a franchising authority (or the Commission) must give the
   operator notice and opportunity to comment.

   (b) An operator's liability for refunds in limited to a one-year period,
   except that an operator that fails to comply with a valid rate order issued
   by a franchising authority or the Commission shall be liable for refunds
   commencing from the effective date of such order until such time as it
   complies with such order.

   (c) The refund period shall run as follows:

   (1) From the date the operator implements a prospective rate reduction back
   in time to September 1, 1993, or one year, whichever is shorter.

   (2)  From  the date a franchising authority issues an accounting order
   pursuant to § 76.933(c), to the date a prospective rate reduction is issued,
   then back in time from the date of the accounting order to the effective
   date of the rules; however, the total refund period shall not exceed one
   year from the date of the accounting order.

   (3) Refund liability shall be calculated on the reasonableness of the rates
   as determined by the rules in effect during the period under review by the
   franchising authority or the Commission.

   (d) The cable operator, in its discretion, may implement a refund in the
   following manner:

   (1) By returning overcharges to those subscribers who actually paid the
   overcharges, either through direct payment or as a specifically identified
   credit to those subscribers' bills; or

   (2) 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.

   (e) Refunds shall include interest computed at applicable rates published by
   the Internal Revenue Service for tax refunds and additional tax payments.

   (f)  Once  an operator has implemented a rate refund to subscribers in
   accordance  with  a  refund order by the franchising authority (or the
   Commission, pursuant to paragraph (a) of this section), the franchising
   authority must return to the cable operator an amount equal to that portion
   of the franchise fee that was paid on the total amount of the refund to
   subscribers. The franchising authority must promptly return the franchise
   fee  overcharge  either in an immediate lump sum payment, or the cable
   operator  may  deduct  it from the cable system's future franchise fee
   payments.  The franchising authority has the discretion to determine a
   reasonable repayment period, but interest shall accrue on any outstanding
   portion of the franchise fee starting on the date the operator has completed
   implementation of the refund order. In determining the amount of the refund,
   the franchise fee overcharge should be offset against franchise fees the
   operator holds on behalf of the franchising authority for lump sum payment.
   The interest rate on any refund owed to the operator presumptively shall be
   11.25%.

   [ 58 FR 29753 , May 21, 1993, as amended at  58 FR 46736 , Sept. 2, 1993;  59 FR 17974 , Apr. 15, 1994;  60 FR 52120 , Oct. 5, 1995]

   return arrow Back to Top