§ 4.5-17. Rates for equipment and installation used to receive the basic service tier

(a) Scope. The equipment regulated under this section consists of all equipment in a subscriber's location that is used to receive the basic service tier, regardless of whether such equipment is additionally used to receive other tiers of regulated programming service and/or unregulated service. Such equipment shall include, but is not limited to:

(1) Converter boxes;

(2) Remote control units;

(3) Connections for additional television receivers; and

(4) Other cable home wiring.

Subscriber charges for such equipment shall not exceed charges based on actual costs in accordance with the requirements set forth below.

(b) Unbundling. A cable operator shall establish rates for remote control units, converter boxes, other customer equipment, installation, and additional connections separate from rates for basic service tier. In addition, the rates for such equipment and installations shall be unbundled one from the other.

(c) Equipment basket. A cable operator shall establish an equipment basket, which will include all costs associated with providing customer equipment and installation under this section. Equipment basket costs shall be limited to the direct and indirect material and labor costs of providing, leasing, installing, repairing, and servicing customer equipment, as determined in accordance with the cost accounting and cost allocation requirements of section 4.5-18. The equipment basket shall not include general administrative overhead including general marketing expenses. The equipment basket may include a reasonable profit.

(d) Hourly service charge. A cable operator shall establish charges for equipment and installation using the hourly service charge ("HSC") methodology. The HSC shall equal the operator's annual equipment basket costs, excluding the purchase cost of customer equipment, divided by the total person hours involved in installing, repairing, and servicing customer equipment during the same period. The purchase cost of customer equipment shall include the cable operator's invoice price plus all other costs incurred with respect to the equipment until the time it is provided to the customer. The HSC is calculated according to the following formula:

HSC =
EB ;minus; CE

   H

Where,
EB =
annual equipment basket cost;

CE =
annual purchase cost of all customer equipment; and

H  =
person hours involved in installing and repairing equipment per year.

(e) Installation charges. Installation charges shall be either:

(1) The HSC multiplied by the actual time spent on each individual installation; or

(2) The HSC multiplied by the average time spent on a specific type of installation.

(f) Remote charges. Monthly charges for rental of a remote control unit shall consist of the average annual unit purchase cost of the type of remote leased, including acquisition price and incidental costs such as sales tax, financing and storage up to the time it is provided to the customer, added to the product of the HSC times the average number of hours annually repairing or servicing a remote, divided by twelve (12) to determine the monthly lease rate for a remote according to the following formula:

UCE + (HSC ;times; HR)

Monthly
=
12

charge

Where,
HR=average hours repair per year; and

UCE=average annual unit cost of remote.

Separate charges shall be established for each significantly different type of remote control unit.

(g) Other equipment charges. The monthly charges for rental of converter boxes and other customer equipment shall be calculated in the same manner as for remote control units. Separate charges shall be established for each significantly different type of converter box and each significantly different type of other customer equipment.

(h) Additional connection charges. The costs of installation and monthly use of additional connections shall be recovered as charges associated with the installation and equipment cost categories, and at rate levels determined by the actual cost methodology presented in the foregoing subsections (e), (f), and (g) of this section. An operator may recover additional programming costs and the costs of signal boosters on the customers premises, if any, associated with the additional connection as a separate monthly unbundled charge for additional connections.

(i) Charges for equipment sold. A cable operator may sell customer premises equipment to a subscriber. The equipment price shall recover the operator's cost of the equipment, including costs associated with storing and preparing the equipment for sale up to the time it is sold to the customer, plus a reasonable profit. An operator may sell service contracts for the maintenance and repair of equipment sold to subscribers. The charge for a service contract shall be the HSC times the estimated average number of hours for maintenance and repair over the life of the equipment.

(j) Promotions. A cable operator may offer equipment or installation at charges below those determined under subsections (e) through (g) of this section, as long as those offerings are reasonable in scope in relation to the operator's overall offerings in the equipment basket and not unreasonably discriminatory. Operators may not recover the cost of a promotional offering by increasing charges for other equipment basket elements, or by increasing programming service rates above the maximum monthly charge per subscriber prescribed by this article. As part of a general cost-of-service showing, an operator may include the cost of promotions in its general system overhead costs.

(k) Franchise fees. Equipment charges may include a properly allocated portion of franchise fees paid to the city.

(Ord. No. 279, § 7, 11-1-93)