February 22, 1994

                                    
     FCC ORDERS FURTHER RATE REDUCTIONS WHILE PRESERVING INCENTIVES
             FOR CABLE OPERATORS TO INVEST IN NEW SERVICES 

     The Commission today completed the first round of rate
regulation to implement the Cable Television Consumer Protection
and Competition Act of 1992.  The Commission unanimously adopted a
comprehensive package including revised rate regulation rules;
rules and procedures allowing cable operators to present a cost-of-
service showing; and an item involving reconsideration of other 
regulation items adopted last April.
 
      "These regulations are fair to cable subscribers, who will
pay reasonable rates, and fair to cable operators, who have strong
incentives for investment and innovation," Chairman Reed Hundt said
today. "We aren't claiming our job is over, but rather that our
first step is completed. These regulations will result in consumers
paying less for the same services or receiving more for the same
money," Chairman Hundt added.

     Upon reconsideration of its original benchmark regulation, the
Commission decided to require that prices for regulated services  
of all cable systems be lowered 17 percent.  This reduction will be
reached through a two-step process.

     The Commission took the first step on April 1, 1993, when it
required systems operating above a price benchmark average to come
down 10 percent.  That action caused the prices of about two-thirds
of all systems to drop when comparing the same package of regulated
services.  The Commission takes the second step, to bring prices
down another 7 percent, today.  This will cause about 90 percent of
cable systems to drop prices for the same package of regulated
services.

     The Commission also adopted going forward rules designed to
preserve the incentives for the cable industry to continue building
the National Information Infrastructure and to add creative new
programming services to its cable offerings.  Cable operators will
be able to add value to their regulated packages of cable services
and to create new, unregulated services.


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     The FCC's implementation of the 1992 Cable Act has already
brought an end to the rapid price increases in cable services that
occurred following the implementation of the 1984 Cable Act.  In
addition, the Commissin has adopted rules that go a long way toward
improving customer service.  Had the 1992 Cable Act not been
passed, prices would have continued to rise and consumers would
have paid more for the same services than they will in 1994. 

     Cable operators below the new benchmark and small cable
operators will have a transition period during which they  will not
be required to lower their prices by the full 17 percent pending
the completion of cost studies.  In addition, certain small systems
will also be relieved of the requirement to unbundle equipment
revenues and rates, a requirement which appears to have placed a
large burden on small operators.

     The Commission adopted rules and procedures for cost of
service rate showings.  Under these regulations, a cable operator
may request relief from the required reduction in rates by showing
that its costs of service are unusually high.  The cable cost of
service policies adopted today are similar to those the Commission
has applied to the telephone industry.  This traditional cost of
service approach balances the interests of the cable operators and
their customers, permitting operators to recover from customers
only the reasonable costs of providing regulated services,
including operating expenses and a reasonable rate of return. 
Included in our cost-of-service rules is a provision for
streamlined showings by small operators, yet another mechanism for
lightening the regulatory burden on small systems.

     The final item adopted by the Commission today affirms earlier
decisions by the Commission, such as the tier buy-through
provisions.  Under this provision cable operators cannot require a
subscriber to purchase any level of service other than the basic
service in order to access pay-per-view and other premium channel
offerings.

     The Commission is undertaking an aggressive effort of
education and assistance in order to maximize the effective
implementation of these regulations.  In December, the Commission
created a stand-alone Cable Services Bureau to provide "one stop
shopping" for cable operators, consumers and state and local
government officials, including franchising authorities.






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     Telephone assistance in obtaining and completing forms as well
as other aspects of compliance with and implementation of these new
regulations is available through the Bureau.  A separate contact
list, released today, is  based on geographic zones and directs
people to the correct Cable Services Bureau staffers.  The
Commission is also holding regional educational seminars for
franchising authorities, other government officials and consumer
representatives and a teleconference seminar for cable operators.

     In adopting these items, the Commission also noted that
implementation of the 1992 Cable Act depends on the participation
of state and local franchising authorities, who must seek
certification to regulate basic cable service, and consumers, who
must complain to the Commission where they feel the Commission's
regulations are being violated with respect to cable programming
services.  The Commission also looks forward to the full
participation of the cable industry in implementing regulations
that have the potential to bring value to the country as a whole.

     
                                   -FCC-

     News Media contact: Karen Watson or Susan Sallet at (202) 632-
5050
     Cable Services Bureau contact:  Sandy Wilson at (202) 416-0856