NEWS
CS-95-10        August 3, 1995

                     COMMISSION AND TIME WARNER CABLE
                        NEGOTIATE SOCIAL CONTRACT;
                    COMMISSION REQUESTS PUBLIC COMMENT


     The Commission and Time Warner Cable (TWC) have negotiated a Social Contract
(Contract) that will, if finally adopted by the Commission, provide for the upgrading of
TWC's cable systems.  The proposed Contract was negotiated in accordance with the
Commission's authority to consider and adopt "social contracts" as alternatives to other
regulatory approaches applicable to cable television rates.  If adopted, the proposed Contract
will assure fair and reasonable rates for TWC's customers, reduce the administrative burden
and costs of regulation for local governments, the Commission and TWC, and resolve 946
cable programming services tier rate complaints on file with the Commission.  The proposed
Contract is designed to improve TWC's service by substantially upgrading the channel
capacity and technical reliability of its United States cable systems.
     
     The Commission requests public comment.  Comments on the proposed Contract are
due by September 5, 1995.  Reply comments are due by September 20, 1995.  A Public
Notice (FCC 95-336), entitled "Social Contract for Time Warner Cable Available for
Comment" has been released today.

      Important elements of the proposed Contract include:
 
      A commitment by TWC to upgrade its domestic cable systems at a cost of $4
      billion over the next 5 years.

      A TWC commitment to establish lifeline basic service tiers priced at 10%
      below TWC's benchmark regulated rates.  TWC will be allowed to recoup
      reduced basic service tier revenue through price increases on its cable
      programming service tiers.  

      The total increase for all regulated programming services provided by TWC
      will be capped at $1 per year for each of the next five years, plus external
      costs and inflation.

      An estimated $4.7 million plus interest in subscriber refunds, in the form of
      subscriber bill credits.

      TWC will provide free service connections at one outlet in 100% of the
      existing public schools (K-12) passed by its cable systems.  Additionally, it
      will provide service connections at cost in secondary private schools that
      receive funding under Title I of the Elementary and Secondary Education
      Act of 1965.  TWC will provide the connected schools with a monthly
      educational program guide having curriculum support ideas to assist
      educators in effectively using the new services.  Any internal wiring needed
      by the connected schools for additional outlets will be provided by TWC at
      cost.  

      Upon successful development by TWC and Time Inc. of an on-line
      service for personal computers, TWC will, upon request, provide the
      cable connected schools (public or private) with one free modem, and
      additional modems will be made available to such schools at cost.  As
      available in each service area, TWC will provide its on-line service free
      through each modem during the school year.

      TWC subscribers will have the right to remove, replace, rearrange or
      maintain any cable wiring located in the interior space of their dwelling
      unit.

      In systems where TWC and its predecessors did not create a la carte
      packages, TWC can create migrated product tiers (MPTs) consisting of
      up to four services migrated from regulated tiers.  The migrated
      channels will be priced at their rate regulated prices.

      In the case of Newhouse systems acquired by TWC that had a la carte
      packages, TWC will be able to convert Newhouse's "Superstation" a la
      carte packages (typically three superstations and one satellite channel)
      into MPTs, priced at current rates (which in no case exceed 29 cents per
      channel).  Another MPT can be created on such systems consisting of
      satellite channels offered on other, low penetration, a la carte packages. 
      These MPTs will be priced at their current per channel rates.  The
      cumulative number of services migrated from the "Superstation" and
      other a la carte packages cannot be greater than six.  All remaining
      channels in Newhouse's a la carte packages will be returned to the
      traditionally rate-regulated service tiers.

      Where TWC created a la carte packages that received new product tier
      (NPT) treatment on systems that are contiguous with systems where
      MPTs will be created, TWC will have the option to lower the prices of
      the NPTs and raise the prices of the adjacent MPTs in a revenue neutral
      manner to TWC to provide uniform rates for the systems.  The NPTs
      will then be subject to the price cap increases applicable to MPTs.

      TWC may add an unlimited number of channels to an MPT at a price
      of 20 cents per channel plus license fees.  After April 1997, TWC may
      convert the MPTs to NPTs with market constrained pricing, as permitted
      by the Commission's going forward rules.

      The resolution of pending rate cases is without any finding by the
      Commission of any wrongdoing by TWC.

 Cable Services Bureau Chief Meredith J. Jones commented, "This agreement with
Time Warner Cable is another example of an innovative solution to regulatory and business
issues of great complexity.  The reaction to the earlier Social Contract with Continental has
been highly positive.  This Contract will provide TWC subscribers with upgraded, reliable
service.  It provides rate stability for TWC subscribers and resolves nearly one thousand rate
complaints.  This Contract also extends free cable service to all public schools in TWC
service areas.  Permitting TWC subscribers to relocate internal cable wiring in their home is
an innovative consumer friendly feature."

News Media contact: Morgan Broman at (202) 416-0852; Cable Services Bureau contacts: 
Nancy Markowitz, Jerome Fowlkes and JoAnn Lucanik at (202) 416-0800