NEWSReport No. DC 96-22             ACTION IN DOCKET CASE                  March 20, 1996

      COMMISSION SEEKS COMMENT ON NOTICE OF PROPOSED RULEMAKING ON
                AMENDMENTS TO CABLE EQUIPMENT COST RULES
                          (CS Docket No. 96-57)
                                    
     The Commission has adopted a Notice of Proposed Rulemaking (FCC 96-117) to
implement Section 301(j) of the Telecommunications Act of 1996 (the "1996 Act"), which
requires the Commission to allow cable operators to aggregate their equipment costs into
broad categories on a franchise, system, regional, or company level.  The Notice tentatively
concludes that equipment used by subscribers who receive only the basic service tier may not
be aggregated into broad categories. The Notice addresses a number of issues related to
equipment cost aggregation by cable operators, including the following.

     Aggregation of Equipment by Categories: The Notice tentatively concludes that
     equipment may be classified and placed in categories based on its primary purpose,
     and that additional outlets may not be aggregated with initial outlets.

     Organizational Levels: The Notice proposes to amend the Commission's rules to
     permit customer equipment cost aggregation at the franchise, system, regional, or
     company level.  The Notice tentatively concludes that Congress did not intend that
     cost aggregation for installation charges be permitted to the same extent as equipment
     charges.  It proposes that operators be permitted to aggregate installation costs based
     on specific service areas designated by the operator.

     Basic Service Tier Only equipment: The Notice tentatively concludes that equipment
     used by subscribers who receive only the basic service tier may not be aggregated
     into broad categories.  It proposes amending the Commission's rules to provide that
     the cost of equipment used by such subscribers may not be averaged with other
     customer equipment.

Action by the Commission by Notice of Proposed Rulemaking March 18, 1996           
(FCC 96-117), Chairman Hundt, Commissioners Quello, Barrett, Ness and Chong

                                 -- FCC --

News Media Contact: Morgan Broman at (202) 416-0852
Cable Services Bureau Contact: Lenworth Smith at (202) 416-0800