NEWS                                                    December 22, 1994

        CABLE SERVICES BUREAU ACTS ON CABLE RATE LETTERS OF INQUIRY
                        INVOLVING A LA CARTE ISSUES

     The Cable Services Bureau of the Federal Communications Commission today issued 
orders resolving the a la carte issues raised in twelve Letters of Inquiry (LOIs) that were issued
by the Commission.  The letters were issued in response to complaints received from local
franchising authorities and subscribers alleging that the cable operators had violated the
Commission's rate rules.  Today's orders address the regulatory status of so-called "a la carte
packages" offered by 12 cable operators.

     The packages at issue in the orders are collective offerings of individually available
channels that were removed from rate-regulated tiers of cable service on the eve of rate
regulation and repackaged as allegedly non-rate-regulated offerings.  The orders relating to
packages offered by four of the operators determine that refunds are not required because the
Bureau cannot conclude that the package offerings evaded the Commission's rate regulations. 
They find that the Commission's rules were unclear as to whether moving a small number of
channels from regulated tiers to a la carte packages constitutes an evasion.  The four operators
and the number of channels affected were:

     1) Chattanooga Cable TV, Chattanooga, TN (LOI-93-51) (4 channels)
     2) Falcon Cable TV, Port Orchard, WA (LOI-93-50) (6 channels)
     3) Nashoba Cable Services, Danvers, MA (LOI-93-23) (5-6 channels)
     4) Cablevision Industries, Wake Forest, NC (LOI-94-7) (3 channels)
     
     However, the orders relating to the packages offered by eight operators determine that
the package offerings evaded rate regulation and, as a result, the operator may be liable to
subscribers for refunds in its rate justification proceedings.  The Bureau found that the packages
of these operators were subject to rate regulation as of September 1, 1993, and that the operators
must count the channels composing the packages as rate-regulated channels as of that date.  The
eight operators were ordered to offer these channels as part of the rate-regulated tiers from
which they came or offer the channels collectively as a separate rate-regulated tier of cable
programming service.  The eight operators are:

     1) Falcon Cable TV, Southern Shores, NC (LOI-94-2) (9 channels)
     2) Binghamton NewChannels, Binghamton, NY (LOI-93-48) (13 channels)

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     3) Lincoln Cablevision, Lincoln, NE (LOI-93-47) (10 channels)
     4) Dynamic Cablevision of Florida, Ltd., Hialeah, FL (LOI-93-43) (10 channels)
     5) Vision Cable of North Carolina, NC., Charlotte and Mecklenburg Co., NC
         (LOI-93-24) (8 channels)
     6) Cablevision of Boston, L.P., Boston, MA (LOI-93-12) (12 channels)
     7) Vision Cable Television Co., Inc., Fort Lee, NY (LOI-93-32) (8 channels)
     8) Century Southwest Cable TV, Beverly Hills and Los Angeles, CA 
         (LOI-93-17)(12 channels)

     In examining these cases, the Bureau also relied on the "going forward" rules adopted
by the Commission at the November 10, 1994 meeting.  In the going forward rules, the
Commission  determined that packages of  a la carte offerings are cable programming service
tiers, and as such are generally subject to rate regulation.

     In the first four orders the Bureau found that the Commission's a la carte rules were
sufficiently ambiguous that it was not clear to the operators whether their multichannel packages
were permissible under the Commission's a la carte rules.  Accordingly, the Bureau determined
that the channels comprising the packages need not be considered rate-regulated channels for
purposes of rate justifications.  The operators may treat the packages as new product tiers under
the Commission's new going forward rules, even though the channels that composed the
packages were removed from rate-regulated tiers.  Under the going forward rules, new product
tiers cannot be composed of channels removed from current basic or cable service programming
tiers.

     In the eight additional orders, however, the Bureau found that the Commission's a la
carte rules were sufficiently clear to indicate that removing  these channels from what would
otherwise be tiers of services subject to rate regulation would be an evasion of the Commission's
rate regulation rules.  As a result, the Bureau found that the packages offered by these 8
operators were subject to rate regulation as of September 1, 1993.

Action by the Chief, Cable Services Bureau December 21, 1994 by Memorandum Opinion and
Order (DA 94-1427 (Chattanooga) and DA 94-1545 - DA 94-1555).

                                   -FCC-

     News Media Contact: Morgan Broman at (202) 416-0852
     Cable Service Contacts: Mark Bollinger, Mindy Littell and Leora Hochstein at
     (202) 416-0800