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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554


In the Matter of                )
                                )
  TCI  of Pennsylvania, Inc.      )CUID No.PA0400 (Mount Union)
                                   )
    Complaint Regarding            )
   Cable Programming Services Tier )
     Rate Increase              )
 
                                  ORDER

        Adopted:  December 13, 1996Released:  December 18, 1996  

By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau:

      1.In this Order we consider a complaint against the June 1, 1996 rate increase by TCI
of Pennsylvania, Inc. ("TCI") for its cable programming services tier ("CPST") in Mount Union,
Pennsylvania CUID No. PA0400. In response, TCI filed its FCC Form 1240.  This Order addresses
only the reasonableness of TCI's rate increase of June 1, 1996.  We conclude that the CPST rate
increase of $2.37 that TCI began charging on June 1, 1996 is not unreasonable.

      2.The Communications Act authorizes the Federal Communications Commission
("Commission") to review the CPST rates of cable systems not subject to effective competition to
ensure that rates charged are not unreasonable.   The Telecommunications Act of 1996 ("the 1996
Act") and our rules implementing the new legislation, require that complaints against the CPST
rates be filed with the Commission by a franchising authority that has received subscriber
complaints.  A franchising authority may not file a CPST rate complaint unless it receives more than
one subscriber complaint within 90 days after such increase becomes effective.   If the Commission
finds the rate unreasonable, it shall determine the correct rate and any refund liability.
                                                               
      3.To justify rates for the period beginning May 15, 1994 through a benchmark or cost
of service showing, operators must use the FCC Form 1200 series.  Operators may justify
adjustments to their rates on an annual basis using FCC Form 1240 to reflect reasonably certain and
quantifiable changes in external costs, inflation, and the number of regulated channels that are
projected for the twelve months following the rate change.  Any incurred cost that is not projected
may be accrued with interest and added to rates at a later time.  If actual and projected costs are
different during the rate year a "true-up" mechanism is available to correct estimated costs with
actual cost changes.  The "true-up" requires operators to decrease their rates or alternatively permits
them to increase their rates to make an adjustment for over or under estimations of these cost
changes.  

      4.On November 4, 1996, the franchising authority Mount Union Borough ("Borough")
filed complaints against TCI's June 1, 1996 CPST rate increase in  Mount Union.  The Borough has
certified that it has complied with the Interim Rules.   In response, TCI submitted its FCC Form
1240 to the Commission to justify the rate increases that went into effect on June 1, 1996.  

      5.Upon review of the record before us, we find that TCI has provided sufficient
evidence to support a CPST rate increase of $2.37 in Mount Union.  We conclude, therefore, that
TCI's CPST rate increase of $2.37 which went into effect June 1, 1996 in Mount Union is  justified. 


      6.Accordingly, IT IS ORDERED, pursuant to Section 0.32l of the Commission's rules,
47 C.F.R. Section 0.321 that the monthly CPST rate increase of $2.37 for Mount Union,
Pennsylvania charged by TCI in CUID No. PA0400 beginning June 1, 1996 IS NOT
UNREASONABLE.

      7.IT IS FURTHER  ORDERED, pursuant to Section 0.32l of the Commission's rules,
47 C.F.R. Section 0.321 that the Borough's complaint against the CPST rate increase, effective June
1, 1996, charged by TCI in Mount Union, Pennsylvania CUID No. PA0400 IS DENIED.

     FEDERAL COMMUNICATIONS COMMISSION 



     Elizabeth W. Beaty
     Chief, Financial Analysis and Compliance Division
     Cable Services Bureau