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


                                 
    In the Matter of)
     )
     TCI of Tucson)CUID No. AZ0159 (Tucson)
                          )
   Complaint Regarding )
   Cable Programming Services Tier)            
     Rate Increase)

                              ORDER

        Adopted:  December 13, 1996 Released:  December 18, 1996  
   
By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau:

      1.In this Order we consider a complaint concerning the June 1, 1996 rate increase of
TCI of Tucson ("TCI") for its cable programming services tier ("CPST") in the City of Tucson,
Arizona, CUID No. AZ0159 (the "City").  This Order addresses only the reasonableness of TCI's
rate increase of $1.25 that became effective on June 1, 1996.  TCI has attempted to justify its CPST
rate through a benchmark showing on FCC Form 1240.  We have already issued an order addressing
the reasonableness of the CPST rates in effect for this community before June 1, 1996.  We
conclude that TCI's June 1, 1996 CPST rate increase is not unreasonable.
    
      2.The Communications Act authorizes the Federal Communications Commission to
review the CPST rates of cable systems not subject to effective competition to ensure that rates
charged are not unreasonable.  The Cable Television Consumer Protection and Competition Act of
1992 ("1992 Cable Act") required the Commission to review CPST rates upon the filing of a valid
complaint by a subscriber or local franchise authority ("LFA").  The Telecommunications Act of
1996 ("1996 Act") and our rules implementing the new legislation, require that complaints against
the CPST rates be filed with the Commission only by an LFA that has received subscriber
complaints.  An LFA may not file a CPST rate complaint unless, within 90 days after such increase
becomes effective, it receives more than one subscriber complaint.  The filing of a valid complaint
triggers an obligation on behalf of the cable operator to file a justification of its CPST rate.  If the
Commission finds the rate to be unreasonable, it shall determine the correct rate and any refund
liability.   

      3.The City filed a complaint on October 8, 1996 regarding the June 1, 1996 increase
in TCI's CPST rate in the City.  The City has certified that it has received subscriber complaints and
has complied with the Interim Rules.  TCI submitted an FCC Form 1240 to justify the rate increase
that went into effect June 1, 1996.  As required by our rules, the City's complaint also included a
copy of the rate justification that TCI submitted to the City.  

      4.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.     





      5.Upon review of the record before us, we find that TCI has provided sufficient
evidence to support a CPST rate increase of $1.25.

      6.Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules,
47 C.F.R.  0.321, that the monthly CPST rate increase of $1.25 charged by TCI of Tucson in CUID
No. AZ0159, City of Tucson, Arizona, beginning June 1, 1996 IS NOT UNREASONABLE.  

      7.IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules,
47 C.F.R.  0.321, that the City of Tucson's complaint against the CPST rate increase, effective June
1, 1996, charged by TCI of Tucson in the City of Tucson, Arizona, CUID No. AZ0159, IS DENIED. 

     FEDERAL COMMUNICATIONS COMMISSION 




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