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


                                 
In the Matter of                )
                                )
TCI of Arlington, Inc.          )  CUID No.  TX0826  
                                )   (City of Arlington)
                                )
                                )                                
Complaints Regarding            )
Cable Programming Services Tier )
Rate Increases                  )


                               ORDER

     Adopted:  January 24, 1997                   Released:  January 29, 1997   

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

     1.   In this Order we consider complaints concerning the June 1, 1996 rate increases of
TCI of Arlington, Inc.  ("TCI") for its cable programming services tiers ("CPST") in the City of
Arlington, Texas for CUID No. TX0826.  This Order addresses only the reasonableness of  TCI's
rate increases of June 1, 1996.  We have already issued  separate orders addressing the
reasonableness of the rates prior to that date.  We conclude that the June  1, 1996 rate increases of
$0.45 (tier 2) and $0.36 (tier 3) for the existing system and $2.24 for the rebuilt system are not
unreasonable.

     2.   Under the Communications Act, the Federal Communications Commission
("Commission") is authorized to review the CPST rates of cable systems not subject to effective
competition to ensure that rates charged are not unreasonable.  If the Commission finds the rate
unreasonable, it shall determine the correct rate and any refund liability.  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 by a local franchising authority ("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 rate complaint.  

     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 27, 1996, valid complaints were filed by the City of Arlington, Texas 
regarding the June 1, 1996 increases in TCI's CPST rates in Arlington, Texas.  The valid complaints
from the LFA trigger an obligation on behalf of the cable operator to file a justification of its CPST
rates with the LFA.  TCI filed FCC Form 1240 with the City of Arlington as justification for its
rate increases, as required by our rules. 
          
     5.   Upon review of TCI's filings, we conclude that TCI's June 1, 1996 rate increases of
$0.45 (tier 2) and $0.36 (tier 3) for the existing system and $2.24 for the rebuilt system are justified.

     6.   Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules,
47 C.F.R.  0.321, that TCI of Arlington, Inc.'s CPST rate increases of $0.45 (tier 2)  and $0.36 (tier
3) for the existing system and $2.24 for the rebuilt system which went into effect on June 1, 1996
ARE 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 complaints referenced herein against the June 1, 1996 CPST rate
increases charged by TCI of Arlington, Inc. in Arlington, Texas CUID No. TX0826, ARE DENIED.

                              FEDERAL COMMUNICATIONS COMMISSION 



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