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


In the Matter of            )
           )
TCI Cablevision of San Jose            )       
           )   CUID No. CA0205 (San Jose)
           )    
Complaint Regarding         )    
Cable Programming Services Tier        )
Rate Increase         )


                                      ORDER

       Adopted:  October 17, 1996      Released:  October 23, 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
by TCI Cablevision of San Jose, ("TCI") for its cable programming services tier ("CPST") in the
City of San Jose, California, CUID No. CA0205.  In response to this complaint, TCI submitted
FCC Form 1240.  This Order addresses the reasonableness of TCI's CPST rate increase of $3.18
that became effective June 1, 1996.  We conclude that, for the reason discussed below, the CPST
rate increase TCI implemented on June 1, 1996 is 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 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, within 90 days after such increase becomes effective, it receives subscriber complaints.
This standard requires more than one subscriber rate complaint. The provisions under the 1996
Act became effective upon its enactment on February 8, 1996.

     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 are permitted
to make changes to their rates on a quarterly basis using FCC Form 1210.  Operators may
alternatively 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 August 26, 1996 the local franchising authority, Redwood City (the "City"),
filed a complaint against TCI's June 1, 1996 CPST rate increase.  The City has certified that it
has received subscriber complaints regarding the CPST rate increase within 90 days after the date
of the increase first appeared on the subscribers' bills.  As required by our rules, the City also
included with its complaint a copy of the FCC Form 1240 rate justification that TCI submitted. 

     5.    Upon review of the record before us, we find that TCI has provided sufficient
evidence to support a CPST rate increase of  $3.18.  

     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 $3.18
charged by TCI Cablevision of San Jose in CUID No. CA0205, San Jose, California, 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 Redwood City's complaint against the CPST rate increase of
$3.18, effective June 1, 1996, charged by TCI Cablevision of San Jose in CUID No. CA0205,
City of San Jose California, IS DENIED.

     FEDERAL COMMUNICATIONS COMMISSION 



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