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


In the Matter of            )
           )       
TCI Cablevision of San Jose            )   CUID No.  CA0843 (City of Cupertino)
           )    
Complaint Regarding         )    
Cable Programming Services Tier        )
Rate Increase         )

 
                                      ORDER

     Adopted: October 31, 1996   Released: November 1, 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 Cablevision of San Jose ("TCI") for its cable programming services tier ("CPST") in the
City of Cupertino, California, CUID No. CA0843.  We have already issued a separate order
addressing the reasonableness of the rates prior to that date.  We conclude that the CPST rate
increase of $2.14 TCI began charging 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.     On August 19, 1996 the City of Cupertino ("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 the increase first
appeared on the subscriber's cable bill.   On March 1, 1996, TCI submitted to the City an FCC
Form 1240 to justify the rate increase that went into effect on June 1, 1996 in the above-
captioned community.  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 $2.14  

     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 $2.14 charged by TCI
Cablevision of San Jose in CUID No. CA0843, Cupertino, 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 the City of Cupertino's complaint against the CPST rate
increase, effective June 1, 1996, charged by TCI Cablevision of San Jose in Cupertino,
California, CUID NO. CA0843, IS DENIED.
     

     FEDERAL COMMUNICATIONS COMMISSION 



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