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


                                 
    In the Matter of)
     )
   TCI Cablevision of San Jose       )CUID No.  CA0280 (Daly City)
                          )
   Complaint Regarding )
   Cable Programming Services Tier)            
     Rate Increase)


                               ORDER

        Adopted:  November 12, 1996Released:  November 15, 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 Cablevision of San Jose ("TCI") for its cable programming services tier ("CPST") in Daly City,
CUID No. CA0280.  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 $3.73 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 ("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.The City of Daly City ("City") filed a complaint on August 19, 1996 regarding the
June 1, 1996 increase in TCI's CPST rate in the above-referenced community.  In its complaint, the
City asserts that it has received more than one subscriber complaint against TCI's CPST rate
increase, thereby triggering the Commission's jurisdiction to review this complaint.  The valid
complaint from the LFA triggers an obligation on behalf of the cable operator to file a justification
of its CPST rates with the LFA.  TCI filed a FCC Form 1240 with the City on March 1, 1996 as
justification for this rate increase, as required by our rules. 

      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 TCI's FCC Form 1240, we find no apparent errors in TCI's
calculation of its CPST rate increase.  We conclude, therefore, that TCI's CPST rate increase of
$3.73 which went into effect on June 1, 1996 is justified.

      6.Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's Rules,
47 C.F.R.  0.321, that TCI Cablevision of San Jose's CPST rate increase of $3.73 which went into
effect on 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 complaint referenced herein against the June 1, 1996 CPST rate increase
charged by TCI Cablevision of San Jose in Daly City, CUID No. CA0280, IS DENIED.

     FEDERAL COMMUNICATIONS COMMISSION 



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