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


                                )
In the Matter of                )
                                )
TCI American Cable Holdings, L.P.) CUID No.  WA0231 (City of Spokane)
                                )                                Complaint Regarding a)
Cable Programming Services Tier )
Rate Increase                   )

                             ORDER

     Adopted:  May 23, 1997             Released:  May 28, 1997  

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

     1.   In this Order we consider a complaint filed on February 5, 1996 concerning the rate
increase of the above-referenced operator ("Operator") for its cable programming services tier
("CPST") in the community referenced above.  We have already issued an order which resolved
complaints against Operator's rates for the period from September 1, 1993 through June 30, 1995
("Settlement Order").  This order addresses the reasonableness of Operator's CPST rates from
January 1, 1996 to date.  We conclude that Operator's CPST rates are not unreasonable.  

     2    The Communications Act, authorizes the Federal Communications Commission
("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.  The filing of a valid complaint triggers an obligation
on behalf of the cable operator to file a justification of its CPST rates.  If the Commission finds the
rate to be unreasonable, it shall determine the correct rate and any refund liability.

     3.   The Commission's original rate regulations took effect on September 1, 1993.  The
Commission subsequently revised its rate regulations effective May 15, 1994.  Cable operators must
use the FCC Form 1200 series to justify their rates through a benchmark showing for the period
beginning May 15, 1994.  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.   Operator filed an FCC Form 1210 for the period from October 1, 1995 through
December 31, 1995 to justify a CPST rate of $19.82 effective January 1, 1996.  To justify a CPST
rate of $21.00 effective October 1, 1996, Operator filed with the Commission an FCC Form 1240
for the projected period from October 1, 1996 through September 30, 1997.

     5.   Upon review of Operator's FCC Form 1210, we conclude that Operator has justified
its CPST rate of $19.82 implemented on January 1, 1996.  Upon review of Operator's FCC Form
1240, we find that line 6, where Operator indicates that it used a nine-month true-up period from
October 1, 1995 through June 30, 1996, differs from Worksheet 1, where Operator actually used a
12-month true-up period from October 1, 1995 through September 30, 1996.  To correct this
discrepancy, we have adjusted Worksheet 1 to reflect the nine-month true-up period.  This
adjustment reduces the average inflation factor for the true-up period from 1.0240 to 1.0185; and we
have corrected the true-up inflation factor in Module C, Line C1, accordingly.  The adjustment to
the inflation factor results in a maximum permitted rate ("MPR") of $21.28 for Operator's projected
period.  Because Operator actually was charging a CPST rate of $21.00, effective October 1, 1996,
we find that Operator's CPST rate is not unreasonable.

     6.   Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules,
47 C.F.R.  0.321, that the CPST rates charged by Operator beginning January 1, 1996 in the
community referenced above 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 complaint referenced herein against the CPST rate charged by Operator
in the franchise area referenced in the caption IS DENIED.

                              FEDERAL COMMUNICATIONS COMMISSION 



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