********************************************************    
                         NOTICE
********************************************************

This document was converted from
WordPerfect to ASCII Text format.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
WordPerfect version or Adobe Acrobat version, if available.

*****************************************************************
                                Before the
                     Federal Communications Commission
                          Washington, D.C. 20554
                                     
                                     )
In the Matter of                     )
                                     )
TCI of Hawaii, Inc.                  )     CUID No.    HI0003 (Hawaii Kai)      
                                     )
Complaint Regarding                  )
Cable Programming Services Tier Rates)
and Refund Plan                      )


                                  ORDER

        Adopted:  October 8, 1997                  Released:  October 10, 1997  

By the Chief, Cable Services Bureau:

  1.    In this Order we consider a complaint against the April 1, 1997 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 in which we found Operator's CPST rates in effect
before April 1, 1997 to be reasonable with the exception of the period May 15, 1994 through June 30,
1994, which we found to be unreasonable ("Prior Order").  Operator filed a Refund Plan in response to
our Prior Order on June 26, 1997.  In this Order, we accept Operator's Refund Plan and address the
reasonableness of Operator's April 1, 1997 CPST rate increase.   

  2.    Under the Communications Act, the 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 a rate to be 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 ("Interim Rules"), require that complaints against the CPST
rates be filed with the Commission by a local franchising authority ("LFA") that has received more than
one subscriber complaint. 

  3.    The LFA for the franchise area referenced above filed a complaint with the Commission
on August 25, 1997.  The LFA verified that it received more than one subscriber complaint and that the
first complaint was received by the LFA on June 10, 1997.  The filing of a complete and timely LFA
complaint triggers an obligation upon the cable operator to file a justification of its CPST rates.  The
Operator has the burden of demonstrating that the CPST rates complained about are reasonable. 

  4.    To justify rates for the period beginning May 15, 1994 through a benchmark showing,
operators must use the FCC Form 1200 series.  Operators may justify 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.
  
  5.    Upon review of Operator's FCC Form 1240 for the projected period April 1, 1997 through
March 31, 1998, we find both Operator's calculated maximum permitted rate ("MPR") of $16.43 and its
actual CPST rate of $16.43, effective April 1, 1997, to be reasonable.

  6.    Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that the CPST rate of $16.43, charged by Operator in the franchise area referenced above,
effective April 1, 1997,  IS REASONABLE.

  7.     IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that Operator's Refund Plan filed on June 26, 1997 IS ACCEPTED.
  8.    IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R.  0.321, that the referenced complaint IS DENIED.

        FEDERAL COMMUNICATIONS COMMISSION 



        Meredith J. Jones
        Chief, Cable Services Bureau