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

In the Matter of                )
                                )
HERITAGE CABLEVISION, INC.      )  File No. CSB-A-0547S
d/b/a TCI OF CENTRAL IOWA       )  CUID IA0036
                                )
Petition for Stay of Local Rate Order)
of City of Des Moines, Iowa     )


                              ORDER

   Adopted:  November 23, 1998          Released:  November 25, 1998

By the Associate Chief, Cable Services Bureau:

     1.   On June 26, 1998, Heritage Cablevision, Inc. d/b/a TCI of Central Iowa ("Operator")
requested a stay of the local rate order passed by the City of Des Moines, Iowa ("the City") on May 18, 1998
pending action on its appeal of that local rate order.  The stay is requested with respect to the City's ruling
on Operator's equipment, installation, and maintenance rates on Form 1205.  The City filed an opposition
on July 10, 1998.

     2.   Franchising authorities may regulate rates for basic cable service and associated equipment
and installation charges pursuant to section 623(a) of the Communications Act of 1934, as amended
("Communications Act") and the Commission's implementing regulations adopted pursuant to section 623(b)
of the Communications Act.  The City issued a local rate order denying Operator's proposed equipment,
installation, and maintenance rate increases.  It based its action on a consultant's report questioning both the
Operator's methodology for determining its rates and some costs included in Operator's rate calculations. 
Operator argues that, if a stay is not granted, it will be irreparably harmed by what it alleges is an erroneous
rate order, because the Commission's prescribed ratemaking methodology determining equipment,
installation, and maintenance rates does not provide a mechanism for recovering lost revenues.  Operator
argues that, if a stay is granted, its subscribers will be fully protected by its pledge to track its revenue and
make appropriate refunds if ordered to do so under the final disposition of the case.  The City opposes
Operator's request, arguing that Operator disregarded its rate order and that Operator's rate filing was
unjustified.

     3.   The Commission evaluates petitions for stay under well settled principles.  To support a stay,
a petitioner must demonstrate:  (1) that it is likely to prevail on the merits; (2) that it will suffer irreparable
harm if a stay is not granted; (3) that other interested parties will not be harmed if the stay is granted; and
(4) that the public interest favors granting a stay.  The likelihood of success on the merits is an important
element in a petitioner's showing.  However, the degree to which a probability of success on the merits must
be found will vary according to the Commission's assessment of the other factors.   When confronted with
a case in which other elements strongly favor interim relief, the Commission may exercise its discretion to
grant a stay.

     4.   The substantive issues addressed by the City concern Operator's development of company-
wide equipment and installation rates after the Telecommunications Act of 1996 amended the
Communications Act to allow aggregated equipment rates on a franchise, system, regional, or company level. 
The appropriateness of Operator's methodology and the adequacy of supportive information provided to
franchising authorities has been questioned in local rate orders adopted by several franchising authorities
and is being further reviewed pursuant to a petition for reconsideration of the Bureau's Memorandum
Opinion and Order in TCI of Richardson, Inc.  We find that a stay of the local rate order pending this review
and a determination of the Operator's appeal is in the public interest so that Operator's nationally aggregated
rate can be treated consistently in these jurisdictions.

     5.   Operator must protect the interests of subscribers and ensure that refunds will be paid if
Operator charges rates in excess of those permitted by the local rate order and does not prevail on the merits. 
If Operator charges equipment, installation, and maintenance rates in excess of the rates permitted by the
City's local rate order at any time after the effective date of the City's local rate order and before this stay
is dissolved, Operator must accumulate in an interest-bearing escrow account an amount equal to the
difference between the rates permitted by the City and the higher rates charged by Operator.  An amount
equal to the excess revenues received up to the time the escrow account is opened must be deposited when
the account is opened, and additional amounts must be accumulated on an ongoing basis.  Alternatively,
Operator may elect to post a bond for the benefit of the City.  The amount of the bond shall be an estimate
of the total amount that will accumulate based on the difference between the rates ordered by the City and
the rates charged customers from the date Operator first began charging rates in excess of those permitted
in the City's local rate order until Operator's next annual rate adjustment is scheduled to take effect.  The
amount of the bond shall be based on Operator's subscriber count at the time the bond is posted.  The bond
shall provide that, if Operator is unable to fulfill its refund obligation for any reason, then the surety will
fulfill that obligation to the City, on behalf of Operator's subscribers.

     6.   Accordingly, IT IS ORDERED that the Request for Emergency Stay of Local Rate Order
filed by Heritage Cablevision, Inc. d/b/a TCI of Central Iowa IS GRANTED with respect to Operator's
equipment, installation, and maintenance rates on FCC Form 1205 pending the resolution of Operator's
appeal on the merits.

     7.   IT IS FURTHER ORDERED that, if Operator implements all or part of its proposed rates
in excess of the rates permitted by the City's local rate order, Operator SHALL ESTABLISH an interest-
bearing escrow account as described above.  Alternatively, Operator SHALL SECURE the City against the
possibility of a refund of revenues collected in excess of those permitted by the City's local rate order by
posting a bond as described above.  Interest shall accrue, or be computed, at the prevailing U.S. Internal
Revenue Service rate for tax refunds and additional tax payments.  Proof of Operator's compliance with this
Order SHALL BE FILED with the Commission within thirty (30) days of the release of this Order or
Operator's implementation of any increase in its equipment, installation, and maintenance rates in excess of
the maximum rates permitted by the City's local rate order, whichever is later.

     8.   IT IS FURTHER ORDERED that the Motion for Extension of Time Within Which to File
Opposition to Request for Emergency Stay filed by the City of Des Moines, Iowa on July 10, 1998 IS
GRANTED.

     9.   This action is taken by the Associate Chief, Cable Services Bureau, pursuant to authority
delegated by section 0.321 of the Commission's rules.  47 C.F.R.  0.321.

                              FEDERAL COMMUNICATIONS COMMISSION



                              Marjorie Reed Greene
                              Associate Chief, Cable Services Bureau