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

In the Matter of                )  
                                )            
Time Warner Communications      )  CUID No.  CA0572 (Poway)
                                )            
Complaint Regarding             )                 
Cable Programming Services Tier )            
Rate Increase                   )            
                                             
                                
                             ORDER

     Adopted:  December 1, 1998         Released:  December 4, 1998   

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

     1.   In this Order we consider a complaint against the January 1, 1996 rate increase of the above-
referenced operator ("Operator") for its cable programming services tier ("CPST") in the community
referenced above.  On November 30, 1995, we issued an Order approving a Social Contract ("Social
Contract") which Operator entered into with the Federal Communications Commission ("Commission"). 
This Order addresses only the reasonableness of Operator's CPST rate increase, consistent with the terms
of the Social Contract, effective January 1, 1996.

     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.  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.  To justify rates for
the period beginning May 15, 1994, operators must use the FCC Form 1200 series.  Operators are permitted
to make changes to their rates on a quarterly basis using FCC Form 1210.  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.  

     3.   Subsequent to the Social Contract, Operator was given permission by Commission staff to
file bifurcated FCC Form 1240s.  In these bifurcated forms, Operator calculates the $1.00 annual increase
permitted by the Social Contract ("Social Contract Dollar") and its true-up on a separate FCC Form 1240
("SCD Form 1240").  On the SCD Form 1240, Operator calculates its true-up adjustment through to the
effective date of the rate increase.  On its other FCC Form 1240, Operator calculates the other adjustments
to its CPST rate adjusting its true-up period to conform with FCC Form 1240 Instructions.

     4.   Upon review of Operator's bifurcated FCC Form 1240 methodology, we find Operator's
methodology acceptable.  It allows Operator to collect its Social Contract Dollar each year, and to true-up
any applicable part of its Social Contract Dollar, within the calendar years covered by the Social Contract. 
In the present case, we will allow Operator to file its bifurcated FCC Form 1240s because we instructed
Operator to make such filings.  Absent such explicit instructions, we would reject the FCC Form 1240s filed
by Operator.  Further, our acceptance of Operator's bifurcated FCC Form 1240 methodology still requires
that we review Operator's calculations on these FCC Form 1240s.

     5.   Upon review of Operator's FCC Form 1240s, for the projected period January 1, 1996
through December 31, 1996,  we accept Operator's filing and find that Operator has correctly calculated its
maximum permitted rate ("MPR") of $15.83.  Because Operator's actual rate of $15.76 does not exceed its
MPR, we find Operator's actual rate of $15.76 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, charged by Operator in the franchise area referenced above, effective
January 1, 1996, IS REASONABLE.

     7.   IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R. Section 0.321, that the complaint referenced herein against the rate charged by Operator in the
community set forth above IS DENIED.


                              FEDERAL COMMUNICATIONS COMMISSION 



                              Margaret M. Egler
                              Acting Chief, Financial Analysis and Compliance Division
                              Cable Services Bureau