TCI, Santa Cruz Agree to Talk

10/04/1998 8:00 PM Eastern

Santa Cruz, Calif. -- Regulators in the city and county of
Santa Cruz have agreed to sit down with Tele-Communications Inc. and an independent
mediator to resolve basic-rate differences.

The apparent détente occurred after the regulators
directed their special counsel to prepare a lawsuit against the cable operator. City and
county officials believe that TCI has manipulated both federal policy and a federal court
decree to justify excessive rate hikes.

For its part, TCI charged that the communities lost a
lawsuit over possessory-interest taxes that were inappropriately applied to the cable
operation. A spokesman for the operator charged that the lawsuit threat was a bargaining
tool to compel the operator to accept less than the $2 million judgment that is due to
TCI's customers.

Bill Marticorena, attorney for the community, said Santa
Cruz regulators still reserve the right to have their day in court, but the two sides are
now discussing a mutually acceptable mediator and meeting dates.

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