Arlington Does Battle with TCI

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Tired of wrangling over annual rate increases, officials in
Arlington, Texas, will try to compel Tele-Communications Inc. to submit to the city's
latest rate order.

By amending its local-cable ordinance, the City Council
made it a misdemeanor for TCI not to abide by a Feb. 3 order requiring decreases in the
price of basic cable, as well as in hourly service and equipment costs. A final reading on
that order is set for this week.

The amended ordinance allows the city to levy liquidated
damages of $500 for each day that the MSO does not comply.

However, the amendment -- patterned after an ordinance in
Richardson, Texas, which has been upheld by the Federal Communications Commission -- does
not alter the city's decision to authorize a transfer of TCI's franchise to
AT&T Corp.

Under the transfer agreement, TCI has agreed to revisions
in its franchise calling for a $200 fine for each day that customer complaints received by
the city average more than one per day during a three-month period.

Meanwhile, the council decided to act on the rate issue
after TCI indicated that it would appeal Arlington's latest rate order to the FCC, as
it has in each of the previous two years, assistant city manager Jennifer Howry said.

The FCC has yet to rule on those appeals, leaving TCI free
to impose its new rates, she said.

"We have rate orders from 1996 that are still on
appeal at the FCC," Howry said. "Basically, we feel like TCI has been ignoring
our rate orders."

The city's latest order demands that TCI drop the cost
of basic cable from $10.98 per month to $10.09. It also calls for reductions in service
and equipment costs.

"Some of these are incredible differences," Howry
said.

Valencia McClure, TCI's director of communications in
Dallas, said the company would file its appeal once the city passes its rate order under
its new ordinance. The company will have until April 1 to file with the FCC.

TCI is expected to ask for an emergency stay, which, if
granted, would theoretically prohibit the city from enforcing its ordinance until the FCC
issues its decision.

However, if the stay is not granted, the MSO is prepared to
comply with the new terms in the ordinance, she said.

The purpose of the stay request is to prevent a
"roller-coaster" ride that would initially cut subscribers' rates, only to
increase them again if the FCC rules in the company's favor, she added.

McClure conceded that the FCC upheld Richardson's
right to impose similar conditions on the company.

However, she noted that the agency also granted the MSO an
emergency stay of a rate order issued in neighboring Plano, Texas, this past November,
indicating that the commission may be reconsidering its position.

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