TCI Faces Fine Mess Over Aurora Rebuild

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The city of Aurora, Colo., may begin fining
Tele-Communications Inc. $2,000 per day Jan. 1 due to the MSO's latest failure to
complete a rebuild of its local system.

TCI has asked for a 15-month extension of an earlier
agreement, which gave the company until Dec. 31 to finish rebuilding the 55,000-subscriber
system.

The MSO said it needs the extra time to replace antiquated
underground "fused-disc" cable, which allows moisture to seep into the lines,
with fiber optics capable of delivering enhanced offerings like the TCI@Home
Internet-access service.

TCI spokesman Matt Fleury said the company discovered the
need for the extra work after it began checking its contractor's findings that the
existing cable could remain in place.

"If you're going to run these [new] services, you
need to have the plant at a certain level," Fleury said. "We're naturally
concerned that it meets the specs that we need. But we're accelerating this thing,
and one way or another, we're going to get it done."

Aurora cable officials, however, were not impressed with
TCI's argument, noting that under the existing franchise, the rebuild was originally
scheduled to be completed at the end of 1997.

"We're on our third agreement," said Joseph
LaRocco, Aurora's television and cable services manager, adding that the rebuild was
put on hold in 1996 while TCI explored the option of introducing digital programming
instead.

In 1997, the city granted a one-year reprieve in exchange
for TCI giving up the right to appeal any monetary penalties that Aurora officials might
assess if the company missed its latest deadline.

Meanwhile, Aurora has been a city with two cable systems --
one an upgraded 550-megahertz network serving two-thirds of the community, or about 33,000
subscribers; and the second an unreliable system prone to service problems.

LaRocco noted that TCI's decision to approach the city
about another extension coincided with the news that the company was being acquired by
AT&T Corp., indicating that its upgrade plans would not support the introduction of
local phone service in Aurora.

"I've got a feeling that AT&T discovered that
the fused-disc system here wouldn't carry telephone service," he said.

The City Council will take up TCI's request at its
Oct. 26 meeting, where it can impose a $2,000-per-day fine or seek additional concessions
in exchange for granting another extension.

"[The council members] are not going to look real
kindly on this," LaRocco said. "We already negotiated a settlement that was
pretty generous. They already got one year free-of-charge, with no penalties. I don't
know that there's much room to negotiate. But I know that we're not going to do
what we did last time and let them off scot-free."

Fleury said completing the job should take fewer than 15
months, since newly upgraded areas will be activated on a node-by-node basis.

"But it's difficult to understand how our company
can be penalized for recognizing an unforeseen challenge and making the considerable
investment to address it," he added.

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