TCI Tries to Avoid Stiff Fine

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City officials in Aurora, Colo., plan to launch settlement
talks with Tele-Communications Inc. over the MSO's failure to rebuild its local cable
system.

If successful, the negotiations could spare TCI a
$2,000-per-day fine, since it's not expected to meet the Dec. 31 deadline contained
in its franchise for rebuilding the Aurora system.

Meeting in executive session last week, the City Council
was briefed on its options, which included imposing the maximum fine on TCI beginning Jan.
1, or striking a deal that would benefit 55,000 area cable subscribers.

Joseph LaRocco, Aurora's television- and
cable-services manager, said the city will try to reach a deal.

"I think it's safe to say that [council members]
are not happy. They had an agreement with TCI, and it wasn't lived up to," he
said.

LaRocco declined to discuss what concessions the city may
seek from TCI.

TCI officials immediately proclaimed themselves
"eager" to work with the city.

"We strongly believe that the increased investment
that we're making in Aurora is to the benefit of the community," TCI spokesman
Matt Fleury said. "Our goal is a win for customers, which is good for TCI and for the
city."

TCI's latest round of problems with Aurora began last
month, when the MSO asked for a 15-month extension of a previous agreement that gave it
until year's end to complete its rebuild.

TCI explained that it must replace the network's
underground "fused-disc" cable, which had deteriorated over time, and which must
be swapped for fiber optics if the system is going to offer enhanced services like its
TCI@Home Internet-access service.

However, LaRocco replied that TCI was already two years
behind in completing its upgrade.

In 1997, the city granted a one-year extension that was
conditioned on TCI surrendering the right to appeal any monetary penalties that Aurora
might impose if the project was not completed by the end of 1998.

LaRocco conceded that TCI cannot physically complete its
upgrade by year's end, which necessitates the upcoming settlement talks.

During the negotiations, TCI will have to sweeten the pot
if it's to avoid being slapped with a fine that could cost the company more than
$900,000 over the course of 15 months.

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