Filed Pursuant to Rule 424(b)(3)
                                                Registration No. 333-00717


  PROSPECTUS
                           Tele-Communications, Inc.

  Tele-Communications, Inc. Series A TCI Group Common Stock ($1.00 par value)
 Tele-Communications, Inc. Series A Liberty Media Group Common Stock ($1.00 par
 value)
    
       This Prospectus relates to (i) an aggregate of 5,000,000 shares (the "TCI
  Group Shares") of the Tele-Communications, Inc. Series A TCI Group Common
  Stock, par value $1.00 per share (the "TCI Group Series A Common Stock"), of
  Tele-Communications, Inc., a Delaware corporation (the "Company" or "TCI"),
  and (ii) an aggregate of 1,250,000 shares (the "Liberty Group Shares," and
  collectively with the TCI Group Shares, the "Shares") of Tele-Communications,
  Inc. Series A Liberty Media Group Common Stock, par value $1.00 per share (the
  "LMG Series A Common Stock"), of the Company to be offered and sold from time
  to time by the holders thereof (the "Selling Stockholders").  The Selling
  Stockholders currently own shares of TCI Group Series A Common Stock and LMG
  Series A Common Stock, as well as shares of the Company's Convertible
  Preferred Stock, Series D (the "Series D Preferred Stock"), which shares are
  convertible into shares of TCI Group Series A Common Stock and LMG Series A
  Common Stock.  Accordingly, the Shares covered by this Prospectus include both
  presently issued and outstanding shares and those issuable upon conversion of
  shares of Series D Preferred Stock.  The aggregate number of shares of TCI
  Group Series A Common Stock and LMG Series A Common Stock currently owned by
  the Selling Stockholders and issuable to them upon conversion of the Series D
  Preferred Stock exceed the number of Shares covered by this Prospectus.  See
  "Selling Stockholders."      

       On August 3, 1995, the Company's Restated Certificate of Incorporation
  was amended to, among other things, (i) redesignate the Company's Class A
  Common Stock, par value $1.00 per share ("Class A Common Stock"), as TCI Group
  Series A Common Stock and the Company's Class B Common Stock, par value $1.00
  per share, as Tele-Communications, Inc. Series B TCI Group Common Stock, par
  value $1.00 per share (the "TCI Group Series B Common Stock" and, together
  with the TCI Group Series A Common Stock, the "TCI Group Common Stock"), and
  (ii) authorize two additional series of the Company's common stock, designated
  as LMG Series A Common Stock and the Tele-Communications, Inc. Series B
  Liberty Media Group Common Stock, par value $1.00 per share (the "LMG Series B
  Common Stock" and, together with the LMG Series A Common Stock, the "Liberty
  Media Group Common Stock").  Thereafter, the Company distributed to holders of
  TCI Group Common Stock one-fourth of a share of the corresponding series of
  Liberty Media Group Common Stock in respect of each share of TCI Group Common
  Stock held of record as of August 4, 1995, the record date for the
  distribution.

       Both series of TCI Group Common Stock are identical in all respects,
  except (i) each share of TCI Group Series B Common Stock has ten votes and
  each share of TCI Group Series A Common Stock has one vote and (ii) each share
  of TCI Group Series B Common Stock is convertible, at the option of the
  holder, into one share of TCI Group Series A Common Stock.  Similarly, both
  series of Liberty Media Group Common Stock are identical in all respects,
  except (i) each share of LMG Series B Common Stock has ten votes and each
  share of LMG Series A Common Stock has one vote and (ii) each share of LMG
  Series B Common Stock is convertible, at the option of the holder, into one
  share of LMG Series A Common Stock.  The shares of TCI Group Series A Common
  Stock and LMG Series A Common Stock are not convertible into the shares of TCI
  Group Series B Common Stock and LMG Series B Common Stock, respectively.

       Shares of the TCI Group Series A Common Stock, the TCI Group Series B
  Common Stock, the LMG Series A Common Stock and the LMG Series B Common Stock
  are traded on the Nasdaq National Market under the symbols "TCOMA," "TCOMB,"
  "LBTYA" and "LBTYB," respectively.
    
       SEE "RISK FACTOR" ON PAGE 4 OF THIS PROSPECTUS FOR A DISCUSSION OF
  CERTAIN RISKS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN
  THE SHARES OFFERED HEREBY.      

                                                                     (continued)


  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
  EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
  AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
  ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
  A CRIMINAL OFFENSE.
    

             The date of this Prospectus is August 1, 1996.      

 
        Each of the TCI Group Shares and the Liberty Group Shares may be offered
  for sale and sold by the Selling Stockholders from time to time in varying
  amounts, including in block transactions, on the Nasdaq National Market at
  then prevailing prices or in private transactions at prices and on terms to be
  determined at the time of sale. The Shares may be sold by the Selling
  Stockholders directly, through an underwritten offering, through agents
  designated from time to time or to or through broker-dealers designated from
  time to time. To the extent required, the number and series of Shares to be
  sold, the name of the Selling Stockholder, the purchase price, the public
  offering price, if applicable, the name of any such agent or broker-dealer,
  and any applicable commissions, discounts or other items constituting
  compensation to such underwriters, agents or broker-dealers with respect to a
  particular offering will be set forth in a supplement or supplements to this
  Prospectus (each, a "Prospectus Supplement"). The aggregate proceeds to the
  Selling Stockholders from the sale of the Shares so offered will be the
  purchase price of the Shares sold less (i) the aggregate commissions,
  discounts and other compensation, if any, paid by the Selling Stockholders to
  underwriters, agents or broker-dealers and (ii) certain other expenses of the
  offering and sale of the Shares that will be the responsibility of the Selling
  Stockholders. See "Selling Stockholders". The Selling Stockholders may also
  sell all or a portion of the Shares in transactions under Rule 145 under the
  Securities Act of 1933, as amended (the "Securities Act"), or as otherwise
  permitted under the Securities Act. See "Plan of Distribution". The Company
  will not receive any proceeds from the sale of the Shares. The Company knows
  of no selling arrangement between any underwriter, agent or broker-dealer and
  the Selling Stockholders.

       The Selling Stockholders and any broker-dealers or agents that
  participate with the Selling Stockholders in the distribution of any of the
  Shares may be deemed to be "underwriters" within the meaning of the Securities
  Act, and any discount or commission received by them and any profit on the
  resale of the Shares purchased by them may be deemed to be underwriting
  discounts or commissions under the Securities Act.

                                       2

 
                             AVAILABLE INFORMATION

       The Company has filed with the Securities and Exchange Commission (the
     "Commission") a registration statement on Form S-3 (together with all
     amendments and exhibits, referred to as the "Registration Statement") under
     the Securities Act, with respect to the Shares.  This Prospectus does not
     contain all of the information set forth in the Registration Statement,
     certain parts of which are omitted in accordance with the rules and
     regulations of the Commission.  For further information pertaining to the
     Shares and the Company, reference is made to the Registration Statement.
     Statements contained herein or in any document incorporated herein by
     reference concerning the provisions of any contract or other document are
     not necessarily complete and, in each instance, reference is made to the
     copy of such contract or other document filed as an exhibit to the
     Registration Statement or such other document.  Each such statement is
     qualified in its entirety by such reference.
    
       The Company is subject to the informational requirements of the
     Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
     accordance therewith files reports and other information with the
     Commission.  Reports, proxy statements and other information filed by the
     Company can be inspected and copied at the public reference facilities
     maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth
     Street, N.W., Washington, D.C. 20549; Suite 1400, 500 West Madison Street,
     Chicago, Illinois  60661; and at Suite 1300, 7 World Trade Center, New
     York, New York 10048; and copies of such material can be obtained from the
     Public Reference Section of the Commission, 450 Fifth Street, N.W.,
     Washington, D.C.  20549, at prescribed rates.  The Commission maintains a
     Web site that contains reports, proxy and information statements and other
     information regarding registrants (including the Company) that file
     electronically with the Commission.  The address of the Commission's Web
     site is http://www.sec.gov.      


                    INCORPORATION OF DOCUMENTS BY REFERENCE
    
     The following documents have been filed by the Company with the Commission
     under the Exchange Act and are hereby incorporated into this Prospectus 
     by reference and made a part hereof (Commission File No. 0-20421): (i) the
     Company's Annual Report on Form 10-K for the year ended December 31, 1995,
     (ii) the Company's Quarterly Report on Form 10-Q for the quarter ended
     March 31, 1996 (as amended by Form 10-Q//A (Amendment No. 1)), (iii) the
     Company's Current Reports on Form 8-K, dated February 9, 1996, June 19,
     1996 and July 2, 1996 and (iv) the financial statements and notes thereto
     of Cablevision (a combination of certain cable television assets of
     Cablevision S.A., Televisora Belgrano S.A., Construred S.A., and Univent's
     S.A.) as of December 31, 1994 and 1993, and for each of the years in the
     three-year period ended December 31, 1994, which appear in the Current
     Report on Form 8-K of the Company, dated April 20, 1995 (as amended by Form
     8-K/A (Amendment No. 1)).     

       All documents filed by the Company with the Commission pursuant to
     Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
     hereof and prior to the termination of the offering of the Shares described
     in this Prospectus shall be deemed to be incorporated herein by reference
     and to be a part hereof from the respective dates of the filing of such
     documents.  Any statement contained in a document incorporated or deemed to
     be incorporated by reference herein shall be deemed to be modified or
     superseded for purposes of this Prospectus to the extent that a statement
     contained herein or in any other subsequently filed document which also is
     or is deemed to be incorporated by reference herein modifies or supersedes
     such statement.  Any such statement so modified or superseded shall not be
     deemed, except as so modified or superseded, to constitute a part of this
     Prospectus.

       The Company will provide without charge to each person to whom a
     Prospectus is delivered, on the written or oral request of any such person,
     a copy of any or all of the documents incorporated by reference herein,
     other than exhibits to such documents (unless such exhibits are
     specifically incorporated by reference into the documents that this
     Prospectus incorporates).  Such requests should be addressed to Stephen M.
     Brett, Esq., Executive Vice President and General Counsel, Tele-
     Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood,
     Colorado  80111-3000; telephone (303) 267-5500.

                                       3

 
    
                                  RISK FACTOR

       The Company incurred net losses of $171 million and $5 million for the
     years ended December 31, 1995 and 1993, respectively, and a net loss of 
     $118 million for the three months ended March 31, 1996. The Company had net
     earnings of $62 million for the year ended December 31, 1994, and a net
     loss of $45 million for the three months ended March 31, 1995.
     Notwithstanding the losses it has incurred, the Company has been able to,
     and expects to continue to be able to, satisfy its debt service and other
     obligations as and when they become due. The Company's operating cash flow
     (operating income before depreciation, amortization and other non-cash
     credits or charges) ($1,975 million, $1,798 million and $1,858 million for
     the years ended December 31, 1995, 1994 and 1993, respectively, and $537
     million and $464 million for the three months ended March 31, 1996 and
     1995, respectively) has historically been sufficient to cover its interest
     expense ($1,010 million, $785 million and $731 million for the years ended
     December 31, 1995, 1994 and 1993, respectively, and $261 million and $240
     million for the three months ended March 31, 1996 and 1995, respectively).
     The Company's interest coverage ratios for the years ended December 31,
     1995, 1994 and 1993 were 196%, 229% and 254%, respectively and for the
     three months ended March 31, 1996 and 1995 were 206% and 193%,
     respectively. Operating cash flow is a measure of value and borrowing
     capacity within the cable television industry and is not intended to be a
     substitute for cash flows provided by operating activities, a measure of
     performance prepared in accordance with generally accepted accounting
     principles, and should not be relied upon as such. Operating cash flow, as
     defined, does not take into consideration substantial costs of doing
     business, such as interest expense, and should not be considered in
     isolation to other measures of performance.     
    
       Another measure of liquidity is net cash provided by operating activities
     as reflected in the Company's consolidated statements of cash flows.  Net
     cash provided by operating activities ($957 million, $908 million and
     $1,247 million for the years ended December 31, 1995, 1994 and 1993,
     respectively, and $317 million and $151 million for the three months ended
     March 31, 1996 and 1995, respectively) reflects net cash from the
     operations of the Company available for the Company's liquidity needs after
     taking into consideration the aforementioned substantial costs of doing
     business not reflected in operating cash flow.  Amounts expended by the
     Company for its investing activities exceed net cash provided by operating
     activities.      

                                  THE COMPANY
    
       The Company, through its subsidiaries and affiliates, is principally
     engaged in the construction, acquisition, ownership and operation of cable
     television systems and the provision of satellite-delivered video
     entertainment, information and home shopping programming services to
     various video distribution media, principally cable television systems.
     The Company is one of the largest providers of cable television services in
     the United States.  The Company also has interests in cable and
     telecommunications operations and television programming in certain
     international markets, as well as investments in companies and joint
     ventures involved in developing and providing programming for new
     television and telecommunications technologies. The Company is principally
     organized into four principal business groups: Domestic Tele-Communications
     and Distribution; Programming; International Cable and Programming; and
     Technology/Venture Capital. The Company is a Delaware corporation and its
     principal executive offices are located at Terrace Tower II, 5619 DTC
     Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500.     
                              SELLING STOCKHOLDERS

       The Selling Stockholders are Frank Batten, as trustee of the Frank Batten
     Trust and as trustee under the will of Fay M. Slover (collectively, the
     "Trusts"), and Richard D. Roberts.  The TCI Group Shares initially were
     acquired as shares of Class A Common Stock (prior to the redesignation of
     such shares into shares of TCI Group Series A Common Stock) by the Selling
     Stockholders pursuant to that certain Agreement and Plan of Merger, dated
     August 8, 1994, by and among the Company, TCI Communications, Inc. ("TCIC")
     and TeleCable Corporation (the "Agreement") pursuant to which

                                       4

 
     TeleCable Corporation ("TeleCable") was merged with and into TCIC (the
     "Merger").  Mr. Batten was Chairman of the Board and Mr. Roberts was
     President and Chief Executive Officer of TeleCable prior to the Merger.

       All of the Liberty Group Shares were acquired by the Selling Stockholders
     in connection with the Company's distribution to the holders of record of
     TCI Group Common Stock on August 4, 1995 (the record date for such
     distribution), of one-fourth of a share of the corresponding series of
     Liberty Media Group Common Stock in respect of each share of TCI Group
     Common Stock held as of such record date.
    
       As of July 1, 1996, the Frank Batten Trust owned 7,657,050 shares of
     TCI Group Series A Common Stock, 1,946,761 shares of LMG Series A Common
     Stock and 184,538 shares of Series D Preferred Stock (which shares as of
     such date were convertible at the option of the holder into 1,845,380
     shares of TCI Group Series A Common Stock and 461,345 shares of LMG Series
     A Common Stock); the Fay M. Slover Trust owned 6,067,801 shares of TCI
     Group Series A Common Stock, 1,536,950 shares of LMG Series A Common Stock,
     254,940 shares of Series D Preferred Stock (which shares as of such date
     were convertible at the option of the holder into 2,549,400 shares of TCI
     Group Series A Common Stock and 637,350 shares of LMG Series A Common
     Stock); and Richard D. Roberts owned 872,686 shares of TCI Group Series A
     Common Stock, 218,171 shares of LMG Series A Common Stock and 20,681 shares
     of Series D Preferred Stock (which shares as of such date were convertible
     at the option of the holder into 206,810 shares of TCI Group Series A
     Common Stock and 51,702.5 shares of LMG Series A Common Stock).  Mr. Batten
     does not own individually any shares of TCI Group Common Stock, Liberty
     Media Group Common Stock or Series D Preferred Stock; however, Mr. Batten
     may be deemed to be the beneficial owner of the shares held by the Trusts
     by virtue of his duties as trustee of each of the Trusts.  The Selling
     Stockholders may sell the Shares under the Registration Statement of which
     this Prospectus forms a part, in transactions under Rule 145 under the
     Securities Act, or as otherwise permitted under the Securities Act.       

            The Company has agreed to register the resale by the Selling
     Stockholders for a period of three years after the effective date of the
     Merger (the "Effective Date") with respect to, at all times, 5,000,000
     shares of TCI Group Series A Common Stock and 1,250,000 shares of LMG
     Series A Common Stock received by the Selling Stockholders pursuant to the
     Merger or upon conversion of shares Series D Preferred Stock received by
     them pursuant to the Merger.  In addition, in connection with the closing
     of the Merger, the Company and Frank Batten, as trustee of the Trusts and
     as agent for the other former TeleCable shareholders and Mr. Roberts,
     entered into a registration rights agreement pursuant to which Mr. Batten,
     as trustee of the Trusts and as agent for the other former TeleCable
     shareholders and Mr. Roberts, have the right to cause the Company to
     register, on not more than two occasions, all of the shares of TCI Group
     Series A Common Stock and LMG Series A Common Stock issued to them as a
     result of the Merger and TCI Group Series A Common Stock and LMG Series A
     Common Stock issuable upon conversion of Series D Preferred Stock issued to
     them as a result of the Merger.  The registration rights agreement also
     entitles Mr. Batten, as trustee of the Trusts and as agent for the other
     TeleCable shareholders and Mr. Roberts to certain "piggyback" registration
     rights.

            Under the Severance Plan Covering Key Employees of TeleCable
     Corporation and its subsidiaries (the "Severance Plan"), Richard D. Roberts
     became entitled to three weeks of severance pay for each complete year of
     service with TeleCable or any of its subsidiaries or affiliates in the
     event of the termination of his employment following the Merger.  Mr.
     Roberts' employment was terminated immediately following the Merger and he
     thus became entitled to severance payments of approximately $1,178,509.
     Such benefits under the Severance Plan are being paid to Mr. Roberts in
     installments as specified therein.

            Under the Agreement, the Company has agreed to cause TCIC to
     continue to provide indemnification to Messrs. Batten and Roberts for a
     period of six years after the Effective Date to the fullest extent
     permitted by applicable law, to the extent that they would have been
     indemnified under the TeleCable charter and bylaws in effect at the
     Effective Date.  The Company has guaranteed unconditionally full payment
     and performance of such indemnification.  The Selling Stockholders have

                                       5

 
     not had any position, office or other material relationship within the past
     three years with the Company or any of its predecessors or affiliates other
     than as described above.


                              PLAN OF DISTRIBUTION

       The Shares may be offered for sale and sold by the Selling Stockholders
     in one or more transactions, including block transactions, at a fixed price
     or prices (which may be changed) at market prices prevailing at the time of
     sale, at prices related to such prevailing market prices or at prices
     determined on a negotiated or competitive bid basis.  The Shares may be
     sold by the Selling Stockholders directly, through an underwritten
     offering, through agents designated from time to time or to or through
     broker-dealers designated from time to time.

       If any Shares are sold in an underwritten offering, such Shares may be
     acquired by the underwriters for their own account and may be resold from
     time to time in one or more transactions, including negotiated
     transactions, at a fixed public offering price or at varying prices
     determined at the time of sale.  Unless otherwise indicated in the
     applicable Prospectus Supplement, the obligations of any underwriters to
     purchase Shares will be subject to certain conditions precedent, and the
     underwriters will be obligated to purchase all of the Shares specified in
     such Prospectus Supplement if any are purchased.

       Shares may be sold through a broker-dealer acting as agent or broker for
     the Selling Stockholders, or to a broker-dealer acting as principal.  In
     the latter case, the broker-dealer may then resell such Shares to the
     public at varying prices to be determined by such broker-dealer at the time
     of resale.

       The Company has been advised by the Selling Stockholders that they have
     not, as of the date of this Prospectus, entered into any arrangement with
     an underwriter, agent or broker-dealer for the sale of the Shares.

       The Selling Stockholders may also sell all or a portion of the Shares in
     transactions under Rule 145 under the Securities Act or as otherwise
     permitted under the Securities Act.

       The Selling Stockholders and any agents or broker-dealers that
     participate with the Selling Stockholders in the distribution of any of the
     Shares may be deemed to be "underwriters" within the meaning of the
     Securities Act, and any discount or commission received by them and any
     profit on the resale of the Shares purchased by them may be deemed to be
     underwriting discounts or commissions under the Securities Act.
 
       The Company has agreed to indemnify the Selling Stockholders against
     certain liabilities which may be incurred in connection with the sale of
     Shares under this Prospectus.

       To the extent required, the number and series of Shares to be sold, the
     purchase price, the public offering price, if applicable, the name of any
     underwriter, agent or broker-dealer, and any applicable commissions,
     discounts or other items constituting compensation to such underwriters,
     agents or broker-dealers with respect to a particular offering will be set
     forth in an accompanying Prospectus Supplement.

       Certain expenses in connection with the distribution of the Shares,
     including registration and filing fees, printing expenses and fees and
     disbursements of the Company's counsel and fees and expenses of any
     accountants, will be borne by the Company.  The Selling Stockholders will
     pay any brokerage discounts, commissions or fees, if any, and fees and
     disbursements of its counsel and any other expenses attributable to the
     distribution of the Shares.

                                       6

 
                          DESCRIPTION OF COMMON STOCK

               The following description of certain terms of the common stock of
     TCI does not purport to be complete and is qualified in its entirety by
     reference to the Restated Certificate of Incorporation, as amended, of TCI
     (the "TCI Charter") which has been filed as an exhibit to the Registration
     Statement of which this Prospectus is a part.


     GENERAL

               The TCI Charter provides, among other things, that TCI is
     authorized to issue 2,725,000,000 shares of common stock, par value $1.00
     per share (the "TCI Common Stock"), of which 1,750,000,000 shares are
     designated Tele-Communications, Inc. Series A TCI Group Common Stock,
     150,000,000 shares are designated Tele-Communications, Inc. Series B TCI
     Group Common Stock, 750,000,000 shares are designated Tele-Communications,
     Inc. Series A Liberty Media Group Common Stock, and 75,000,000 shares are
     designated Tele-Communications, Inc. Series B Liberty Media Group Common
     Stock.
    
               As of April 30, 1996, 583,361,905 shares of TCI Group Series A
     Common Stock, 84,682,729 shares of TCI Group Series B Common Stock,
     145,815,385 shares of LMG Series A Common Stock and 21,192,387 shares of
     LMG Series B Common Stock (in each case net of shares held by subsidiaries
     of TCI) had been issued and were outstanding and 100,524,364 shares of TCI
     Group Series A Common Stock were held by subsidiaries of TCI.  As of that
     date, 90,809,696 shares of TCI Group Series A Common Stock and 20,880,824
     shares of LMG Series A Common Stock were reserved for issuance upon
     conversion, exchange or exercise of outstanding convertible or exchangeable
     securities and options.  In addition, TCI has reserved a number of shares
     of TCI Group Series A Common Stock equal to the number of shares of TCI
     Group Series B Common Stock outstanding, and a number of shares of LMG
     Series A Common Stock equal to the number of shares of LMG Series B Common
     Stock outstanding, for issuance upon conversion, at the option of the
     holder, of the TCI Group Series B Common Stock and LMG Series B Common
     Stock, respectively.  Additionally, subsidiaries of TCI own shares of the
     Company's Convertible Redeemable Participating Preferred Stock, Series F
     (the "Series F Preferred Stock") which is convertible into 357,565,989
     shares of TCI Group Series A Common Stock.      
    
               The TCI Charter also authorizes 52,375,096 shares of preferred
     stock (the "TCI Preferred Stock"), of which 700,000 shares are designated
     Class A Preferred Stock, par value $0.01 per share (the "Class A Preferred
     Stock"), 1,675,096 shares are designated Class B 6% Cumulative Redeemable
     Exchangeable Junior Preferred Stock, par value $.01 per share (the "Class B
     Preferred Stock"), and 50,000,000 shares are designated Series Preferred
     Stock, par value $.01 per share (the "Series Preferred Stock"), issuable in
     series.  All of the shares of Class A Preferred Stock have previously been
     redeemed and retired and may not be reissued, thereby reducing the number
     of authorized shares of TCI Preferred Stock.  Of the Series Preferred
     Stock, as of March 31, 1996, 80,000 shares are designated Convertible
     Preferred Stock, Series C (the "Series C Preferred Stock"), 1,000,000
     shares are designated Convertible Preferred Stock, Series D (the "Series D
     Preferred Stock"), 400,000 shares are designated Redeemable Convertible
     Preferred Stock, Series E (the "Series E Preferred Stock"), 500,000 shares
     are designated Series F Preferred Stock, 7,259,380 shares are designated
     Redeemable Convertible TCI Group Preferred Stock, Series G (the "Series G
     Preferred Stock") and 7,259,380 shares are designated Redeemable
     Convertible Liberty Media Group Preferred Stock, Series H (the "Series H
     Preferred Stock").  As of March 31, 1996, 1,620,026 shares of Class B
     Preferred Stock, 70,575 shares of Series C Preferred Stock, 999,569 shares
     of Series D Preferred Stock, 277,719 shares of Series F Preferred Stock,
     7,259,380 shares of Series G Preferred Stock and 7,259,380 shares of Series
     H Preferred Stock had been issued and were outstanding. All of the shares
     of Series E Preferred Stock have previously been redeemed and retired with
     the effect that such shares have been restored to the status of authorized
     and unissued shares of Series Preferred Stock and may be reissued as shares
     of another series of Series Preferred Stock, but not as Series E Preferred
     Stock. All of the outstanding shares of Series F Preferred Stock are held
     by subsidiaries of TCI. Approximately 33,901,240 shares of Series Preferred
     Stock remain available for designation pursuant to the TCI Charter     

                                       7

 
    
     as of March 31, 1996.  The rights evidenced by the TCI Common Stock are
     subject to the prior preferences and rights of the TCI Preferred Stock.
     

     CERTAIN DEFINITIONS

          As used herein, the following terms have the meanings specified below:

          "Committed Acquisition Shares"  means (a) the shares of LMG Series A
     Common Stock that TCI had, prior to the record date for the Distribution,
     agreed to issue, but as of such record date had not issued, and (b) the
     shares of LMG Series A Common Stock that are issuable upon conversion,
     exercise or exchange of Convertible Securities that TCI  had, prior to the
     record date for the Distribution, agreed to issue, but as of such record
     date had not issued, in each case including obligations of TCI to issue
     shares of TCI's Class A Common Stock, par value $1.00 per share (which has
     been redesignated TCI Group Series A Common Stock), which as a result of
     the Distribution, constitute obligations to issue, among other securities,
     LMG Series A Common Stock or Convertible Securities which are convertible
     into or exercisable or exchangeable for LMG Series A Common Stock;
     provided, however that Committed Acquisition Shares will not include any
     shares of Liberty Media Group Common Stock issuable upon conversion,
     exercise or exchange of Pre-Distribution Convertible Securities. The type
     and amount of Committed Acquisition Shares issuable will be appropriately
     adjusted to reflect subdivisions and combinations of the LMG Series A
     Common Stock and dividends or distributions of shares of LMG Series A
     Common Stock or LMG Series B Common Stock to holders of LMG Series A Common
     Stock and other reclassifications of the LMG Series A Common Stock, in each
     case occurring (or the record date for which occurs) after the
     Distribution.

          "Convertible Securities" means any securities of TCI (other than any
     series of TCI Common Stock) that are convertible into, exchangeable for or
     evidence the right to purchase any shares of any series of TCI Common
     Stock, whether upon conversion, exercise, exchange, pursuant to
     antidilution provisions of such securities or otherwise.

          "DGCL" means the General Corporation Law of the State of Delaware.

          The "Distribution" means the distribution paid by TCI on August 10,
     1995 of one-fourth of one share of LMG Series A Common Stock on each
     outstanding share of TCI Group Series A Common Stock and one-fourth of one
     share of LMG Series B Common Stock on each outstanding share of TCI Group
     Series B Common Stock to holders of record on August 4, 1995.

          The "Inter-Group Interest" means any equity value of TCI attributable
     to the Liberty Media Group that is not represented by outstanding shares of
     Liberty Media Group Common Stock.  The Inter-Group Interest is represented
     by the Number of Shares Issuable with Respect to the Inter-Group Interest.

          The "Inter-Group Interest Fraction" means a fraction the numerator of
     which is the Number of Shares Issuable with Respect to the Inter-Group
     Interest and the denominator of which is the sum of such Number of Shares
     Issuable with Respect to the Inter-Group Interest and the aggregate number
     of shares of Liberty Media Group Common Stock outstanding.

          The "Liberty Media Group" means:

          (a) the interest of TCI or any of its subsidiaries in Liberty Media
       Corporation or any of its subsidiaries (including any successor thereto
       by merger, consolidation or sale of all or substantially all of its
       assets, whether or not in connection with a Related Business Transaction
       (as defined below under "--Conversion and Redemption-Mandatory Dividend,
       Redemption or Conversion of Liberty Media Group Common Stock")) and their
       respective properties and assets,

          (b) all assets and liabilities of TCI or any of its subsidiaries to
       the extent attributed to any of the properties or assets referred to in
       clause (a) of this sentence, whether or not such assets or

                                       8

 
       liabilities are assets and liabilities of Liberty Media Corporation or
       any of its subsidiaries (or a successor as described in clause (a) of
       this sentence),

          (c) all assets and properties contributed or otherwise transferred to
       the Liberty Media Group from the TCI Group, and

          (d) the interest of TCI or any of its subsidiaries in the businesses,
       assets and liabilities acquired by TCI or any of its subsidiaries for the
       Liberty Media Group, as determined by the Board of Directors of TCI (the
       "TCI Board of Directors");

     provided that (i) from and after any dividend or other distribution with
     respect to any shares of Liberty Media Group Common Stock (other than a
     dividend or other distribution payable in shares of Liberty Media Group
     Common Stock, with respect to which adjustment will be made as described in
     clause (a) of the definition of "Number of Shares Issuable with Respect to
     the Inter-Group Interest," or in other securities of TCI attributed to the
     Liberty Media Group for which provision will be made as described in the
     penultimate sentence of this definition), the Liberty Media Group will no
     longer include an amount of assets or properties equal to the aggregate
     amount of such kind of assets or properties so paid in respect of shares of
     Liberty Media Group Common Stock multiplied by a fraction the numerator of
     which is equal to the Inter-Group Interest Fraction in effect immediately
     prior to the record date for such dividend or other distribution and the
     denominator of which is equal to the Outstanding Interest Fraction in
     effect immediately prior to the record date for such dividend or other
     distribution and (ii) from and after any transfer of assets or properties
     from the Liberty Media Group to the TCI Group, the Liberty Media Group will
     no longer include the assets or properties so transferred. If TCI pays a
     dividend or makes any other distribution with respect to shares of Liberty
     Media Group Common Stock payable in securities of TCI attributed to the
     Liberty Media Group other than Liberty Media Group Common Stock, the TCI
     Group will be deemed to hold an amount of such other securities equal to
     the amount so distributed multiplied by the fraction specified in clause
     (i) of this definition (determined as of a time immediately prior to the
     record date for such dividend or other distribution), and to the extent
     interest or dividends are paid or other distributions are made on such
     other securities so distributed to the holders of Liberty Media Group
     Common Stock, the Liberty Media Group will no longer include a
     corresponding ratable amount of the kind of assets paid as such interest or
     dividends or other distributions in respect of such securities so deemed to
     be held by the TCI Group. TCI may also, to the extent any such other
     securities constitute Convertible Securities which are at the time
     convertible, exercisable or exchangeable, cause such Convertible Securities
     deemed to be held by the TCI Group to be deemed to be converted, exercised
     or exchanged (and to the extent the terms of such Convertible Securities
     require payment or delivery of consideration in order to effect such
     conversion, exercise or exchange, the Liberty Media Group will in such case
     include an amount of the kind of properties or assets required to be paid
     or delivered as such consideration for the amount of the Convertible
     Securities deemed converted, exercised or exchanged as if such Convertible
     Securities were outstanding), in which case such Convertible Securities
     will no longer be deemed to be held by the TCI Group or attributed to the
     Liberty Media Group.

          "Market Value" of any class or series of capital stock of TCI on any
     day means the average of the high and low reported sale prices regular way
     of a share of such class or series on such day (if such day is a trading
     day, and if such day is not a trading day, on the trading day immediately
     preceding such day) or in case no such reported sale takes place on such
     trading day the average of the reported closing bid and asked prices
     regular way of a share of such class or series on such trading day, in
     either case on the Nasdaq National Market, or if the shares of such class
     or series are not quoted on such Nasdaq National Market on such trading
     day, the average of the closing bid and asked prices of a share of such
     class or series in the over-the-counter market on such trading day as
     furnished by any New York Stock Exchange member firm selected from time to
     time by TCI, or if such closing bid and asked prices are not made available
     by any such New York Stock Exchange member firm on such trading day, the
     market value of a share of such class or series as determined by the TCI
     Board of Directors; provided that for purposes of determining the ratios
     described under "--Conversion and Redemption--Conversion of Liberty Media
     Group Common Stock at the Option of TCI" and "--Conversion and Redemption--
     Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common
     Stock" and "--Liquidation

                                       9

 
     Rights," (a) the "Market Value" of any share of any series of TCI Common
     Stock on any day prior to the "ex" date or any similar date for any
     dividend or distribution paid or to be paid with respect to such series of
     TCI Common Stock will be reduced by the fair market value of the per share
     amount of such dividend or distribution as determined by the TCI  Board of
     Directors and (b) the "Market Value" of any share of any series of TCI
     Common Stock on any day prior to (i) the effective date of any subdivision
     (by stock split or otherwise) or combination (by reverse stock split or
     otherwise) of outstanding shares of such series of TCI Common Stock or (ii)
     the "ex" date or any similar date for any dividend or distribution with
     respect to any such series of TCI Common Stock in shares of such series of
     TCI Common Stock will be appropriately adjusted to reflect such
     subdivision, combination, dividend or distribution.

          The "Number of Shares Issuable with Respect to the Inter-Group
     Interest" is currently zero and will from time to time be

          (a) adjusted as appropriate to reflect subdivisions (by stock split or
       otherwise) and combinations (by reverse stock split or otherwise) of the
       LMG Series A Common Stock and dividends or distributions of shares of LMG
       Series A Common Stock or LMG Series B Common Stock to holders of LMG
       Series A Common Stock and other reclassifications of LMG Series A Common
       Stock,

          (b) decreased (but not to less than zero) by (i) the aggregate number
       of shares of LMG Series A Common Stock issued or sold by TCI after the
       Distribution other than Committed Acquisition Shares, the proceeds of
       which are attributed to the TCI Group, (ii) the aggregate number of
       shares of LMG Series A Common Stock issued or delivered upon conversion,
       exercise or exchange of Convertible Securities (other than Pre-
       Distribution Convertible Securities and Convertible Securities which are
       convertible into or exercisable or exchangeable for Committed Acquisition
       Shares), the proceeds of which are attributed to the TCI Group, (iii) the
       aggregate number of shares of LMG Series A Common Stock issued or
       delivered by TCI as a dividend or distribution to holders of TCI Group
       Series A Common Stock and TCI Group Series B Common Stock, (iv) the
       aggregate number of shares of LMG Series A Common Stock issued or
       delivered upon the conversion, exercise or exchange of any Convertible
       Securities (other than Pre-Distribution Convertible Securities and
       Convertible Securities which are convertible into or exercisable or
       exchangeable for Committed Acquisition Shares) issued or delivered by TCI
       after the Distribution as a dividend or distribution or by
       reclassification or exchange to holders of TCI Group Series A Common
       Stock and TCI Group Series B Common Stock and (v) the aggregate number of
       shares of LMG Series A Common Stock (rounded, if necessary, to the
       nearest whole number), equal to the aggregate fair value (as determined
       by the TCI Board of Directors) of assets or properties attributed to the
       Liberty Media Group that are transferred from the Liberty Media Group to
       the TCI Group in consideration of a reduction in the Number of Shares
       Issuable with Respect to the Inter-Group Interest, divided by the Market
       Value of one share of LMG Series A Common Stock as of the date of such
       transfer, and

          (c) increased by (i) the aggregate number of any shares of LMG Series
       A Common Stock and LMG Series B Common Stock which are retired or
       otherwise cease to be outstanding following their purchase with funds
       attributed to the TCI Group, (ii) a number (rounded, if necessary, to the
       nearest whole number), equal to the fair value (as determined by the TCI
       Board of Directors) of assets or properties, theretofore attributed to
       the TCI Group that are contributed to the Liberty Media Group in
       consideration of an increase in the Number of Shares Issuable with
       Respect to the Inter-Group Interest, divided by the Market Value of one
       share of LMG Series A Common Stock as of the date of such contribution
       and (iii) the aggregate number of shares of LMG Series A Common Stock and
       LMG Series B Common Stock into or for which Convertible Securities are
       deemed to be converted, exercised or exchanged pursuant to the last
       sentence of the definition of "TCI Group."

     TCI will not issue or sell shares of LMG Series B Common Stock in respect
     of a reduction in the Number of Shares Issuable with Respect to the Inter-
     Group Interest.  Whenever a change in the Number of Shares Issuable with
     Respect to the Inter-Group Interest occurs, TCI will prepare and file a
     statement of such change with the Secretary of TCI.

                                       10

 
          The "Outstanding Interest Fraction" means a fraction the numerator of
     which is the aggregate number of shares of Liberty Media Group Common Stock
     outstanding and the denominator of which is the sum of such aggregate
     number of shares of Liberty Media Group Common Stock outstanding and the
     Number of Shares Issuable with Respect to the Inter-Group Interest.

          "Pre-Distribution Convertible Securities" means Convertible Securities
     that were outstanding on the record date for the Distribution and were,
     prior to such date, convertible into or exercisable or exchangeable for
     shares of TCI's Class A Common Stock, par value $1.00 per share (which has
     been redesignated TCI Group Series A Common Stock).

          The "TCI Group" means as of any date of determination thereof:

          (a) the interest of TCI or any of its subsidiaries in all of the
       businesses in which TCI or any of its subsidiaries (or any of their
       predecessors or successors) is or has been engaged, directly or
       indirectly, and the respective assets and liabilities of TCI or any of
       its subsidiaries, other than any businesses, assets or liabilities of the
       Liberty Media Group;

          (b) a proportionate interest in the businesses, assets and liabilities
       of the Liberty Media Group equal to the Inter-Group Interest Fraction as
       of such date;

          (c) from and after any dividend or other distribution with respect to
       shares of Liberty Media Group Common Stock (other than a dividend or
       other distribution payable in shares of Liberty Media Group Common Stock,
       with respect to which adjustment will be made as described in clause (a)
       of the definition of "Number of Shares Issuable with Respect to the
       Inter-Group Interest," or in other securities of TCI attributed to the
       Liberty Media Group, for which provision will be made as described in the
       penultimate sentence of this definition), an amount of assets or
       properties theretofore included in the Liberty Media Group equal to the
       aggregate amount of such kind of assets or properties so paid in respect
       of such dividend or other distribution with respect to shares of Liberty
       Media Group Common Stock multiplied by a fraction the numerator of which
       is equal to the Inter-Group Interest Fraction in effect immediately prior
       to the record date for such dividend or other distribution and the
       denominator of which is equal to the Outstanding Interest Fraction in
       effect immediately prior to the record date for such dividend or other
       distribution; and

          (d) any assets or properties transferred from the Liberty Media Group
       to the TCI Group;

     provided that, from and after any contribution or transfer of any assets or
     properties from the TCI Group to the Liberty Media Group, the TCI Group
     will no longer include such assets or properties so contributed or
     transferred (other than pursuant to its interest in the businesses, assets
     and liabilities of the Liberty Media Group described in clause (b) above).
     If TCI pays a dividend or makes any other distribution with respect to
     shares of Liberty Media Group Common Stock payable in other securities of
     TCI attributed to the Liberty Media Group, the TCI Group will be deemed to
     hold an amount of such other securities equal to the amount so distributed
     multiplied by the fraction specified in clause (c) of this definition
     (determined as of a time immediately prior to the record date for such
     dividend or other distribution), and to the extent interest or dividends
     are paid or other distributions are made on such other securities so
     distributed to holders of Liberty Media Group Common Stock, the TCI Group
     will include a corresponding ratable amount of the kind of assets paid as
     such interest or dividends or other distributions in respect of such
     securities so deemed to be held by the TCI Group. TCI may also, to the
     extent any such other securities constitute Convertible Securities which
     are at the time convertible, exercisable or exchangeable, cause such
     Convertible Securities deemed to be held by the TCI Group to be deemed to
     be converted, exercised or exchanged (and to the extent the terms of such
     Convertible Securities require payment or delivery of consideration in
     order to effect such conversion, exercise or exchange, the TCI Group will
     in such case no longer include an amount of the kind of properties or
     assets required to be paid or delivered as such consideration for the
     amount of the Convertible Securities deemed converted, exercised or
     exchanged as if such Convertible Securities were outstanding), in which
     case such Convertible Securities will no longer be deemed to be held by the
     TCI Group or attributed to the Liberty Media Group.

                                       11

 
     VOTING RIGHTS

          Holders of TCI Group Series A Common Stock are entitled to one vote
     for each share of such stock held, holders of TCI Group Series B Common
     Stock are entitled to ten votes for each share of such stock held, holders
     of LMG Series A Common Stock are entitled to one vote for each share of
     such stock held and holders of LMG Series B Common Stock are entitled to
     ten votes for each share of such stock held, on all matters presented to
     such stockholders.  Except as may otherwise be required by the laws of the
     State of Delaware or, with respect to any class or series of TCI Preferred
     Stock, in the TCI Charter (including any resolution or resolutions
     providing for the establishment of such class or series pursuant to
     authority vested in the TCI Board of Directors by the TCI Charter), the
     holders of TCI Group Common Stock and the holders of Liberty Media Group
     Common Stock and the holders of each class or series of TCI Preferred Stock
     entitled to vote on a particular matter will vote as one class for all
     purposes.  See "--Other Matters."

          Neither the holders of TCI Group Series A Common Stock or TCI Group
     Series B Common Stock, nor the holders of LMG Series A Common Stock or LMG
     Series B Common Stock, have any rights to vote as a separate class or
     series on any matter coming before the stockholders of TCI, except with
     respect to certain limited class and series voting rights provided under
     the DGCL.  Under the DGCL, the approval of the holders of a majority of the
     outstanding shares of any class of capital stock of a corporation, voting
     separately as a class, is required to approve any amendment to the charter
     that would alter or change the powers, preferences or special rights of the
     shares of such class so as to affect them adversely, provided that, if any
     amendment would alter or change the powers, preferences or special rights
     of one or more series of the class so as to affect them adversely, but
     would not so affect the entire class, then only the shares of the series so
     affected by the amendment would be entitled to vote thereon separately as a
     class.

     DIVIDENDS

          Subject to the prior payment of dividends on, and other rights of, any
     of the outstanding shares of TCI Preferred Stock, dividends may be paid as
     determined by the TCI Board of Directors (i) on the TCI Group Common Stock
     out of the lesser of (x) the TCI Group Available Dividend Amount and (y)
     funds of TCI legally available therefor under the DGCL and (ii) on the
     Liberty Media Group Common Stock out of the lesser of (x) the Liberty Media
     Group Available Dividend Amount and (y) funds of TCI legally available
     therefor under the DGCL.  Under the DGCL the amount of the funds of TCI
     legally available for the payment of dividends on any series of TCI Common
     Stock is determined on the basis of the entire corporation and not just the
     Liberty Media Group or the TCI Group.  Consequently, the amount of legally
     available funds will be reduced by the amount of any net losses of the
     Liberty Media Group or the TCI Group and any dividends or distributions on,
     or repurchases of, the TCI Group Common Stock or the Liberty Media Group
     Common Stock and dividends on, or certain repurchases of, TCI Preferred
     Stock.  Certain loan agreements to which certain subsidiaries of TCI are
     parties or are subject contain restricted payment provisions that limit the
     amount of dividends, other than stock dividends, that those companies may
     pay.  Future loan agreements may also contain similar restrictions and
     limits.

          The "TCI Group Available Dividend Amount," as of any date, means
     either (a) the excess of (i) an amount equal to the total assets of the TCI
     Group less the total liabilities (not including preferred stock) of the TCI
     Group as of such date over (ii) the aggregate par value of, or any greater
     amount determined to be capital in respect of, all outstanding shares of
     TCI Group Common Stock and each class or series of TCI Preferred Stock
     attributed to the TCI Group or (b) in case there is no such excess, an
     amount equal to TCI Earnings (Loss) Attributable to the TCI Group (if
     positive) for the fiscal year in which such date occurs and/or the
     preceding fiscal year.  "TCI Earnings (Loss) Attributable to the TCI
     Group," for any period, means the net earnings or loss of the TCI Group for
     such period determined on a basis consistent with the determination of the
     net earnings or loss of the TCI Group for such period as presented in the
     combined financial statements of the TCI Group for such period, including
     income and expenses of TCI attributed to the operations of the TCI Group on
     a substantially consistent basis, including without limitation, corporate
     administrative costs, net interest and income taxes.  The TCI

                                       12

 
     Group Available Dividend Amount is intended to be similar to the amount
     that would be legally available for the payment of dividends on the TCI
     Group Common Stock under the DGCL if the TCI Group were a separate Delaware
     corporation.  There can be no assurance that there will be a TCI Group
     Available Dividend Amount.

          The "Liberty Media Group Available Dividend Amount," as of any date,
     means the product of the Outstanding Interest Fraction and either (a) the
     excess of (i) an amount equal to the total assets of the Liberty Media
     Group less the total liabilities (not including preferred stock) of the
     Liberty Media Group as of such date over (ii) the aggregate par value of,
     or any greater amount determined to be capital in respect of, all
     outstanding shares of Liberty Media Group Common Stock and each class or
     series of TCI Preferred Stock attributed to the Liberty Media Group or (b)
     in case there is no such excess, an amount equal to TCI Earnings (Loss)
     Attributable to the Liberty Media Group (if positive) for the fiscal year
     in which such date occurs and/or the preceding fiscal year.  "TCI Earnings
     (Loss) Attributable to the Liberty Media Group," for any period, means the
     net earnings or loss of the Liberty Media Group for such period determined
     on a basis consistent with the determination of the net earnings or loss of
     the Liberty Media Group for such period as presented in the combined
     financial statements of the Liberty Media Group for such period, including
     income and expenses of TCI attributed to the operations of the Liberty
     Media Group on a substantially consistent basis, including, without
     limitation, corporate administrative costs, net interest and income taxes.
     The Liberty Media Group Available Dividend Amount is intended to be similar
     to the amount that would be legally available for the payment of dividends
     on the Liberty Media Group Common Stock under the DGCL if the Liberty Media
     Group were a separate Delaware corporation.  There can be no assurance that
     there will be a Liberty Media Group Available Dividend Amount.

          Except for dividends declared or paid as described below under "--
     Share Distributions" and "--Conversion and Redemption--Mandatory Dividend,
     Redemption or Conversion of Liberty Media Group Common Stock," any
     dividends paid on the TCI Group Series A Common Stock or the TCI Group
     Series B Common Stock will be paid only on both series, in equal amounts
     per share, and any dividends paid on the LMG Series A Common Stock or the
     LMG Series B Common Stock will be paid only on both series, in equal
     amounts per share.

          The TCI Board of Directors, subject to the provisions described herein
     under "--Dividends" and below under "--Share Distributions," has the
     authority and discretion to declare and pay dividends on the TCI Group
     Common Stock or the Liberty Media Group Common Stock in equal or unequal
     amounts, notwithstanding the relationship between the TCI Group Available
     Dividend Amount and the Liberty Media Group Available Dividend Amount, the
     respective amounts of prior dividends declared on, or liquidation rights
     of, the TCI Group Common Stock or the Liberty Media Group Common Stock or
     any other factor.

          At the time of any dividend or other distribution on the outstanding
     shares of Liberty Media Group Common Stock (including any dividend of Net
     Proceeds from the Disposition of all or substantially all of the properties
     and assets of the Liberty Media Group as described below under "--
     Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of
     Liberty Media Group Common Stock"), the TCI Group will (if at such time
     there is an Inter-Group Interest) be credited, and the Liberty Media Group
     will be charged (in addition to the charge for the dividend or other
     distribution paid or distributed in respect of outstanding shares of
     Liberty Media Group Common Stock), with an amount equal to the product of
     (i) the aggregate amount of such dividend or distribution paid or
     distributed in respect of outstanding shares of Liberty Media Group Common
     Stock times (ii) a fraction the numerator of which is the Inter-Group
     Interest Fraction and the denominator of which is the Outstanding Interest
     Fraction.

     SHARE DISTRIBUTIONS

          DISTRIBUTIONS ON TCI GROUP COMMON STOCK.  If at any time after the
     Distribution a distribution paid in TCI Group Common Stock, Liberty Media
     Group Common Stock, or any other securities of TCI

                                       13

 
     or any other person (a "share distribution") is to be made with respect to
     the TCI Group Common Stock, such share distribution will be declared and
     paid only as follows:

          (i)  a share distribution consisting of shares of TCI Group Series A
               Common Stock (or Convertible Securities convertible into or
               exercisable or exchangeable for shares of TCI Group Series A
               Common Stock) to holders of TCI Group Series A Common Stock and
               TCI Group Series B Common Stock, on an equal per share basis; or
               consisting of shares of TCI Group Series B Common Stock (or
               Convertible Securities convertible into or exercisable or
               exchangeable for shares of TCI Group Series B Common Stock) to
               holders of TCI Group Series A Common Stock and TCI Group Series B
               Common Stock, on an equal per share basis; or consisting of
               shares of TCI Group Series A Common Stock (or Convertible
               Securities convertible into or exercisable or exchangeable for
               shares of TCI Group Series A Common Stock) to holders of TCI
               Group Series A Common Stock and, on an equal per share basis,
               shares of TCI Group Series B Common Stock (or like Convertible
               Securities convertible into or exercisable or exchangeable for
               shares of TCI Group Series B Common Stock) to holders of TCI
               Group Series B Common Stock;

          (ii) a share distribution consisting of shares of LMG Series A Common
               Stock (or Convertible Securities convertible into or exercisable
               or exchangeable for shares of LMG Series A Common Stock) to
               holders of TCI Group Series A Common Stock and TCI Group Series B
               Common Stock, on an equal per share basis; provided that the sum
               of (a) the aggregate number of shares of LMG Series A Common
               Stock to be so issued (or the number of such shares which would
               be issuable upon conversion, exercise or exchange of any
               Convertible Securities to be so issued) and (b) the number of
               shares of such series that are subject to issuance upon
               conversion, exercise or exchange of any Convertible Securities
               then outstanding that are attributed to the TCI Group (other than
               Pre-Distribution Convertible Securities and other than
               Convertible Securities convertible into or exercisable or
               exchangeable for Committed Acquisition Shares) is less than or
               equal to the Number of Shares Issuable with Respect to the Inter-
               Group Interest; and

         (iii) a share distribution consisting of any class or series of
               securities of TCI or any other person other than TCI Group Common
               Stock or Liberty Media Group Common Stock (or Convertible
               Securities convertible into or exercisable or exchangeable for
               shares of TCI Group Common Stock or Liberty Media Group Common
               Stock), either on the basis of a distribution of identical
               securities, on an equal per share basis, to holders of TCI Group
               Series A Common Stock and TCI Group Series B Common Stock or on
               the basis of a distribution of one class or series of securities
               to holders of TCI Group Series A Common Stock and another class
               or series of securities to holders of TCI Group Series B Common
               Stock, provided that the securities so distributed (and, if the
               distribution consists of Convertible Securities, the securities
               into which such Convertible Securities are convertible or for
               which they are exercisable or exchangeable) do not differ in any
               respect other than their relative voting rights and related
               differences in designation, conversion, redemption and share
               distribution provisions, with holders of shares of TCI Group
               Series B Common Stock receiving the class or series having the
               higher relative voting rights (without regard to whether such
               rights differ to a greater or lesser extent than the
               corresponding differences in voting rights, designation,
               conversion, redemption and share distribution provisions between
               the TCI Group Series A Common Stock and the TCI Group Series B
               Common Stock), provided that if the securities so distributed
               constitute capital stock of a subsidiary of TCI, such rights will
               not differ to a greater extent than the corresponding differences
               in voting rights, designation, conversion, redemption and share
               distribution provisions between the TCI Group Series A Common
               Stock and the TCI Group Series B Common Stock, and provided in
               each case that such distribution is otherwise made on an equal
               per share basis.

          TCI will not reclassify, subdivide or combine the TCI Group Series A
     Common Stock without reclassifying, subdividing or combining the TCI Group
     Series B Common Stock, on an equal per share

                                       14

 
     basis, and TCI will not reclassify, subdivide or combine the TCI Group
     Series B Common Stock without reclassifying, subdividing or combining the
     TCI Group Series A Common Stock, on an equal per share basis.

          DISTRIBUTIONS ON LIBERTY MEDIA GROUP COMMON STOCK.  If at any time a
     share distribution is to be made with respect to the Liberty Media Group
     Common Stock, such share distribution will be declared and paid only as
     follows (or as described under "--Conversion and Redemption" with respect
     to the redemptions and other distributions referred to therein):

          (i)  a share distribution consisting of shares of LMG Series A Common
               Stock (or Convertible Securities convertible into or exercisable
               or exchangeable for shares of LMG Series A Common Stock) to
               holders of LMG Series A Common Stock and LMG Series B Common
               Stock, on an equal per share basis; or consisting of shares of
               LMG Series B Common Stock (or Convertible Securities convertible
               into or exercisable or exchangeable for shares of LMG Series B
               Common Stock) to holders of LMG Series A Common Stock and LMG
               Series B Common Stock, on an equal per share basis; or consisting
               of shares of LMG Series A Common Stock (or Convertible Securities
               convertible into or exercisable or exchangeable for shares of LMG
               Series A Common Stock) to holders of LMG Series A Common Stock
               and, on an equal per share basis, shares of LMG Series B Common
               Stock (or like Convertible Securities convertible into or
               exercisable or exchangeable for shares of LMG Series B Common
               Stock) to holders of LMG Series B Common Stock; and

          (ii) a share distribution consisting of any class or series of
               securities of TCI or any other person other than as described in
               the immediately preceding clause (i) and other than TCI Group
               Common Stock (or Convertible Securities convertible into or
               exercisable or exchangeable for shares of TCI Group Series A
               Common Stock or TCI Group Series B Common Stock), either on the
               basis of a distribution of identical securities, on an equal per
               share basis, to holders of LMG Series A Common Stock and LMG
               Series B Common Stock or on the basis of a distribution of one
               class or series of securities to holders of LMG Series A Common
               Stock and another class or series of securities to holders of LMG
               Series B Common Stock, provided that the securities so
               distributed (and, if the distribution consists of Convertible
               Securities, the securities into which such Convertible Securities
               are convertible or for which they are exercisable or
               exchangeable) do not differ in any respect other than their
               relative voting rights and related differences in designation,
               conversion, redemption and share distribution provisions, with
               holders of shares of LMG Series B Common Stock receiving the
               class or series having the higher relative voting rights (without
               regard to whether such rights differ to a greater or lesser
               extent than the corresponding differences in voting rights,
               designation, conversion, redemption and share distribution
               provisions between the LMG Series A Common Stock and the LMG
               Series B Common Stock), provided that if the securities so
               distributed constitute capital stock of a subsidiary of TCI, such
               rights will not differ to a greater extent than the corresponding
               differences in voting rights, designation, conversion, redemption
               and share distribution provisions between the LMG Series A Common
               Stock and the LMG Series B Common Stock, and provided in each
               case that such distribution is otherwise made on an equal per
               share basis.

          TCI will not reclassify, subdivide or combine the LMG Series A Common
     Stock without reclassifying, subdividing or combining the LMG Series B
     Common Stock, on an equal per share basis, and TCI will not reclassify,
     subdivide or combine the LMG Series B Common Stock without reclassifying,
     subdividing or combining the LMG Series A Common Stock, on an equal per
     share basis.

                                       15

 
     CONVERSION AND REDEMPTION

          CONVERSION OF TCI GROUP SERIES B COMMON STOCK AND LMG SERIES B COMMON
     STOCK AT THE OPTION OF THE HOLDER.  Each share of TCI Group Series B Common
     Stock is convertible, at the option of the holder thereof, into one share
     of TCI Group Series A Common Stock.  Each share of LMG Series B Common
     Stock is convertible, at the option of the holder thereof, into one share
     of LMG Series A Common Stock.  Shares of TCI Group Series A Common Stock
     are not convertible into shares of TCI Group Series B Common Stock, and
     shares of LMG Series A Common Stock are not convertible into shares of LMG
     Series B Common Stock.

          CONVERSION OF LIBERTY MEDIA GROUP COMMON STOCK AT THE OPTION OF TCI.
     The TCI Board of Directors may at any time declare that (i) all of the
     outstanding shares of LMG Series A Common Stock will be converted into a
     number (or fraction) of fully paid and nonassessable shares of TCI Group
     Series A Common Stock equal to the Optional Conversion Ratio, and (ii) all
     of the outstanding shares of LMG Series B Common Stock will be converted
     into a number (or fraction) of fully paid and nonassessable shares of TCI
     Group Series B Common Stock equal to the Optional Conversion Ratio.
    
          For these purposes, the "Optional Conversion Ratio" means the quotient
     (calculated to the nearest five decimal places) obtained by dividing (x)
     the Liberty Media Group Common Stock Per Share Value by (y) the average
     Market Value of one share of TCI Group Series A Common Stock over the 20-
     trading day period ending on the trading day preceding the Appraisal Date.
     The Liberty Media Group Common Stock Per Share Value will equal the
     quotient obtained by dividing the Liberty Media Group Private Market Value
     by the Adjusted Outstanding Shares of Liberty Media Group Common Stock,
     which will be determined in the manner described below.      

          The "Liberty Media Group Private Market Value" means an amount equal
     to the private market value of the Liberty Media Group as of the last day
     of the calendar month preceding the month in which the last of the two
     appraisers referred to in the immediately following sentence are selected
     (the last day of such calendar month is hereinafter referred to as the
     "Appraisal Date").  In the event that TCI determines to establish the
     Liberty Media Group Private Market Value, two investment banking firms of
     recognized national standing will be designated to determine the private
     market value of the Liberty Media Group, one designated by TCI (the "First
     Appraiser") and one designated by a committee of the TCI Board of Directors
     all of whose members are independent directors as determined under Nasdaq
     National Market rules (the "Second Appraiser").  The date upon which the
     last of such appraisers is selected is hereinafter referred to as the
     "Selection Date."  Not later than 20 days after the Selection Date, the
     First Appraiser and the Second Appraiser will each determine its initial
     view as to the private market value of the Liberty Media Group as of the
     Appraisal Date and will consult with one another with respect thereto.  Not
     later than the 30th day after the Selection Date, the First Appraiser and
     the Second Appraiser will each have determined its final view as to such
     private market value.  If the higher of the respective final views of the
     First Appraiser and the Second Appraiser as to such private market value
     (the "Higher Appraised Amount") is not more than 120% of the lower of such
     respective final views (the "Lower Appraised Amount"), the Liberty Media
     Group Private Market Value (subject to any adjustment described in the
     second succeeding paragraph) will be the average of those two amounts.  If
     the Higher Appraised Amount is more than 120% of the Lower Appraised
     Amount, the First Appraiser and the Second Appraiser will agree upon and
     jointly designate a third investment banking firm of recognized national
     standing (the "Mutually Designated Appraiser") to determine such private
     market value.  The Mutually Designated Appraiser will not be provided with
     any of the work of the First Appraiser and Second Appraiser.  The Mutually
     Designated Appraiser will, no later than the 20th day after the date the
     Mutually Designated Appraiser is designated, determine such private market
     value (the "Mutually Appraised Amount"), and the Liberty Media Group
     Private Market Value (subject to any adjustment described in the second
     succeeding paragraph) will be (i) if the Mutually Appraised Amount is
     between the Lower Appraised Amount and the Higher Appraised Amount, (a) the
     average of (1) the Mutually Appraised Amount and (2) the Lower Appraised
     Amount or the Higher Appraised Amount, whichever is closer to the Mutually
     Appraised Amount, or (b) the Mutually Appraised Amount, if neither the
     Lower Appraised Amount nor the Higher Appraised Amount is closer to the
     Mutually Appraised Amount, or (ii) if the Mutually Appraised Amount is
     greater than the Higher Appraised Amount or less than the

                                       16

 
     Lower Appraised Amount, the average of the Higher Appraised Amount and the
     Lower Appraised Amount.  For these purposes, if any such investment banking
     firm expresses its final view of the private market value of the Liberty
     Media Group as a range of values, such investment banking firm's final view
     of such private market value will be deemed to be the midpoint of such
     range of values.

          Each of the investment banking firms referred to in the immediately
     preceding paragraph will be instructed to determine the private market
     value of the Liberty Media Group as of the Appraisal Date based upon the
     amount a willing purchaser would pay to a willing seller, in an arm's
     length transaction, if it were acquiring the Liberty Media Group, as if the
     Liberty Media Group were a publicly traded non-controlled corporation and
     the purchaser was acquiring all of the capital stock of such corporation
     and without consideration of any potential regulatory constraints limiting
     the potential purchasers of the Liberty Media Group other than that which
     would have existed if the Liberty Media Group were a publicly traded non-
     controlled entity.

          Following the determination of the Liberty Media Group Private Market
     Value, the investment banking firms whose final views of the private market
     value of the Liberty Media Group were used in the calculation of the
     Liberty Media Group Private Market Value will determine the Adjusted
     Outstanding Shares of Liberty Media Group Common Stock together with any
     further appropriate adjustments to the Liberty Media Group Private Market
     Value resulting from such determination.  The "Adjusted Outstanding Shares
     of Liberty Media Group Common Stock" means a number, as determined by such
     investment banking firms as of the Appraisal Date, equal to the sum of the
     number of shares of Liberty Media Group Common Stock outstanding, the
     Number of Shares Issuable with Respect to the Inter-Group Interest, the
     number of Committed Acquisition Shares issuable, the number of shares of
     Liberty Media Group Common Stock issuable upon the conversion, exercise or
     exchange of all Pre-Distribution Convertible Securities and the number of
     shares of Liberty Media Group Common Stock issuable upon the conversion,
     exercise or exchange of those Convertible Securities (other than Pre-
     Distribution Convertible Securities and other than Convertible Securities
     which are convertible into or exercisable or exchangeable for Committed
     Acquisition Shares) the holders of which would derive an economic benefit
     from conversion, exercise or exchange of such Convertible Securities which
     exceeds the economic benefit of not converting, exercising or exchanging
     such Convertible Securities.  The "Liberty Media Group Common Stock Per
     Share Value" means the quotient obtained by dividing the Liberty Media
     Group Private Market Value by the Adjusted Outstanding Shares of Liberty
     Media Group Common Stock, provided that if such investment banking firms do
     not agree on the determinations provided for in this paragraph, the Liberty
     Media Group Common Stock Per Share Value will be the average of the
     quotients so obtained on the basis of the respective determinations of such
     firms.

          If TCI determines to convert shares of LMG Series A Common Stock into
     TCI Group Series A Common Stock and shares of LMG Series B Common Stock
     into TCI Group Series B Common Stock at the Optional Conversion Ratio, such
     conversion will occur on a conversion date on or prior to the 120th day
     following the Appraisal Date.  If TCI determines not to undertake such
     conversion, TCI may at any time thereafter undertake to reestablish the
     Liberty Media Group Common Stock Per Share Value as of a subsequent date.

          MANDATORY DIVIDEND, REDEMPTION OR CONVERSION OF LIBERTY MEDIA GROUP
     COMMON STOCK.  Upon the sale, transfer, assignment or other disposition,
     whether by merger, consolidation, sale or contribution of assets or stock
     or otherwise (a "Disposition"), in one transaction or a series of related
     transactions by TCI and its subsidiaries of all or substantially all of the
     properties and assets of the Liberty Media Group to one or more persons,
     entities or groups (other than (a) in connection with the Disposition by
     TCI of all of TCI's properties and assets in one transaction or a series of
     related transactions in connection with the liquidation, dissolution or
     winding up of TCI, (b) a dividend, other distribution or redemption in
     accordance with any provision described under "--Dividends," "--Share
     Distributions," "--Redemption in Exchange for Stock of Subsidiary" or "--
     Liquidation Rights," (c) to any person, entity or group which TCI, directly
     or indirectly, after giving effect to the Disposition, controls or (d) in
     connection with a Related Business Transaction), TCI will on or prior to
     the 85th trading day following the consummation of such Disposition,
     either:

                                       17

 
          (i)  subject to the limitations described above under "--Dividends,"
               declare and pay a dividend in cash and/or securities or other
               property (other than a dividend or distribution of TCI Common
               Stock) to the holders of the outstanding shares of Liberty Media
               Group Common Stock equally on a share for share basis (subject to
               the provisions described in the last sentence of the paragraph
               herein which defines the term "Net Proceeds"), in an aggregate
               amount equal to the product of the Outstanding Interest Fraction
               as of the record date for determining the holders entitled to
               receive such dividend and the Net Proceeds of such Disposition;

          (ii) provided that there are funds of TCI legally available therefor
               and the Liberty Media Group Available Dividend Amount would have
               been sufficient to pay a dividend in lieu thereof as described in
               clause (i) of this paragraph:

                    (a) if such Disposition involves all (not merely
               substantially all) of the properties and assets of the Liberty
               Media Group, redeem all outstanding shares of LMG Series A Common
               Stock and LMG Series B Common Stock in exchange for cash and/or
               securities or other property (other than TCI Common Stock) in an
               aggregate amount equal to the product of the Adjusted Outstanding
               Interest Fraction as of the date of such redemption and the Net
               Proceeds of such Disposition, such aggregate amount to be
               allocated (subject to the provisions described in the last
               sentence of the paragraph herein which defines the term "Net
               Proceeds") to shares of LMG Series A Common Stock and LMG Series
               B Common Stock in the ratio of the number of shares of each such
               series outstanding (so that the amount of consideration paid for
               the redemption of each share of LMG Series A Common Stock and
               each share of LMG Series B Common Stock is the same); or

                    (b) if such Disposition involves substantially all (but not
               all) of the properties and assets of the Liberty Media Group,
               apply an aggregate amount of cash and/or securities or other
               property (other than TCI Common Stock) equal to the product of
               the Outstanding Interest Fraction as of the date shares are
               selected for redemption and the Net Proceeds of such Disposition
               to the redemption of outstanding shares of LMG Series A Common
               Stock and LMG Series B Common Stock, such aggregate amount to be
               allocated (subject to the provisions described in the last
               sentence of the paragraph herein which defines the term "Net
               Proceeds") to shares of LMG Series A Common Stock and LMG Series
               B Common Stock in the ratio of the number of shares of each such
               series outstanding, and the number of shares of each such series
               to be redeemed to equal the lesser of (x) the whole number
               nearest the number determined by dividing the aggregate amount so
               allocated to the redemption of such series by the average Market
               Value of one share of LMG Series A Common Stock during the ten-
               trading day period beginning on the 16th trading day following
               the consummation of such Disposition and (y) the number of shares
               of such series outstanding (so that the amount of consideration
               paid for the redemption of each share of LMG Series A Common
               Stock and each share of LMG Series B Common Stock is the same);
               or

         (iii) convert (a) each outstanding share of LMG Series A Common Stock
               into a number (or fraction) of fully paid and nonassessable
               shares of TCI Group Series A Common Stock and (b) each
               outstanding share of LMG Series B Common Stock into a number (or
               fraction) of fully paid and nonassessable shares of TCI Group
               Series B Common Stock, in each case equal to 110% of the average
               daily ratio (calculated to the nearest five decimal places) of
               the Market Value of one share of LMG Series A Common Stock to the
               Market Value of one share of TCI Group Series A Common Stock
               during the ten-trading day period referred to in clause (ii)(b)
               of this paragraph.

          For these purposes, "substantially all of the properties and assets of
     the Liberty Media Group" as of any date means a portion of such properties
     and assets that represents at least 80% of the

                                       18

 
     then-current market value (as determined by the TCI Board of Directors) of
     the properties and assets of the Liberty Media Group as of such date.

          A "Related Business Transaction" means any Disposition of all or
     substantially all of the properties and assets of the Liberty Media Group
     in which TCI receives as proceeds of such Disposition primarily equity
     securities (including, without limitation, capital stock, convertible
     securities, partnership or limited partnership interests and other types of
     equity securities, without regard to the voting power or contractual or
     other management or governance rights related to such equity securities) of
     the purchaser or acquiror of such assets and properties of the Liberty
     Media Group, any entity which succeeds (by merger, formation of a joint
     venture enterprise or otherwise) to such assets and properties of the
     Liberty Media Group or a third party issuer, which purchaser, acquiror or
     other issuer is engaged or proposes to engage primarily in one or more
     businesses similar or complementary to the businesses conducted by the
     Liberty Media Group prior to such Disposition, as determined in good faith
     by the TCI Board of Directors.

          The "Adjusted Outstanding Interest Fraction" means a fraction the
     numerator of which is the number of outstanding shares of Liberty Media
     Group Common Stock and the denominator of which is the sum of (a) such
     number of outstanding shares, (b) the Number of Shares Issuable with
     Respect to the Inter-Group Interest, (c) the number of shares of Liberty
     Media Group Common Stock issuable upon conversion, exercise or exchange of
     Pre-Distribution Convertible Securities and (d) the number of Committed
     Acquisition Shares issuable.

          The "Net Proceeds" with respect to any Disposition of any of the
     properties and assets of the Liberty Media Group means an amount, if any,
     equal to the gross proceeds of such Disposition after any payment of, or
     reasonable provision for, (a) any taxes payable by TCI in respect of such
     Disposition or in respect of any resulting dividend or redemption (or which
     would have been payable but for the utilization of tax benefits
     attributable to the TCI Group), (b) any transaction costs, including,
     without limitation, any legal, investment banking and accounting fees and
     expenses and (c) any liabilities and other obligations (contingent or
     otherwise) of, or attributed to, the Liberty Media Group, including,
     without limitation, any indemnity or guarantee obligations incurred in
     connection with the Disposition or any liabilities for future purchase
     price adjustments and any preferential amounts plus any accumulated and
     unpaid dividends and other obligations (without duplication of amounts
     allocated for the satisfaction of TCI's obligations with respect to Pre-
     Distribution Convertible Securities and Committed Acquisition Shares
     issuable which are included in the determination of the Adjusted
     Outstanding Interest Fraction) in respect of TCI Preferred Stock attributed
     to the Liberty Media Group.  TCI may elect to pay the dividend or
     redemption price referred to in clause (i) or (ii) above either in the same
     form as the proceeds of the Disposition were received or in any other
     combination of cash or securities or other property (other than TCI Common
     Stock) that the TCI Board of Directors determines will have an aggregate
     market value on a fully distributed basis, of not less than the amount of
     the Net Proceeds.  If the dividend or redemption price is paid in the form
     of securities of an issuer other than TCI, the TCI Board of Directors may
     determine either to (i) pay the dividend or redemption price in the form of
     separate classes or series of securities, with one class or series of such
     securities to holders of LMG Series A Common Stock and another class or
     series of securities to holders of LMG Series B Common Stock, provided that
     such securities (and, if such securities are convertible into or
     exercisable or exchangeable for shares of another class or series of
     securities, the securities so issuable upon such conversion, exercise or
     exchange) do not differ in any respect other than their relative voting
     rights and related differences in designation, conversion, redemption and
     share distribution provisions with holders of shares of LMG Series B Common
     Stock receiving the class or series having the higher relative voting
     rights (without regard to whether such rights differ to a greater or lesser
     extent than the corresponding differences in voting rights, designation,
     conversion, redemption and share distribution provisions between the LMG
     Series A Common Stock and the LMG Series B Common Stock), provided that if
     such securities constitute capital stock of a subsidiary of TCI, such
     rights will not differ to a greater extent than the corresponding
     differences in voting rights, designation, conversion, redemption and share
     distribution provisions between the LMG Series A Common Stock and LMG
     Series B Common Stock, and otherwise such securities will be distributed on
     an equal per share basis, or (ii) pay the dividend or redemption price in

                                       19

 
     the form of a single class of securities without distinction between the
     shares received by the holders of LMG Series A Common Stock and LMG Series
     B Common Stock.

          At the time of any dividend made as a result of a Disposition referred
     to above, the TCI Group will be credited, and the Liberty Media Group will
     be charged (in addition to the charge for the dividend paid in respect of
     outstanding shares of Liberty Media Group Common Stock), with an amount
     equal to the product of (i) the aggregate amount paid in respect of such
     dividend times (ii) a fraction the numerator of which is the Inter-Group
     Interest Fraction and the denominator of which is the Outstanding Interest
     Fraction.

          REDEMPTION IN EXCHANGE FOR STOCK OF SUBSIDIARY.  At any time at which
     all of the assets and liabilities attributed to the Liberty Media Group are
     held directly or indirectly by any one or more corporations all of the
     capital stock of which is owned by TCI (the "Liberty Media Group
     Subsidiaries"), the TCI Board of Directors may, subject to there being
     funds of TCI legally available therefor, redeem on a pro rata basis, all of
     the outstanding shares of Liberty Media Group Common Stock in exchange for
     an aggregate number of outstanding fully paid and nonassessable shares of
     common stock of each Liberty Media Group Subsidiary equal to the product of
     the Adjusted Outstanding Interest Fraction and the number of all of the
     outstanding shares of common stock of such Liberty Media Group Subsidiary.

          In effecting such a redemption, the TCI Board of Directors may
     determine either to (i) redeem shares of LMG Series A Common Stock and LMG
     Series B Common Stock in exchange for shares of separate classes or series
     of common stock of each Liberty Media Group Subsidiary with relative voting
     rights and related differences in designation, conversion, redemption and
     share distribution provisions not greater than the corresponding
     differences in voting rights, designation, conversion, redemption and share
     distribution provisions between the LMG Series A Common Stock and LMG
     Series B Common Stock, with holders of shares of LMG Series B Common Stock
     receiving the class or series having the higher relative voting rights, or
     (ii) redeem shares of LMG Series A Common Stock and LMG Series B Common
     Stock in exchange for shares of a single class of common stock of each
     Liberty Media Group Subsidiary without distinction between the shares
     distributed to the holders of the two series of Liberty Media Group Common
     Stock.  If TCI determines to undertake a redemption as described in clause
     (i) of the preceding sentence, the outstanding shares of common stock of
     each Liberty Media Group Subsidiary not distributed to holders of Liberty
     Media Group Common Stock would consist solely of the class or series having
     the lower relative voting rights.

          CERTAIN PROVISIONS RESPECTING CONVERTIBLE SECURITIES.  Unless the
     provisions of any class or series of Pre-Distribution Convertible
     Securities or Convertible Securities which are convertible into or
     exercisable or exchangeable for Committed Acquisition Shares provide
     specifically to the contrary, after any conversion date or redemption date
     on which all outstanding shares of Liberty Media Group Common Stock were
     converted or redeemed, any share of Liberty Media Group Common Stock that
     is issued on conversion, exercise or exchange of any Pre-Distribution
     Convertible Securities or any Convertible Securities which are convertible
     into or exercisable or exchangeable for Committed Acquisition Shares will,
     immediately upon issuance pursuant to such conversion, exercise or exchange
     and without any notice or any other action on the part of TCI or the TCI
     Board of Directors or the holder of such share of Liberty Media Group
     Common Stock, be converted into or redeemed in exchange for, as applicable,
     the kind and amount of shares of capital stock, cash and/or other
     securities or property that a holder of such Pre-Distribution Convertible
     Securities or any Convertible Securities which are convertible into or
     exercisable or exchangeable for Committed Acquisition Shares would have
     been entitled to receive pursuant to the terms of such securities had such
     terms provided that the conversion, exercise or exchange privilege in
     effect immediately prior to any such conversion or redemption of all
     outstanding shares of Liberty Media Group Common Stock would be adjusted so
     that the holder of any such Pre-Distribution Convertible Securities or any
     Convertible Securities which are convertible into or exercisable or
     exchangeable for Committed Acquisition Shares thereafter surrendered for
     conversion, exercise or exchange would be entitled to receive the kind and
     amount of shares of capital stock, cash and/or other securities or property
     such holder would have received as a result of such action had such
     securities been converted, exercised or exchanged immediately prior
     thereto.  With respect to any Convertible Securities which are created,
     established or otherwise first authorized for issuance subsequent to the
     record date for

                                       20

 
     the Distribution (other than Pre-Distribution Convertible Securities and
     Convertible Securities which are convertible into or exercisable or
     exchangeable for Committed Acquisition Shares), the terms and provisions of
     which do not provide for adjustments specifying the kind and amount of
     capital stock, cash and/or securities or other property that such holder
     would be entitled to receive upon the conversion, exercise or exchange of
     such Convertible Securities following any conversion date or redemption
     date on which all outstanding shares of Liberty Media Group Common Stock
     were converted or redeemed, then upon such conversion, exercise or exchange
     of such Convertible Securities, any share of Liberty Media Group Common
     Stock that is issued on conversion, exercise or exchange of any such
     Convertible Securities will, immediately upon issuance pursuant to such
     conversion, exercise or exchange and without any notice or any other action
     on the part of TCI or the TCI Board of Directors or the holder of such
     share of Liberty Media Group Common Stock, be redeemed in exchange for, to
     the extent assets of TCI are legally available therefor, the amount of $.01
     per share in cash.

          GENERAL CONVERSION AND REDEMPTION PROVISIONS.  Not later than the 10th
     trading day following the consummation of a Disposition referred to above
     under "--Mandatory Dividend, Redemption or Conversion of Liberty Media
     Group Common Stock," TCI will announce publicly by press release (i) the
     Net Proceeds of such Disposition, (ii) the number of outstanding shares of
     LMG Series A Common Stock and LMG Series B Common Stock, (iii) the number
     of shares of LMG Series A Common Stock and LMG Series B Common Stock into
     or for which Convertible Securities are then convertible, exercisable or
     exchangeable and the conversion, exercise or exchange prices thereof (and
     stating which, if any, of such Convertible Securities constitute Pre-
     Distribution Convertible Securities or Convertible Securities which are
     convertible into or exercisable or exchangeable for Committed Acquisition
     Shares) and the number of Committed Acquisition Shares issuable, (iv) the
     Outstanding Interest Fraction as of a recent date preceding the date of
     such notice and (v) the Adjusted Outstanding Interest Fraction as of a
     recent date preceding the date of such notice.  Not earlier than the 26th
     trading day and not later than the 30th trading day following the
     consummation of such Disposition, TCI will announce publicly by press
     release which of the actions described in clauses (i), (ii) or (iii) of the
     first paragraph under "--Mandatory Dividend, Redemption or Conversion of
     Liberty Media Group Common Stock" it has irrevocably determined to take.

          TCI also will cause to be given to each holder of outstanding shares
     of LMG Series A Common Stock and LMG Series B Common Stock and to each
     holder of Convertible Securities convertible into or exercisable or
     exchangeable for shares of either such series (unless provision for notice
     is otherwise made pursuant to the terms of such Convertible Securities) a
     notice setting forth (i) if TCI has determined to pay a dividend described
     in clause (i) of the first paragraph under "--Mandatory Dividend,
     Redemption or Conversion of Liberty Media Group Common Stock" (a "Dividend
     Election"), (x) the record date for determining holders entitled to receive
     such dividend, which will not be earlier than the 40th trading day, nor
     later than the 50th trading day, following the consummation of such
     Disposition and (y) the anticipated payment date of such dividend (which
     will not be more than 85 trading days following the consummation of such
     Disposition), (ii) if TCI has determined to redeem shares of Liberty Media
     Group Common Stock following a Disposition of all (and not merely
     substantially all) of the properties and assets of the Liberty Media Group
     as described in clause (ii)(a) of the first paragraph under "--Mandatory
     Dividend, Redemption or Conversion of Liberty Media Group Common Stock" (a
     "Full Redemption Election"), (x) the redemption date (which will not be
     more than 85 trading days following the consummation of such Disposition)
     and (y) a statement that all shares of Liberty Media Group Common Stock
     outstanding on the redemption date will be redeemed, (iii) if TCI has
     determined to redeem shares of Liberty Media Group Common Stock following a
     Disposition of substantially all (but not all) of the properties and assets
     of the Liberty Media Group as described in clause (ii)(b) of the first
     paragraph under "--Mandatory Dividend, Redemption or Conversion of Liberty
     Media Group Common Stock" (a "Partial Redemption Election"), (x) a date not
     earlier than the 40th trading day and not later than the 50th trading day
     following the consummation of such Disposition on which shares of Liberty
     Media Group Common Stock then outstanding will be selected for redemption
     and (y) the anticipated redemption date (which will not be more than 85
     trading days following the consummation of such Disposition) and (iv) in
     the event of any conversion as described above under "--Conversion of
     Liberty Media Group Common Stock at the Option of TCI" or as described in
     clause (iii) of the first paragraph under "--Mandatory Dividend, Redemption
     or Conversion of Liberty Media Group Common Stock" (a "Conversion
     Election"), (x) a

                                       21

 
     statement that all outstanding shares of Liberty Media Group Common Stock
     will be converted and (y) the conversion date (which will not be more than
     85 trading days following the consummation of the Disposition in the event
     of conversion pursuant to the provisions described under "--Mandatory
     Dividend, Redemption or Conversion of Liberty Media Group Common Stock" and
     which will not be more than 120 days after the Appraisal Date in the event
     of conversion pursuant to the provisions described under "--Conversion of
     Liberty Media Group Common Stock at the Option of TCI").  Each notice of a
     Dividend Election, a Full Redemption Election or a Partial Redemption
     Election also will state, as applicable, (i) the kind of shares of capital
     stock, cash and/or other securities or property to be distributed in
     respect of shares of Liberty Media Group Common Stock (in the case of a
     Dividend Election) or paid as the redemption price with respect to shares
     of Liberty Media Group Common Stock outstanding on the redemption date (in
     the case of a Full Redemption Election) or selected for redemption (in the
     case of a Partial Redemption Election); (ii) the Net Proceeds of such
     Disposition; (iii) in the case of a Dividend Election and a Partial
     Redemption Election, the Outstanding Interest Fraction as of a recent date
     preceding the date of such notice, and in the case of a Full Redemption
     Election, the Adjusted Outstanding Interest Fraction as of a recent date
     preceding the date of such notice; (iv) the number of outstanding shares of
     LMG Series A Common Stock and LMG Series B Common Stock and the number of
     shares of LMG Series A Common Stock and LMG Series B Common Stock into or
     for which outstanding Convertible Securities are then convertible,
     exercisable or exchangeable and the conversion, exercise or exchange price
     thereof (and, in the case of a Full Redemption Election, stating which, if
     any, of such Convertible Securities constitute Pre-Distribution Convertible
     Securities or Convertible Securities which are convertible into or
     exercisable or exchangeable for Committed Acquisition Shares and the number
     of Committed Acquisition Shares issuable); (v) in the case of a Full
     Redemption Election, the place or places where certificates for shares of
     Liberty Media Group Common Stock properly endorsed or assigned for transfer
     (unless TCI waives such requirement), are to be surrendered for delivery of
     certificates for shares of such capital stock, cash and/or other securities
     or property; (vi) in the case of notice to holders of Convertible
     Securities, a statement to the effect that holders of such Convertible
     Securities will be entitled to receive such dividend (in the case of a
     Dividend Election) or participate in such redemption (in the case of a Full
     Redemption Election) or in the selection of shares for redemption (in the
     case of a Partial Redemption Election) only if such holders appropriately
     convert, exercise or exchange such Convertible Securities on or prior to
     the record date for determining holders entitled to receive such dividend,
     the redemption date, or the date fixed for the selection of shares to be
     redeemed, respectively, and a statement as to what, if anything, such
     holder will be entitled to receive pursuant to the terms of such
     Convertible Securities or, if applicable, the provisions described under 
     "-- Certain Provisions Respecting Convertible Securities" if such holder
     converts, exercises or exchanges such Convertible Securities following such
     redemption date or date for selection of shares to be redeemed, as
     applicable, and (vii) in the case of a Partial Redemption Election, a
     statement that TCI will not be required to register a transfer of any
     shares of Liberty Media Group Common Stock for a period of 15 trading days
     next preceding the date fixed for selection of shares to be redeemed. In
     the case of a Partial Redemption Election, TCI also will cause to be given
     to each holder of shares of Liberty Media Group Common Stock selected for
     redemption, a notice setting forth (i) the number of shares of LMG Series A
     Common Stock and LMG Series B Common Stock held by such holder to be
     redeemed, (ii) a statement that such shares of LMG Series A Common Stock
     and LMG Series B Common Stock will be redeemed, (iii) the redemption date
     (which will not be more than 85 trading days following the consummation of
     such Disposition), (iv) the kind and per share amount of shares of capital
     stock, cash and/or other securities or property to be received by such
     holder with respect to each share of such Liberty Media Group Common Stock
     to be redeemed, including details as to the calculation thereof, and (v)
     the place or places where certificates for shares of such Liberty Media
     Group Common Stock, properly endorsed or assigned for transfer (unless TCI
     waives such requirement), are to be surrendered for delivery of
     certificates for shares of such capital stock, cash and/or other securities
     or property. The outstanding shares of Liberty Media Group Common Stock to
     be redeemed will be redeemed by TCI pro rata among the holders of Liberty
     Media Group Common Stock or by such other method as may be determined by
     the TCI Board of Directors to be equitable.

          In the case of a Conversion Election, TCI's notice also will state (i)
     the per share number of shares of TCI Group Series A Common Stock or TCI
     Group Series B Common Stock, as applicable, to be received with respect to
     each share of LMG Series A Common Stock or LMG Series B Common

                                       22

 
     Stock, including details as to the calculation thereof, (ii) the place or
     places where certificates for shares of Liberty Media Group Common Stock,
     properly endorsed or assigned for transfer (unless TCI waives such
     requirement), are to be surrendered, (iii) the number of outstanding shares
     of LMG Series A Common Stock and LMG Series B Common Stock, the number of
     Committed Acquisition Shares issuable and the number of shares of LMG
     Series A Common Stock and LMG Series B Common Stock into or for which
     outstanding Convertible Securities are then convertible, exercisable or
     exchangeable and the conversion, exercise or exchange prices thereof and
     (iv) in the case of a notice to holders of Convertible Securities, a
     statement to the effect that holders of such Convertible Securities will be
     entitled to participate in such conversion only if such holders
     appropriately convert, exercise or exchange such Convertible Securities on
     or prior to the conversion date and a statement as to what, if anything,
     such holders will be entitled to receive pursuant to the terms of such
     Convertible Securities or, if applicable, the provision described under "--
     Certain Provisions Respecting Convertible Securities" if such holders
     convert, exercise or exchange such Convertible Securities following such
     conversion date.

          Notice of a Dividend Election will be given not later than the 30th
     trading day following the consummation of the Disposition; notice of a Full
     Redemption Election will be given not less than 35 trading days nor more
     than 45 trading days prior to the redemption date; notice of a Partial
     Redemption Election will be given not later than the 30th trading day
     following the consummation of the Disposition and the notice to holders of
     shares selected for redemption will be given promptly following such
     selection, but not earlier than the 40th trading day and not later than the
     50th trading day following the consummation of the Disposition; and notice
     of a Conversion Election will be given not less than 35 trading days nor
     more than 45 trading days prior to the conversion date.  All such notices
     will be sent by first-class mail, postage prepaid, to a holder at such
     holder's address as the same appears on the transfer books of TCI.

          If TCI determines to redeem shares of LMG Series A Common Stock and
     LMG Series B Common Stock as described above under "--Redemption in
     Exchange for Stock of Subsidiary," TCI will promptly cause to be given to
     each holder of LMG Series A Common Stock and LMG Series B Common Stock and
     to each holder of Convertible Securities convertible into or exercisable or
     exchangeable for shares of either such series (unless provision for such
     notice is otherwise made pursuant to the terms of such Convertible
     Securities), a notice setting forth (i) a statement that all outstanding
     shares of Liberty Media Group Common Stock will be redeemed in exchange for
     shares of common stock of the Liberty Media Group Subsidiaries, (ii) the
     redemption date, (iii) the Adjusted Outstanding Interest Fraction as of a
     recent date preceding the date of such notice, (iv) the place or places
     where certificates for shares of Liberty Media Group Common Stock, properly
     endorsed or assigned for transfer (unless TCI waives such requirement), are
     to be surrendered for delivery of certificates for shares of common stock
     of the Liberty Media Group Subsidiaries, (v) the number of outstanding
     shares of LMG Series A Common Stock and LMG Series B Common Stock and the
     number of shares of LMG Series A Common Stock and LMG Series B Common Stock
     into or for which outstanding Convertible Securities are then convertible,
     exercisable or exchangeable and the conversion, exercise or exchange prices
     thereof (and stating which, if any, of such Convertible Securities
     constitute Pre-Distribution Convertible Securities or Convertible
     Securities which are convertible into or exercisable or exchangeable for
     Committed Acquisition Shares) and the number of Committed Acquisition
     Shares issuable, and (vi) in the case of a notice to holders of Convertible
     Securities, a statement to the effect that holders of such Convertible
     Securities will be entitled to receive shares of common stock of the
     Liberty Media Group Subsidiaries upon redemption only if such holders
     appropriately convert, exercise or exchange such Convertible Securities on
     or prior to the redemption date referred to in clause (ii) of this sentence
     and a statement as to what, if anything, such holders will be entitled to
     receive pursuant to the terms of such Convertible Securities or, if
     applicable, the provisions described under "--Certain Provisions Respecting
     Convertible Securities" if such holders convert, exercise or exchange such
     Convertible Securities following the redemption date.  Such notice will be
     sent by first-class mail, postage prepaid, not less than 35 trading days
     nor more than 45 trading days prior to the redemption date, at such
     holder's address as the same appears on the transfer books of TCI.

          Neither the failure to mail any notice to any particular holder of
     Liberty Media Group Common Stock or of Convertible Securities nor any
     defect therein will affect the sufficiency thereof with respect

                                       23

 
     to any other holder of outstanding shares of Liberty Media Group Common
     Stock or of Convertible Securities, or the validity of any conversion or
     redemption.

          TCI will not be required to issue or deliver fractional shares of any
     class of capital stock or any fractional securities to any holder of
     Liberty Media Group Common Stock upon any conversion, redemption, dividend
     or other distribution described above.  In connection with the
     determination of the number of shares of any class of capital stock that is
     issuable or the amount of securities that is deliverable to any holder of
     record upon any such conversion, redemption, dividend or other distribution
     (including any fractions of shares or securities), TCI may aggregate the
     number of shares of Liberty Media Group Common Stock held at the relevant
     time by such holder of record.  If the number of shares of any class of
     capital stock or the amount of securities remaining to be issued or
     delivered to any holder of Liberty Media Group Common Stock is a fraction,
     TCI will, if such fraction is not issued or delivered to such holder, pay a
     cash adjustment in respect of such fraction in an amount equal to the fair
     market value of such fraction on the fifth trading day prior to the date
     such payment is to be made (without interest).  For purposes of the
     preceding sentence, "fair market value" of any fraction will be (i) in the
     case of any fraction of a share of capital stock of TCI, the product of
     such fraction and the Market Value of one share of such capital stock and
     (ii) in the case of any other fractional security, such value as is
     determined by the TCI Board of Directors.

          No adjustments in respect of dividends will be made upon the
     conversion or redemption of any shares of Liberty Media Group Common Stock;
     provided, however, that if the conversion date or the redemption date with
     respect to the Liberty Media Group Common Stock is subsequent to the record
     date for the payment of a dividend or other distribution thereon or with
     respect thereto, the holders of shares of Liberty Media Group Common Stock
     at the close of business on such record date will be entitled to receive
     the dividend or other distribution payable on or with respect to such
     shares on the date set for payment of such dividend or other distribution,
     notwithstanding the conversion or redemption of such shares or TCI's
     default in payment of the dividend or distribution due on such date.

          Before any holder of shares of Liberty Media Group Common Stock will
     be entitled to receive certificates representing shares of any kind of
     capital stock or cash and/or securities or other property to be received by
     such holder with respect to any conversion or redemption of shares of
     Liberty Media Group Common Stock, such holder is required to surrender at
     such place as TCI will specify certificates for such shares, properly
     endorsed or assigned for transfer (unless TCI waives such requirement).
     TCI will as soon as practicable after such surrender of certificates
     representing shares of Liberty Media Group Common Stock deliver to the
     person for whose account such shares were so surrendered, or to the nominee
     or nominees of such person, certificates representing the number of whole
     shares of the kind of capital stock or cash and/or securities or other
     property to which such person is entitled, together with any payment for
     fractional securities referred to above.  If less than all of the shares of
     Liberty Media Group Common Stock represented by any one certificate are to
     be redeemed, TCI will issue and deliver a new certificate for the shares of
     Liberty Media Group Common Stock not redeemed.  TCI will not be required to
     register a transfer of (i) any shares of Liberty Media Group Common Stock
     for a period of 15 trading days next preceding any selection of shares of
     Liberty Media Group Common Stock to be redeemed or (ii) any shares of
     Liberty Media Group Common Stock selected or called for redemption.  Shares
     selected for redemption may not thereafter be converted pursuant to the
     provisions described under "--Conversion of TCI Group Series B Common Stock
     and LMG Series B Common Stock at the Option of the Holder."

          From and after any applicable conversion date or redemption date, all
     rights of a holder of shares of Liberty Media Group Common Stock that were
     converted or redeemed will cease except for the right, upon surrender of
     the certificates representing shares of Liberty Media Group Common Stock,
     to receive certificates representing shares of the kind and amount of
     capital stock or cash and/or securities or other property for which such
     shares were converted or redeemed, together with any payment for fractional
     securities and such holder will have no other or further rights in respect
     of the shares of Liberty Media Group Common Stock so converted or redeemed,
     including, but not limited to, any rights with respect to any cash,
     securities or other property which are reserved or otherwise designated by
     TCI as being held for the satisfaction of TCI's obligations to pay or
     deliver any cash, securities or other property upon the

                                       24

 
     conversion, exercise or exchange of any Convertible Securities outstanding
     as of the date of such conversion or redemption or any Committed
     Acquisition Shares which may then be issuable.  No holder of a certificate
     that, immediately prior to the applicable conversion date or redemption
     date for the Liberty Media Group Common Stock, represented shares of
     Liberty Media Group Common Stock will be entitled to receive any dividend
     or other distribution with respect to shares of any kind of capital stock
     into or in exchange for which the Liberty Media Group Common Stock was
     converted or redeemed until surrender of such holder's certificate for a
     certificate or certificates representing shares of such kind of capital
     stock.  Upon such surrender, there will be paid to the holder the amount of
     any dividends or other distributions (without interest) which theretofore
     became payable with respect to a record date after the conversion date or
     redemption date, as the case may be, but that were not paid by reason of
     the foregoing, with respect to the number of whole shares of the kind of
     capital stock represented by the certificate or certificates issued upon
     such surrender.  From and after a conversion date or redemption date, as
     the case may be, for any shares of Liberty Media Group Common Stock, TCI
     will, however, be entitled to treat the certificates for shares of Liberty
     Media Group Common Stock that have not yet been surrendered for conversion
     or redemption as evidencing the ownership of the number of whole shares of
     the kind or kinds of capital stock for which the shares of Liberty Media
     Group Common Stock represented by such certificates have been converted or
     redeemed, notwithstanding the failure to surrender such certificates.

          TCI will pay any and all documentary, stamp or similar issue or
     transfer taxes that may be payable in respect of the issue or delivery of
     any shares of capital stock and/or other securities on conversion or
     redemption of shares of Liberty Media Group Common Stock.  TCI will not,
     however, be required to pay any tax that may be payable in respect of any
     transfer involved in the issue and delivery of any shares of capital stock
     in a name other than that in which the shares of Liberty Media Group Common
     Stock so converted or redeemed were registered and no such issue or
     delivery will be made unless and until the person requesting such issue has
     paid to TCI the amount of any such tax, or has established to the
     satisfaction of TCI that such tax has been paid.

     LIQUIDATION RIGHTS

          In the event of a liquidation, dissolution or winding up of TCI,
     whether voluntary or involuntary, after payment or provision for payment of
     the debts and other liabilities of TCI and subject to the prior payment in
     full of the preferential amounts to which any class or series of TCI
     Preferred Stock is entitled, (i) the holders of the shares of TCI Group
     Common Stock will share equally, on a share for share basis, in a
     percentage of the funds of TCI remaining for distribution to its common
     stockholders equal to 100% multiplied by the average daily ratio (expressed
     as a decimal) of X/Z for the 20-trading day period ending on the trading
     day prior to the date of the public announcement of such liquidation,
     dissolution or winding up, and (ii) the holders of the shares of Liberty
     Media Group Common Stock will share equally, on a share for share basis, in
     a percentage of the funds of TCI remaining for distribution to its common
     stockholders equal to 100% multiplied by the average daily ratio (expressed
     as a decimal) of Y/Z for such 20-trading day period, where X is the
     aggregate Market Capitalization of the TCI Group Series A Common Stock and
     the TCI Group Series B Common Stock, Y is the aggregate Market
     Capitalization of the LMG Series A Common Stock and the LMG Series B Common
     Stock, and Z is the aggregate Market Capitalization of the TCI Group Series
     A Common Stock, the TCI Group Series B Common Stock, the LMG Series A
     Common Stock and the LMG Series B Common Stock.  Neither a consolidation,
     merger nor sale of assets will be construed to be a "liquidation,"
     "dissolution" or "winding up" of TCI.  The "Market Capitalization" of any
     class or series of capital stock of TCI on any trading day means the
     product of (i) the Market Value of one share of such class or series on
     such trading day and (ii) the number of shares of such class or series
     outstanding on such trading day.

          No holder of Liberty Media Group Common Stock will have any special
     right to receive specific assets of the Liberty Media Group in the case of
     any dissolution, liquidation or winding up of TCI.

                                       25

 
     DETERMINATIONS BY THE TCI BOARD OF DIRECTORS

          The TCI Charter provides that any determinations made by the TCI Board
     of Directors under any provision described under this section will be final
     and binding on all stockholders of TCI, except as may otherwise be required
     by law.  Such a determination would not be binding if it were established
     that the determination was made in breach of a fiduciary duty of the TCI
     Board of Directors.  TCI will prepare a statement of any such determination
     by the TCI Board of Directors respecting the fair market value of any
     properties, assets or securities and will file such statement with the
     Secretary of TCI.

     PREEMPTIVE RIGHTS

          Holders of the TCI Group Common Stock and Liberty Media Group Common
     Stock do not have any preemptive rights to subscribe for any additional
     shares of capital stock or other obligations convertible into or
     exercisable for shares of capital stock that may hereafter be issued by
     TCI.

     OTHER MATTERS

       The DGCL, the TCI Charter and TCI's Bylaws contain provisions which may
     serve to discourage or make more difficult a change in control of TCI
     without the support of the TCI Board of Directors or without meeting
     various other conditions.  The principal provisions of the DGCL and the
     aforementioned corporate governance documents are outlined below.

       DGCL Section 203, in general, prohibits a "business combination" between
     a corporation and an "interested stockholder" within three years of the
     date such stockholder became an "interested stockholder," unless (i) prior
     to such date the board of directors of the corporation approved either the
     business combination or the transaction which resulted in the stockholder
     becoming an interested stockholder, (ii) upon consummation of the
     transaction which resulted in the stockholder becoming an interested
     stockholder, the interested stockholder owned at least 85% of the voting
     stock of the corporation outstanding at the time the transaction commenced,
     exclusive of shares owned by directors who are also officers and by certain
     employee stock plans or (iii) on or after such date, the business
     combination is approved by the board of directors and authorized by the
     affirmative vote at a stockholders' meeting of at least 66 2/3% of the
     outstanding voting stock which is not owned by the interested stockholder.
     The term "business combination" is defined to include, among other
     transactions between the interested stockholder and the corporation or any
     direct or indirect majority-owned subsidiary thereof, a merger or
     consolidation; a sale, pledge, transfer or other disposition (including as
     part of a dissolution) of assets having an aggregate market value equal to
     10% or more of either the aggregate market value of all assets of the
     corporation on a consolidated basis or the aggregate market value of all
     the outstanding stock of the corporation; certain transactions that would
     increase the interested stockholder's proportionate share ownership of the
     stock of any class or series of the corporation or such subsidiary; and any
     receipt by the interested stockholder of the benefit of any loans,
     advances, guarantees, pledges or other financial benefits provided by or
     through the corporation or any such subsidiary.  In general, and subject to
     certain exceptions, an "interested stockholder" is any person who is the
     owner of 15% or more of the outstanding voting stock (or, in the case of a
     corporation with classes of voting stock with disparate voting power, 15%
     or more of the voting power of the outstanding voting stock) of the
     corporation, and the affiliates and associates of such person.  The term
     "owner" is broadly defined to include any person that individually or with
     or through his or its affiliates or associates, among other things,
     beneficially owns such stock, or has the right to acquire such stock
     (whether such right is exercisable immediately or only after the passage of
     time) pursuant to any agreement or understanding or upon the exercise of
     warrants or options or otherwise or has the right to vote such stock
     pursuant to any agreement or understanding, or has an agreement or
     understanding with the beneficial owner of such stock for the purpose of
     acquiring, holding, voting or disposing of such stock.  The restrictions of
     DGCL Section 203 do not apply to corporations that have elected, in the
     manner provided therein, not to be subject to such section or, with certain
     exceptions, which do not have a class of voting stock that is listed on a
     national securities exchange or authorized for quotation on an interdealer
     quotation system of a registered national securities association or held of
     record by more than 2,000 stockholders.  The TCI Charter does not contain
     any provision "opting out" of the application of DGCL Section 203 and TCI

                                       26

 
     has not taken any of the actions necessary for it to "opt out" of such
     provision.  As a result, the provisions of Section 203 will remain
     applicable to transactions between TCI and any of its "interested
     stockholders."

       The TCI Charter also contains certain provisions which could make a
     change in control of TCI more difficult.  For example, the TCI Charter
     requires, subject to the rights, if any, of any class or series of TCI
     Preferred Stock, the affirmative vote of 66 2/3% of the total voting power
     of the outstanding shares of Voting Securities, voting together as a single
     class, to approve (i) a merger or consolidation of TCI with, or into,
     another corporation, other than a merger or consolidation which does not
     require the consent of stockholders under the DGCL or a merger or
     consolidation which has been approved by 75% of the members of the TCI
     Board of Directors (in which case, in accordance with the DGCL, the
     affirmative vote of a majority of the total voting power of the outstanding
     Voting Securities would, with certain exceptions, be required for
     approval), (ii) the sale, lease or exchange of all or substantially all of
     the property and assets of TCI or (iii) the dissolution of TCI. "Voting
     Securities" is currently defined as the TCI Group Common Stock, the Liberty
     Media Group Common Stock and any class or series of TCI Preferred Stock
     entitled to vote generally with the holders of TCI Common Stock on matters
     submitted to stockholders for a vote. The TCI Charter also provides for a
     TCI Board of Directors of not less than three members, divided into three
     classes of approximately equal size, with each class to be elected for a
     three-year term at each annual meeting of stockholders. The exact number of
     directors, currently nine, is fixed by the TCI Board of Directors. The
     holders of TCI Group Common Stock, Liberty Media Group Common Stock, Class
     B Preferred Stock and certain series of Series Preferred Stock, voting
     together as a single class, vote in elections for directors. (TCI's
     Convertible Redeemable Participating Preferred Stock, Series F has voting
     rights, but outstanding shares are not entitled to vote because they are
     held by subsidiaries of TCI.) Stockholders of TCI do not have cumulative
     voting rights.
    
       The TCI Charter authorizes the issuance of 50,000,000 shares of Series
     Preferred Stock, of which 33,901,240 shares remain available for
     designation as of March 31, 1996.  Under the TCI Charter, the TCI Board of
     Directors is authorized, without further action by the stockholders of TCI,
     to establish the preferences, limitations and relative rights of the Series
     Preferred Stock.  In addition, 1,900,000,000 shares of the TCI Group Common
     Stock and 825,000,000 shares of Liberty Media Group Common Stock are
     currently authorized by the TCI Charter, of which 1,131,431,002 and
     657,992,228 respectively, remained available for issuance as of April 30,
     1996 (before giving effect to reservations of shares for issuance upon
     conversion, exchange or exercise of outstanding convertible or exchangeable
     securities and options).  The issue and sale of shares of TCI Group Common
     Stock, Liberty Media Group Common Stock and/or Series Preferred Stock could
     occur in connection with an attempt to acquire control of TCI, and the
     terms of such shares of Series Preferred Stock could be designed in part to
     impede the acquisition of such control.      

       The TCI Charter requires the affirmative vote of 66 2/3% of the total
     voting power of the outstanding shares of Voting Securities, voting
     together as a single class, to approve any amendment, alteration or repeal
     of any provision of the TCI Charter or the addition or insertion of other
     provisions therein.

       The TCI Charter and TCI's Bylaws provide that a special meeting of
     stockholders will be held at any time, subject to the rights of the holders
     of any class or series of TCI Preferred Stock, upon the call of the
     Secretary of TCI upon (i) the written request of the holders of not less
     than 66 2/3% of the total voting power of the outstanding shares of Voting
     Securities or (ii) at the request of not less than 75% of the members of
     the TCI Board of Directors.  Subject to the rights of any class or series
     of TCI Preferred Stock, TCI's Bylaws require that written notice of the
     intent to make a nomination at a meeting of stockholders must be received
     by the Secretary of TCI, at TCI's principal executive offices, not later
     than (a) with respect to an election of directors to be held at an annual
     meeting of stockholders, 90 days in advance of such meeting, and (b) with
     respect to an election of directors to be held at a special meeting of
     stockholders, the close of business on the seventh day following the day on
     which notice of such meeting is first given to stockholders.  The notice
     must contain: (1) the name and address of the stockholder who intends to
     make the nomination and of the person or persons to be nominated; (2) a
     representation that the stockholder is a holder of record of TCI's Voting
     Securities entitled to vote at the

                                       27

 
     meeting and intends to appear in person or by proxy at the meeting to
     nominate the person or persons specified in the notice; (3) a description
     of all arrangements or understandings between the stockholder and each
     nominee and any other person or persons (naming such person or persons)
     pursuant to which the nomination or nominations are to be made by the
     stockholder; (4) such other information regarding each nominee proposed by
     such stockholder as would have been required to be included in a proxy
     statement filed pursuant to the proxy rules of the Securities and Exchange
     Commission had each proposed nominee been nominated, or intended to be
     nominated, by the TCI Board of Directors; and (5) the consent of each
     nominee to serve as a director of TCI if so elected.  Any actions to remove
     directors is required to be for "cause" (as defined in the TCI Charter) and
     be approved by the holders of 66 2/3% of the total voting power of the
     outstanding shares entitled to vote in the election of directors.



                                 LEGAL MATTERS

       Certain legal matters with respect to the Shares will be passed upon for
     the Company by Stephen M. Brett, Esq., Executive Vice President and General
     Counsel of the Company.


                                    EXPERTS
    
       The consolidated balance sheets of Tele-Communications, Inc. and
     subsidiaries as of December 31, 1995 and 1994, and the related consolidated
     statements of operations, stockholders' equity, and cash flows for each of
     the years in the three-year period ended December 31, 1995, and all related
     financial statement schedules, which appear in the December 31, 1995 Annual
     Report on Form 10-K of Tele-Communications, Inc., have been incorporated by
     reference herein in reliance upon the reports, dated March 18, 1996, of
     KPMG Peat Marwick LLP, independent certified public accountants,
     incorporated by reference herein, and upon the authority of said firm as
     experts in accounting and auditing.      
    
       The consolidated balance sheet of TeleWest plc and subsidiaries as of
     December 31, 1995 and 1994, and the related consolidated statements of
     operations and cash flows for each of the years in the three year period
     ended December 31, 1995, which appear in the December 31, 1995 Annual
     Report on Form 10-K of Tele-Communications, Inc., have been incorporated by
     reference herein in reliance upon the report, dated March 6, 1996, of KPMG,
     independent chartered accountants, incorporated by reference herein, and
     upon the authority of said firm as experts in accounting and auditing.
     
    
       The combined balance sheets of Cablevision (a combination of certain
     cable television assets of Cablevision S.A., Televisora Belgrano S.A.,
     Construred S.A. and Univent's S.A.) as of December 31, 1994 and 1993, and
     the related combined statements of operations and deficit and cash flows
     for each of the years in the three-year period ended December 31, 1994,
     which appear in the Current Report of Form 8-K of Tele-Communications, Inc.
     dated April 20, 1995, as amended, have been incorporated by reference
     herein in reliance upon the report, dated March 24, 1995, of KPMG
     Finsterbusch Pickenhayn Sibille, independent certified public accountants,
     incorporated by reference herein, and upon the authority of said firm as
     experts in accounting and auditing.      
    
       The combined balance sheets of TCI Group as of December 31, 1995 and
     1994, and the related combined statements of operations, equity, and cash
     flows for each of the years in the three-year period ended December 31,
     1995, which appear in the December 31, 1995 Annual Report on Form 10-K of
     Tele-Communications, Inc., have been incorporated by reference herein in
     reliance upon the report, dated March 18, 1996, of KPMG Peat Marwick LLP,
     independent certified public accountants, incorporated by reference herein,
     and upon the authority of said firm as experts in accounting and auditing.
     The report of KPMG Peat Marwick LLP covering the combined financial
     statements refers to the effects of not consolidating TCI Group's interest
     in Liberty Media Group for the periods subsequent to the mergers of TCI
     Communications, Inc. and Liberty Media Corporation on August 4, 1994.      

                                       28

 
    
       The combined balance sheets of Liberty Media Group as of December 31,
     1995 and 1994, and the related combined statements of operations, equity,
     and cash flows for each of the years in the three-year period ended
     December 31, 1995, which appear in the December 31, 1995 Annual Report on
     Form 10-K of Tele-Communications, Inc., have been incorporated by reference
     herein in reliance upon the report, dated March 18, 1996, of KPMG Peat
     Marwick LLP, independent certified public accountants, incorporated by
     reference herein, and upon the authority of said firm as experts in
     accounting and auditing.      
    
       The statements of operations, stockholders' equity, and cash flows of
     Liberty Media Corporation and subsidiaries for the year ended December 31,
     1993, which appear in the December 31, 1995 Annual Report on Form 10-K of
     Tele-Communications, Inc., have been incorporated by reference herein in
     reliance upon the report, dated March 18, 1994, of KPMG Peat Marwick LLP,
     independent certified public accountants, incorporated by reference herein,
     and upon the authority of said firm as experts in accounting and auditing.
     The report of KPMG Peat Marwick LLP covering the December 31, 1993
     financial statements refers to a change in method in accounting for income
     taxes.      
    
       The combined financial statements of VII Cable which appear in TCI's
     Current Report on Form 8-K dated June 19, 1996, have been incorporated by
     reference herein in reliance on the report dated February 14, 1996 of Price
     Waterhouse LLP, independent accountants, given on the authority of said
     firm as experts in auditing and accounting.      

                                       29

 
       NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDER.  NEITHER THE DELIVERY OF
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE.  THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.


                         -----------------------------


                               TABLE OF CONTENTS
    


                                 PAGE
                                 ----
                              
 
AVAILABLE INFORMATION..........     3
INCORPORATION OF DOCUMENTS BY
   REFERENCE...................     3
RISK FACTOR....................     4
THE COMPANY....................     4
SELLING STOCKHOLDERS...........     4
PLAN OF DISTRIBUTION...........     6
DESCRIPTION OF COMMON STOCK....     7
LEGAL MATTERS..................    28
EXPERTS........................    28
 
      





                           TELE-COMMUNICATIONS, INC.


                 Tele-Communications, Inc. Series A TCI Group
                        Common Stock ($1.00 par value)

                           Tele-Communications, Inc.
                         Series A Liberty Media Group
                        Common Stock ($1.00 par value)



                   -----------------------------------------

                                   PROSPECTUS


                   -----------------------------------------



                                August 1, 1996