<PAGE>
 
                                                                   EXHIBIT 10.5

                                   

                           INDEMNIFICATION AGREEMENT
                           -------------------------


          This AGREEMENT is made and entered into this 4th day of December,
                                                       ---
1996, by and between Tele-Communications, Inc., a Delaware corporation (the
"Company"), and Gary S. Howard ("Indemnitee").

          WHEREAS it is essential to the Company and its subsidiaries to retain
and attract as officers the most capable persons available;

          WHEREAS Indemnitee is an officer of TCI Communications, Inc. ("TCIC")
and an officer and director of TCI Digital Satellite Entertainment, Inc.
("Digital") and TCI Satellite Entertainment, Inc. ("Satellite"), each of which
is a subsidiary of the Company;

          WHEREAS both the Company and Indemnitee recognize the increased risk
of litigation and other claims routinely being asserted against directors of
public companies in today's environment, and the attendant costs of defending
even wholly frivolous claims;

          WHEREAS it has become increasingly difficult to obtain insurance
against the risk of personal liability of directors on terms providing
reasonable protection at reasonable cost;

          WHEREAS the Bylaws of the Company, TCIC, Digital and Satellite provide
certain indemnification rights to officers and directors of such corporations,
and the officers and directors of such corporations have been otherwise assured
indemnification, as provided by Delaware law;

          WHEREAS in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's service to the
Company and its subsidiaries in an effective manner, the increasing difficulty
in obtaining and maintaining satisfactory insurance coverage, and Indemnitee's
reliance on assurances of indemnification, the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses (whether
partial or complete) to Indemnitee to the fullest extent permitted by law and as
set forth in this Agreement, and, to the extent insurance is maintained, for the
continued coverage of Indemnitee under the Company's directors' and officers'
liability insurance policies; and

          WHEREAS Indemnitee has agreed to serve as an officer and/or director
of the Company and/or one or more subsidiaries of the Company in reliance on the
protections and benefits afforded to him under and in accordance with this
Agreement;
<PAGE>
 
          NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein and Indemnitee's agreement to serve as an
officer and/or director of the Company and/or one or more subsidiaries of the
Company, the parties hereto agree as follows:

          1.  Certain Definitions:  As used in this Agreement, the following 
              -------------------     
terms shall have the corresponding meanings:
             

               (a) A "Change in Control" shall be deemed to have occurred if (i)
                      -----------------                                         
     any "person" (as such term is used in Section 13(d) of the Securities
     Exchange Act of 1934, as amended (the "Exchange Act")), other than any
     Specified Person (as defined below), is or becomes a "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
     securities of the Company representing 20% or more of the total voting
     power represented by the Company's then outstanding Voting Securities,
     without the prior approval of a majority of the Board of Directors of the
     Company (the "Board"), or (ii) during any period of two consecutive years,
     individuals who at the beginning of such period constitute the whole Board
     and any new director whose election by the Board or nomination for election
     by the Company's stockholders was approved by a vote of at least two-thirds
     (2/3) of the directors then still in office who either were directors at
     the beginning of the period or whose election or nomination for election
     was previously so approved, cease for any reason to constitute a majority
     thereof, or (iii) the stockholders of the Company approve a merger or
     consolidation of the Company with any other corporation, other than a
     merger or consolidation approved in advance of such stockholder vote by a
     majority of the Board, or the stockholders of the Company approve a plan of
     complete liquidation of the Company or an agreement for the sale or
     disposition by the Company (in one transaction or a series of transactions)
     of all or substantially all the Company's assets.  For purposes of this
     definition, "Specified Person" means each of (1) the Chairman of the Board
     of the Company as of the date of this Agreement, (2) the President of the
     Company as of the date of this Agreement, (3) the spouse, siblings, lineal
     descendants, estates and heirs of such Chairman of the Board or such
     President, or any trust or other investment vehicle for the primary benefit
     of such Chairman of the Board or such President and/or the spouse,
     siblings, lineal descendants and/or heirs of any such person, (4) Kearns-
     Tribune Corporation, a Delaware corporation or any successor thereto by
     merger or consolidation and (5) the trustee under the qualified employee
     stock purchase plan of the Company or any successor plan.  The trustee
     under the qualified employee stock purchase plan of the Company or any
     successor plan shall be deemed to have beneficial ownership of all shares
     of common stock of the Company held under the plan, whether or not
     allocated to or vested in participants' accounts.

               (b) "Claim" means any threatened, pending or completed action,
                    -----                                                    
     suit or proceeding, whether instituted by or in the right of the Company or
     by any other party, or any inquiry or investigation that Indemnitee in good
     faith believes might lead to the institution of any such action, suit or
     proceeding, whether civil (including without limitation intentional and
     unintentional tort claims), criminal, administrative, investigative or
     other.

                                       2
<PAGE>
 
               (c) "Expenses" means and includes attorneys' fees, disbursements
                    --------                                                   
     and other charges and all other costs, expenses and obligations whatsoever
     paid or incurred in connection with investigating, defending, being a
     witness in, participating in (including on appeal), or preparing for any
     Claim relating to or arising in whole or in part out of any Indemnifiable
     Event.

               (d) "Indemnifiable Event" means any event or occurrence related
                    -------------------                                       
     to or arising out of the fact that Indemnitee is or was an officer,
     director, employee, agent or fiduciary of the Company or any subsidiary of
     the Company, or is or was serving at the request of the Company as an
     officer, director, employee, agent, fiduciary or trustee of any other
     corporation, partnership, joint venture, employee benefit plan, trust or
     other enterprise, or any event or occurrence related to or arising out of
     anything done or not done by Indemnitee in any such capacity.

               (e) "Independent Legal Counsel" means an attorney or firm of
                    -------------------------                              
     attorneys, selected in accordance with the provisions of Section 3, who
     shall not have otherwise performed services for the Company or Indemnitee
     within the last five years (other than with respect to matters concerning
     the rights of Indemnitee under this Agreement, or of other indemnitees
     under similar indemnification agreements or under the Company's Bylaws).

               (f) "Reviewing Party" means an appropriate person or body
                    ---------------                                     
     consisting of a member or members of the Company's Board of Directors or
     any other independent and impartial person or body appointed by the
     Company's Board of Directors who is not a party to the particular Claim for
     which Indemnitee is seeking indemnification, or Independent Legal Counsel,
     as determined pursuant to Section 2(b).

               (g) "Voting Securities" means securities of the Company that vote
                    -----------------                                           
     generally in the election of directors.

          2.   Basic Indemnification Arrangement.
               --------------------------------- 

          (a) If Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in, any Claim relating to or arising in whole or in part out of an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable but in any event no later than
thirty days after written demand is presented to the Company, against any and
all Expenses, judgments, fines, penalties and amounts paid or payable in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties or amounts paid or payable in settlement) of such Claim.  If so
requested by Indemnitee, the Company shall advance (within two business days
after such request) any and all Expenses to Indemnitee (an "Expense Advance").

          (b) Notwithstanding the foregoing, (i) the obligations of the Company
under Section 2(a) shall be subject to the condition that the Reviewing Party
shall not have

                                       3
<PAGE>
 
determined, which determination shall, in all cases, be in a written opinion
specifying in reasonable detail the reasons therefor, that Indemnitee would not
be permitted to be indemnified under applicable law, and (ii) the obligation of
the Company to make an Expense Advance pursuant to Section 2(a) shall be subject
to the condition that, if, when and to the extent that the Reviewing Party
determines by rendering such written opinion that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
                                                --------  -------         
Indemnitee pursues legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under applicable
law, (A) any determination made by the Reviewing Party that Indemnitee would not
be permitted to be indemnified under applicable law shall not be binding, (B)
the obligations of the Company to indemnify Indemnitee and to make Expense
Advances pursuant to Section 2(a) shall continue in full force and effect, and
(C) Indemnitee shall not be required to reimburse the Company for any Expense
Advance, in each case until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed).  If there has not been a Change in Control, the Reviewing Party shall
be selected by the Board of Directors, and if there has been a Change in
Control, the Reviewing Party shall be the Independent Legal Counsel referred to
in Section 3 hereof.  If there has been no determination by the Reviewing Party
or if the Reviewing Party determines that Indemnitee substantively would not be
permitted to be indemnified in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation in any court in the State of
Delaware or the State of Colorado having subject matter jurisdiction thereof and
in which venue is proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Company hereby consents
to service of process and agrees to appear in any such proceeding and hereby
waives any objection that venue in any court is not proper.  Any determination
by the Reviewing Party otherwise shall be conclusive and binding on the Company
and Indemnitee.

          3.   Change in Control.  The Company agrees that if there is a Change
               -----------------                                               
in Control of the Company then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and Expense Advances
under this Agreement or any other agreement or Company Bylaw now or hereafter in
effect relating to Claims arising in whole or in part out of Indemnifiable
Events, the Company shall seek and obtain legal advice with respect thereto from
Independent Legal Counsel selected by Indemnitee and approved by the Company
(which approval shall not be unreasonably withheld or delayed).  Such
Independent Legal Counsel, among other things, shall be responsible for making
any determination to be made by the Reviewing Party pursuant to Section 2(b) and
shall render its written opinion to the Company and Indemnitee as to whether and
to what extent Indemnitee would be permitted to be indemnified under applicable
law. The Company agrees to pay the reasonable fees, disbursements and other
charges of the Independent Legal Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including attorneys' fees,
disbursements and other charges), claims, liabilities and damages arising out of
or relating to this Agreement or its engagement pursuant hereto.

          4.   Indemnification for Additional Expenses.  The Company shall
               ---------------------------------------                    
indemnify Indemnitee against (and, if requested by Indemnitee, shall advance to
Indemnitee within two

                                       4
<PAGE>
 
business days after any such request) any and all Expenses incurred by
Indemnitee in connection with any action brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Company Bylaw now or hereafter in effect
relating to Claims arising in whole or in part out of Indemnifiable Events or
(ii) recovery under any directors' and officers' liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be.

          5.   Partial Indemnity.  If Indemnitee is entitled under any provision
               -----------------                                                
of this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim,
but not, however, for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

          6.   Burden of Proof.  In connection with any determination by the
               ---------------                                              
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.

          7.   No Presumptions.  For purposes of this Agreement:
               ---------------                                  

               (a)  the termination of any claim, action, suit or proceeding, by
     judgment, order, settlement (whether with or without court approval) or
     conviction, or upon a plea of nolo contendere, or its equivalent, shall not
     create a presumption that Indemnitee did not meet any particular standard
     of conduct or have any particular belief or that a court has determined
     that indemnification is not permitted by applicable law; and

               (b)  neither the failure of the Reviewing Party to have made a
     determination as to whether Indemnitee has met any particular standard of
     conduct or had any particular belief, nor, except as expressly provided in
     Section 2(b) hereof, an actual determination by the Reviewing Party that
     Indemnitee has not met such standard of conduct or did not have such
     belief, shall be a defense to any claim by Indemnitee that he is entitled
     to indemnification, or create a presumption that Indemnitee has not met any
     particular standard of conduct or did not have any particular belief, in
     any legal proceeding considering whether Indemnitee should be indemnified
     under applicable law.

          8.   Nonexclusivity; Subsequent Change in Law.  The rights of
               ----------------------------------------                
Indemnitee hereunder shall be in addition to any other rights Indemnitee may
have from time to time under the Company's Bylaws or the General Corporation Law
of the State of Delaware or otherwise, and nothing contained in this Agreement
shall derogate or limit Indemnitee's rights to indemnification as provided under
the Company's Bylaws or applicable law.  To the extent that a change in the
General Corporation Law of the State of Delaware (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Company's Bylaws

                                       5
<PAGE>
 
and this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.

          9.   Liability Insurance.  To the extent the Company maintains an
               -------------------                                         
insurance policy or policies providing directors' and officers' liability
insurance that permits coverage of persons who are or were officers or directors
of TCIC, Digital and/or Satellite, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any director or officer of TCIC, Digital and/or
Satellite.

          10.  Amendments; Waiver.  No supplement, modification or amendment of
               ------------------                                              
this Agreement shall be binding unless executed in writing by both the Company
and Indemnitee.  No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

          11.  Subrogation.  In the event of payment under this Agreement, the
               -----------                                                    
Company shall be subrogated to the extent of such payment to all rights of
recovery of Indemnitee relating thereto, and Indemnitee shall execute all papers
required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights; provided however, that the
Company shall not enforce any of such rights in any manner or at any time as
would prevent or delay payment to Indemnitee of all amounts owing to him.

          12.  No Duplication of Payments.  The Company shall not be liable
               --------------------------                                  
under this Agreement to make any payment in connection with any Claim made
against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, Bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder.

          13.  Binding Effect.  This Agreement shall be binding upon and inure
               --------------                                                 
to the benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets
of the Company), assigns, spouses, heirs, executors and personal and legal
representatives.  This Agreement shall continue in full force and effect in
perpetuity, unless and until terminated by written instrument signed by both the
Company and Indemnitee, regardless of whether Indemnitee continues to serve as
an officer, director, employee, agent or fiduciary of the Company or any of its
subsidiaries or as an officer, director, employee, agent, fiduciary or trustee
of any other enterprise at the Company's request.

          14.  Severability.  The provisions of this Agreement shall be
               ------------                                            
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) is held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable in any
respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way
impaired and shall remain enforceable to the fullest extent permitted by law.

                                       6
<PAGE>
 
          15.  Effective Date.  This Agreement shall be effective as of the date
               --------------                                                   
hereof and shall apply to any claim for indemnification by the Indemnitee on or
after such date, whether such claim for indemnification relates to or arises out
of, in whole or in part, events or circumstances occurring or existing before,
on, or after the date hereof.

          16.  Governing Law.  This Agreement shall be governed by and construed
               -------------                                                    
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state, without giving effect to the
principles of conflicts of laws thereof.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.

                            TELE-COMMUNICATIONS, INC.



                            By: /s/ Stephen M. Brett
                                -------------------------------------
                                Name: Stephen M. Brett
                                Title: Executive Vice President



                                /s/ Gary S. Howard
                                -------------------------------------
                                    Gary S. Howard

                                       7