<PAGE>

                                   FORM 10-K
                      SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.


(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
                                      OR
[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from_________to________

Commission file number:    0-14906

                       JONES CABLE INCOME FUND 1-B, LTD.
                       ---------------------------------
             (Exact name of registrant as specified in its charter)

     Colorado                                                 84-1010417
     --------                                                 ----------
(State of Organization)                                      (IRS Employer
                                                          Identification No.)

P.O. Box 3309, Englewood, Colorado 80155-3309                (303) 792-3111
---------------------------------------------                --------------
(Address of principal executive office and Zip Code)    (Registrant's telephone
                                                        no. including area code)

       Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:  Limited Partnership
                                   Interests

Indicate by check mark whether the registrants, (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days:

     Yes     x                                                 No   ____
           -----

Aggregate market value of the voting stock held by non-affiliates of the
registrant:  N/A

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ((S)229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.      X
                                       -----



                   DOCUMENTS INCORPORATED BY REFERENCE:  None
<PAGE>

     Information contained in this Form 10-K Report contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.  All statements, other than statements of historical facts, included in
this Form 10-K Report that address activities, events or developments that the
Partnership, the Venture or the General Partner expects, believes or anticipates
will or may occur in the future are forward-looking statements.  These forward-
looking statements are based upon certain assumptions and are subject to a
number of risks and uncertainties.  Actual results could differ materially from
the results predicted by these forward-looking statements.

                                    PART I.
                                    -------

                               ITEM 1.  BUSINESS
                               -----------------

     THE PARTNERSHIP.  Jones Cable Income Fund 1-B, Ltd. (the "Partnership") is
a Colorado limited partnership that was formed pursuant to the public offering
of limited partnership interests in the Jones Cable Income Fund 1 Limited
Partnership Program (the "Program"), which was sponsored by Jones Intercable,
Inc. (the "General Partner").  Jones Cable Income Fund 1-A, Ltd. and Jones Cable
Income Fund 1-C, Ltd. ("Fund 1-C") are the other partnerships that were formed
pursuant to the Program.  The Partnership and Fund 1-C formed a general
partnership known as Jones Cable Income Fund 1-B/C Venture (the "Venture") in
which the Partnership owns a 40 percent interest and Fund 1-C owns a 60 percent
interest.  The Partnership and the Venture were formed for the purpose of
acquiring and operating cable television systems

     Since the sale of the cable television system serving Orangeburg, South
Carolina (the "Orangeburg System") as described below, the Partnership does not
directly own any cable television systems.  The Partnership's only asset is its
40 percent interest in the Venture.  The Venture owns the cable television
systems serving the communities of Clearlake Oaks, California (the "Clearlake
Oaks System"), Canyonville, Myrtle Creek, Riddle and Winston, Oregon (the
"Myrtle Creek System"), South Sioux City, Nebraska (the "South Sioux City
System") and Three Rivers, Schoolcraft/Vicksburg, Constantine/White Pigeon,
Dowagiac, Watervliet and Vandalia, Michigan (the "Southwestern Michigan
System").  Until January 1997, the Venture also owned a cable television system
serving the cities of Broomfield and Brighton, the town of Lochbuie, and
portions of unincorporated Adams, Boulder and Weld Counties, all in the State of
Colorado (the "Brighton/Broomfield System").  The Clearlake Oaks System, Myrtle
Creek System, South Sioux City System and the Southwestern Michigan System may
hereinafter collectively be referred to as the "Systems."

     One of the primary objectives of the Partnership is to provide quarterly
cash distributions to its partners.  Such cash returns are primarily from cash
generated through the operating activities of the Venture and from the
distributions made to the Partnership from the Venture. As a result of the sale
of the Orangeburg System, the Partnership's quarterly cash distributions will be
limited to distributions received by the Partnership from the Venture.  The
Venture expects to refinance its credit facility and, as a result of the
refinancing, the Venture anticipates that it will resume distributions from cash
flow in the second quarter of 1997. The level of future distributions, if any,
will be determined on a quarter-by-quarter basis.  As described below, the
limited partners received a distribution of a portion of the net proceeds from
the Orangeburg System sale in April 1996, and the limited partners will receive
a distribution from a portion of the net proceeds from the sale by the Venture
of the Brighton/Broomfield System.

     DISPOSITIONS OF CABLE TELEVISION SYSTEMS.

     Orangeburg System.  On February 28, 1996, the Partnership sold the
     ------------------
Orangeburg System to Jones Cable Holdings, Inc., a wholly owned subsidiary of
the General Partner, for a sales price of $18,347,667.  The sales price was the
average of three separate, independent appraisals of the fair market value of
the Orangeburg System.  Proceeds from the sale of the Orangeburg System were
used to repay all of the Partnership's indebtedness, which totaled approximately
$6,866,000, and in April 1996 the Partnership distributed the remaining net
proceeds, which totaled approximately $11,105,000, to its limited partners
pursuant to the partnership agreement.  The distribution of $11,105,000
represented a return to each limited partner of

                                       2
<PAGE>

approximately $265 for each $1,000 invested in the Partnership. This amount is
in addition to the $328 per $1,000 invested in the Partnership already returned
to the limited partners through prior distributions. The Partnership will retain
its interest in the Venture. No vote of the limited partners of the Partnership
was required in connection with this transaction because the assets of the
Orangeburg System did not constitute all or substantially all of the
Partnership's assets.

     On February 29, 1996, Jones Cable Holdings, Inc., pursuant to an asset
exchange agreement (the "TWEAN Exchange Agreement") with Time Warner
Entertainment-Advance/Newhouse Partnership ("TWEAN"), an unaffiliated cable
television system operator, conveyed to TWEAN the Orangeburg System along with
certain other properties and cash in the amount of $3,500,000.  In return, Jones
Cable Holdings, Inc. received from TWEAN the cable television systems serving
Andrews Air Force Base, Capitol Heights, Cheltenham, District Heights, Fairmount
Heights, Forest Heights, Morningside, Seat Pleasant, Upper Marlboro, and
portions of Prince George's County, all in Maryland, and portions of Fairfax
County, Virginia.

     Brighton/Broomfield System.  On January 24, 1997, the Venture sold
     --------------------------
substantially all of the assets, property and business of the Venture relating
to the Brighton/Broomfield System to Tele-Vue Systems, Inc., an affiliate of
Tele-Communications, Inc. (the "Purchaser"), for a sales price of $35,000,000,
subject to customary closing adjustments.  The Purchaser is not affiliated with
the Venture or with the General Partner.  The Venture has distributed
approximately $15,000,000 to the Partnership and Fund 1-C, which amount
represents the net sale proceeds following the Venture's repayment of a portion
of its credit facility.  The Partnership received $5,965,360 in such
distribution and, in turn, distributed such amount (approximately $142 per each
$1,000 invested in the Partnership) of the net sale proceeds to the limited
partners of the Partnership.  Because the distribution to the limited partners
of the Partnership did not return the amount initially contributed by the
limited partners to the Partnership plus the preferred distribution provided
under the Partnership's limited partnership agreement, the General Partner did
not receive a distribution from the sale proceeds.  The Jones Group, Ltd., a
subsidiary of the General Partner, received a brokerage fee from the Venture of
$875,000, representing 2.5 percent of the sales price, for acting as a broker in
this transaction.  Because the sale of the Brighton/Broomfield System did not
represent a sale of all or substantially all of the Partnership's assets, no
vote of the limited partners of the Partnership was required to approve this
sale.

     CABLE TELEVISION SERVICES.  The Systems offer to their subscribers various
types of programming, which include basic service, tier service, premium
service, pay-per-view programs and packages including several of these services
at combined rates.

     Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites.  Basic
service also usually includes programs originated locally by the system, which
may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or entertainment
nature.  FM radio signals are also frequently distributed to subscribers as part
of the basic service.

     The Systems offer tier services on an optional basis to their subscribers.
A tier generally includes most of the cable networks such as Entertainment and
Sports Programming Network (ESPN), Cable News Network (CNN), Turner Network
Television (TNT), Family Channel, Discovery and others, and the cable television
operators buy tier programming from these networks.  The Systems also offer a
package that includes the basic service channels and the tier services.

     The Systems also offer premium services to their subscribers, which consist
of feature films, sporting events and other special features that are presented
without commercial interruption.  The cable television operators buy premium
programming from suppliers such as HBO, Showtime, Cinemax or others at a cost
based on the number of subscribers the cable operator serves.  Premium service
programming usually is significantly more expensive than the basic service or
tier service programming, and consequently cable operators price premium service
separately when sold to subscribers.

                                       3
<PAGE>

     The Systems also offer to subscribers pay-per-view programming.  Pay-per-
view is a service that allows subscribers to receive single programs, frequently
consisting of motion pictures that have recently completed their theatrical
exhibitions and major sporting events, and to pay for such service on a program-
by-program basis.

     REVENUES.  Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems.  At December 31, 1996,
the Systems' monthly basic service rates ranged from $7.03 to $18.00, monthly
basic and tier ("basic plus") service rates ranged from $20.97 to $24.43 and
monthly premium services ranged from $3.95 to $10.95 per premium service.  In
addition, the Venture earns revenues from the Systems' pay-per-view programs and
advertising fees.  Related charges may include a nonrecurring installation fee
that ranges from $5.00 to $45.00; however, from time to time the Systems have
followed the common industry practice of reducing or waiving the installation
fee during promotional periods.  Commercial subscribers such as hotels, motels
and hospitals are charged a nonrecurring connection fee that usually covers the
cost of installation.  Except under the terms of certain contracts with
commercial subscribers and residential apartment and condominium complexes, the
subscribers are free to discontinue the service at any time without penalty.
For the year ended December 31, 1996, of the total fees received by the Systems,
basic service and tier service fees accounted for approximately 74% of total
revenues, premium service fees accounted for approximately 14% of total
revenues, pay-per-view fees were approximately 2% of total revenues, advertising
fees were approximately 3% of total revenues and the remaining 7% of total
revenues came principally from equipment rentals, installation fees and program
guide sales.  The Venture is dependent upon the timely receipt of service fees
to provide for maintenance and replacement of plant and equipment, current
operating expenses and other costs of the Systems.

     FRANCHISES.  The Systems are constructed and operated under non-exclusive,
fixed-term franchises or other types of operating authorities (referred to
collectively herein as "franchises") granted by local governmental authorities.
These franchises typically contain many conditions, such as time limitations on
commencement and completion of construction, conditions of service, including
the number of channels, types of programming and the provision of free service
to schools and certain other public institutions, and the maintenance of
insurance and indemnity bonds.  The provisions of local franchises are subject
to federal regulation.

     The Venture holds 51 franchises relating to the Systems.  These franchises
provide for the payment of fees to the issuing authorities and generally range
from 3% to 5% of the gross revenues of a cable television system.  The 1984
Cable Act prohibits franchising authorities from imposing annual franchise fees
in excess of 5% of gross revenues and also permits the cable television system
operator to seek renegotiation and modification of franchise requirements if
warranted by changed circumstances.

     The Venture has never had a franchise revoked.  The Venture is currently
negotiating the renewal of five franchises that are either operating under
extensions or will expire prior to December 31, 1997, and the General Partner
has no reason to believe that such franchises will not be renewed in due course.
The General Partner recently has experienced lengthy negotiations with some
franchising authorities for the granting of franchise renewals.  Some of the
issues involved in recent renewal negotiations include rate regulation, customer
service standards, cable plant upgrade or replacement and shorter terms of
franchise agreements.

     COMPETITION.  Cable television systems currently experience competition
from several sources.

     Broadcast Television.  Cable television systems have traditionally competed
     ---------------------
with broadcast television, which consists of television signals that the viewer
is able to receive directly on his television without charge using an "off-air"
antenna.  The extent of such competition is dependent in part upon the quality
and quantity of signals available by such antenna reception as compared to the
services provided by the local cable system.  Accordingly, it has generally been
less difficult for cable operators to obtain higher penetration rates in rural
areas where signals available off-air are limited, than in metropolitan areas
where numerous, high quality off-air signals are often available without the aid
of cable television systems.

     Traditional Overbuild.  Cable television franchises are not exclusive, so
     ---------------------
that more than one cable television system may be built in the same area (known
as an "overbuild"), with potential loss of revenues to the

                                       4
<PAGE>

operator of the original cable television system. The General Partner has
experienced overbuilds in connection with certain systems that it has owned or
managed for limited partnerships, and currently there are overbuilds in the
systems owned or managed by the General Partner. Constructing and developing a
cable television system is a capital intensive process, and it is often
difficult for a new cable system operator to create a marketing edge over the
existing system. Generally, an overbuilder would be required to obtain
franchises from the local governmental authorities, although in some instances,
the overbuilder could be the local government itself. In any case, an
overbuilder would be required to obtain programming contracts from entertainment
programmers and, in most cases, would have to build a complete cable system,
including headends, trunk lines and drops to individual subscribers homes,
throughout the franchise areas.

     DBS.  High-powered direct-to-home satellites have made possible the wide-
     ---
scale delivery of programming to individuals throughout the United States using
small roof-top or wall-mounted antennas.  Several companies began offering
direct broadcast satellite ("DBS") service over the last few years and
additional entrants are expected.  Companies offering DBS service use video
compression technology to increase channel capacity of their systems to 100 or
more channels and to provide packages of movies, satellite network and other
program services which are competitive to those of cable television systems.
DBS cannot currently offer its subscribers local programming, although at least
one future DBS entrant is attempting to offer customers regional delivery of
local broadcast signals.  In addition to emerging high-powered DBS competition,
cable television systems face competition from a major medium-powered satellite
distribution provider and several low-powered providers, whose service requires
use of much larger home satellite dishes.  Not all subscribers terminate cable
television service upon acquiring a DBS system.  The General Partner has
observed that there are DBS subscribers that also elect to subscribe to cable
television service in order to obtain the greatest variety of programming on
multiple television sets, including local programming not available through DBS
service.  The ability of DBS service providers to compete successfully with the
cable television industry will depend on, among other factors, the ability of
DBS providers to overcome certain legal and technical hurdles and the
availability of equipment at reasonable prices.

     Telephone.  Federal cross-ownership restrictions historically limited entry
     ---------
by local telephone companies into the cable television business.  The 1996
Telecommunications Act (the "1996 Telecom Act") eliminated this cross-ownership
restriction, making it possible for companies with considerable resources to
overbuild existing cable operators and enter the business.  Several telephone
companies have begun seeking cable television franchises from local governmental
authorities and constructing cable television systems.  Ameritech, one of the
seven regional Bell Operating Companies ("BOCs"), which provides telephone
service in a multi-state region including Illinois, has been the most active BOC
in seeking local cable franchises within its service area.  It has already begun
cable service in Naperville, Illinois and has also obtained franchises for Glen
Ellyn and Vernon Hills, Illinois, all of which are currently served by cable
systems owned by three partnerships managed by the General Partner.  The General
Partner cannot predict at this time the extent of telephone company competition
that will emerge to owned or managed cable television systems.  The entry of
telephone companies as direct competitors, however, is likely to continue over
the next several years and could adversely affect the profitability and market
value of the General Partner's owned and managed systems.  The entry of electric
utility companies into the cable television business, as now authorized by the
1996 Telecom Act, could have a similar adverse effect.

     Private Cable.  Additional competition is provided by private cable
     -------------
television systems, known as Satellite Master Antenna Television (SMATV),
serving multi-unit dwellings such as condominiums, apartment complexes, and
private residential communities.  These private cable systems may enter into
exclusive agreements with apartment owners and homeowners associations, which
may preclude operators of franchised systems from serving residents of such
private complexes.  Private cable systems that do not cross public rights of way
are free from the federal, state and local regulatory requirements imposed on
franchised cable television operators.  In some cases, the Venture has been
unable to provide cable television service to buildings in which private
operators have secured exclusive contracts to provide video and telephony
services.  The Venture is interested in providing these same services, but
expects that the market to install and provide these services in multi-unit
buildings will continue to be highly competitive.

                                       5
<PAGE>

     MMDS.  Cable television systems also compete with wireless program
     ----
distribution services such as multichannel, multipoint distribution service
("MMDS") systems, commonly called wireless cable, which are licensed to serve
specific areas.  MMDS uses low-power microwave frequencies to transmit
television programming over-the-air to paying subscribers.  The MMDS industry is
less capital intensive than the cable television industry, and it is therefore
more practical to construct MMDS systems in areas of lower subscriber
penetration.  Wireless cable systems are now in direct competition with cable
television systems in several areas of the country, including the system in Pima
County, Arizona owned by the General Partner.  Telephone companies have recently
acquired or invested in wireless companies, and may use MMDS systems to provide
services within their service areas in lieu of wired delivery systems.
Enthusiasm for MMDS has waned in recent months, however, as Bell Atlantic and
NYNEX have suspended their investment in two major MMDS companies.  To date, the
Venture has not lost a significant number of subscribers, nor a significant
amount of revenue, to MMDS operators competing with the Venture's cable
television systems.  A series of actions taken by the FCC, however, including
reallocating certain frequencies to the wireless services, are intended to
facilitate the development of wireless cable television systems as an
alternative means of distributing video programming.  The FCC recently held
auctions for spectrum that will be used by wireless operators to provide
additional channels of programming over larger distances.  In addition, an
emerging technology, Local Multipoint Distribution services ("LMDS"), could also
pose a significant threat to the cable television industry, if and when it
becomes established. LMDS, sometimes referred to as cellular television, could
have the capability of delivering more than 100 channels of video programming to
a subscriber's home.  The potential impact, however, of LMDS is difficult to
assess due to the newness of the technology and the absence of any current fully
operational LMDS systems.

     Cable television systems are also in competition, in various degrees with
other communications and entertainment media, including motion pictures and home
video cassette recorders.

REGULATION AND LEGISLATION
--------------------------

     The operation of cable television systems is extensively regulated by the
FCC, some state governments and most local governments.  The new 1996 Telecom
Act alters the regulatory structure governing the nation's telecommunications
providers.  It removes barriers to competition in both the cable television
market and the local telephone market.  Among other things, it also reduces the
scope of cable rate regulation.

     The 1996 Telecom Act requires the FCC to undertake a host of implementing
rulemakings, the final outcome of which cannot yet be determined.  Moreover,
Congress and the FCC have frequently revisited the subject of cable regulation.
Future legislative and regulatory changes could adversely affect the Venture's
operations.  This section briefly summarizes key laws and regulations affecting
the operation of the Venture's cable systems and does not purport to describe
all present, proposed, or possible laws and regulations affecting the Venture.

     Cable Rate Regulation.  The 1992 Cable Act imposed an extensive rate
     ---------------------
regulation regime on the cable television industry.  Under that regime, all
cable systems are subject to rate regulation, unless they face "effective
competition" in their local franchise area.  Federal law now defines "effective
competition" on a community-specific basis as requiring either low penetration
(less than 30%) by the incumbent cable operator, appreciable penetration (more
than 15%) by competing multichannel video providers ("MVPs"), or the presence of
a competing MVP affiliated with a local telephone company.

     Although the FCC rules control, local government units (commonly referred
to as local franchising authorities or "LFAs") are primarily responsible for
administering the regulation of the lowest level of cable -- the basic service
tier ("BST"), which typically contains local broadcast stations and public,
educational, and government ("PEG") access channels.  Before an LFA begins BST
rate regulation, it must certify to the FCC that it will follow applicable
federal rules, and many LFAs have voluntarily declined to exercise this
authority.  LFAs

                                       6
<PAGE>

also have primary responsibility for regulating cable equipment rates. Under
federal law, charges for various types of cable equipment must be unbundled from
each other and from monthly charges for programming services. The 1996 Telecom
Act allows operators to aggregate costs for broad categories of equipment across
geographic and functional lines. This change should facilitate the introduction
of new technology.

     The FCC itself directly administers rate regulation of any cable
programming service tiers ("CPST"), which typically contain satellite-delivered
programming.   Under the 1996 Telecom Act, the FCC can regulate CPST rates only
if an LFA first receives at least two rate complaints from local subscribers and
then files a formal complaint with the FCC.  When new CPST rate complaints are
filed, the FCC now considers only whether the incremental increase is justified
and will not reduce the previously established CPST rate.

     Under the FCC's rate regulations, most cable systems were required to
reduce their BST and CPST rates in 1993 and 1994, and have since had their rate
increases governed by a complicated price cap scheme that allows for the
recovery of inflation and certain increased costs, as well as providing some
incentive for expanding channel carriage.  The FCC has modified its rate
adjustment regulations to allow for annual rate increases and to minimize
previous problems associated with regulatory lag. Operators also have the
opportunity of bypassing this "benchmark" regulatory scheme in favor of
traditional "cost-of-service" regulation in cases where the latter methodology
appears favorable.  Premium cable services offered on a per-channel or per-
program basis remain unregulated, as do affirmatively marketed packages
consisting entirely of new programming product.  Federal law requires that the
BST be offered to all cable subscribers, but limits the ability of operators to
require purchase of any CPST before purchasing premium services offered on a
per-channel or per-program basis.

     The 1996 Telecom Act sunsets FCC regulation of CPST rates for all systems
(regardless of size) on March 31, 1999.  It also relaxes existing uniform rate
requirements by specifying that uniform rate requirements do not apply where the
operator faces "effective competition," and by exempting bulk discounts to
multiple dwelling units, although complaints about predatory pricing still may
be made to the FCC.

     Cable Entry Into Telecommunications.  The 1996 Telecom Act provides that no
     -----------------------------------
state or local laws or regulations may prohibit or have the effect of
prohibiting any entity from providing any interstate or intrastate
telecommunications service. States are authorized, however, to impose
"competitively neutral" requirements regarding universal service, public safety
and welfare, service quality, and consumer protection. State and local
governments also retain their authority to manage the public rights-of-way and
may require reasonable, competitively neutral compensation for management of the
public rights-of-way when cable operators provide telecommunications service.
The favorable pole attachment rates afforded cable operators under federal law
can be gradually increased by utility companies owning the poles (beginning in
2001) if the operator provides telecommunications service, as well as cable
service, over its plant.

     Cable entry into telecommunications will be affected by the regulatory
landscape now being fashioned by the FCC and state regulators.  One critical
component of the 1996 Telecom Act to facilitate the entry of new
telecommunications providers (including cable operators) is the interconnection
obligation imposed on all telecommunications carriers.  Review of the FCC's
initial interconnection order is now pending before the Eighth Circuit Court of
Appeals.

     Telephone Company Entry Into Cable Television.  The 1996 Telecom Act allows
     ---------------------------------------------
telephone companies to compete directly with cable operators by repealing the
historic telephone company/cable cross-ownership ban.  Local exchange carriers
("LECs"), including the BOCs, can now compete with cable operators both inside
and outside their telephone service areas.  Because of their resources, LECs
could be formidable competitors to traditional cable operators, and certain LECs
have begun offering cable service.  As described above, the General Partner is
now witnessing the beginning of LEC competition in a few of its cable
communities.

     Under the 1996 Telecom Act, a LEC providing video programming to
subscribers will be regulated as a traditional cable operator (subject to local
franchising and federal regulatory requirements), unless the LEC elects

                                       7
<PAGE>

to provide its programming via an "open video system" ("OVS"). To qualify for
OVS status, the LEC must reserve two-thirds of the system's activated channels
for unaffiliated entities.

     Although LECs and cable operators can now expand their offerings across
traditional service boundaries, the general prohibition remains on LEC buyouts
(i.e., any ownership interest exceeding 10 percent) of co-located cable systems,
cable operator buyouts of co-located LEC systems, and joint ventures between
cable operators and LECs in the same market.  The 1996 Telecom Act provides a
few limited exceptions to this buyout prohibition, including a carefully
circumscribed "rural exemption."  The 1996 Telecom Act also provides the FCC
with the limited authority to grant waivers of the buyout prohibition (subject
to LFA approval).

     Electric Utility Entry Into Telecommunications/Cable Television.  The 1996
     ---------------------------------------------------------------
Telecom Act provides that registered utility holding companies and subsidiaries
may provide telecommunications services (including cable television)
notwithstanding the Public Utilities Holding Company Act.  Electric utilities
must establish separate subsidiaries, known as "exempt telecommunications
companies" and must apply to the FCC for operating authority.  Again, because of
their resources, electric utilities could be formidable competitors to
traditional cable systems.

     Additional Ownership Restrictions.  The 1996 Telecom Act eliminates
     ---------------------------------
statutory restrictions on broadcast/cable cross-ownership (including broadcast
network/cable restrictions), but leaves in place existing FCC regulations
prohibiting local cross-ownership between co-located television stations and
cable systems.  The 1996 Telecom Act also eliminates the three year holding
period required under the 1992 Cable Act's "anti-trafficking" provision. The
1996 Telecom Act leaves in place existing restrictions on cable cross-ownership
with SMATV and MMDS facilities, but lifts those restrictions where the cable
operator is subject to effective competition.  In January 1995, however, the FCC
adopted regulations which permit cable operators to own and operate SMATV
systems within their franchise area, provided that such operation is consistent
with local cable franchise requirements.

     Pursuant to the 1992 Cable Act, the FCC adopted rules precluding a cable
system from devoting more than 40% of its activated channel capacity to the
carriage of affiliated national program services.  A companion rule establishing
a nationwide ownership cap on any cable operator equal to 30% of all domestic
cable subscribers has been stayed pending further judicial review.

     There are no federal restrictions on non-U.S. entities having an ownership
interest in cable television systems or the FCC licenses commonly employed by
such systems.  Section 310(b)(4) of the Communications Act does, however,
prohibit foreign ownership of FCC broadcast and telephone licenses, unless the
FCC concludes that such foreign ownership is consistent with the public
interest.  BCI's investment in the General Partner could, therefore, adversely
affect any plan to acquire FCC broadcast or common carrier licenses.  The
Partnership, however, does not currently plan to acquire such licenses.

     Must Carry/Retransmission Consent.  The 1992 Cable Act contains broadcast
     ---------------------------------
signal carriage requirements that allow local commercial television broadcast
stations to elect once every three years between requiring a cable system to
carry the station ("must carry") or negotiating for payments for granting
permission to the cable operator to carry the station ("retransmission
consent").  Less popular stations typically elect "must carry," and more popular
stations typically elect "retransmission consent."  Must carry requests can
dilute the appeal of a cable system's programming offerings, and retransmission
consent demands may require substantial payments or other concessions.  Either
option has a potentially adverse affect on the Venture's business.
Additionally, cable systems are required to obtain retransmission consent for
all "distant" commercial television stations (except for satellite-delivered
independent "superstations" such as WTBS). The constitutionality of the must
carry requirements has been challenged and is awaiting a decision from the U.S.
Supreme Court.

     Access Channels.  LFAs can include franchise provisions requiring cable
     ---------------
operators to set aside certain channels for public, educational and governmental
access programming.  Federal law also requires cable systems to designate a
portion of their channel capacity (up to 15% in some cases) for commercial
leased access by unaffiliated third parties.  The FCC has adopted rules
regulating the terms, conditions and maximum rates a cable

                                       8
<PAGE>

operator may charge for use of the designated channel capacity, but use of
commercial leased access channels has been relatively limited. The FCC released
revised rules in February 1997 which mandate a modest rate reduction and could
make commercial leased access a more attractive option to third party
programmers.

     Access to Programming.  To spur the development of independent cable
     ---------------------
programmers and competition to incumbent cable operators, the 1992 Cable Act
imposed restrictions on the dealings between cable operators and cable
programmers.  Of special significance from a competitive business posture, the
1992 Cable Act precludes video programmers affiliated with cable companies from
favoring cable operators over competitors and requires such programmers to sell
their programming to other multichannel video distributors.  This provision
limits the ability of vertically integrated cable programmers to offer exclusive
programming arrangements to cable companies.

     Other FCC Regulations.  In addition to the FCC regulations noted above,
     ---------------------
there are other FCC regulations covering such areas as equal employment
opportunity, subscriber privacy, programming practices (including, among other
things, syndicated program exclusivity, network program nonduplication, local
sports blackouts, indecent programming, lottery programming, political
programming, sponsorship identification, and children's programming
advertisements), registration of cable systems and facilities licensing,
maintenance of various records and public inspection files,  frequency usage,
lockbox availability, antenna structure notification, tower marking and
lighting, consumer protection and customer service standards, technical
standards, and consumer electronics equipment compatibility.  The FCC is
expected to impose new Emergency Alert System requirements on cable operators
this year.  The FCC has the authority to enforce its regulations through the
imposition of substantial fines, the issuance of cease and desist orders and/or
the imposition of other administrative sanctions, such as the revocation of FCC
licenses needed to operate certain transmission facilities used in connection
with cable operations.

     Two pending FCC proceedings of particular competitive concern involve
inside wiring and navigational devices.  The former rulemaking is considering
ownership of cable wiring located inside multiple dwelling unit complexes.  If
the FCC concludes that such wiring belongs to, or can be unilaterally acquired
by the complex owner, it will become easier for complex owners to terminate
service from the incumbent cable operator in favor of a new entrant.  The latter
rulemaking is considering whether cable customers must be allowed to purchase
cable converters from third party vendors.  If the FCC concludes that such
distribution is required, and does not make appropriate allowances for signal
piracy concerns, it may become more difficult for cable operators to combat
theft of service.

     Copyright.  Cable television systems are subject to federal copyright
     ---------
licensing covering carriage of television and radio broadcast signals.  In
exchange for filing certain reports and contributing a percentage of their
revenues to a federal copyright royalty pool (that varies depending on the size
of the system and the number of distant broadcast television signals carried),
cable operators can obtain blanket permission to retransmit copyrighted material
on broadcast signals.  The possible modification or elimination of this
compulsory copyright license is the subject of continuing legislative review and
could adversely affect the Venture's ability to obtain desired broadcast
programming.  In addition, the cable industry pays music licensing fees to BMI
and is negotiating a similar arrangement with ASCAP.  Copyright clearances for
nonbroadcast programming services are arranged through private negotiations.

     State and Local Regulation.  Cable television systems generally are
     --------------------------
operated pursuant to nonexclusive franchises granted by a municipality or other
state or local government entity in order to cross public rights-of-way.
Federal law now prohibits franchise authorities from granting exclusive
franchises or from unreasonably refusing to award additional franchises.   Cable
franchises generally are granted for fixed terms and in many cases include
monetary penalties for non-compliance and may be terminable if the franchisee
fails to comply with material provisions.

     The terms and conditions of franchises vary materially from jurisdiction to
jurisdiction.  Each franchise generally contains provisions governing cable
operations, service rates, franchise fees, system construction and maintenance
obligations, system channel capacity, design and technical performance, customer
service standards,

                                       9
<PAGE>

and indemnification protections. A number of states subject cable television
systems to the jurisdiction of centralized state governmental agencies, some of
which impose regulation of a character similar to that of a public utility.
Although LFAs have considerable discretion in establishing franchise terms,
there are certain federal limitations. For example, LFAs cannot insist on
franchise fees exceeding 5% of the system's gross revenues, cannot dictate the
particular technology used by the system, and cannot specify video programming
other than identifying broad categories of programming.

     Federal law contains renewal procedures designed to protect incumbent
franchisees against arbitrary denials of renewal.  Even if a franchise is
renewed, the franchise authority may seek to impose new and more onerous
requirements such as significant upgrades in facilities and services or
increased franchise fees as a condition of renewal.  Similarly, if a franchise
authority's consent is required for the purchase or sale of a cable system or
franchise, such authority may attempt to impose more burdensome or onerous
franchise requirements in connection with a request for consent.  Historically,
franchises have been renewed for cable operators that have provided satisfactory
services and have complied with the terms of their franchises.

     GENERAL.  The Venture's business consists of providing cable television
services to a large number of customers, the loss of any one of which would have
no material effect on the Venture's business.  The Systems have had some
subscribers who later terminated the service.  Terminations occur primarily
because people move to another home or to another city.  In other cases, people
terminate on a seasonal basis or because they no longer can afford or are
dissatisfied with the service.  The amount of past due accounts in the Systems
is not significant.  The Venture's policy with regard to past due accounts is
basically one of disconnecting service before a past due account becomes
material.

     The Venture does not depend to any material extent on the availability of
raw materials; it carries no significant amounts of inventory and it has no
material backlog of customer orders.  Neither the Venture nor the Partnership
has any employees because all properties are managed by employees of the General
Partner.  The General Partner has engaged in research and development activities
relating to the provision of new services but the amount of the Venture's funds
expended for such research and development has never been material.

     Compliance with federal, state and local provisions that have been enacted
or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Venture.


                              ITEM 2.  PROPERTIES
                              -------------------

     The cable television systems owned by the Venture are described below:

<TABLE>
<CAPTION>
                SYSTEM                  ACQUISITION DATE
                ------                  ----------------
   <S>                                  <C>
   Myrtle Creek System                  December 1987
   Clearlake Oaks System                December 1987
   South Sioux City System              February 1988
   Southwestern Michigan System         September 1988
</TABLE>

     The following sets forth (i) the monthly basic plus service rates charged
to subscribers and (ii) the number of basic subscribers and pay units for the
Systems. The monthly basic service rates set forth herein represent, with
respect to systems with multiple headends, the basic service rate charged to the
majority of the subscribers within the system.  In cable television systems,
basic subscribers can subscribe to more than one pay TV service.  Thus, the
total number of pay services subscribed to by basic subscribers are called pay
units.  As of December 31, 1996, the Clearlake Oaks System operated cable plant
passing approximately 27,800 homes, with an approximate 62% penetration rate,
the South Sioux City System operated cable plant passing approximately 9,000
homes, with an approximate 69% penetration rate, the Myrtle Creek System
operated cable plant passing

                                      10
<PAGE>

approximately 9,100 homes, with an approximate 72% penetration rate, and the
Southwestern Michigan System operated cable plant passing approximately 27,000
homes, with an approximate 62% penetration rate. Figures for numbers of
subscribers and homes passed are compiled from the General Partner's records and
may be subject to adjustments.

<TABLE>
<CAPTION>
CLEARLAKE OAKS SYSTEM                   At December 31,
---------------------             --------------------------
                                    1996     1995     1994
                                    ----     ----     ----
<S>                                <C>      <C>      <C>
Monthly basic plus service rate    $ 22.45  $ 21.30  $ 20.05
Basic subscribers                   17,287   17,446   17,267
Pay units                            6,410    6,291    5,859
</TABLE>

<TABLE>
<CAPTION>
                                         At December 31,
                                  --------------------------
MYRTLE CREEK SYSTEM                 1996     1995     1994
-------------------                 ----     ----     ----
<S>                                <C>      <C>      <C>
Monthly basic plus service rate    $ 22.07  $ 21.23  $ 18.93
Basic subscribers                    6,582    6,500    6,293
Pay units                            3,957    3,966    4,014
</TABLE>

<TABLE>
<CAPTION>
SOUTH SIOUX CITY SYSTEM                  At December 31,
-----------------------            -------------------------
                                     1996     1995     1994
                                     ----     ----     ----
<S>                                <C>      <C>      <C>
Monthly basic plus service rate    $ 22.99  $ 22.06  $ 21.56
Basic subscribers                    6,302    5,944    5,730
Pay units                            4,094    4,028    3,699
</TABLE>

<TABLE>
<CAPTION>
SOUTHWESTERN MICHIGAN SYSTEM             At December 31,
----------------------------       -------------------------
                                     1996     1995     1994
                                     ----     ----     ----
<S>                                <C>      <C>      <C>
Monthly basic plus service rate    $ 24.42  $ 22.75  $ 21.69
Basic subscribers                   16,923   16,717   15,832
Pay units                           10,001   11,098   10,328
</TABLE>

                          ITEM 3.  LEGAL PROCEEDINGS
                          --------------------------

     None.


         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ------------------------------------------------------------

     None.

                                      11
<PAGE>

                                   PART II.
                                   --------

               ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK
               -------------------------------------------------
                      AND RELATED SECURITY HOLDER MATTERS
                      -----------------------------------

     While the Partnership is publicly held, there is no public market for the
limited partnership interests, and it is not expected that a market will develop
in the future.  As of February 14, 1997, the approximate number of equity
security holders in the Partnership was 4,486.

                                      12
<PAGE>

Item 6.  Selected Financial Data
--------------------------------
<TABLE>
<CAPTION>
                                                                                For the Year Ended December 31,
                                                        -----------------------------------------------------------------------
Jones Cable Income Fund 1-B, Ltd.                            1996            1995          1994          1993          1992
---------------------------------                       ---------------  ------------  ------------  ------------  ------------
<S>                                                     <C>              <C>           <C>           <C>           <C>
Revenues                                                   $   862,911     $ 4,920,983   $ 4,484,892   $ 4,341,380   $ 4,163,690
Depreciation and Amortization                                  227,488       1,335,945     1,367,809     1,691,043     1,931,255
Operating Income (Loss)                                       (202,060)         36,281      (184,959)     (446,056)     (696,084)
Equity in net loss of cable television joint venture       (1,185,182)      (1,738,404)   (1,949,794)   (1,753,583)   (1,639,873)
Net Income (Loss)                                           9,816,941/(a)/  (2,224,727)   (2,592,181)   (2,623,378)   (3,032,014)
Net Income (Loss) per Limited Partnership Unit                   113.50         (26.26)       (30.59)       (30.96)       (35.78)
Distributions per Limited Partnership Unit                       132.38             -             -          20.48         19.39
Weighted Average Number of
  Limited Partnership Units Outstanding                         83,884        83,884        83,884        83,884        83,884
General Partner's Deficit                                      (13,057)     (309,119)     (276,772)     (250,850)     (207,264)
Limited Partners' Capital                                    1,176,079     2,760,075     5,962,555     8,528,814    12,843,958
Total Assets                                                 1,163,022     9,994,303    11,874,378    14,590,808    19,020,685
Debt                                                                 -     6,866,146     3,544,000     3,547,767     3,525,945
General Partner Advances                                             -             -     2,162,870     1,944,230     1,994,401

</TABLE>
<TABLE>
<CAPTION>

                                                                                For the Year Ended December 31,
                                                        ----------------------------------------------------------------------
Jones Cable Income Fund 1-B/C Venture                       1996          1995          1994          1993          1992
---------------------------------------                 ------------  ------------  ------------  ------------  ------------
<S>                                                      <C>           <C>           <C>           <C>           <C>

Revenues                                                 $24,624,270   $22,867,228   $21,121,787   $20,350,776   $18,848,345
Depreciation and Amortization                              7,919,508     8,951,345     8,632,481     8,787,240     9,131,442
Operating Income (Loss)                                      161,479    (1,244,929)   (2,243,001)   (2,397,832)   (2,216,442)
Net Loss                                                  (2,980,092)   (4,371,145)   (4,902,676)   (4,409,310)   (4,123,392)
Partner's Capital                                          2,934,909     5,915,001    10,286,146    15,188,822    23,918,132
Total Assets                                              47,556,243    50,844,037    54,545,774    58,148,834    62,614,638
Debt                                                      42,559,250    43,104,090    42,383,339    36,298,318    35,635,061
Advances from Jones Intercable, Inc.                         284,390       109,893        66,224     4,068,472       602,765
</TABLE>
(a)  Net income resulted primarily from the sale of the Orangeburg System by
 Jones Cable Income Fund 1-B, Ltd. in February 1996.

                                       13
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

     The following discussion of Jones Cable Income Fund 1-B, Ltd.'s (the
"Partnership") and Jones Cable Income Fund 1-B/C Venture's (the "Venture")
financial condition and results of operations contains, in addition to
historical information, forward-looking statements that are based upon certain
assumptions and are subject to a number of risks and uncertainties.  The
Partnership's and Venture's actual results may differ significantly from the
results predicted in such forward-looking statements.

FINANCIAL CONDITION
-------------------

Jones Cable Income Fund 1-B, Ltd. -
---------------------------------

     It is the General Partner's publicly announced policy that it intends to
liquidate its managed limited partnerships, including the Partnership, as
opportunities for sales of partnership cable television systems arise in the
marketplace over the next several years.  In accordance with the General
Partner's policy, the Partnership sold the Orangeburg System in February 1996
and the Venture sold its Colorado Systems in January 1997.  No specific dates or
terms have yet been set for the sale of the Venture's remaining systems.  There
can be no assurance as to the timing or terms of any sale.

     On February 28, 1996, the Partnership sold the Orangeburg System to a
subsidiary of the General Partner for $18,347,667.  The sales
price represented the average of three separate, independent appraisals of the
Orangeburg System.  The Partnership used the net sales proceeds to pay all of
its indebtedness, which totaled approximately $6,866,000, and the Partnership
distributed the remaining net sales proceeds, which totaled approximately
$11,105,000, to its limited partners pursuant to the terms of the Partnership's
partnership agreement in April 1996.  This distribution represented a return to
each limited partner of approximately $265 for each $1,000 invested in the
Partnership.  This amount was in addition to the $328 per $1,000 invested in the
Partnership already returned to the limited partners through prior operating
cash flow distributions.  The Partnership will retain its interest in the
Venture.

Jones Cable Income Fund 1-B/C Venture -
-------------------------------------

     The Partnership continues to own a 40 percent interest in the Venture.  The
investment is accounted for under the equity method.  When compared to the
December 31, 1995 balance, this investment has decreased by $1,185,182.  This
decrease represents the Partnership's proportionate share of losses during 1996.
The Venture's losses, which are principally the result of depreciation and
amortization charges, are expected to continue.

     The Venture's financial condition is significant to the Partnership and
should be reviewed in conjunction with this discussion.

     On January 24, 1997, the Venture sold the Colorado Systems to an
unaffiliated party for a sales price of $35,000,000, subject to customary
closing adjustments. The Venture distributed $15,000,000 to the Partnership and
Jones Cable Income Fund 1-C, Ltd. ("Fund 1-C") in February 1997, which amount
represents the net sale proceeds following the Venture's repayment of a portion
of the balance outstanding of its credit facility. The Partnership received
$5,965,360 and Fund 1-C received $9,034,640 in such distribution. The
Partnership, in turn, distributed the $5,965,360 (approximately $142 per
each $1,000 invested in the Partnership) to the limited partners of the
Partnership. Because the distribution to the limited partners of the Partnership
together with all prior distributions, did not return the amount initially
contributed by the limited partners to the Partnership plus the preferred return
provided by the Partnership's limited partnership agreement, the General Partner
did not receive a distribution from the sale proceeds. The Jones Group, Ltd., a
subsidiary of Intercable, received a brokerage fee from the Venture of $875,000,
representing 2.5 percent of the sales price, for acting as a broker in this
transaction. Because the sale of the Colorado Systems did not represent a sale
of all or substantially all of the Partnership's assets, no vote of the limited
partners of the Partnership was required to approve this sale. The Venture will
continue to own and operate its systems in California, Oregon, Nebraska and
Michigan.

     For the year ended December 31, 1996, the Venture generated net cash from
operating activities totaling $4,984,665, which is available to fund capital
expenditures and non-operating costs.  During 1996, capital improvements within
the Venture's operating systems totaled approximately $4,618,000.  Approximately
51 percent was for the

                                       14
<PAGE>

construction of service drops to subscribers' homes and approximately 23 percent
of these expenditures was for the construction of new cable plant. The remainder
of these expenditures related to various system enhancements and improvements in
all of the Venture's systems. Funding for these expenditures was provided by
borrowings under the Venture's credit facility and cash generated from
operations. Anticipated capital expenditures for 1997 are approximately
$3,069,000. Construction of service drops to homes will account for
approximately 37 percent of the anticipated expenditures and construction of new
cable plant will account for approximately 30 percent of the anticipated
expenditures. The remainder of the expenditures will relate to other various
enhancements in all of the Venture's remaining systems. Funding for these
expenditures is expected to come from cash generated from operations and
available borrowings under the Venture's credit facility.

     At December 31, 1996, the Venture's $45,000,000 credit facility had
$42,200,000 outstanding, leaving $2,800,000 of available borrowings.  Although
the revolving credit facility matures on May 31, 1997, the General Partner
negotiated a new $27,500,000 reducing revolving credit facility, which subject
to the completion of closing documentation related to the new reducing revolving
credit facility, will extend the revolving credit period to June 30, 2005.  The
Partnership used a portion of the proceeds from the sale of the Colorado Systems
to repay a portion of the balance outstanding of its then-existing credit
facility.  As a result of such repayment, the Venture's credit facility had an
outstanding balance of $24,200,000 prior to the General Partner's negotiations
for the new reducing revolving credit facility.  Interest on outstanding
principal on the new reducing revolving credit facility is calculated at the
Venture's option of the Base Rate plus 3/8 percent, the Euro-Rate plus 1-3/8
percent or the Certificate of Deposit Rate plus 1-1/2 percent.  The effective
interest rates on amounts outstanding as of December 31, 1996 and 1995 were 7.03
percent and 7.38 percent, respectively.

     One of the primary objectives of the Venture is to provide quarterly cash
distributions to the Venture partners, primarily from cash generated through
operating activities of the Venture.  The Venture's partners in turn seek to
provide quarterly cash distributions to their partners.  The Venture's credit
facility had a maximum amount available of $45,000,000, of which $42,200,000 was
outstanding on December 31, 1996.  This limits the amount of borrowings
available to the Venture to fund capital expenditures; therefore, the Venture
used cash generated from operations to fund capital expenditures and did not
declare any distributions in 1996, 1995 or 1994.  As a result of the sale of the
Colorado Systems and the renegotiated reducing revolving credit facility, the
Venture will announce future distributions on a quarter-by-quarter basis;
however, no determination has been made regarding any specific level of future
distributions.

     The General Partner believes that the Venture has sufficient sources
of capital available from cash generated from operations and from borrowings
available under its credit facility to meet its anticipated needs.

RESULTS OF OPERATIONS
---------------------

Jones Cable Income Fund 1-B, Ltd. -
---------------------------------

     On February 28, 1996, the Partnership sold the Orangeburg System, which was
the Partnership's only directly held system.  The Partnership's continuing
operations are represented by its 40 percent interest in the Venture.

Jones Cable Income Fund 1-B/C Venture -
-------------------------------------

1996 Compared to 1995-

     Revenues of the Venture increased $1,757,042, or approximately 8 percent,
to $24,624,270 in 1996 from $22,867,228 in 1995.  The increase in revenues was
primarily a result of basic service rate increases and an increase in the number
of basic subscribers. Basic service rate increases accounted for approximately
32 percent of the increase in revenues.  An increase in the number of basic
subscribers accounted for approximately 22 percent of the increase in revenues.
The number of basic subscribers totaled 66,002 at December 31, 1996, compared to
64,738 at December 31, 1995, an increase of 1,264, or approximately 2 percent.
No other individual factor contributed significantly to the increase in
revenues.

     Operating expenses consist primarily of costs associated with the operation
and administration of the Venture's cable television systems.  The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and marketing expenses.

                                       15
<PAGE>

     Operating expenses increased $1,334,639, or approximately 11 percent, to
$13,684,546 in 1996 from $12,349,907 in 1995.  Operating expenses represented 56
percent of revenue in 1996 compared to 54 percent in 1995.  The increase in
operating expenses was due primarily to increases in programming fees.  No other
individual factor was significant to the increase in operating expenses.

     Management fees and allocated overhead from the General Partner increased
$47,832, or approximately 2 percent, to $2,858,737 in 1996 from $2,810,905 in
1995, due to the increase in revenues, upon which such fees are based.

     Depreciation and amortization expense decreased $1,031,837, or
approximately 12 percent, to $7,919,508 in 1996 from $8,951,345 in 1995.  This
decrease was due to the decrease in the Venture's depreciable asset base.

     The Venture reported operating income of $161,479 in 1996 compared to an
operating loss of $1,244,929 in 1995.  This change was a result of the increase
in revenues and decrease in depreciation and amortization expense exceeding the
increases in operating expenses and management fees and allocated overhead from
the General Partner.

     The cable television industry generally measures the financial performance
of a cable television system in terms of operating income before depreciation
and amortization.  This measure is not intended to be a substitute or
improvement upon the items disclosed on the financial statements, rather it is
included because it is an industry standard.  Operating income before
depreciation and amortization increased $374,571 or approximately 5 percent, to
$8,080,987 in 1996 from $7,706,416 in 1995.  This increase was the result of the
increase in revenues exceeding the increases in operating expenses and
management fees and allocated overhead from the General Partner.

     Interest expense decreased $280,784, or approximately 8 percent, to
$3,110,571 in 1996 from $3,391,355 in 1995.  This decrease was due to lower
outstanding balances on interest bearing obligations and lower interest rates on
outstanding obligations.

     Net loss decreased $1,391,053, or approximately 32 percent, to $2,980,092
in 1996 from $4,371,145 in 1995.  This loss was due to the factors discussed
above.

1995 Compared to 1994-

     Revenues of the Venture increased $1,745,441, or approximately 8 percent,
to $22,867,228 in 1995 from $21,121,787 in 1994.  An increase in the number of
basic subscribers accounted for approximately 39 percent of the increase in
revenues.  The number of basic subscribers totaled 64,738 at December 31, 1995,
compared to 62,467 at December 31, 1994, an increase of 2,271, or approximately
4 percent.  Basic service rate increases accounted for approximately 35 percent
of the increase in revenues.  No other individual factor contributed
significantly to the increase in revenues.

     Operating expenses increased $332,399, or approximately 3 percent, to
$12,349,907 in 1995 from $12,017,508 in 1994.  Operating expenses represented 54
percent of revenue in 1995 compared to 57 percent in 1994.  The increase in
operating expenses was due primarily to increases in programming fees which
increased approximately 10 percent from 1994 to 1995.  No other individual
factor was significant to the increase in operating expenses.

     Management fees and allocated overhead from the General Partner increased
$96,106, or approximately 4 percent, to $2,810,905 in 1995 from $2,714,799 in
1994, due primarily to the increase in revenues, upon which such fees and
allocations are based, and an increase in expenses allocated from the General
Partner.

     Depreciation and amortization expense increased $318,864, or approximately
4 percent, to $8,951,345 in 1995 from $8,632,481 in 1994.  This increase was due
to the increase in the Venture's depreciable asset base.

     Operating loss decreased $998,072, or approximately 45 percent, to
$1,244,929 in 1995 from $2,243,001 in 1994.  This decrease was a result of the
increase in revenues exceeding the increases in operating expenses, depreciation
and amortization expense and management fees and allocated overhead from the
General Partner.

                                       16
<PAGE>

     Operating income before depreciation and amortization increased $1,316,936
or approximately 21 percent, to $7,706,416 in 1995 from $6,389,480 in 1994.
This increase was the result of the increase in revenues exceeding the increases
in operating expenses and management fees and allocated overhead from the
General Partner.

     Interest expense increased $629,946, or approximately 23 percent, to
$3,391,355 in 1995 from $2,761,409 in 1994.  This increase was due to higher
outstanding balances on interest bearing obligations.

     Net loss decreased $531,531, or approximately 11 percent, to $4,371,145 in
1995 from $4,902,676 in 1994.  These losses were due to the factors discussed
above.

                                       17
<PAGE>

Item 8.  Financial Statements
-----------------------------


                     JONES CABLE INCOME FUND 1-B, LTD. AND
                     -------------------------------------
                     JONES CABLE INCOME FUND 1-B/C VENTURE
                     -------------------------------------

                              FINANCIAL STATEMENTS
                              --------------------

                        AS OF DECEMBER 31, 1996 AND 1995
                        --------------------------------

                                     INDEX
                                     -----


                                                Page
                                               -----

                                             1-B  1-B/C
                                             ---  -----

Report of Independent Public Accountants      19     30

Balance Sheets                                20     31

Statements of Operations                      22     33

Statements of Partners' Capital (Deficit)     23     34

Statements of Cash Flows                      24     35

Notes to Financial Statements                 25     36


                                       18
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    ----------------------------------------


To the Partners of Jones Cable Income Fund 1-B, Ltd.:

        We have audited the accompanying balance sheets of JONES CABLE INCOME
FUND 1-B, LTD. (a Colorado limited partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' capital (deficit) and
cash flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the General Partner's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

        We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Jones Cable Income
Fund 1-B, Ltd. as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.



                                         ARTHUR ANDERSEN LLP


Denver, Colorado,
March 7, 1997.

                                       19
<PAGE>

                       JONES CABLE INCOME FUND 1-B, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                                 BALANCE SHEETS
                                 --------------
<TABLE>
<CAPTION>


                                                                              December 31,
                                                                        -----------------------
<S>                                                                     <C>         <C>

                     ASSETS                                                1996         1995
                     ------                                             ----------  -----------

CASH                                                                    $      145  $    54,135

RECEIVABLES:
  Trade receivables, less allowance for doubtful
    receivables of $-0- and $17,594 at
    December 31, 1996 and 1995, respectively                                     -      247,500

INVESTMENT IN CABLE TELEVISION PROPERTIES:
  Property, plant and equipment, at cost                                         -   11,934,307
    Less- accumulated depreciation                                               -   (5,878,915)
                                                                        ----------  -----------

                                                                                 -    6,055,392

  Subscriber lists and other intangible assets, net of
    accumulated amortization of $-0- and $3,518,302 at
    December 31, 1996 and 1995, respectively                                     -    1,240,298
  Investment in cable television joint venture                           1,162,877    2,348,059
                                                                        ----------  -----------

                     Total investment in cable television properties     1,162,877    9,643,749

DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES                                  -       48,919
                                                                        ----------  -----------

                     Total assets                                       $1,163,022  $ 9,994,303
                                                                        ==========  ===========

</TABLE>
                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.

                                       20
<PAGE>

                       JONES CABLE INCOME FUND 1-B, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                                 BALANCE SHEETS
                                 --------------
<TABLE>
<CAPTION>


                                                                       December 31,
                                                               ----------------------------
<S>                                                            <C>            <C>

          LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)              1996           1995
          -------------------------------------------          ------------   ------------

LIABILITIES:
  Debt                                                         $          -   $  6,866,146
  Trade accounts payable and accrued liabilities                          -        389,119
  Accrued distribution to limited partners                                -        250,000
  Subscriber prepayments                                                  -         38,082
                                                               ------------   ------------

                     Total liabilities                                    -      7,543,347
                                                               ------------   ------------

COMMITMENTS AND CONTINGENCIES

PARTNERS' CAPITAL (DEFICIT):
  General Partner-
    Contributed capital                                               1,000          1,000
    Accumulated earnings (deficit)                                   96,162       (199,900)
    Distributions                                                  (110,219)      (110,219)
                                                               ------------   ------------

                                                                    (13,057)      (309,119)
                                                               ------------   ------------

  Limited Partners-
    Net contributed capital (83,884 units outstanding
      at December 31, 1996 and 1995)                             34,449,671     34,449,671
    Accumulated deficit                                         (10,151,011)   (19,671,890)
    Distributions                                               (23,122,581)   (12,017,706)
                                                               ------------   ------------

                                                                  1,176,079      2,760,075
                                                               ------------   ------------

          Total liabilities and partners' capital (deficit)    $  1,163,022   $  9,994,303
                                                               ============   ============

</TABLE>
                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.

                                       21
<PAGE>

                       JONES CABLE INCOME FUND 1-B, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                            STATEMENTS OF OPERATIONS
                            ------------------------
<TABLE>
<CAPTION>


                                                             Year Ended December 31,
                                                     ---------------------------------------
                                                         1996          1995          1994
                                                     -----------   -----------   -----------
<S>                                                  <C>           <C>           <C>
REVENUES                                             $   862,911   $ 4,920,983   $ 4,484,892

COSTS AND EXPENSES:
  Operating expense                                      730,908     2,941,756     2,720,750
  Management fees and allocated overhead
    from General Partner                                 106,575       607,001       572,292
  Depreciation and amortization                          227,488     1,335,945     1,376,809
                                                     -----------   -----------   -----------

OPERATING INCOME (LOSS)                                 (202,060)       36,281      (184,959)
                                                     -----------   -----------   -----------

OTHER INCOME (EXPENSE):
  Interest expense                                      (123,888)     (524,050)     (391,583)
  Gain on sale of cable television system             11,122,663             -             -
  Other, net                                             205,408         1,446       (65,845)
                                                     -----------   -----------   -----------

                     Total other income (expense)     11,204,183      (522,604)     (457,428)
                                                     -----------   -----------   -----------

INCOME (LOSS) BEFORE EQUITY IN NET
  INCOME (LOSS) OF CABLE TELEVISION
  JOINT VENTURE                                       11,002,123      (486,323)     (642,387)

EQUITY IN NET LOSS OF CABLE
  TELEVISION JOINT VENTURE                            (1,185,182)   (1,738,404)   (1,949,794)
                                                     -----------   -----------   -----------

NET INCOME (LOSS)                                    $ 9,816,941   $(2,224,727)  $(2,592,181)
                                                     ===========   ===========   ===========

ALLOCATION OF NET INCOME (LOSS):
  General Partner                                    $   296,062   $    22,247   $   (25,922)
                                                     ===========   ===========   ===========

  Limited Partners                                   $ 9,520,879   $(2,202,480)  $(2,566,259)
                                                     ===========   ===========   ===========

NET INCOME (LOSS) PER LIMITED
  PARTNERSHIP UNIT                                   $    113.50   $(26.26)      $(30.59)
                                                     ===========   ===========   ===========

WEIGHTED AVERAGE NUMBER OF LIMITED
  PARTNERSHIP UNITS OUTSTANDING                           83,884        83,884        83,884
                                                     ===========   ===========   ===========

</TABLE>
                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                       22
<PAGE>

                       JONES CABLE INCOME FUND 1-B, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                   STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
                   ----------------------------------------


                                        Year Ended December 31,
                                ----------------------------------------
                                     1996          1995          1994
                                ------------   -----------   -----------
GENERAL PARTNER:
  Balance, beginning of year    $   (309,119)  $  (276,772)  $  (250,850)
  Distributions                            -       (10,100)            -
  Net income (loss) for year         296,062       (22,247)      (25,922)
                                ------------   -----------   -----------

  Balance, end of year          $    (13,057)  $  (309,119)  $  (276,772)
                                ============   ===========   ===========


LIMITED PARTNERS:
  Balance, beginning of year    $  2,760,075   $ 5,962,555   $ 8,528,814
  Distributions                  (11,104,875)   (1,000,000)            -
  Net income (loss) for year       9,520,879    (2,202,480)   (2,566,259)
                                ------------   -----------   -----------

  Balance, end of year          $  1,176,079   $ 2,760,075   $ 5,962,555
                                ============   ===========   ===========

                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                       23
<PAGE>

                       JONES CABLE INCOME FUND 1-B, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                            ------------------------
<TABLE>
<CAPTION>


                                                                                   Year Ended December 31,
                                                                            ----------------------------------------
                                                                                 1996          1995          1994
                                                                            ------------   -----------   -----------
<S>                                                                         <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                  $  9,816,941   $(2,224,727)  $(2,592,181)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
      Depreciation and amortization                                              227,488     1,335,945     1,376,809
      Equity in net loss of cable television joint venture                     1,185,182     1,738,404     1,949,794
      Gain on sale of cable television system                                (11,122,663)            -             -
      Decrease (increase) in trade receivables                                   247,500       (79,913)      (48,788)
      Decrease (increase) in deposits, prepaid expenses and
        deferred charges                                                          48,919       (54,409)      (17,083)
      Increase (decrease) in trade accounts payable and
        accrued liabilities and subscriber prepayments                          (427,201)      (54,524)       90,378
                                                                            ------------   -----------   -----------

                     Net cash provided by (used in) operating activities         (23,834)      660,776       758,929
                                                                            ------------   -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment, net                                       (156,802)   (1,132,756)     (901,452)
  Proceeds from sale of cable television system                               18,347,667             -       429,500
                                                                            ------------   -----------   -----------

                     Net cash provided by (used in)
                       investing activities                                   18,190,865    (1,132,756)     (471,952)
                                                                            ------------   -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings                                                             -     6,852,071        16,830
  Repayment of debt                                                           (6,866,146)   (3,529,925)      (20,597)
  Distributions to limited partners                                          (11,104,875)   (1,000,000)            -
  Increase (decrease) in accrued distributions to
    limited partners                                                            (250,000)      250,000      (429,500)
  Increase (decrease) in advances from General Partner                                 -    (2,162,870)      218,640
                                                                            ------------   -----------   -----------

                     Net cash provided by (used in)
                       financing activities                                  (18,221,021)      409,276      (214,627)
                                                                            ------------   -----------   -----------

Increase (decrease) in cash                                                      (53,990)      (62,704)       72,350

Cash, beginning of year                                                           54,135       116,839        44,489
                                                                            ------------   -----------   -----------

Cash, end of year                                                           $        145   $    54,135   $   116,839
                                                                            ============   ===========   ===========

SUPPLEMENTAL CASH FLOW DISCLOSURE:
  Interest paid                                                             $    220,222   $   463,280   $   360,569
                                                                            ============   ===========   ===========

</TABLE>
                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                       24
<PAGE>

                       JONES CABLE INCOME FUND 1-B, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS
                         -----------------------------

(1)  ORGANIZATION AND PARTNERS' INTERESTS
     ------------------------------------

     Formation and Business
     ----------------------

     Jones Cable Income Fund 1-B, Ltd. (the "Partnership"), a Colorado limited
partnership, was formed on August 14, l986, under a public program sponsored by
Jones Intercable, Inc. ("Intercable").  The Partnership was formed to acquire,
develop and operate cable television systems.  Intercable is the "General
Partner" and manager of the Partnership.  The General Partner and its
subsidiaries also own and operate cable television systems.  In addition,
Intercable manages cable television systems for other limited partnerships for
which it is general partner and, also, for other affiliated entities.

     Cable Television System Sales
     -----------------------------

     On February 28, 1996, the Partnership sold the cable television system
serving the community of Orangeburg, South Carolina (the "Orangeburg System")
to a subsidiary of the General Partner for $18,347,667. The sales price
represented the average of three separate, independent appraisals of
the Orangeburg System. The Partnership used the net sales proceeds to pay all of
its indebtedness, which totaled approximately $6,866,000, and the Partnership
distributed the remaining net sales proceeds, which totaled approximately
$11,105,000, to its limited partners pursuant to the terms of the Partnership's
partnership agreement in April 1996. This distribution represented a return to
each limited partner of approximately $265 for each $1,000 invested in the
Partnership. This amount was in addition to the $328 per $1,000 invested in the
Partnership already returned to the limited partners through prior operating
cash flow distributions. The Partnership will retain its interest in the
Venture.

        The pro forma effect of the sale of the Orangeburg System on the results
of the Partnership's operations for the years ended December 31, 1996 and 1995,
assuming the transaction had occurred at the beginning of the year, is presented
in the following unaudited tabulation:

                              For the Year Ended December 31, 1996
                           -----------------------------------------

                                           Pro Forma
                           As Reported    Adjustments    Pro Forma
                           ------------  -------------  ------------

Revenues                   $   862,911   $   (862,911)  $         -
                           ===========   ============   ===========

Operating Income           $  (202,060)  $    202,060   $         -
                           ===========   ============   ===========

Net Income (Loss)          $ 9,816,941   $(11,002,123)  $(1,185,182)
                           ===========   ============   ===========

                              For the Year Ended December 31, 1995
                           ----------------------------------------

                                          Pro Forma
                           As Reported   Adjustments    Pro Forma
                           -----------   ------------   -----------

Revenues                   $ 4,920,983   $ (4,920,983)  $         -
                           ===========   ============   ===========

Operating Income           $    36,281   $    (36,281)  $         -
                           ===========   ============   ===========

Net Loss                   $(2,224,727)  $    485,901   $(1,738,404)
                           ===========   ============   ===========

     Contributed Capital
     -------------------

     The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit).  No limited partner is obligated to
make any additional contribution to partnership capital.

                                       25
<PAGE>

     The General Partner purchased its interest in the Partnership by
contributing $1,000 to partnership capital.

     All profits and losses of the Partnership are allocated 99 percent to the
limited partners and 1 percent to the General Partner, except for income or gain
from the sale or disposition of cable television properties, which will be
allocated to the partners based upon the formula set forth in the partnership
agreement.

     Cable Television System Acquisition
     -----------------------------------

     At December 31, 1996, the Partnership owned a 40 percent interest in Jones
Cable Income Fund 1-B/C Venture (the "Venture"), through a capital contribution
made to the Venture in November 1987 of $24,220,000.  The Venture acquired cable
television systems in Colorado, Oregon and California on December 31, 1987 and
in Colorado, Nebraska and Michigan during 1988.  The Venture incurred losses of
$2,980,092, $4,371,145 and $4,902,676 in 1996, 1995 and 1994, respectively, of
which $1,185,182, $1,738,404 and $1,949,794, respectively, were allocated to the
Partnership.

     On January 24, 1997, the Venture sold the cable television system serving
the areas in and around Brighton, Broomfield and Boulder County, Colorado (the
"Colorado Systems") to an unaffiliated party for a sales price of $35,000,000,
subject to customary closing adjustments.  The Venture distributed $15,000,000
to the Partnership and Jones Cable Income Fund 1-C, Ltd. ("Fund 1-C") in
February 1997, which amount represents the net sale proceeds following the
Venture's repayment of a portion of its credit facility.  The Partnership
received $5,965,360 and Fund 1-C received $9,034,640 in such distribution.
The Partnership, in turn, distributed the $5,965,360 (approximately $142 per
each $1,000 invested in the Partnership) to the limited partners of the
Partnership.  Because the distribution to the limited partners of the
Partnership together with all prior distributions did not return the amount
initially contributed by the limited partners to the Partnership plus the
preferred return provided by the Partnership's limited partnership agreement,
the General Partner did not receive a distribution from the sale proceeds.  The
Jones Group, Ltd., a subsidiary of Intercable, received a brokerage fee from the
Venture of $875,000, representing 2.5 percent of the sales price, for acting as
a broker in this transaction.  Because the sale of the Colorado Systems did not
represent a sale of all or substantially all of the Partnership's assets, no
vote of the limited partners of the Partnership was required to approve this
sale.  The Venture will continue to own and operate its systems in California,
Oregon, Nebraska and Michigan.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     ------------------------------------------

     Accounting Records
     ------------------

     The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The Partnership's tax returns are also prepared on the accrual basis.

     The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those estimates.

     The Partnership's acquisition of the cable television system serving the
community of Orangeburg, South Carolina (the "Orangeburg System") was accounted
for as a purchase with the purchase price allocated as follows:  first, to the
fair value of net tangible assets acquired; second, to the value of a subscriber
list, franchise costs and favorable leaseholds; and third to costs in excess of
interests in net assets purchased.  Brokerage fees paid to a subsidiary of the
General Partner were allocated to intangible assets based upon the relative
value of these assets at acquisition.  Other system acquisition costs were
capitalized and included in the cost of distribution systems.

     Investment in Cable Television Joint Venture
     --------------------------------------------

     The Partnership's investment in the Venture is accounted for under the
equity method.  The operations of the Venture are significant to the Partnership
and should be reviewed in conjunction with these financial statements.
Reference is made to the accompanying financial statements of the Venture on
pages 31 to 41.

                                       26
<PAGE>

     Property, Plant and Equipment
     -----------------------------

     Depreciation of property, plant and equipment is provided primarily using
the straight-line method over the following estimated service lives:

               Cable distribution systems         5 - 15 years
               Equipment and tools                     5 years
               Office furniture and equipment     5 - 15 years
               Buildings                         10 - 20 years
               Vehicles                                3 years

     Replacements, renewals and improvements are capitalized and maintenance and
repairs are charged to expense as incurred.

     Intangible Assets
     -----------------

     Costs assigned to subscriber lists, favorable leaseholds and costs in
excess of interests in net assets purchased are being amortized using the
straight-line method over the following remaining estimated useful lives:

               Subscriber lists                        3 years
               Favorable leaseholds                    4 years
               Costs in excess of interests in
                net assets purchased                  31 years

     Revenue Recognition
     -------------------

     Subscriber prepayments are initially deferred and recognized as revenue
when earned.

     Reclassifications
     -----------------

     Certain prior year amounts have been reclassified to conform to the 1996
presentation.

(3)  TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
     ----------------------------------------------------

     Management Fees, Distribution Ratios and Reimbursements
     -------------------------------------------------------

     The General Partner manages the Partnership and receives a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises.  Management
fees charged during the years ended December 31, 1996, 1995 and 1994 (exclusive
of the Partnership's 40 percent interest in the Venture) were $43,146, $246,049
and $224,245, respectively.

     Any partnership distributions made from cash flow (defined as cash receipts
derived from routine operations, less debt principal and interest payments and
cash expenses) are allocated 99 percent to the limited partners and 1 percent to
the General Partner.  Distributions resulting from the sale or refinancing of a
system or upon dissolution of the Partnership will be made as follows:  first,
to the limited partners in an amount which together with all prior
distributions, other than those made regularly from cash flow, will equal their
initial capital contribution; second, payment to the limited partners of a
liquidation preference equal to a 10 percent cumulative return on their initial
capital contribution, reduced by all prior distributions from cash flow; and the
balance, 75 percent to the limited partners and 25 percent to the General
Partner.

     The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses.  These expenses represent the salaries and
related benefits paid for corporate personnel, rent, data processing and other
corporate facilities costs.  Such personnel provide engineering, marketing,
administrative, accounting, legal, and investor relations services to the
Partnership.  Such services, and their related costs, are necessary to the
operations of the Partnership and would have been incurred by the Partnership if
it was a stand alone entity.  Allocations of personnel costs are based primarily
on actual time spent by employees of the General Partner with respect to each
partnership managed.  Remaining expenses are allocated based on the pro rata
relationship of the Partnership's revenues to the total revenues of all systems
owned or managed by the General Partner and certain of its subsidiaries.
Systems owned by the General

                                       27
<PAGE>

Partner and all other systems owned by partnerships for which Intercable is the
General partner are also allocated a proportionate share of these expenses. The
General Partner believes that the methodology used in allocating overhead and
administrative expenses is reasonable. Amounts charged to the Partnership by the
General Partner for allocated overhead and administrative expenses during the
years ended December 31, 1996, 1995 and 1994 (exclusive of the Partnership's 40
percent interest in the Venture) were $63,429, $360,952 and, $348,047,
respectively.

     The Partnership was charged interest during 1996 at an average interest
rate of 8.58 percent on the amounts due to the General Partner, which
approximated the General Partner's weighted average cost of borrowing.  Total
interest charged to the Partnership by the General Partner during the years
ended December 31, 1996, 1995 and 1994 was $65,616, $5,975 and $176,867,
respectively.

     Payments to/from Affiliates for Programming Services
     ----------------------------------------------------

     The Partnership receives programming from Superaudio, Jones Education
Company and Product Information Network, all of which are affiliates of the
General Partner.

     Payments to Superaudio totaled $1,161, $7,062 and $7,193 in 1996, 1995 and
1994, respectively.  Payments to Jones Education Company totaled $1,412, $7,555
and $6,517 in 1996, 1995 and 1994, respectively.

     The Partnership receives a commission from Product Information Network
based on a percentage of advertising revenues and number of subscribers.
Product Information Network paid commissions to the Partnership totaling $303,
$1,755 and $321 in 1996, 1995 and 1994, respectively.

(4)  DISTRIBUTIONS FROM CASH FLOW
     ----------------------------

     One of the primary objectives of the Partnership is to provide quarterly
cash distributions to the partners.  Such cash returns are primarily from cash
generated through the operating activities of the Partnership and from the
distributions made to the Partnership from the Venture.  As a result of the sale
of the Orangeburg System, Partnership quarterly cash distributions will be
limited to distributions received by the Partnership from the Venture.  The
timing and level of future distributions, if any, will be determined on a
quarter-by-quarter basis.

(5)    PROPERTY, PLANT AND EQUIPMENT
       -----------------------------

       Property, plant and equipment as of December 31, 1996 and 1995, consisted
of the following:

                                               December 31,
                                            -------------------
                                            1996       1995
                                            -----  ------------

          Cable distribution systems        $   -  $11,094,696
          Equipment and tools                   -      341,933
          Office furniture and equipment        -      114,557
          Buildings                             -       36,333
          Vehicles                              -      344,156
          Land                                  -        2,632
                                            -----  -----------
                                                    11,934,307
          Less-accumulated depreciation         -   (5,878,915)
                                            -----  -----------
                                            $   -  $ 6,055,392
                                            =====  ===========

                                       28
<PAGE>

(6)  DEBT
     ----

     Debt consists of the following:            December 31,
                                            -----------------

                                             1996      1995
                                            -----  ----------
            Lending institutions-
              Revolving credit agreement    $   -  $6,800,000
            Capital lease obligations           -      66,146
                                            -----  ----------

                                            $   -  $6,866,146
                                            =====  ==========

     As discussed in Note (1), on February 28, 1996, the Partnership sold its
Orangeburg System and used a portion of the sales proceeds to repay the then-
outstanding debt balance.  Accordingly, no significant maturities exist.

(7)  INCOME TAXES
     ------------

     Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners.  The federal and state
income tax returns of the Partnership are prepared and filed by the General
Partner.

     The Partnership's tax returns, the qualification of the Partnership as such
for tax purposes, and the amount of distributable Partnership income or loss are
subject to examination by federal and state taxing authorities.  If such
examinations result in changes with respect to the Partnership's qualification
as such, or in changes with respect to the Partnership's recorded income or
loss, the tax liability of the general and limited partners would likely be
changed accordingly.

     Taxable loss reported to the partners is different from that reported in
the statements of operations due to the difference in depreciation recognized
under generally accepted accounting principles and the expense allowed for tax
purposes under the Modified Accelerated Cost Recovery System (MACRS).  There are
no other significant differences between taxable loss and the net loss reported
in the statements of operations.

(8)  SUPPLEMENTARY PROFIT AND LOSS INFORMATION
     -----------------------------------------

     Supplementary profit and loss information for the respective years is
presented below:
<TABLE>
<CAPTION>

                                                            Year Ended December 31,
                                                           ----------------------------
                                                             1996      1995      1994
                                                           --------  --------  --------
<S>                                                        <C>       <C>       <C>

          Maintenance and repairs                          $ 45,200  $ 38,357  $ 45,139
                                                           ========  ========  ========

          Taxes, other than income and  payroll taxes      $ 12,663  $ 83,754  $ 57,742
                                                           ========  ========  ========

          Advertising                                      $ 14,131  $ 70,108  $ 57,444
                                                           ========  ========  ========

          Depreciation of property, plant and equipment    $162,053  $930,857  $903,483
                                                           ========  ========  ========

          Amortization of intangible assets                $ 65,435  $405,088  $473,326
                                                           ========  ========  ========

</TABLE>

                                       29
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    ----------------------------------------


To the Partners of Jones Cable Income Fund 1-B/C Venture:

        We have audited the accompanying balance sheets of JONES CABLE INCOME
FUND 1-B/C VENTURE (a Colorado general partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' capital and cash flows
for each of the three years in the period ended December 31, 1996.  These
financial statements are the responsibility of the General Partner's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

        We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Jones Cable Income
Fund 1-B/C Venture as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.



                                         ARTHUR ANDERSEN LLP


Denver, Colorado,
March 7, 1997.

                                       30
<PAGE>

                     JONES CABLE INCOME FUND 1-B/C VENTURE
                     -------------------------------------
                            (A General Partnership)

                                 BALANCE SHEETS
                                 --------------
<TABLE>
<CAPTION>


                                                                              December 31,
                                                                      ----------------------------
<S>                                                                   <C>            <C>

                     ASSETS                                               1996           1995
                     ------                                           ------------   -------------
<S>                                                                   <C>            <C>
CASH                                                                  $    702,640   $    880,728

TRADE RECEIVABLES, less allowance for doubtful
  receivables of $87,075 and $65,022 at December 31, 1996
  and 1995, respectively                                                   530,025        524,740

INVESTMENT IN CABLE TELEVISION PROPERTIES:
  Property, plant and equipment, at cost                                65,758,352     62,220,451
  Less- accumulated depreciation                                       (32,628,107)   (29,056,927)
                                                                      ------------   ------------

                                                                        33,130,245     33,163,524

  Franchise costs, net of accumulated  amortization of $38,696,513
    and $35,608,812 at December 31, 1996 and 1995, respectively         12,801,757     15,889,458
                                                                      ------------   ------------

                  Total investment in cable television properties       45,932,002     49,052,982

DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES                            391,576        385,587
                                                                      ------------   ------------

                  Total assets                                        $ 47,556,243   $ 50,844,037
                                                                      ============   ============

</TABLE>
                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.

                                       31
<PAGE>

                     JONES CABLE INCOME FUND 1-B/C VENTURE
                     -------------------------------------
                            (A General Partnership)

                                 BALANCE SHEETS
                                 --------------
<TABLE>
<CAPTION>


                                                                     December 31,
                                                             ----------------------------
         LIABILITIES AND PARTNERS' CAPITAL                       1996           1995
         ---------------------------------                   ------------   -------------
<S>                                                          <C>            <C>
LIABILITIES:
  Debt                                                       $ 42,559,250   $ 43,104,090
  Jones Intercable, Inc. advances                                 284,390        109,893
  Trade accounts payable and accrued liabilities                1,530,794      1,449,607
  Subscriber prepayments                                          246,900        265,446
                                                             ------------   ------------

                  Total liabilities                            44,621,334     44,929,036
                                                             ------------   ------------

COMMITMENTS AND CONTINGENCIES (Note 8)

PARTNERS' CAPITAL:
  Contributed capital                                          60,036,950     60,036,950
  Accumulated deficit                                         (36,569,099)   (33,589,007)
  Distributions                                               (20,532,942)   (20,532,942)
                                                             ------------   ------------

                                                                2,934,909      5,915,001
                                                             ------------   ------------

                  Total liabilities and partners' capital    $ 47,556,243   $ 50,844,037
                                                             ============   ============

</TABLE>
                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.

                                       32
<PAGE>

                     JONES CABLE INCOME FUND 1-B/C VENTURE
                     -------------------------------------
                            (A General Partnership)

                            STATEMENTS OF OPERATIONS
                            ------------------------
<TABLE>
<CAPTION>


                                                        Year Ended December 31,
                                                  ---------------------------------------
                                                      1996          1995          1994
                                                  -----------   -----------   -----------
<S>                                               <C>           <C>           <C>
REVENUES                                          $24,624,270   $22,867,228   $21,121,787

COSTS AND EXPENSES:
  Operating expenses                               13,684,546    12,349,907    12,017,508
  Management fees and allocated overhead from
    General Partner                                 2,858,737     2,810,905     2,714,799
  Depreciation and amortization                     7,919,508     8,951,345     8,632,481
                                                  -----------   -----------   -----------

OPERATING INCOME (LOSS)                               161,479    (1,244,929)   (2,243,001)
                                                  -----------   -----------   -----------

OTHER INCOME (EXPENSE):
  Interest expense                                 (3,110,571)   (3,391,355)   (2,761,409)
  Other, net                                          (31,000)      265,139       101,734
                                                  -----------   -----------   -----------

                  Total other income (expense)     (3,141,571)   (3,126,216)   (2,659,675)
                                                  -----------   -----------   -----------

NET LOSS                                          $(2,980,092)  $(4,371,145)  $(4,902,676)
                                                  ===========   ===========   ===========
</TABLE>
                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                       33
<PAGE>

                     JONES CABLE INCOME FUND 1-B/C VENTURE
                     -------------------------------------
                            (A General Partnership)

                        STATEMENTS OF PARTNERS' CAPITAL
                        -------------------------------
<TABLE>
<CAPTION>


                                             Year Ended December 31,
                                      ---------------------------------------
                                         1996          1995          1994
                                      -----------   -----------   -----------
<S>                                   <C>           <C>           <C>
Jones Cable Income Fund 1-B, Ltd.:
  Balance, beginning of year          $ 2,348,059   $ 4,086,463   $ 6,036,257
  Net loss for year                    (1,185,182)   (1,738,404)   (1,949,794)
                                      -----------   -----------   -----------

  Balance, end of year                $ 1,162,877   $ 2,348,059   $ 4,086,463
                                      ===========   ===========   ===========


Jones Cable Income Fund 1-C, Ltd.:
  Balance, beginning of year          $ 3,566,942   $ 6,199,683   $ 9,152,565
  Net loss for year                    (1,794,910)   (2,632,741)   (2,952,882)
                                      -----------   -----------   -----------

  Balance, end of year                $ 1,772,032   $ 3,566,942   $ 6,199,683
                                      ===========   ===========   ===========

Total:
  Balance, beginning of year          $ 5,915,001   $10,286,146   $15,188,822
  Net loss for year                    (2,980,092)   (4,371,145)   (4,902,676)
                                      -----------   -----------   -----------

  Balance, end of year                $ 2,934,909   $ 5,915,001   $10,286,146
                                      ===========   ===========   ===========
</TABLE>
                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                       34
<PAGE>

                     JONES CABLE INCOME FUND 1-B/C VENTURE
                     -------------------------------------
                            (A General Partnership)

                            STATEMENTS OF CASH FLOWS
                            ------------------------
<TABLE>
<CAPTION>

                                                                         Year Ended December 31,
                                                                  ---------------------------------------
                                                                      1996          1995          1994
                                                                  -----------   -----------   -----------
<S>                                                               <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                        $(2,980,092)  $(4,371,145)  $(4,902,676)
  Adjustments to reconcile net loss to net cash provided by
    (used in) operating activities:
      Depreciation and amortization                                 7,919,508     8,951,345     8,632,481
      Amortization of interest rate protection contract                     -        48,500        48,500
      Increase in trade receivables                                    (5,285)      (65,328)      (27,364)
      Increase in deposits, prepaid expenses and
        deferred charges                                             (186,604)     (148,623)     (257,709)
      Increase (decrease) in trade accounts payable and
        accrued liabilities and subscriber prepayments                 62,641       (95,012)      296,843
      Increase (decrease) in amount due Jones Intercable, Inc.        174,497        43,669    (4,002,248)
                                                                  -----------   -----------   -----------

                  Net cash provided by (used in)
                    operating activities                            4,984,665     4,363,406      (212,173)
                                                                  -----------   -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net                           (4,617,913)   (4,513,277)    (4,601,807)
                                                                  ----------    ----------     ----------

                  Net cash used in investing activities           (4,617,913)   (4,513,277)    (4,601,807)
                                                                  ----------    ----------     ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings                                           273,404       898,199      6,552,832
  Repayment of debt                                                 (818,244)     (177,448)      (467,811)
  Decrease in accrued distributions to partners                            -             -     (1,080,000)
                                                                  ----------    ----------    -----------

                  Net cash provided by (used in)
                    financing activities                            (544,840)      720,751      5,005,021
                                                                  ----------    ----------    -----------

Increase (decrease) in cash                                         (178,088)      570,880        191,041

Cash, beginning of year                                              880,728       309,848        118,807
                                                                  ----------    ----------    -----------

Cash, end of year                                                 $  702,640    $  880,728    $   309,848
                                                                  ==========    ==========    ===========

SUPPLEMENTAL CASH FLOW DISCLOSURE:
  Interest paid                                                   $3,132,265    $3,389,425    $ 2,536,991
                                                                  ==========    ==========    ===========
</TABLE>
                 The accompanying notes to financial statements
                   are an integral part of these statements.

                                       35
<PAGE>

                     JONES CABLE INCOME FUND 1-B/C VENTURE
                     -------------------------------------
                            (A General Partnership)

                         NOTES TO FINANCIAL STATEMENTS
                         -----------------------------

(1)  ORGANIZATION AND PARTNERS' INTERESTS
     ------------------------------------

     Formation and Business
     ----------------------

     On October 21, 1987, Jones Cable Income Fund 1-B, Ltd. ("Fund 1-B") and
Jones Cable Income  Fund 1-C, Ltd. ("Fund 1-C") formed a Colorado general
partnership known as Jones Cable Income Fund 1-B/C Venture (the "Venture") by
making capital contributions of $24,220,000 and $36,681,000, respectively
(approximately 40 and 60 percent, respectively).  The Venture was formed to
acquire, develop and operate cable television systems.  During 1988 and 1987,
the Venture acquired various cable television systems serving the areas in and
around Brighton, Broomfield and Boulder County, Colorado (the "Colorado
Systems"); Lake County, California; Myrtle Creek, Oregon; South Sioux City,
Nebraska; and Three Rivers and Watervliet, Michigan.

     Jones Intercable, Inc. ("Intercable"), the General Partner of Fund 1-B and
Fund 1-C, manages the Venture.  Intercable and its subsidiaries also own and
operate cable television systems.  In addition, Intercable manages cable
television systems for other limited partnerships for which it is general
partner and, also, for affiliated entities.

     Cable Television System Sale
     ----------------------------

     On January 24, 1997, the Venture sold the Colorado Systems to an
unaffiliated party for a sales price of $35,000,000, subject to customary
closing adjustments.  The Venture distributed $15,000,000 to Fund 1-B and Fund
1-C in February 1997, which amount represents the net sale proceeds following
the Venture's repayment of a portion of the balance outstanding of its credit
facility.  Fund 1-B received $5,965,360 and Fund 1-C received $9,034,640
in such distribution.  Fund 1-B and Fund 1-C, in turn, distributed such
amounts (approximately $142 per each $1,000 invested in Fund 1-B and
approximately $212 per each $1,000 invested in Fund 1-C) to the limited partners
of each of Fund 1-B and Fund 1-C.  Because the distribution to the limited
partners of Fund 1-B and Fund 1-C did not return the amount initially
contributed by the limited partners to Fund 1-B and Fund 1-C plus the preferred
return provided by Fund 1-B and Fund 1-C limited partnership agreements, the
General Partner did not receive a distribution from the sale proceeds.  The
Jones Group, Ltd., a subsidiary of Intercable, received a brokerage fee from the
Venture of $875,000, representing 2.5 percent of the sales price, for acting as
a broker in this transaction.  Because the sale of the Colorado Systems did not
represent a sale of all or substantially all of Fund 1-B and Fund 1-C's assets,
no vote of the limited partners of Fund 1-B and Fund 1-C was required to approve
this sale.  The Venture will continue to own and operate its systems in
California, Oregon, Nebraska and Michigan.

        The pro forma effect of the sale of the Colorado Systems on the results
of the Venture's operations for the years ended December 31, 1996 and 1995,
assuming the transaction had occurred at the beginning of the year, is presented
in the following unaudited tabulation:

                                  For the Year Ended December 31, 1996
                                ----------------------------------------
                                               Pro Forma
                                As Reported   Adjustments    Pro Forma
                                ------------  ------------  ------------

     Revenues                   $24,624,270   $(7,577,574)  $17,046,696
                                ===========   ===========   ===========

     Operating Income           $   161,479   $   (72,292)  $    89,187
                                ===========   ===========   ===========

     Net Loss                   $(2,980,092)  $ 1,223,408   $(1,756,684)
                                ===========   ===========   ===========


                                       36
<PAGE>

                         For the Year Ended December 31, 1995
                       ----------------------------------------

                                      Pro Forma
                       As Reported   Adjustments    Pro Forma
                       ------------  ------------  ------------

     Revenues          $22,867,228   $(6,896,065)  $15,971,163
                       ===========   ===========   ===========

     Operating Loss    $(1,244,929)  $   246,522   $  (998,407)
                       ===========   ===========   ===========

     Net Loss          $(4,371,145)  $ 1,592,171   $(2,778,974)
                       ===========   ===========   ===========

     Contributed Capital
     -------------------

     The capitalization of the Venture is set forth in the accompanying
statements of partners' capital.

     All Venture distributions, including those made from cash flow, from the
sale or refinancing of Venture property and on dissolution of the Venture, shall
be made to Fund 1-B and Fund 1-C in proportion to their interests in the
Venture.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     ------------------------------------------

     Accounting Records
     ------------------

     The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The Venture's tax returns are also prepared on the accrual basis.

     The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those estimates.

     Purchase Price Allocation
     -------------------------

     Venture acquisitions were accounted for as purchases with the purchase
prices allocated as follows:  first, to the fair value of net tangible assets
acquired; second, to the value of subscriber lists, franchise costs and a
noncompete agreement; and third, to cost in excess of interests in net assets
purchased.  Brokerage fees paid to a subsidiary of Intercable's parent were
allocated to intangible assets based upon the relative value of these assets at
acquisition.  Other system acquisition costs were capitalized and included in
the cost of distribution systems.

     Property, Plant and Equipment
     -----------------------------

     Depreciation of property, plant and equipment is provided primarily using
the straight-line method over the following estimated service lives:

               Cable distribution systems         5  -  15 years
               Equipment and tools                   -   5 years
               Office furniture and equipment     5  -  15 years
               Buildings                         10  -  20 years
               Vehicles                              -   3 years

          Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.

                                       37
<PAGE>

     Intangible Assets
     -----------------

     Costs assigned to franchises, subscriber lists, a noncompete agreement and
costs in excess of interests in net assets purchased are amortized using the
straight-line method over the following remaining estimated useful lives:

                Franchise costs                        1  -  14 years
                Noncompete agreement                   1  -   2 years
                Costs in excess of interests in net
                 assets purchased                            32 years

     Revenue Recognition
     -------------------

     Subscriber prepayments are initially deferred and recognized as revenue
when earned.

     Reclassifications
     -----------------

     Certain prior year amounts have been reclassified to conform to the 1996
presentation.

(3)  TRANSACTIONS WITH JONES INTERCABLE, INC. AND AFFILIATES
     -------------------------------------------------------

     Management Fees and Reimbursements
     ----------------------------------

     Intercable manages the Venture and receives a fee for its services equal to
5 percent of the gross revenues of the Venture, excluding revenues from the sale
of cable television systems or franchises.  Management fees paid to Intercable
by the Venture during the years ended December 31, 1996, 1995 and 1994 were
$1,231,213, $1,143,361 and $1,056,089, respectively.

     The Venture reimburses Intercable for certain allocated overhead and
administrative expenses.  These expenses represent the salaries and related
benefits paid for corporate personnel, rent, data processing services and other
corporate facilities costs.  Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Venture. Such services, and their related costs, are necessary to the operations
of the Venture and would have been incurred by the Venture if it was a stand
alone entity.  Allocations of personnel costs are based primarily on actual time
spent by employees of Intercable with respect to each entity managed.  Remaining
expenses are allocated based on the pro rata relationship of the Venture's
revenues to the total revenues of all systems owned or managed by Intercable and
certain of its subsidiaries.  Systems owned by Intercable and all other systems
owned by partnerships for which Intercable is the general partner are also
allocated a proportionate share of these expenses.  Intercable believes that the
methodology of allocating overhead and administrative expenses is reasonable.
Overhead and administrative expenses allocated to the Venture by Intercable
during the years ended December 31, 1996, 1995 and 1994 were $1,627,524,
$1,667,544 and $1,658,710, respectively.

     The Venture was charged interest during 1996 at an average interest rate of
8.58 percent on the amounts due Intercable, which approximated Intercable's
weighted average cost of borrowing.  Total interest charged to the Venture by
Intercable was $25,331, $14,252 and $180,316 during 1996, 1995 and 1994,
respectively.

     Payments to/from Affiliates for Programming Services
     ----------------------------------------------------

     The Venture receives programming from Superaudio, Jones Education Company,
Great American Country, Inc. and Product Information Network, all of which are
affiliates of the General Partner.

     Payments to Superaudio totaled $40,317, $33,947 and $25,189 in 1996, 1995
and 1994, respectively.  Payments to Jones Education Company totaled $97,933,
$85,969 and $46,417 in 1996, 1995 and 1994, respectively.  Payments to Great
American Country, Inc., which initiated service in 1996, totaled $37,518 in
1996.

     The Venture receives a commission from Product Information Network based on
a percentage of advertising revenues and number of subscribers.  Product
Information Network paid commissions to the Venture totaling $59,288, $80,014
and $15,283 in 1996, 1995 and 1994, respectively.

                                       38
<PAGE>

(4)  DISTRIBUTIONS FROM CASH FLOW
     ----------------------------

     One of the primary objectives of the Venture is to provide quarterly cash
distributions to the Venture partners, primarily from cash generated through
operating activities of the Venture.  The Venture's partners in turn seek to
provide quarterly cash distributions to their partners.  The Venture's credit
facility had a maximum amount available of $45,000,000, of which $42,200,000 was
outstanding on December 31, 1996.  This limits the amount of borrowings
available to the Venture to fund capital expenditures; therefore, the Venture
used cash generated from operations to fund capital expenditures and did not
declare any distributions in 1996, 1995 or 1994.  As a result of the sale of the
Colorado Systems and the renegotiated reducing revolving credit facility, the
Venture will announce future distributions on a quarter-by-quarter basis;
however, no determination has been made regarding any specific level of future
distributions.

(5)    PROPERTY, PLANT AND EQUIPMENT
       -----------------------------

       Property, plant and equipment as of December 31, 1996 and 1995, consisted
of the following:

                                                    December 31,
                                            ----------------------------
                                                1996           1995
                                            -------------  -------------

     Cable distribution systems             $ 61,006,749   $ 57,020,173
     Equipment and tools                       2,091,493      2,198,719
     Office furniture and equipment              908,509        783,468
     Buildings                                   453,488        453,488
     Vehicles                                  1,126,171      1,597,461
     Land                                        171,942        167,142
                                            ------------   ------------
                                              65,758,352     62,220,451

          Less- accumulated depreciation     (32,628,107)   (29,056,927)
                                            ------------   ------------

                                            $ 33,130,245   $ 33,163,524
                                            ============   ============

(6)  DEBT
     ----

     Debt consists of the following:                 December 31,
                                            ---------------------------

                                                1996           1995
                                            ------------   ------------
          Lending institutions -
           Revolving credit agreement       $ 42,200,000   $ 42,700,000
          Capital lease obligations              359,250        404,090
                                            ------------   ------------

                                            $ 42,559,250   $ 43,104,090
                                            ============   ============

     At December 31, 1996, the Venture's $45,000,000 credit facility had
$42,200,000 outstanding, leaving $2,800,000 of available borrowings.  Although
the revolving credit facility matures on May 31, 1997, the General Partner
negotiated a new $27,500,000 reducing revolving credit facility, which subject
to the completion of closing documentation related to the new reducing revolving
credit facility, will extend the revolving credit period to June 30, 2005.  The
Partnership used a portion of the proceeds from the sale of the Colorado Systems
to repay a portion of the balance outstanding of its then-existing credit
facility.  As a result of such repayment, the Venture's credit facility had an
outstanding balance of $24,200,000 prior to the General Partner's negotiations
for the new reducing revolving credit facility.  Interest on outstanding
principal on the new reducing revolving credit facility is calculated at the
Venture's option of the Base Rate plus 3/8 percent, the Euro-Rate plus 1-3/8
percent or the Certificate of Deposit Rate plus 1-1/2 percent.  The effective
interest rates on amounts outstanding as of December 31, 1996 and 1995 were 7.03
percent and 7.38 percent, respectively.

     Installments due on debt principal for each of the five years in the period
ending December 31, 2001, respectively, are $42,307,775, $107,775, $107,775,
$35,925, $-0- and $-0-.  As of December 31, 1996, substantially all of the
Venture's assets secured the above indebtedness.

                                       39
<PAGE>

     At December 31, 1996, the carrying amount of the Venture's long-term debt
did not differ significantly from the estimated fair value of the financial
instruments.  The fair value of the Venture's long-term debt is estimated based
on the discounted amount of future debt service payments using rates of
borrowing for a liability of similar risk.

(7)  INCOME TAXES
     ------------

     Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to Fund 1-B and Fund 1-C.  The federal
and state income tax returns of the Partnership are prepared and filed by
Intercable.

     The Venture's tax returns, the qualification of the Venture as such for tax
purposes, and the amount of distributable Venture income or loss are subject to
examination by federal and state taxing authorities.  If such examinations
result in changes with respect to the Venture's qualification as such, or in
changes with respect to the Venture's recorded income or loss, the tax liability
of Fund 1-B and Fund 1-C would likely be changed accordingly.

     Taxable loss reported to Fund 1-B and Fund 1-C is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS).  There are no other significant differences between taxable income or
loss and the net income or loss reported in the statements of operations.

(8)  COMMITMENTS AND CONTINGENCIES
     -----------------------------

     The Venture rents office and other facilities under various long-term lease
arrangements.  Rent paid under such lease arrangements totaled $93,161, $93,192
and $82,204, respectively, for the years ended December 31, 1996, 1995 and 1994.
Minimum commitments under operating leases for each of the five years in the
period ending December 31, 2001, and thereafter are as follows:

                    1997          $ 80,456
                    1998            48,267
                    1999            39,829
                    2000            24,005
                    2001            18,522
                    Thereafter     152,158
                                  --------

                                  $363,237
                                  ========

(9)  SUPPLEMENTARY PROFIT AND LOSS INFORMATION
     -----------------------------------------
<TABLE>
<CAPTION>

Supplementary profit and loss information for the respective years is presented
 below:

                                                                    Year Ended December 31,
                                                             -----------------------------------
                                                                1996         1995        1994
                                                             ----------   ----------  ----------
<S>                                                          <C>              <C>         <C>
Maintenance and repairs                                      $  186,432   $  209,529  $  203,987
                                                             ==========   ==========  ==========

Taxes, other than income and payroll taxes                   $  494,974   $  505,916  $  455,044
                                                             ==========   ==========  ==========

Advertising                                                  $  361,437   $  327,980  $  353,212
                                                             ==========   ==========  ==========

Depreciation of property, plant and equipment                $4,709,869   $4,347,554  $4,072,061
                                                             ==========   ==========  ==========

Amortization of intangible assets                            $3,209,639   $4,603,791  $4,560,420
                                                             ==========   ==========  ==========

</TABLE>

                                       40
<PAGE>

           ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ---------------------------------------------------------
                      ACCOUNTING AND FINANCIAL DISCLOSURE
                      -----------------------------------

     None.


                                   PART III.
                                   ---------

         ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
         ------------------------------------------------------------

     The Partnership itself has no officers or directors.  Certain information
concerning the directors and executive officers of the General Partner is set
forth below.  Directors of the General Partner serve until the next annual
meeting of the General Partner and until their successors shall be elected and
qualified.

<TABLE>
<S>                      <C> <C>
Glenn R. Jones           67  Chairman of the Board and Chief Executive Officer
Derek H. Burney          57  Vice Chairman of the Board
James B. O'Brien         47  President and Director
Ruth E. Warren           47  Group Vice President/Operations
Kevin P. Coyle           45  Group Vice President/Finance
Christopher J. Bowick    41  Group Vice President/Technology
George H. Newton         62  Group Vice President/Telecommunications
Raymond L. Vigil         50  Group Vice President/Human Resources
Cynthia A. Winning       45  Group Vice President/Marketing
Elizabeth M. Steele      45  Vice President/General Counsel/Secretary
Larry W. Kaschinske      37  Vice President/Controller
Robert E. Cole           64  Director
William E. Frenzel       68  Director
Donald L. Jacobs         58  Director
James J. Krejci          55  Director
John A. MacDonald        43  Director
Raphael M. Solot         63  Director
Howard O. Thrall         49  Director
Siim A. Vanaselja        40  Director
Sanford Zisman           57  Director
Robert B. Zoellick       43  Director
</TABLE>

     Mr. Glenn R. Jones has served as Chairman of the Board of Directors and
Chief Executive Officer of the General Partner since its formation in 1970, and
he was President from June 1984 until April 1988.  Mr. Jones is the sole
shareholder, President and Chairman of the Board of Directors of Jones
International, Ltd.  He is also Chairman of the Board of Directors of the
subsidiaries of the General Partner and of certain other affiliates of the
General Partner.  Mr. Jones has been involved in the cable television business
in various capacities since 1961, is a member of the Board of Directors and the
Executive Committee of the National Cable Television Association. Additionally,
Mr. Jones is a member of the Board of Governors for the American Society for
Training and Development, and a member of the Board of Education Council of the
National Alliance of Business.  Mr. Jones is also a founding member of the James
Madison Council of the Library of Congress.  Mr. Jones has been the recipient of
several awards including the Grand Tam Award in 1989, the highest award from the
Cable Television Administration and Marketing Society; the President's Award
from the Cable Television Public Affairs Association in recognition of Jones
International's educational efforts through Mind Extension University (now
Knowledge TV); the Donald G. McGannon Award for the advancement of minorities
and women in cable from the United Church of Christ Office of Communications;
the STAR Award from American Women in Radio and Television, Inc. for exhibition
of a commitment to the issues and concerns of women in television and radio; the
Cableforce 2000 Accolade awarded by Women in Cable in recognition of the General
Partner's innovative employee programs; the Most Outstanding Corporate
Individual Achievement Award from the International Distance Learning Conference
for his contributions to distance education; the Golden Plate Award from the

                                      42
<PAGE>

American Academy of Achievement for his advances in distance education; the Man
of the Year named by the Denver chapter of the Achievement Rewards for College
Scientists; and in 1994 Mr. Jones was inducted into Broadcasting and Cable's
Hall of Fame.

     Mr. Derek H. Burney was appointed a Director of the General Partner in
December 1994 and Vice Chairman of the Board of Directors on January 31, 1995.
Mr. Burney joined BCE Inc., Canada's largest telecommunications company, in
January 1993 as Executive Vice President, International.  He has been the
Chairman of Bell Canada International Inc., a subsidiary of BCE, since January
1993 and, in addition, has been Chief Executive Officer of BCI since July 1993.
Prior to joining BCE, Mr. Burney served as Canada's ambassador to the United
States from 1989 to 1992.  Mr. Burney also served as chief of staff to the Prime
Minister of Canada from March 1987 to January 1989 where he was directly
involved with the negotiation of the U.S. - Canada Free Trade Agreement. In July
1993, he was named an Officer of the Order of Canada. Mr. Burney is also a
director of Bell Cablemedia plc, Mercury Communications Limited, Videotron
Holdings plc, Tele-Direct (Publications) Inc., Teleglobe Inc., Bimcor Inc.,
Maritime Telegraph and Telephone Company, Limited, Moore Corporation Limited,
Northbridge Programming Inc. and certain subsidiaries of Bell Canada
International.

     Mr. James B. O'Brien, the General Partner's President, joined the General
Partner in January 1982.  Prior to being elected President and a Director of the
General Partner in December 1989, Mr. O'Brien served as a Division Manager,
Director of Operations Planning/Assistant to the CEO, Fund Vice President and
Group Vice President/Operations.  Mr. O'Brien was appointed to the General
Partner's Executive Committee in August 1993.  As President, he is responsible
for the day-to-day operations of the cable television systems managed and owned
by the General Partner. Mr. O'Brien is Vice Chairman and a board member of Cable
Labs, Inc., the research arm of the U.S. cable television industry. He also
serves as a director of the Cable Television Administration and Marketing
Association and as a director and member of the Executive Committee of the
Walter Kaitz Foundation, a foundation that places people of ethnic minority
groups in positions with cable television systems, networks and vendor
companies.

     Ms. Ruth E. Warren joined the General Partner in August 1980 and has served
in various operational capacities, including system manager and Fund Vice
President, since then.  Ms. Warren was elected Group Vice President/Operations
of the General Partner in September 1990.

     Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services.  In September 1985, he was appointed Senior Vice
President/Financial Services.  He was elected Treasurer of the General Partner
in August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990.

     Mr. Christopher J. Bowick joined the General Partner in September 1991 as
Group Vice President/Technology and Chief Technical Officer.  Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.

     Mr. George H. Newton joined the General Partner in January 1996 as Group
Vice President/Telecommunications.  Prior to joining the General Partner, Mr.
Newton was President of his own consulting business, Clear Solutions, and since
1994 Mr. Newton has served as a Senior Advisor to Bell Canada International.
From 1990 to 1993, Mr. Newton served as the founding Chief Executive Officer and
Managing Director of Clear Communications, New Zealand, where he established an
alternative telephone company in New Zealand.  From 1964 to 1990, Mr. Newton
held a wide variety of operational and business assignments with Bell Canada
International.

     Mr. Raymond L. Vigil joined the General Partner in June 1993 as Group Vice
President/Human Resources.  Previous to joining the General Partner, Mr. Vigil
served as Executive Director of Learning with USWest.  Prior to USWest, Mr.
Vigil worked in various human resources posts over a 14-year term with the IBM
Corporation.

                                      43
<PAGE>

     Ms. Cynthia A. Winning joined the General Partner as Group Vice
President/Marketing in December 1994.  Previous to joining the General Partner,
Ms. Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a
sports and event marketing company.  From 1979 to 1981 and from 1986 to 1994,
Ms. Winning served as the Vice President and Director of Marketing for Citicorp
Retail Services, Inc., a provider of private-label credit cards for ten national
retail department store chains.  From 1981 to 1986, Ms. Winning was the Director
of Marketing Services for Daniels & Associates cable television operations, as
well as the Western Division Marketing Director for Capital Cities Cable.  Ms.
Winning also serves as a board member of Cities in Schools, a dropout
intervention/prevention program.

     Ms. Elizabeth M. Steele joined the General Partner in August 1987 as Vice
President/General Counsel and Secretary.  From August 1980 until joining the
General Partner, Ms. Steele was an associate and then a partner at the Denver
law firm of Davis, Graham & Stubbs, which serves as counsel to the General
Partner.

     Mr. Larry Kaschinske joined the General Partner in 1984 as a staff
accountant in the General Partner's former Wisconsin Division, was promoted to
Assistant Controller in 1990, named Controller in August 1994 and was elected
Vice President/Controller in June 1996.

     Mr. Robert E. Cole was appointed a Director of the General Partner in March
1996.  Mr. Cole is currently self-employed as a partner of First Variable
Insurance Marketing and is responsible for marketing to National Association of
Securities Dealers, Inc. firms in northern California, Oregon, Washington and
Alaska.  From 1993 to 1995, Mr. Cole was the Director of Marketing for Lamar
Life Insurance Company; from 1992 to 1993, Mr. Cole was Senior Vice President of
PMI Inc., a third party lender serving the special needs of Corporate Owned Life
Insurance (COLI) and from 1988 to 1992, Mr. Cole was the principal and co-
founder of a specialty investment banking firm that provided services to finance
the ownership and growth of emerging companies, productive assets and real
property.  Mr. Cole is a Certified Financial Planner and a former United States
Naval Aviator.

     Mr. William E. Frenzel was appointed a Director of the General Partner in
April 1995.  Mr. Frenzel has been a Guest Scholar since 1991 with the Brookings
Institution, a research organization located in Washington D. C.  Until his
retirement in January 1991, Mr. Frenzel served for twenty years in the United
States House of Representatives, representing the State of Minnesota, where he
was a member of the House Ways and Means Committee and its Trade Subcommittee,
the Congressional Representative to the General Agreement on Tariffs and Trade
(GATT), the Ranking Minority Member on the House Budget Committee and a member
of the National Economic Commission.  Mr. Frenzel also served in the Minnesota
Legislature for eight years.  He is a Distinguished Fellow of the Tax
Foundation, Vice Chairman of the Eurasia Foundation, a Board Member of the U.S.-
Japan Foundation, the Close-Up Foundation, Sit Mutual Funds and Chairman of the
Japan-America Society of Washington.

     Mr. Donald L. Jacobs was appointed a Director of the General Partner in
April  1995.  Mr. Jacobs is a retired executive officer of TRW.  Prior to his
retirement, he was Vice President and Deputy Manager of the Space and Defense
Sector; prior to that appointment, he was the Vice President and General Manager
of the Defense Systems Group and prior to his appointment as Group General
Manager, he was President of ESL, Inc., a wholly owned subsidiary of TRW.
During his career, Mr. Jacobs served on several corporate, professional and
civic boards.

     Mr. James J. Krejci was President of the International Division of
International Gaming Technology, International headquartered in Reno, Nevada,
until March 1995.  Prior to joining IGT in May 1994, Mr. Krejci was Group Vice
President of Jones International, Ltd. and was Group Vice President of the
General Partner. He was an officer of subsidiaries of Jones International, Ltd.
until leaving the General Partner in May 1994. Mr. Krejci has been a Director of
the General Partner since August 1987.

                                      44
<PAGE>

     Mr. John A. MacDonald was appointed a Director of the General Partner in
November 1995.  Mr. MacDonald is Executive Vice President of Business
Development and Chief Technology Officer of Bell Canada International Inc.
Prior to joining Bell Canada in November 1994, Mr. MacDonald was President and
Chief Executive Officer of The New Brunswick Telephone Company, Limited, a post
he had held since March of that year.  Prior to March 1994, Mr. MacDonald was
with NBTel for 17 years serving in various capacities, including Market Planning
Manager, Corporate Planning Manager, Manager of Systems Planning and Development
and General Manager, Chief Engineer and General Manager of Engineering and
Information Systems and Vice President of Planning.  Mr. MacDonald was the
former Chairman of the New Brunswick section of the Institute of Electrical and
Electronic Engineers and also served on the Federal Government's Information
Highway Advisory Council.  Mr. MacDonald is Chairman of MediaLinx Interactive
Inc. and Stentor Canadian Network Management and is presently a Governor of the
Montreal Exchange.  He also serves on the Board of Directors of Tele-Direct
(Publications) Inc., Bell-Northern Research, Ltd., SRCI, Bell Sygma, Canarie
Inc., and is a member of the University of New Brunswick Venture Campaign
Cabinet.

     Mr. Raphael M. Solot was appointed a Director of the General Partner in
March 1996.  Mr. Solot is an attorney and has practiced law for 31 years with an
emphasis on franchise, corporate and partnership law and complex litigation.

     Mr. Howard O. Thrall was appointed a Director of the General Partner in
March 1996. Mr. Thrall had previously served as a Director of the General
Partner from December 1988 to December 1994. Mr. Thrall is Senior Vice
President-Corporate Development for First National Net, Inc., a leading service
provider for the mortgage banking industry, and he heads First National Net's
Washington, D.C. regional office. From September 1993 to July 1996, Mr. Thrall
has served as Vice President of Sales, Asian Region, for World Airways, Inc.
headquartered at the Washington Dulles International Airport. From 1984 until
August 1993, Mr. Thrall was with the McDonnell Douglas Corporation, where he
concluded as a Regional Vice President, Commercial Marketing with the Douglas
Aircraft Company subsidiary. Mr. Thrall is also an active management and
international marketing consultant, having completed assignments with McDonnell
Douglas Aerospace, JAL Trading, Inc., Technology Solutions Company, Cheong Kang
Associated (Korea), Aero Investment Alliance, Inc. and Western Real Estate
Partners, among others.

     Mr. Siim A. Vanaselja was appointed a Director of the General Partner in
August 1996.  Mr. Vanaselja joined BCE Inc., Canada's largest telecommunications
company, in February 1994 as Assistant Vice-President, International Taxation.
In June 1994, he was appointed Assistant Vice-President and Director of
Taxation, and in February 1995, Mr. Vanaselja was appointed Vice-President,
Taxation.  On August 1, 1996, Mr. Vanaselja was appointed the Chief Financial
Officer of Bell Canada International Inc., a subsidiary of BCE Inc.  Prior to
joining BCE Inc. and since August 1989, Mr. Vanaselja was a partner in the
Toronto office of KPMG Peat Marwick Thorne.  Mr. Vanaselja has been a member of
the Institute of Chartered Accountants of Ontario since 1982 and is a member of
the Canadian Tax Foundation, the Tax Executives Institute and the International
Fiscal Association.

     Mr. Sanford Zisman was appointed a director of the General Partner in June
1996.  Mr. Zisman is a member of the law firm, Zisman & Ingraham, P.C. of
Denver, Colorado and has practiced law for 31 years, with an emphasis on tax,
business and estate planning and probate administration.  Mr. Zisman currently
serves as a member of the Board of Directors of Saint Joseph Hospital, the
largest hospital in Colorado, and he has served as Chairman of the Board,
Chairman of the Finance Committee and Chairman of the Strategic Planning
Committee of the hospital.  Since 1992, he has also served on the Board of
Directors of Maxim Series Fund, Inc., a subsidiary of Great-West Life Assurance
Company.

     Mr. Robert B. Zoellick was appointed a Director of the General Partner in
April 1995.  Mr. Zoellick is Executive Vice President for Housing and Law of
Fannie Mae, a federally chartered and stockholder-owned corporation that is the
largest housing finance investor in the United States.  From August 1992 to
January 1993, Mr. Zoellick served as Deputy Chief of Staff of the White House
and Assistant to the President.  From May 1991 to August 1992, Mr. Zoellick
served concurrently as the Under Secretary of State for Economic and
Agricultural Affairs and as Counselor of the Department of State, a post he
assumed in March 1989.  From 1985 to 1988, Mr. Zoellick served at the Department
of Treasury in a number of capacities, including Counselor to the Secretary.
Mr. Zoellick received the Alexander Hamilton and Distinguished Service Awards,
highest honors of the Departments of Treasury and State, respectively.  The
German Government awarded him the Knight Commanders

                                      45
<PAGE>

Cross for his work on Germany unification. Mr. Zoellick currently serves on the
boards of Alliance Capital, Said Holdings, the Council on Foreign Relations, the
Congressional Institute, the German Marshall Fund of the U.S., the European
Institute, the National Bureau of Asian Research, the American Council on
Germany, the American Institute for Contemporary German Studies and the Overseas
Development Council.


                       ITEM 11.  EXECUTIVE COMPENSATION
                       --------------------------------

     The Partnership has no employees; however, various personnel are required
to operate the cable television systems owned by the Venture.  Such personnel
are employed by the General Partner and, the cost of such employment is charged
by the General Partner to the Venture as a direct reimbursement item.  See Item
13.


    ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
    ----------------------------------------------------------------------

     As of March 4, 1997, no person or entity owned more than 5 percent of the
limited partnership interests of the Partnership.


           ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
           --------------------------------------------------------

     The General Partner and its affiliates engage in certain transactions with
the Venture.  During the year ended December 31, 1996, the General Partner also
engaged in certain transactions with the Partnership with respect to the
Partnership's ownership of the Orangeburg System.  The General Partner believes
that the terms of such transactions are generally as favorable as could be
obtained from unaffiliated parties.  This determination has been made by the
General Partner in good faith, but none of the terms were or will be negotiated
at arm's-length and there can be no assurance that the terms of such
transactions have been or will be as favorable as those that could have been
obtained from unaffiliated parties.

TRANSACTIONS WITH THE GENERAL PARTNER

     The General Partner charges a management fee, and the General Partner is
reimbursed for certain allocated overhead and administrative expenses.  These
expenses represent the salaries and benefits paid to corporate personnel, rent,
data processing services and other corporate facilities costs.  Such personnel
provide engineering, marketing, administrative, accounting, legal and investor
relations services to the Venture.  Allocations of personnel costs are based
primarily on actual time spent by employees of the General Partner with respect
to each partnership managed.  Remaining expenses are allocated based on the pro
rata relationship of the Venture's revenues to the total revenues of all systems
owned or managed by the General Partner and certain of its subsidiaries.
Systems owned by the General Partner and all other systems owned by partnerships
for which Jones Intercable, Inc. is the general partner are also allocated a
proportionate share of these expenses.

     The General Partner also advances funds and charges interest on the balance
payable.  The interest rate charged approximates the General Partner's weighted
average cost of borrowing.

TRANSACTIONS WITH AFFILIATES

     Jones Education Company ("JEC") is owned 63% by Jones International, Ltd.
("International"), an affiliate of the General Partner, 9% by Glenn R. Jones,
12% by Bell Canada International Inc. ("BCI") and 16% by the General Partner.
JEC operates two television networks, JEC Knowledge TV and Jones Computer
Network.  JEC Knowledge TV provides programming related to computers and
technology; business, careers and finance; health and wellness; and global
culture and languages.  Jones Computer Network provides programming focused
primarily on computers and technology.  JEC sells its programming to certain
cable television systems owned or managed by the General Partner.

                                      46
<PAGE>

     The Great American Country network provides country music video programming
to certain cable television systems owned or managed by the General Partner.
This network is owned and operated by Great American Country, Inc., a subsidiary
of Jones International Networks, Ltd., an affiliate of International.

     Jones Galactic Radio, Inc. is a company now owned by Jones International
Networks, Ltd., an affiliate of International.  Superaudio, a joint venture
between Jones Galactic Radio, Inc. and an unaffiliated entity, provides
satellite programming to certain cable television systems owned or managed by
the General Partner.

     The Product Information Network Venture (the "PIN Venture") is a venture
among a subsidiary of Jones International Networks, Ltd., an affiliate of
International, and two unaffiliated cable system operators.  The PIN Venture
operates the Product Information Network ("PIN"), which is a 24-hour network
that airs long-form advertising generally known as "infomercials."  The PIN
Venture generally makes incentive payments of approximately 60% of its net
advertising revenue to the cable systems that carry its programming.  Most of
the General Partner's owned and managed systems carry PIN for all or part of
each day.  Revenues received by the Partnership from the PIN Venture relating to
the Orangeburg System totaled approximately $303 for the year ended December 31,
1996.  Revenues received by the Venture from the PIN Venture relating to the
Venture's owned cable television systems totaled approximately $59,288 for the
year ended December 31, 1996.

     The charges to the Partnership and the Venture for related party
transactions are as follows for the periods indicated:

<TABLE>
<CAPTION>
Jones Cable Income Fund 1-B                          For the Year Ended December 31,
---------------------------                          -------------------------------
                                                       1996        1995        1994
                                                       ----        ----        ----
<S>                                                 <C>         <C>         <C>
Management fees                                     $   43,146  $  246,049  $  224,245
Allocation of expenses                                  63,429     360,952     348,047
Interest expense                                        80,070       5,975     176,867
Amount of notes and advances outstanding                     0           0   2,162,870
Highest amount of notes and advances outstanding             0     219,572   2,162,870
Programming fees:
   Jones Education Company                               1,412       7,555       6,517
   Superaudio                                            1,161       7,062       7,193
</TABLE>

<TABLE>
<CAPTION>
                                                     For the Year Ended December 31,
                                                     -------------------------------
Jones Cable Income Fund 1-B/C                         1996        1995        1994
-----------------------------                         ----        ----        ----
<S>                                                 <C>         <C>         <C>
Management fees                                     $1,231,213  $1,143,361  $1,056,089
Allocation of expenses                               1,627,524   1,667,544   1,658,710
Interest expense                                        30,911         223     180,316
Amount of notes and advances outstanding               284,390     109,893      66,224
Highest amount of notes and advances outstanding       284,390     109,893   5,126,872
Programming fees:
   Jones Education Company                              97,933      85,969      46,417
   Great American Country                               37,518
   Superaudio                                           40,317      33,947      25,189
</TABLE>

                                      47
<PAGE>

                                   PART IV.
                                   -------

               ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
               -------------------------------------------------
                            AND REPORTS ON FORM 8-K
                            -----------------------

(a)1.          See index to financial statements for a list of financial
               statements and exhibits thereto filed as a part of this report.

     3.        The following exhibits are filed herewith:

     4.1       Limited Partnership Agreement of Jones Cable Income Fund 1-B,
               Ltd. (1)

     4.2       Joint Venture Agreement of Jones Cable Income Fund 1-B/C Venture.
               (1)

     10.1.1    Copy of a franchise and related documents thereto granting a
               community antenna television franchise for the City of Clearlake,
               California. (1)

     10.1.2    Copy of a franchise and related documents thereto granting a
               community antenna television franchise for Lake County,
               California. (1)

     10.1.3    Copy of Resolution 91-31 amending the Lake County, California
               franchise. (2)

     10.1.4    Copy of a franchise and related documents thereto granting a
               community antenna television franchise for the City of Lakeport,
               California. (1)

     10.1.5    Copy of a franchise and related documents thereto granting a
               community antenna television franchise for Adams County,
               Colorado. (1)

     10.1.6    Copies of Utility/Construction Permits for Boulder County,
               Colorado. (1)

     10.1.7    Copy of a franchise and related documents thereto granting a
               community antenna television franchise for the City of Brighton,
               Colorado. (1)

     10.1.8    Copy of a franchise and related documents thereto granting a
               community antenna television franchise for the City of
               Broomfield, Colorado. (2)

     10.1.9    Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for Weld County,
               Colorado. (Fund 1-B/C) (1)

     10.1.9    Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Brady, Michigan. (3)

     10.1.10   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Calvin, Michigan. (4)

     10.1.11   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Village of
               Centreville, Michigan. (5)

     10.1.12   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the City of
               Coloma, Michigan. (5)

     10.1.13   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Coloma, Michigan. (2)

                                      48
<PAGE>

     10.1.14   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Constantine, Michigan. (5)

     10.1.15   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Village of
               Constantine, Michigan. (5)

     10.1.16   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the City of
               Dowagiac, Michigan. (5)

     10.1.17   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the County of
               Elkhart, Michigan. (5)

     10.1.18   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Fabius, Michigan. (5)

     10.1.19   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Flowerfield, Michigan. (Fund 1-B/C). (5)

     10.1.20   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Hagar, Michigan. (Fund 1-B/C) (3)

     10.1.21   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Hartford, Michigan. (Fund 1-B/C) (4)

     10.1.22   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the County of
               LaGrange, Michigan. (Fund 1-B/C) (3)

     10.1.23   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Lockport, Michigan. (Fund 1-B/C) (3)

     10.1.24   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Mendon, Michigan. (Fund 1-B/C) (3)

     10.1.25   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Mottville, Michigan. (Fund 1-B/C) (3)

     10.1.26   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Newberg, Michigan. (4)

     10.1.27   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Nottawa, Michigan. (5)

     10.1.28   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Park, Michigan. (5)

     10.1.29   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Pavillion, Michigan. (5)

     10.1.30   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Penn, Michigan. (6)

     10.1.31   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Pipestone, Michigan. (4)

                                      49
<PAGE>

     10.1.32   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Pokagon, Michigan. (4)

     10.1.33   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Porter, Michigan. (6)

     10.1.34   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Schoolcraft, Michigan. (4)

     10.1.35   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Sherman, Michigan. (6)

     10.1.36   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Silvercreek, Michigan. (5)

     10.1.37   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the City of
               Three Rivers, Michigan. (5)

     10.1.38   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Village of
               Vandalia, Michigan. (2)

     10.1.39   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Village of
               Vicksburg, Michigan. (5)

     10.1.40   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the City of
               Watervliet, Michigan. (5)

     10.1.41   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Watervliet, Michigan. (5)

     10.1.42   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               Wayne, Michigan. (5)

     10.1.43   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Township of
               White Pigeon, Michigan. (5)

     10.1.44   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Village of
               White Pigeon, Michigan. (5)

     10.1.45   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for Dakota City,
               Nebraska. (1)

     10.1.46   Copy of Service Permit granted by Dakota County, Nebraska Board
               of County Commissioners. (1)

     10.1.47   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Village of
               Homer, Nebraska. (1)

     10.1.48   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for South Sioux
               City, Nebraska. (1)

     10.1.49   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Village of
               Walthill, Nebraska. (2)

                                      50
<PAGE>

     10.1.50   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the Village of
               Walthill, Nebraska. (1)

     10.1.51   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the City of
               Canyonville, Oregon. (1)

     10.1.52   Copy of resolution amending the franchise for the City of
               Canyonville, Oregon. (2)

     10.1.53   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the City of
               Myrtle Creek, Oregon. (1)

     10.1.54   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the City of
               Riddle, Oregon. (2)

     10.1.55   Copy of a franchise and related documents thereto granting a
               community antenna television system franchise for the City of
               Winston, Oregon. (1)

     10.2.1    Credit Agreement dated 8/5/88 between Jones Cable Income Fund 1-
               B, Ltd. and First Wisconsin National Bank of Milwaukee. (2)

     10.2.2    Amendment No. 1 dated 7/21/89 to Credit Agreement dated 8/5/88
               between Jones Cable Income Fund 1-B, Ltd. and First Wisconsin
               National Bank of Milwaukee. (2)

     10.2.3    Amendment No. 2 dated 10/15/90 to Credit Agreement dated 8/5/88
               between Jones Cable Income Fund 1-B, Ltd. and First Wisconsin
               National Bank of Milwaukee. (2)

     10.2.3    Amendment No. 3 dated 6/30/92 to Credit Agreement dated 8/5/88
               between Jones Cable Income Fund 1-B, Ltd. and First Wisconsin
               National Bank of Milwaukee. (2)

     10.2.4    Amended and Restated Revolving Credit Agreement dated September
               30, 1994 between Jones Cable Income Fund 1-B/C Venture,
               Corestates Bank, N.A., First National Bank of Maryland, Dresdner
               Bank AG and Continental Bank. (8)

     10.2.5    Revolving Credit and Term Loan Agreement dated as of January 19,
               1995 between Jones Cable Income Fund 1-B and Colorado National
               Bank. (8)

     10.3.1    Purchase and Sale Agreement dated as of August 11, 1995 between
               Jones Cable Income Fund 1-B, Ltd. and Jones Intercable, Inc.  (9)

     10.3.2    Asset Purchase Agreement dated September 13, 1996 between Jones
               Cable Income Fund 1-B/C Venture and Tele-Vue Systems, Inc.  (10)

     27        Financial Data Schedule

__________
(1)            Incorporated by reference from Registrant's Report on Form 10-K
               for the fiscal year ended December 31, 1987.

(2)            Incorporated by reference from Registrant's Report on Form 10-K
               for the fiscal year ended December 31, 1992.

(3)            Incorporated by reference from Registrant's Report on Form 10-K
               for the fiscal year ended December 31, 1993.

(4)            Incorporated by reference from Registrant's Report on Form 10-K
               for the fiscal year ended December 31, 1990.

(5)            Incorporated by reference from Registrant's Report on Form 10-K
               for the fiscal year ended December 31, 1988.

                                      51
<PAGE>

(6)            Incorporated by reference from Registrant's Report on Form 10-K
               for the fiscal year ended December 31, 1989.

(7)            Incorporated by reference from Registrant's Report on Form 10-K
               for the fiscal year ended December 31, 1986.

(8)            Incorporated by reference from Registrant's Report on Form 10-K
               for the fiscal year ended December 31, 1994.

(9)            Incorporated by reference from the Annual Report on Form 10-K for
               fiscal year ended May 31, 1996 of Jones Intercable, Inc.
               (Commission File No. 1-9953).

(10)           Incorporated by reference from Registrant's Current Report on
               Form 8-K dated September 26, 1996.

(b)            Reports on Form 8-K.

               A Current Report on Form 8-K (Commission File No. 0-14906), dated
               March 13. 1996. describing the sale of the Orangeburg System was
               filed with the Securities and Exchange Commission on March 14,
               1996.

                                      52
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                 JONES CABLE INCOME FUND 1-B, LTD.
                                 a Colorado limited partnership
                                 By:  Jones Intercable, Inc.


                                 By:  /s/ Glenn R. Jones
                                      -----------------------------------------
                                      Glenn R. Jones
                                      Chairman of the Board and Chief
Dated: March 24, 1997                 Executive Officer



     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


                                 By:  /s/ Glenn R. Jones
                                      -----------------------------------------
                                      Glenn R. Jones
                                      Chairman of the Board and Chief
                                      Executive Officer
Dated: March 24, 1997                 (Principal Executive Officer)


                                 By:  /s/ Kevin P. Coyle
                                      -----------------------------------------
                                      Kevin P. Coyle
                                      Group Vice President/Finance
Dated: March 24, 1997                 (Principal Financial Officer)


                                 By:  /s/ Larry Kaschinske
                                      -----------------------------------------
                                      Larry Kaschinske
                                      Vice President/Controller
Dated: March 24, 1997                 (Principal Accounting Officer)


                                 By:  /s/ James B. O'Brien
                                      -----------------------------------------
                                      James B. O'Brien
Dated: March 24, 1997                 President and Director


                                 By:  /s/ Derek H. Burney
                                      -----------------------------------------
                                      Derek H. Burney
Dated: March 24, 1997                 Director


                                 By:  /s/ Robert E. Cole
                                      -----------------------------------------
                                      Robert E. Cole
Dated: March 24, 1997                 Director

                                      53
<PAGE>

                                 By:  /s/ Willliam E. Frenzel
                                      -----------------------------------------
                                      William E. Frenzel
Dated: March 24, 1997                 Director


                                 By:  /s/ Donald L. Jacobs
                                      -----------------------------------------
                                      Donald L. Jacobs
Dated: March 24, 1997                 Director


                                 By:  /s/ James J. Krejci
                                      -----------------------------------------
                                      James J. Krejci
Dated: March 24, 1997                 Director


                                 By:  _________________________________________
                                      John A. MacDonald
Dated: March 24, 1997                 Director


                                 By:  /s/ Raphael M. Solot
                                      -----------------------------------------
                                      Raphael M. Solot
Dated: March 24, 1997                 Director


                                 By:  _________________________________________
                                      Howard O. Thrall
Dated: March 24, 1997                 Director


                                 By:  /s/ Siim A. Vanaselja
                                      -----------------------------------------
                                      Siim A. Vanaselja
Dated: March 24, 1997                 Director


                                 By:  /s/ Sanford Zisman
                                      -----------------------------------------
                                      Sanford Zisman
Dated: March 24, 1997                 Director


                                 By:  /s/ Robert B. Zoellick
                                      -----------------------------------------
                                      Robert B. Zoellick
Dated: March 24, 1997                 Director

                                      54