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SEC Filings

S-4
RENAISSANCE MEDIA GROUP LLC filed this Form S-4 on 06/12/1998
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subscriber rates and maintain a high level of technical capacity in such
systems. Among other obligations, Time Warner agreed to upgrade one-half of
its systems to 550 MHz capacity and the balance to 750MHz capacity within the
term of the Social Contract, of which at least 200 MHz is expected to be
allocated to digital compression technology by January 1, 2001. In exchange,
the Social Contract settled those certain outstanding rate cases and
established a right of Time Warner to increase monthly CPST rates by an
additional $1.00 per year above other permissible increases resulting from
inflation and so-called "external costs" for the term of the Social Contract
through the year 2000. The Social Contract provides that Time Warner may
petition the FCC to modify or terminate the Social Contract based on any
relevant change in applicable law, regulation or circumstance.
 
  In connection with the Acquisition, the Company received the FCC's consent
to the assignment of the Social Contract as it applies to the Systems. By
assuming Time Warner's unsatisfied obligations with respect to the Systems,
the Company has gained certain rate benefits described above. The principal
remaining obligations of the Social Contract as they relate to the Systems
will be to upgrade the Tennessee System, the St. Landry system and
approximately one-half of the St. Tammany and Lafourche systems to 750 MHz
capacities. The failure to comply with the upgrade requirements will subject
the Company to refund liability under the terms of the Social Contract. The
Company also is required to ensure that at least 60% of new analog services in
the Systems are added to the CPST, and add at least 15 new channels on average
(weighted by CPST subscribers) to the CPST of the Systems. The Company
believes the upgrades are prudent both due to the competitive advantages to be
gained by technologically advanced facilities and from the rate increases the
Company will be permitted to implement.
 
INDUSTRY OVERVIEW
 
  A cable television system receives television, radio and data signals at the
system's "headend" site by means of off-air antennas, microwave relay systems
and satellite earth stations. These signals are then modulated, amplified and
distributed, primarily through coaxial and fiber optic distribution systems,
to deliver a wide variety of channels of television programming, primarily
entertainment and informational video programming, to the homes of subscribers
who pay fees for this service, generally on a monthly basis. A cable
television system may also produce its own television programming and other
information services for distribution through the system. Cable television
systems generally are constructed and operated pursuant to non-exclusive
franchises or similar licenses granted by local governmental authorities for a
specified period of time, generally up to ten years.
 
  Cable television systems offer customers various levels (or "tiers") of
cable services consisting of broadcast television signals of local network
affiliates, independent and educational television stations, a limited number
of broadcast television signals from so-called "super stations" originating
from distant cities (such as WGN), various satellite-delivered, non-broadcast
channels (such as Cable News Network (CNN), MTV: Music Television (MTV), the
USA Network, ESPN and Turner Network Television (TNT), programming originated
locally by the cable television system (such as public, educational and
governmental access programs) and informational displays featuring news,
weather and public service announcements. Cable television systems also offer
"premium" television services to customers on a monthly charge per-channel
basis and sometimes on a pay-per-view basis. These services (such as Home Box
Office ("HBO") and Showtime and selected regional sports networks) are
satellite channels that consist principally of feature films, live sporting
events, concerts and other special entertainment features, usually presented
without commercial interruption.
 
  A customer generally pays an initial installation charge and fixed monthly
fees for basic, tier and premium television services and for other services
(such as the rental of converters and remote control devices). Such monthly
service fees constitute the primary source of revenue for cable television
systems. In addition to customer revenue, cable television systems also
frequently offer to their customers home shopping services, which pay such
systems a share of revenue from products sold in the systems' service areas.
Some cable television systems also receive revenue from the sale of available
spots on advertiser-supported programming.
 
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