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S-4
RENAISSANCE MEDIA GROUP LLC filed this Form S-4 on 06/12/1998
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  The 1996 Telecom Act deregulates rates for CPSTs after March 31, 1999 for
most MSOs and, for certain small cable operators, immediately eliminates rate
regulation of CPSTs and, in certain circumstances, basic services and
equipment. Deregulation will occur sooner for systems in markets where
comparable video programming services, other than DBS, are offered by local
telephone companies, or their affiliates, or by third parties using the local
telephone company's facilities, or where "effective competition" is
established under the 1992 Cable Act. The 1996 Telecom Act also modifies the
uniform rate provisions of the 1992 Cable Act by prohibiting regulation of
non-predatory bulk discount rates offered to subscribers in commercial and
residential developments and permits regulated equipment rates to be computed
by aggregating costs of broad categories of equipment at the franchise,
system, regional or company level. The FCC and Congress continue to be
concerned that cable rates are rising too rapidly. The FCC has begun to
explore ways of addressing this issue, and a bill was recently introduced in
Congress which would repeal the deregulation of CPSTs now scheduled for March
1999.
 
  The FCC's regulations govern rates that may be charged to subscribers for
Regulated Services. The FCC uses a benchmark methodology as the principal
method of regulating rates for Regulated Services. Cable operators may also
justify rates using a cost-of-service methodology. The FCC has also adopted
comprehensive and restrictive regulations allowing operators to modify their
regulated rates on a quarterly or annual basis using various methodologies
that account for changes in the number of regulated channels, inflation, and
increases in certain external costs, such as franchise and other governmental
fees, copyright and retransmission consent fees, taxes, programming fees and
franchise related obligations. The FCC's regulations also permit cable
operators to create new programming packages, called new product tiers
("NPTs"), that are not subject to rate regulation upon compliance with certain
conditions, including affirmatively marketing NPT services and adding to an
NPT only new services which had not been previously carried by the system in
the past two years, among other conditions. The Company cannot predict whether
the FCC will modify these comprehensive regulations in the future.
 
  The 1996 Telecom Act provides for the deregulation of the CPST of certain
cable systems owned by "small cable operators." Among other requirements, an
eligible small operator is one which does not serve, directly or through an
affiliate, one percent or more of cable subscribers nationwide and is not
affiliated with any entity or entities whose gross annual revenues aggregate
more than $250,000,000. The Company will not be eligible for small cable
operator status under the 1996 Telecom Act because the Morgan Stanley Entities
own more than 20% of the Company and those investors and their affiliated
companies have aggregated revenues in excess of $250,000,000.
 
  In addition to rate deregulation for certain small cable operators under the
1996 Telecom Act, the FCC adopted regulations in June 1995 ("Small System
Regulations") pursuant to the 1992 Cable Act that were designed to reduce the
substantive and procedural burdens of rate regulation on "small cable
systems." For purposes of these FCC regulations, a "small cable system" is a
system serving 15,000 or fewer subscribers that is owned by or affiliated with
a cable company which serves, in the aggregate, 400,000 or fewer subscribers.
Under the FCC's Small System Regulations, qualifying systems may justify their
regulated service and equipment rates using a simplified cost-of-service
formula. The regulatory benefits accruing to qualified small cable systems
under certain circumstances remain effective even if such systems are later
acquired by a larger cable operator that serves in excess of 400,000
subscribers. Various franchising authorities and municipal groups have
requested the FCC to reconsider its Small System Regulations. Renaissance
Media's assumption of Time Warner's Social Contract precludes such exemption
from rate regulation for systems that serve 15,000 or fewer subscribers, but
ameliorates the effect of such preclusion by permitting the Company to benefit
from automatic rate adjustments during the term of the Social Contact for all
of the Systems acquired from Time Warner. The Company will have the right to
increase monthly CPST rates by $1.00 during each year of the Social Contact
above other permissible increases resulting from inflation and so-called
"external costs."
 
  Franchising authorities are empowered to regulate the rates charged for
additional outlets and for the installation, lease and sale of equipment used
by customers to receive the basic service tier, such as converter boxes and
remote control units. The FCC's rules require franchising authorities to
regulate these rates on the
 
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