FCC regulates most pole attachment rates under the Federal Pole Attachment Act
although in certain cases attachment rates are regulated by state law.
The Company owns or leases 27 parcels of real property for signal reception
sites (antenna towers and headends), microwave complexes and business offices.
The Company believes that its properties, both owned and leased, are in good
condition and are suitable and adequate for the Company's business operations
as presently conducted.
As of the date hereof, the Company is not a party to any litigation
proceedings. The Systems are subject to certain litigation proceedings
incidental to their businesses. Pursuant to the Asset Purchase Agreement, the
Company did not assume any liabilities related to litigation commenced on or
prior to the Acquisition Date, and Time Warner has agreed to indemnify the
Company from and against any such liabilities, subject to the terms and
provisions of the Asset Purchase Agreement. See "The Company--Asset Purchase
Agreement." The Company's management believes that the outcome of all pending
legal proceedings will not, individually or in the aggregate, have a material
adverse effect on the Company's business, results of operations or financial
LEGISLATION AND REGULATION
The cable television industry currently is regulated by the FCC and certain
state and local governments. In addition, legislative and regulatory proposals
under consideration by the Congress and federal agencies may materially affect
the cable television industry.
The Cable Acts and the 1996 Telecom Act amended the Communications Act and
established a national policy to guide the development and regulation of cable
television systems. The 1996 Telecom Act, which became effective in February
1996, was the most comprehensive reform of the nation's telecommunications
laws since the Communications Act. Although the long term goal of the 1996
Telecom Act is to promote competition and decrease regulation of various
communications industries, in the short term, the law delegates to the FCC
(and in some cases to the states) broad new rulemaking authority. Principal
responsibility for implementing the policies of the Cable Acts and the 1996
Telecom Act is allocated between the FCC and state or local franchising
authorities. The FCC and state regulatory agencies are required to conduct
numerous rulemaking and regulatory proceedings to implement the 1996 Telecom
Act and such proceedings may materially affect the cable television industry.
The following is a summary of federal laws and regulations materially
affecting the growth and operation of the cable television industry and a
description of certain state and local laws.
THE COMMUNICATIONS ACT AND FCC REGULATIONS
The 1992 Cable Act authorized rate regulation for certain cable
communications services and equipment in communities that are not subject to
"effective competition" as defined by federal law. Most cable television
systems are now subject to rate regulation for basic cable service and
equipment by local officials under the oversight of the FCC which prescribed
detailed guidelines for such rate regulation. The 1992 Cable Act also required
the FCC to resolve complaints about rates for nonbasic cable programming
services (other than programming offered on a per channel or per program
basis) and to reduce any such rates found to be unreasonable. The 1996 Telecom
Act eliminates the right of individual customers to file rate complaints with
the FCC concerning certain CPSTs and requires the FCC to issue a final order
within 90 days after receipt of CPST rate complaints filed by any franchising
authority after the date of enactment of the 1996 Telecom Act. The 1992 Cable
Act limits the ability of cable television systems to raise rates for basic
and certain cable programming services (collectively, the "Regulated
Services"). Cable services offered on a per channel (a la carte) or per
program (pay-per-view) basis are not subject to rate regulation by either
local franchising authorities or the FCC.