amended by the Telecommunications Act of 1996. Principal responsibility for
implementing the policies of these amendments has been allocated between the
FCC and state and local franchising authorities.
Federal Law and Regulation. The Cable Television Consumer Protection and
Competition Act of 1992 and the FCC's implementing rules generally have
increased the administrative and operational expenses of cable television
systems and have resulted in additional regulatory oversight by the FCC and
local and/or state franchise authorities. The Cable Television Consumer
Protection and Competition Act of 1992, the Cable Communications Policy Act of
1984 and the FCC regulations promulgated under these acts have established:
. regulation of rates for certain services,
. mandatory carriage and retransmission consent requirements that require a
cable system under certain circumstances to carry a local broadcast
station or to obtain consent to carry a local or distant broadcast
. rules for certain franchise renewals and all transfers, and
. other requirements covering a variety of operational areas, such as equal
employment opportunity, technical standards and customer service
The Telecommunications Act of 1996 deregulates rates for cable programming
services tiers in 1999 for all cable television companies, including our
company. For certain small cable operators, the Telecommunications Act of 1996
also immediately eliminated rate regulation of cable programming services tiers
and, in certain circumstances, basic services and equipment. In July 1998, the
FCC issued a Notice of Proposed Rulemaking to determine the obligation of cable
operators to carry the digital signals of broadcasters. We cannot predict the
ultimate effect of the Cable Television Consumer Protection and Competition Act
of 1992 or the Telecommunications Act of 1996, and the ultimate outcome of the
various FCC rulemaking proceedings.
State and Local Regulation. As described above, cable television systems
generally operate under non-exclusive franchises, permits or licenses granted
by municipalities or other state or local governmental entities. Subject to
federal limitations, the terms and conditions of franchises vary materially
from jurisdiction to jurisdiction. A number of states subject cable systems to
the jurisdiction of centralized state governmental agencies. To date, New York,
Connecticut and Massachusetts all have centralized authorities. For additional
information, please refer to "Regulation" section of this prospectus.
Additional Legislation. Our results of operations may be adversely impacted
by changes in federal, state and local regulations. Currently, the Chairman of
the House Telecommunications Subcommittee, Rep. Billy Tauzin, has introduced
legislation that would, among other things, impact the manner in which cable
services are packaged and rate regulated. The legislation could require certain
cable operators to offer a low-cost, limited version of basic service that
would include only off-air signals and public, government and education access.
It would also allow regulation of certain cable rates if a community, after due
process, determined that a cable operator offered insufficient customer choice
in the packaging of its services. This legislation remains at the introductory
phase of the legislative process. We cannot predict whether this legislation,
or any other pending or future legislation, will ultimately become law, if it
does what its final provisions will be and, consequently, what impact it would
have on us.
We may be adversely affected by rapid technological change.
The cable television industry is subject to rapid and significant changes in
technology. We plan to upgrade the technical quality of our cable plant to
expand our services, increase the number of channels that we offer to customers
and, if economically viable, provide new services. We cannot assure you,
however, that existing, proposed or yet undeveloped technologies will not
become dominant in the future or otherwise render cable television services
less profitable or less viable. For additional information, please refer to the
"Business--Technology" section of this prospectus.