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properly handle the Year 2000 Problem, could nonetheless suffer "integration
failure" because their method of dealing with the problem is not compatible.
     These problems are expected to increase in frequency and severity as the
year 2000 approaches. This issue impacts our owned or licensed computer systems
and equipment used in connection with internal operations, including
     - information processing and financial reporting systems,
     - customer billing systems,
     - customer service systems,
     - telecommunication transmission and reception systems, and
     - facility systems.
     We also rely directly and indirectly, in the regular course of business, on
the proper operation and compatibility of third party systems. The Year 2000
Problem could cause these systems to fail, err, or become incompatible with our
     If we or a significant third party on which we rely fails to become year
2000 ready, or if the Year 2000 Problem causes our systems to become internally
incompatible or incompatible with such third party systems, our business could
suffer from material disruptions, including the inability to process
transactions, send invoices, accept customer orders or provide customers with
our cable services. We could also face similar disruptions if the Year 2000
Problem causes general widespread problems or an economic crisis. We cannot now
estimate the extent of these potential disruptions.
     We are addressing the Year 2000 Problem with respect to our internal
operations in three stages: (1) inventory and evaluation of our systems,
components and other significant infrastructure to identify those elements that
reasonably could be expected to be affected by the Year 2000 Problem, (2)
remediation and replacement to address problems identified in stage one and (3)
testing of the remediation and replacement carried out in stage two. With
respect to the Charter Systems, we formed an executive Year 2000 Taskforce at
the beginning of 1998, have completed stage one, and anticipate that we will
complete stages two and three by August 1999. With respect to the Marcus
Systems, we have substantially completed stage one and elements of stage two. We
plan to complete all stages for our existing systems by August 1999, but we have
not yet determined when such stages would be completed in connection with
systems we may acquire in the near future.
     Much of our assessment efforts in stage one have involved, and depend on,
inquiries to third party service providers, who are the suppliers and vendors of
various parts or components of our systems. Certain of these third parties that
have certified the readiness of their products will not certify their
interoperability within our fully integrated systems. We cannot assure you that
these technologies of third parties, on which we rely, will be year 2000 ready
or timely converted into year 2000 compliant systems compatible with our
systems. Moreover, because a full test of our systems, on an integrated basis,
would require a complete shut down of our operations, it is not practicable to
conduct such testing. We have been advised that a plan has been developed to
utilize a third party, in cooperation with other cable operators, to begin
testing a "mock-up" of our major billing and plant components (including
pay-per-view systems) as an integrated system. We are also evaluating the
potential impact of third party failure and integration failure on our systems.
     We have incurred only immaterial costs to date directly related to
addressing the Year 2000 Problem. We have redeployed internal resources and have
selectively engaged outside