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SEC Filings

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additional channel offerings to each system in response to demographics,
programming preferences, competition, price sensitivity and local regulation.
     Our traditional cable television service offerings include the following:
     - BASIC CABLE.  All of our customers receive basic cable services, which
       generally consist of local broadcast television, local community
       programming (including governmental and public access) and limited
       satellite programming. As of December 31, 1998, the average monthly fee
       was $10.86 for basic service.
     - EXPANDED BASIC CABLE.  This expanded tier includes a group of
       satellite-delivered or non-broadcast channels, such as Entertainment and
       Sports Programming Network ("ESPN"), Cable News Network ("CNN") and
       Lifetime Television ("Lifetime"). As of December 31, 1998, the average
       monthly fee was $18.57 for expanded basic service.
     - PREMIUM CHANNELS.  These channels provide unedited, commercial-free
       movies, sports and other special event entertainment programming. Home
       Box Office ("HBO"), Cinemax and Showtime are typical examples. We offer
       subscriptions to these channels either individually or in premium channel
       packages. As of December 31, 1998, the average monthly fee was $7.23 per
       premium subscription.
     - PAY-PER-VIEW.  These channels allow customers to pay to view a single
       showing of a recently released movie, a one-time special sporting event
       or music concerts on an unedited, commercial-free basis. We currently
       charge a fee that ranges from $3 to $9 for movies. For special events,
       such as championship boxing matches, we have charged a fee of up to
     We have employed a variety of targeted marketing techniques to attract new
customers by focusing on delivering value, choice, convenience and quality. We
employ direct mail and telemarketing utilizing demographic "cluster codes" to
target specific messages to target audiences. In many of our systems, we offer
discounts to customers who purchase premium services on a limited trial basis in
order to encourage a higher level of service subscription. We also have a
coordinated strategy for retaining customers that includes televised retention
advertising to reinforce the decision to subscribe and to encourage customers to
purchase higher service levels.
     NEW PRODUCTS AND TECHNOLOGIES.  A variety of emerging technologies and the
rapid growth of Internet usage have presented us with substantial opportunities
to provide new or expanded products and services to our customers and to expand
our sources of revenue. The desire for such new technologies and the use of the
Internet by businesses in particular have triggered a significant increase in
our commercial market penetration. As a result, we are in the process of
introducing a variety of new or expanded services beyond the traditional
offerings of analog television programming for the benefit of both our
residential and commercial customers. These new products include digital
television and its related enhancements, high-speed Internet access (through
television set-top converter boxes, cable modems installed in PCs and
traditional telephone Internet access), interactive services (such as Wink), and
IP telephony and data transmission services. We believe that we are well
positioned to compete with other providers of these services due to the high
bandwidth of cable technology and our ability to access homes and businesses.
     DIGITAL TELEVISION.  As part of upgrading our systems, we are installing
headend equipment capable of delivering digitally encoded cable transmissions
with a two-way digital-capable set-top converter box in the customer's home.
This digital connection offers