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significant advantages. For example, we can compress the digital signal to allow
the transmission of up to twelve digital channels in the bandwidth normally used
by one analog channel. This will allow us to increase both programming and
service offerings, including near video-on-demand for pay-per-view customers
which is expected to increase the amount of services purchased by our customers.
     Digital services customers may receive a mix of additional television
programming, an electronic program guide and up to 40 channels of digital music.
The additional programming falls into four categories which are targeted towards
specific markets:
     - Additional basic channels, which are marketed in systems primarily
       serving rural communities;
     - Additional premium channels, which are marketed in systems serving both
       rural and urban communities;
     - "Multiplexes" of premium channels to which a customer previously
       subscribed (such as multiple channels of HBO or Showtime), which are
       marketed in systems serving both rural and urban communities; and
     - Additional pay-per-view programming (for instance, more pay-per-view
       options and/or frequent showings of the most popular films to provide
       near video-on-demand), which are more heavily marketed in systems
       primarily serving both rural and urban communities.
     As part of our current pricing strategy for digital services, we have
established a retail rate of $6.95 to $8.95 per month for the digital set-top
converter and the delivery of "multiplexes" of premium services, additional
pay-per-view channels, digital music and an electronic programming guide.
Certain of our systems also offer additional basic and expanded basic tiers of
service. These tiers of services retail for $6.95 per month. At March 31, 1999,
we had in excess of 3,000 customers subscribing to digital services offered by
eight of our cable systems, which serve approximately 318,000 basic cable
customers. By December 31, 1999, we anticipate that approximately 734,000 of our
customers will be served by cable systems capable of delivering digital
     INTERNET ACCESS.  We currently provide Internet access to our customers by
two principal means: (i) through television access, using a service such as
WorldGate, and (ii) through cable modems attached to PCs, either directly or
through an outsourcing contract with an Internet service provider. We can also
provide Internet access through traditional dial-up telephone modems, using a
service provider such as HSAC. The principal advantage of cable Internet
connections is the high speed of data transfer over a cable system. We currently
offer these services to our residential customers over coaxial cable at speeds
that can range up to approximately 50 times the speed of a conventional 28.8
Kbps telephone modem. Furthermore, a two-way communication HFC cable system can
support the entire connection at cable speeds without any need for a separate
telephone line. If the cable system only supports one-way signals (from the
headend to the customer), the customer must use a separate telephone line to
send signals to the provider, although such customer still receives the benefit
of high speed cable access when downloading information, which is the primary
reason for using cable as an Internet connection. In addition to Internet access
over our traditional coaxial system, we also provide our commercial customers
fiber optic cable access cable at a price that we believe is generally 20% lower
than the price offered by the telephone companies.