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SEC Filings

S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 04/30/1999
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cost to us and for new channel launches, we may receive a fee for distribution.
For home shopping channels, we may receive a percentage fee for home shopping
revenues from our customers. Our programming contracts generally continue for a
fixed period of time, generally from three to ten years. Although longer
contract terms are available, we prefer to limit contracts to three years so
that we retain flexibility to change programming and include some of the new
channels regularly being developed. Some program suppliers offer marketing
support or volume discount pricing structures. Some of our programming
agreements with premium service suppliers offer cost incentives under which
premium service unit prices decline as certain premium service growth thresholds
are met.
 
     PROGRAMMING COSTS.  Our cable programming costs have increased in recent
years and are expected to continue to increase due to system acquisitions,
additional programming being provided to customers, increased cost to produce or
purchase cable programming, inflationary increases and other factors affecting
the cable television industry generally. In every year we have operated, our
costs to acquire programming have exceeded customary inflationary and
cost-of-living type increases. A significant factor with respect to increased
programming costs is the rate increases and surcharges imposed by national and
regional sports networks directly tied to escalating costs to acquire
programming for professional sports packages in a competitive market. Under FCC
rate regulation, cable operators may increase their rates to customers to cover
increased costs for programming, subject to certain limitations. See "Regulation
and Legislation." In October 1995, the Charter Companies and in April, 1996, the
Marcus Companies joined the TeleSynergy programming purchasing cooperative which
offers its members contract benefits in buying programming by virtue of volume
discounts available to a larger buying base. We now contract through TeleSynergy
for more than 50% of our programming. Management believes its membership in
TeleSynergy limits increases in the Company's programming costs relative to what
the increases would otherwise be, although given our increased size and
purchasing ability following the Marcus Combination, the effect may not be
material. Management also believes it will, as a general matter, be able to pass
increases in its programming costs through to customers, although there can be
no assurance that it will be possible.
 
RATES
 
     Pursuant to the FCC's rules, we have set rates for cable-related equipment
(e.g., converter boxes and remote control devices) and installation services
based upon actual costs plus a reasonable profit and have unbundled these
charges from the charges for the provision of cable service.
 
     Rates charged to customers vary based on the market served and service
selected. As of December 31, 1998, the average monthly fee was $10.86 for basic
service and $18.57 for expanded basic service. A one-time installation fee,
which may be waived in part during certain promotional periods, is charged to
new customers. We believe our rate practices are in accordance with FCC
Guidelines and are consistent with those prevailing in the industry generally.
See "Regulation and Legislation."
 
THEFT PROTECTION
 
     The unauthorized tapping of cable plant and the unauthorized receipt of
programming using cable converters purchased through unauthorized sources are
problems which continue to challenge the entire cable industry. We have adopted
specific measures to combat the unauthorized use of our plant to receive
programming. For instance, in several
 
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