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<PAGE>   86
Industry." The following table summarizes our systems' franchises by year of
expiration, and approximate number of basic customers as of December 31, 1998.

                                                PERCENTAGE                   PERCENTAGE
                                  NUMBER OF      OF TOTAL     TOTAL BASIC     OF TOTAL
- ----------------------------      ----------    ----------    -----------    ----------
<S>                               <C>           <C>           <C>            <C>
Prior to December 31, 1999......      128          11.0%         321,000        13.9%
2000 to 2002....................      217          18.7%         504,000        21.7%
2003 to 2005....................      239          20.6%         447,000        19.3%
2006 or after...................      577          49.7%       1,045,000        45.1%
     Total......................    1,161         100.0%       2,317,000       100.0%

     Under the 1996 Telecom Act, cable operators are not required to obtain
franchises in order to provide telecommunications services, and granting
authorities are prohibited from limiting, restricting or conditioning the
provision of such services. In addition, granting authorities may not require a
cable operator to provide telecommunications services or facilities, other than
institutional networks, as a condition of an initial franchise grant, a
franchise renewal, or a franchise transfer. The 1996 Telecom Act also limits
franchise fees to an operator's cable-related revenues and clarifies that they
do not apply to revenues that a cable operator derives from providing new
telecommunications services.
     We believe our relations with the franchising authorities under which our
systems are operated are generally good. Substantially all of the material
franchises relating to our systems eligible for renewal have been renewed or
extended at or prior to their stated expiration dates.
     Cable television systems compete with other providers of television signals
and other sources of home entertainment. The competitive environment has been
significantly affected both by technological developments and regulatory changes
enacted in the 1996 Telecom Act which were designed to enhance competition in
the cable television and local telephone markets. See "Regulation and
     To date, we believe that we have not lost a significant number of
customers, nor a significant amount of revenue, to our competitors' systems.
However, competition from these technologies may have a negative impact on our
cable television business in the future. As we expand our offerings to include
telecommunications services, we will be subject to competition from other
telecommunications providers. The telecommunications industry is highly
competitive and includes competitors with greater financial and personnel
resources, who have brand name recognition and long-standing relationships with
regulatory authorities. Moreover, mergers, joint ventures and alliances among
franchise, wireless or private cable television operators, RBOCs and others may
result in providers capable of offering cable television and telecommunications
services in direct competition with the Company. See "Risk
Factors -- Competition in the Cable Industry."
     For example, the possibility of delivering video programming via the
Internet is only now developing. Although Internet "video streaming" poses new
potential competition to cable systems, the possibility of cable systems
themselves becoming providers of Internet (and telecommunications) services
represents a large potential growth area for the established cable television
industry. Advances in communications technology as well as changes in the
marketplace and the regulatory and legislative environments are constantly