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to be successful, a competitor's overbuild would need to be able to serve the
homes and businesses in the overbuilt area on a more cost-effective basis than
us. Any such overbuild operation would require either significant access to
capital or access to facilities already in place that are capable of delivering
cable television programming.
     We are aware of overbuild situations in six of our systems located in
Newnan, Columbus and West Point, Georgia; Barron, Wisconsin; and Lanett and
Valley, Alabama. Approximately 44,000 basic customers (approximately 1.9% of our
total basic customers) are passed by these overbuilds. Additionally, we have
been notified that franchises have been awarded, and present potential overbuild
situations, in four of our systems located in Southlake, Roanoke and Keller,
Texas and Willimantic, Connecticut. These potential overbuild areas service an
aggregate of approximately 45,000 basic customers or approximately 2% of our
total basic customers. In response to such overbuilds, these systems have been
designated priorities for the upgrade of cable plant and the launch of new and
enhanced services. We have upgraded each of these systems to at least 750 MHz
two-way HFC architecture, with the exceptions of our systems in Columbus,
Georgia, and Willimantic, Connecticut. Upgrades to at least 750 MHz two-way HFC
architecture with respect to these two systems are expected to be completed by
December 31, 2000 and December 31, 2001, respectively.
     - TELEPHONE COMPANIES.  Federal cross-ownership restrictions historically
limited entry by local telephone companies into the cable television business.
The 1996 Telecom Act modified this cross-ownership restriction, making it
possible for local exchange carriers ("LECs") who have considerable resources to
provide a wide variety of video services competitive with services offered by
cable systems. Several telephone companies have obtained or are seeking cable
television franchises from local governmental authorities and are constructing
cable systems. SNET PersonalVision, Inc. ("SNET") has a cable television
franchise to offer cable service in the entire state of Connecticut and has
begun offering cable television service in certain communities.
Cross-subsidization by LECs of video and telephony services poses a strategic
advantage over cable operators seeking to compete with LECs that provide video
services. In addition, LECs provide facilities for the transmission and
distribution of voice and data services (including Internet access) in
competition with our existing or potential interactive services ventures and
businesses, including Internet service, as well as data and other non-video
services. We cannot predict the likelihood of success of the broadband services
offered by our competitors or the impact on us of such competitive ventures. See
"Regulation and Legislation -- Telephone Company Entry Into Cable Television."
The entry of telephone companies as direct competitors in the video marketplace,
however, is likely to become more widespread and could adversely affect the
profitability and valuation of the systems.
     - SMATV.  Additional competition is posed by SMATV systems serving multiple
dwelling units ("MDUs") such as condominiums, apartment complexes, and private
residential communities. These private cable systems may enter into exclusive
agreements with such MDUs, which may preclude operators of franchise systems
from serving residents of such private complexes, although certain states
mandate that franchised cable operators have access to MDUs. Due to the
widespread availability of satellite earth stations, such private cable systems
can offer both improved reception of local television stations and many of the
same satellite-delivered program services which are offered by cable systems.
SMATV systems currently benefit from operating advantages not available to
franchised cable systems, including fewer regulatory burdens and no requirement
to service low density or economically depressed communities. It is possible
that, as a result of the expansion under the 1996 Telecom Act of the scope of
entities which are exempt