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established cable television industry. Advances in communications technology as
well as changes in the marketplace and the regulatory and legislative
environments are constantly occurring. Thus, it is not possible to predict the
effect that ongoing or future developments might have on the cable television
industry or our operations.
     Key competitors today include:
     - BROADCAST TELEVISION.  Cable television has long competed with broadcast
television, which consists of television signals that the viewer is able to
receive without charge using a traditional "off-air" antenna. The extent of such
competition is dependent upon the quality and quantity of broadcast signals
available through "off-air" reception compared to the services provided by the
local cable system. Accordingly, cable operators in rural areas, where "off-air"
reception is more limited, generally achieve higher penetration rates than do
operators in most major metropolitan areas, where numerous, high quality
"off-air" signals are available. The 1996 Telecom Act directed the FCC to
establish, and the FCC has adopted, regulations and policies for the issuance of
licenses for digital television ("DTV") to incumbent television broadcast
licensees. DTV is expected to deliver high definition television pictures and
multiple digital-quality program streams, as well as advanced digital services
such as subscription video.
     - DBS.  Direct broadcast satellite ("DBS") has emerged as significant
competition to cable systems. The DBS industry has grown rapidly over the last
several years, and now serves approximately 10 million subscribers nationwide.
DBS service allows the subscriber to receive video services directly via
satellite using a relatively small dish antenna. Moreover, video compression
technology allows DBS providers to offer more than 100 digital channels, thereby
surpassing the typical cable system. DBS providers offer most of the same
programming as cable television, but also offer certain sports packages not
available through cable systems and a wide array of pay-per-view movies. DBS
currently faces technical and legal obstacles to providing popular local
broadcast signals, although at least one DBS provider is now attempting to
provide this programming in certain major markets, and Congress and the FCC are
considering proposals that would remove existing legal obstacles. DirecTV, Inc.
("DirecTV"), United States Satellite Broadcasting Corporation, Inc. ("USSB") and
EchoStar Communications Corporation currently offer DBS programming. In
addition, there are several companies licensed to operate a DBS system who have
yet to begin service. PrimeStar, Inc. ("PrimeStar") offers a medium-powered
fixed satellite service that shares many of the attributes of DBS operators.
Additionally, several DBS companies have recently completed mergers which should
strengthen their position, including the combination of DirecTV, USSB and
PrimeStar. DirecTV estimates that such combination will result in its DBS
business serving more than seven million subscribers with more than 370
entertainment channels. Others may announce intentions to enter the DBS market
and may offer DBS services within our service areas.
     - TRADITIONAL OVERBUILDS.  Cable television systems are operated under
non-exclusive franchises granted by local authorities. More than one cable
system may legally be built in the same area. Although still relatively
uncommon, it is possible that a franchising authority might grant a second
franchise to another cable operator and that franchise might contain terms and
conditions more favorable than those afforded us. Well financed businesses from
outside the cable industry (such as the public utilities) may over time become
competitors. There has been a recent increase in the number of cities that have
constructed their own cable systems, in a manner similar to city-provided
utility services. Although the total number of municipal overbuild cable systems
remains small, the