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<PAGE>   104
of the Cable Industry." The following table summarizes our systems' franchises
by year of expiration, and approximate number of basic customers as of March 31,

                                                PERCENTAGE                   PERCENTAGE
                                  NUMBER OF      OF TOTAL     TOTAL BASIC     OF TOTAL
----------------------------      ----------    ----------    -----------    ----------
<S>                               <C>           <C>           <C>            <C>
Prior to December 31, 1999......      127           11%          328,000         14%
2000 to 2002....................      214           18%          513,000         22%
2003 to 2005....................      239           21%          456,000         19%
2006 or after...................      578           50%        1,067,000         45%
     Total......................    1,158          100%        2,364,000        100%

     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.
     We face competition in the areas of price, service offerings, and service
reliability. We compete with other providers of television signals and other
sources of home entertainment. In addition, as we expand into additional
services such as digital television, Internet access, interactive services and
Internet protocol telephony, we face competition from other cable systems
operators providing such services as well as from other providers of each type
of service we will provide.
     To date, we believe that we have not lost a significant number of
customers, or a significant amount of revenue, to our competitors' systems.
However, competition from other providers of the technologies we expect to offer
in the future may have a negative impact on our business in the future.
     Through mergers such as the recent merger of Tele-Communications, Inc. and
AT&T, customers will come to expect a variety of services from a single
provider. While the TCI/AT&T merger has no direct or immediate impact on our
business, it encourages providers of cable and telecommunications services to
expand their service offerings. It also encourages consolidation in the cable
industry as cable operators recognize the competitive benefits of a large
customer base and expanded financial resources.
     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