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SEC Filings

S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
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                            INTERMEDIA CABLE SYSTEMS
              (COMPRISED OF COMPONENTS OF INTERMEDIA PARTNERS AND
                     INTERMEDIA CAPITAL PARTNERS IV, L.P.)
 
             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
                             (DOLLARS IN THOUSANDS)
 
     Many aspects of regulation at the federal and local levels are currently
the subject of judicial review and administrative proceedings. In addition, the
FCC is required to conduct rulemaking proceedings to implement various
provisions of the 1996 Act. It is not possible at this time to predict the
ultimate outcome of these reviews or proceedings or their effect on the Systems.
 
11. COMMITMENTS AND CONTINGENCIES
 
     The Systems are committed to provide cable television services under
franchise agreements with remaining terms of up to eighteen years. Franchise
fees of up to 5% of gross revenues are payable under these agreements.
 
     Current FCC regulations require that cable television operators obtain
permission to retransmit major network and certain local television station
signals. The Systems have entered into long-term retransmission agreements with
all applicable stations in exchange for in-kind and/or other consideration.
 
     InterMedia has been named in purported and certified class actions in
various jurisdictions concerning late fee charges and practices. Certain cable
systems owned by InterMedia charge late fees to customers who do not pay their
cable bills on time. These late fee cases challenge the amount of the late fees
and the practices under which they are imposed. The Plaintiffs raise claims
under state consumer protection statutes, other state statutes, and common law.
Plaintiffs generally allege that the late fees charged by InterMedia's cable
systems, including the Systems in the States of Tennessee, South Carolina and
Georgia are not reasonably related to the costs incurred by the cable systems as
a result of the late payment. Plaintiffs seek to require cable systems to reduce
their late fees on a prospective basis and to provide compensation for alleged
excessive late fee charges for past periods. These cases are either at the early
stages of the litigation process or are subject to a case management order that
sets forth a process leading to mediation. Based upon the facts available
management believes that, although no assurances can be given as to the outcome
of these actions, the ultimate disposition of these matters should not have a
material adverse effect upon the financial condition of the Systems.
 
     Under existing Tennessee laws and regulations, the Systems pay an Amusement
Tax in the form of a sales tax on programming service revenues generated in
Tennessee in excess of charges for the basic and expanded basic levels of
service. Under the existing statute, only the service charges or fees in excess
of the charges for the "basic cable" television service package are exempt from
the Amusement Tax. Related regulations clarify the definition of basic cable to
include two tiers of service, which InterMedia's management and other operators
in Tennessee have interpreted to mean both the basic and expanded basic level of
services.
 
     The Tennessee Department of Revenue ("TDOR") has proposed legislation which
would replace the Amusement Tax under the existing statute with a new sales tax
on all cable service revenues in excess of twelve dollars per month. The new tax
would be computed at a rate approximately equal to the existing effective tax
rate.
 
     Unless InterMedia and other cable operators in Tennessee support the
proposed legislation, the TDOR has suggested that it would assess additional
taxes on prior years' expanded basic service revenues. The TDOR can issue an
assessment for prior periods up to three years. Management estimates that the
amount of such an assessment for the Systems, if made for all
 
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