Print Page  Close Window

SEC Filings

Entire Document
<PAGE>   101
by 16 of our cable systems, which serve approximately 330,000 basic cable
customers. By December 31, 1999, we anticipate that approximately 1.6 million of
our customers will be served by cable systems capable of delivering digital
     INTERNET ACCESS.  We currently provide Internet access to our customers by
two principal means:
     (1) through cable modems attached to personal computers, either directly or
through an outsourcing contract with an Internet service provider; and
     (2) through television access, via a service such as WorldGate.
     We also provide Internet access in some markets through traditional dial-up
telephone modems, using a service provider. Modems convert digital signals to
analog signals and vice-versa and are used to send digital data signals over the
telephone network, which is usually analog.
     The principal advantage of cable Internet connections is the high speed of
data transfer over a cable system. We currently offer these services to our
residential customers over coaxial cable at speeds that can range up to
approximately 50 times the speed of a conventional 28.8 kilobits per second
telephone modem. Furthermore, a two-way communication cable system using the HFC
architecture can support the entire connection at cable modem speeds without any
need for a separate telephone line. If the cable system only supports one-way
signals from the headend to the customer, the customer must use a separate
telephone line to send signals to the provider, although such customer still
receives the benefit of high speed cable access when downloading information,
which is the primary reason for using cable as an Internet connection. In
addition to Internet access over our traditional coaxial cable system, we also
provide our commercial customers fiber optic cable access at a price that we
believe is less than 25% of the price offered by the telephone companies.
     In the past, cable Internet connections have provided customers with widely
varying access speeds because each customer accessed the Internet by sending and
receiving data through a node. Users connecting simultaneously through a single
node share the bandwidth of that node, so that a users' connection speeds may
diminish as additional users connect through the same node. To induce users to
switch to our Internet services, however, we guarantee our cable modem customers
the minimum access speed selected from several speed options we offer. We also
provide higher guaranteed access speeds for customers willing to pay an
additional cost. In order to meet these guarantees, we are increasing the
bandwidth of our systems and "splitting" nodes easily and cost-effectively to
reduce the number of customers per node.
     We have deployed cable modem-based Internet access services in 28 markets
including: Los Angeles, California; St. Louis, Missouri; and Fort Worth, Texas.
As of June 30, 1999, we provided Internet access service to approximately 13,460
homes and 160 businesses. The following table indicates the historical and
projected availability of Internet access services in our systems, pro forma for
our recent and pending acquisitions as of the dates indicated. These numbers
reflect the number of homes who have access to these