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     We have adopted the hybrid fiber optic/coaxial architecture, a type of
cable distribution network generally referred to as the HFC architecture, as the
standard for our ongoing systems upgrades. The HFC architecture combines the use
of fiber optic cable, which can carry hundreds of video, data and voice channels
over extended distances, with coaxial cable, which requires a more extensive
signal amplification in order to obtain the desired transmission levels for
delivering channels. In most systems, we connect fiber optic cable to individual
nodes serving an average of 800 homes or commercial buildings. We believe that
this network design provides high capacity and superior signal quality, and will
enable us to provide the newest forms of telecommunications services to our
customers. The primary advantages of HFC architecture over traditional coaxial
cable networks include:
     - increased channel capacity of cable systems;
     - reduced number of amplifiers, which are devices to compensate for signal
       loss caused by coaxial cable, needed to deliver signals from the headend
       to the home, resulting in improved signal quality and reliability;
     - reduced number of homes that need to be connected to an individual node,
       improving the capacity of the network to provide high-speed Internet
       access and reducing the number of households affected by disruptions in
       the network; and
     - sufficient dedicated bandwidth for two-way services, which avoids reverse
       signal interference problems that can otherwise occur when you have
       two-way communication capability.
     The HFC architecture will enable us to offer new and enhanced services.
Such services include additional channels and tiers, expanded pay-per-view
options, high-speed Internet access, wide area network, which permits a network
of computers to be connected together beyond an area, point-to-point data
service, which is a service that provides a data connection with only two end
points that can switch data links from one point to the other, and digital
advertising insertion, which is the insertion of local, regional and national
programming. The upgrades will facilitate our new services in two primary ways:
     - greater bandwidth allows us to send more information through our systems.
       This provides us with the capacity to provide new services in addition to
       our current services. As a result, we will be able to roll out digital
       cable programming in addition to existing analog channels offered to
       customers who do not wish to subscribe to a package of digital services.
     - enhanced design configured for two-way communication with the customer
       allows us to provide cable Internet services without telephone support
       and other interactive services, such as an interactive program guide,
       impulse pay-per-view that gives the subscriber the ability to select
       pay-per-view programming through the cable system without placing a
       separate call, video-on-demand and interactive services provided by Wink,
       that cannot be offered without upgrading the bandwidth capacity of our
     This HFC architecture will also position us to offer cable telephony
services in the future, using either Internet protocol technology, which is a
technology that allows telephone services to be conducted over the Internet, or
switch-based technology, which is a more standard technology used to connect the
public switch telephone network, the worldwide voice telephone network
accessible to all those with telephones and access privileges.