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SEC Filings

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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 services provided by the
local cable system. The recent licensing of digital spectrum by the Federal
Communications Commission will provide incumbent television broadcast licensees
with the ability 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, known as DBS, is a satellite service of
one or more entertainment or information program channels that can be received
directly using an antenna on the subscriber's premises. DBS has emerged as
significant competition to cable systems. The DBS industry has grown rapidly
over the last several years, far exceeding the growth rate of the cable
television industry, 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, however, is limited in the local
programming it can provide because of the current capacity limitations of
satellite technology. In addition, existing copyright rules restrict the ability
of DBS providers to offer local broadcast programming. Congress is now
considering legislation that would remove these legal obstacles. After recent
mergers, the two primary DBS providers are DirecTV, Inc., and EchoStar
Communications Corporation. America Online Inc., the nation's leading provider
of Internet services has recently announced a plan to invest $1.5 billion in
Hughes Electronics Corp., DirecTV, Inc.'s parent company, and these companies
intend to jointly market America Online's prospective Internet television
service to DirecTV's DBS customers.
     - 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, which is the government
entity that grants a cable operator a franchise to construct and operate a cable
television system within the bounds of that entity's governmental authority,
might grant a second franchise to another cable operator. That franchise might
contain terms and conditions more favorable than those afforded us. In addition,
entities willing to establish an open video system, under which they offer