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RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
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operators, that provide telecommunication services. (Cable operators that
provide only cable services are unaffected.) The 1996 Act also contains
provisions regulating the content of video programming and computer services.
Specifically, the new law prohibits the use of computer services to transmit
"indecent" and "obscene" material to minors. The U.S. Supreme Court has held
that these computer-related provisions are unconstitutional to the extent they
regulate the transmission of indecent material. Under the 1996 Act, a
franchising authority may not require a cable operator to provide
telecommunications services or facilities, other than an institutional
network, as a condition to a grant, renewal, or transfer of a cable franchise,
and franchising authorities are preempted from regulating telecommunications
services provided by cable operators and from requiring cable operators to
obtain a franchise to provide such services. The 1996 Act also repeals the
1992 Cable Act's anti-trafficking provision which generally required the
holding of cable television systems for three years.
   It is premature to predict the effect of the 1996 Act on the cable industry
in general or the Company in particular. The FCC was required to undertake
numerous rulemaking proceedings to interpret and implement the 1996 Act. Most
of these rulemakings have been completed, but are subject to pending petitions
for reconsideration, appeals, or both. It is not possible at this time to
predict several the outcome of those proceedings or their effect on the
   The Communications Act allocates principal responsibility for enforcing
federal policies between the FCC, state and local governmental authorities.
The FCC and state regulatory agencies regularly conduct administrative
proceedings to adopt or amend regulations implementing the statutory mandate
of the Communications Act. At various times interested parties to these
administrative proceedings have challenged the new or amended regulations and
policies in the courts with varying levels of success. The Company expects
that further court actions and regulatory proceedings will occur and will
refine the rights and obligations of various parties, including the
government, under the Communications Act. The results of these judicial and
administrative proceedings may materially affect the cable industry and the
Company's business and operations. In the following paragraphs, the federal
laws and regulations materially affecting the growth and operation of the
cable industry are summarized. A brief description of certain state and local
laws is also provided.
The Communications Act and FCC Regulations
 Rate Regulation
   The Communications Act limits the ability of cable television systems to
raise rates for basic services and equipment, as well as certain non-basic
cable programming services. The Communications Act authorizes rate regulation
for certain cable services and customer equipment in communities that are not
subject to "effective competition," as defined by federal law. The
Communications Act and the FCC's regulations prohibit the regulation of cable
television operators' rates where comparable video programming services, other
than DBS, are offered by local telephone companies, or their affiliates, or by
third parties using the local telephone company's facilities, or where
"effective competition" is established as defined by federal law. Under the
effective competition standard implemented by the 1992 Cable Act, most cable
television systems became subject to rate regulation.
   Where there is no effective competition to the cable television operator's
services, the Communications Act gives local franchising authorities the
responsibility to regulate the monthly rates charged by the operator for: (i)
the lowest level of programming service offered by the cable television
operator, typically called basic service, which includes the local broadcast
channels and any public access or governmental channels that are required by
the operator's franchise; and (ii) the installation, sale and lease of
equipment used by subscribers to receive basic service, such as converter
boxes and remote control units.
   Local franchising authorities who wish to regulate basic service rates and
related equipment rates must first obtain FCC certification to regulate by
submitting certain general information to the FCC about the community and the
cable television operator, complying with a simplified FCC certification
procedure, and agreeing to follow established FCC rules and policies when
regulating the operator's rates.