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SEC Filings

RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
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directly or through an affiliate, one percent or more of cable subscribers
nationwide and is not affiliated with any entity or entities whose gross
annual revenues aggregate more than $250,000,000. The Company is not eligible
for small cable operator status under the 1996 Telecom Act because the Morgan
Stanley Entities own more than 20% of the Company, and those investors and
their affiliated companies have aggregated annual revenues in excess of
   In addition to rate deregulation for certain small cable operators under
the 1996 Telecom Act, the FCC adopted regulations in June 1995 ("Small System
Regulations") pursuant to the 1992 Cable Act that were designed to reduce the
substantive and procedural burdens of rate regulation on "small cable
systems." For purposes of these FCC regulations, a "small cable system" is a
system serving 15,000 or fewer subscribers that is owned by or affiliated with
a cable company which serves, in the aggregate, 400,000 or fewer subscribers.
Under the FCC's Small System Regulations, qualifying systems may justify their
regulated service and equipment rates using a simplified cost-of-service
formula. The regulatory benefits accruing to qualified small cable systems
under certain circumstances remain effective even if such systems are later
acquired by a larger cable operator that serves in excess of 400,000
subscribers. Various franchising authorities and municipal groups have
requested the FCC to reconsider its Small System Regulations. Renaissance
Media's assumption of Time Warner's Social Contract precludes such exemption
from rate regulation for systems that serve 15,000 or fewer subscribers, but
ameliorates the effect of such preclusion by permitting the Company to benefit
from automatic rate adjustments during the term of the Social Contact for all
of the Systems acquired from Time Warner. The Company has the right to
increase monthly CPST rates by $1.00 during each year of the Social Contact
above other permissible increases resulting from inflation and so-called
"external costs."
 "Anti-Buy Through" Provisions
   The 1992 Cable Act also requires cable systems to permit customers to
purchase video programming offered by the operator on a per channel or a per
program basis without the necessity of subscribing to any tier of service,
other than the basic service tier, unless the system's lack of addressable
converter boxes or other technological limitations does not permit it to do
so. The statutory exemption for cable systems that do not have the
technological capacity to offer programming in the manner required by the
statute is available until a system obtains such capability, but not later
than December 2002. The FCC may waive such time periods, if deemed necessary.
Most of the Company's cable systems do not have the technological capability
to offer programming in the manner required by the statute and currently are
exempt from complying with the requirement.
 Must Carry/Retransmission Consent
   The 1992 Cable Act contains broadcast signal carriage requirements that
allow local commercial television broadcast stations to elect once every three
years to require a cable system to carry the station, subject to certain
exceptions, or to negotiate for "retransmission consent" to carry the station.
A cable system generally is required to devote up to one-third of its
activated channel capacity for the carriage of local commercial television
stations whether pursuant to the mandatory carriage or retransmission consent
requirements of the 1992 Cable Act. Local noncommercial television stations
are also given mandatory carriage rights; however, such stations are not given
the option to negotiate retransmission consent for the carriage of their
signals by cable systems. Additionally, cable systems are required to obtain
retransmission consent for all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations" such as
WGN), commercial radio stations and certain low power television stations
carried by such systems after October 1993. In March 1997, the U.S. Supreme
Court affirmed a three-judge district court decision upholding the
constitutional validity of the 1992 Cable Act's mandatory signal carriage
requirements. As a result of the mandatory carriage rules, some of the Systems
have been required to carry television broadcast stations that otherwise would
not have been carried and may be required to displace possibly more attractive
programming. The retransmission consent rules have resulted in the deletion of
certain local and distant television broadcast stations which various Systems
were carrying. To the extent retransmission consent fees must be paid for the
continued carriage of certain television stations, the Company's cost of doing
business will increase with no assurance that such fees can be recovered
through rate increases. The FCC has initiated rulemaking to consider the
requirements, if any, for mandatory