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SEC Filings

RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
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carriage of DTV signals. The Company cannot predict the ultimate outcome of
this proceeding, which could require the carriage on its cable television
system of new services and the displacement of more attractive programming.
 Designated Channels
   The Communications Act permits franchising authorities to require cable
operators to set aside certain channels for public, educational and
governmental access programming. Federal law also requires a cable system with
36 or more activated channels to designate a portion of its channel capacity
for commercial leased access by third parties to provide programming that may
compete with services offered by the cable operator. The U.S. Supreme Court
has upheld the statutory right of cable operators to prohibit or limit the
provision of indecent or obscene programming on commercial leased access
channels. The FCC has adopted rules regulating: (i) the maximum reasonable
rate a cable operator may charge for commercial use of the designated channel
capacity; (ii) the terms and conditions for commercial use of such channels;
and (iii) the procedures for the expedited resolution of disputes concerning
rates or commercial use of the designated channel capacity.
 Franchise Procedures
   The 1984 Cable Act affirms the right of franchising authorities (state or
local, depending on the practice in individual states) to award one or more
franchises within their jurisdictions and prohibits non-grandfathered cable
systems from operating without a franchise in such jurisdictions. The 1992
Cable Act encourages competition with existing cable systems by (i) allowing
municipalities to operate their own cable systems without franchises, (ii)
preventing franchising authorities from granting exclusive franchises or
unreasonably refusing to award additional franchises covering an existing
cable system's service area, and (iii) prohibiting (with limited exceptions)
the common ownership of cable systems and co-located MMDS or SMATV systems. In
January 1995, the FCC relaxed its restrictions on ownership of SMATV systems
to permit a cable operator to acquire SMATV systems in the operator's existing
franchise area so long as the programming services provided through the SMATV
system are offered according to the terms and conditions of the cable
operator's local franchise agreement. The 1996 Telecom Act provides that the
cable/SMATV and cable/MMDS cross-ownership rules do not apply in any franchise
area where the cable operator faces "effective competition" as defined by
federal law. The 1996 Telecom Act also permits local telephone companies to
provide video programming services as traditional cable operators with local
   The 1984 Cable Act also provides that in granting or renewing franchises,
local authorities may establish requirements for cable-related facilities and
equipment, but not for video programming or information services other than in
broad categories. The 1984 Cable Act limits franchise fees to 5% of cable
system revenue derived from the provision of cable services and permits cable
operators to obtain modification of franchise requirements by the franchising
authority or judicial action if warranted by changed circumstances. The
Company's franchises typically provide for payment of fees to franchising
authorities in the range of 3% to 5% of "revenue" (as defined by each
franchise agreement). Recently, a federal appellate court held that a cable
operator's gross revenue includes all revenue received from subscribers,
without deduction, and overturned an FCC order which had held that a cable
operator's gross revenue does not include money collected from subscribers
that is allocated to pay local franchise fees. The 1996 Telecom Act generally
prohibits franchising authorities from: (i) imposing requirements in the cable
franchising process that require, prohibit or restrict the provision of
telecommunications services by an operator; (ii) imposing franchise fees on
revenue derived by the operator from providing telecommunications services
over its cable system; or (iii) restricting an operator's use of any type of
subscriber equipment or transmission technology.
   The 1984 Cable Act provides for, among other things, procedural and
substantive safeguards for cable operators and creates an orderly franchise
renewal process in which renewal of franchise licenses issued by governmental
authorities cannot be unreasonably withheld, or, if renewal is withheld and
the franchise authority acquires ownership of the system or effects a transfer
of the system to another person, such franchise authority or other person must
pay the operator either: (i) the "fair market value" (without value assigned
to the franchise)