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SEC Filings

10-K405
RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
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   The 1992 Cable Act, the 1996 Telecom Act and the FCC's rules implementing
these statutory provisions generally have increased the administrative and
operational expenses of cable systems and have resulted in additional
regulatory oversight by the FCC and local franchise authorities. The Company
will continue to develop strategies to minimize the adverse impact that the
FCC's regulations and the other provisions of the 1992 Cable Act and the 1996
Telecom Act have on the Company's business. However, no assurances can be
given that the Company will be able to develop and successfully implement such
strategies to minimize any adverse impact of the 1992 Cable Act or the 1996
Telecom Act on the Company's business.
 
The Social Contract
 
   The Social Contract between Time Warner and the FCC, which became effective
on January 1, 1996, resolved certain outstanding cable rate cases involving
Time Warner that arose in connection with regulations promulgated by the FCC
pursuant to the 1992 Cable Act. The Social Contract established parameters
within which Time Warner and subsequent buyers of Time Warner's cable
television systems might determine certain subscriber rates and maintain a
high level of technical capacity in such systems. Among other obligations,
Time Warner agreed to upgrade one-half of its systems to 550 MHz capacity and
the balance to 750 MHz capacity within the term of the Social Contract of
which at least 200 MHz is expected to be allocated to digital compression
technology by January 1, 2001. In exchange, the Social Contract settled those
certain outstanding rate cases and established a right of Time Warner to
increase monthly CPST rates by an additional $1.00 per year above other
permissible increases resulting from inflation and so-called "external costs"
for the term of the Social Contract through the year 2000. The Social Contract
provides that Time Warner may petition the FCC to modify or terminate the
Social Contract based on any relevant change in applicable law, regulation or
circumstance.
 
   In connection with the Acquisition, the Company received the FCC's consent
to the assignment of the Social Contract as it applies to the Systems. By
assuming Time Warner's unsatisfied obligations with respect to the System, the
Company gained certain rate benefits described above. The principal remaining
obligations of the Social Contract as they relate to the Systems is to upgrade
the Tennessee System, the St. Landry system and approximately one-half of the
St. Tammany and Lafourche systems to 750 MHz capacities. The failure to comply
with the Social Contract's upgrade requirements will subject the Company to
refund liability under the terms of the Social Contract. The Company is also
required to ensure that at least 60% of new analog services in the Systems are
added to the CPST and add at least 15 new channels on average (weighted by
CPST subscribers) to the CPST of the Systems. The Company believes the
upgrades are prudent both due to the competitive advantages to be gained by
technologically advanced facilities and from the rate increases the Company
will be permitted to implement.
 
   The consummation of the Charter Transaction will not change the rights or
obligations of the Company under the Social Contract.
 
Copyright
 
   Cable systems are subject to federal copyright licensing covering carriage
of television and radio broadcast signals. In exchange for filing certain
reports and contributing a percentage of their revenue to a federal copyright
royalty pool, cable operators can obtain blanket permission to retransmit
copyrighted material on broadcast signals. The nature and amount of future
payments for broadcast signal carriage cannot be predicted at this time. In a
recent report to Congress, the Copyright Office recommended that Congress make
major revisions of both the cable television and satellite compulsory licenses
to make them as simple as possible to administer, to provide copyright owners
with full compensation for the use of their works, and to treat every
multichannel video delivery system the same, except to the extent that
technological differences or differences in the regulatory
 
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