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SEC Filings

AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
Entire Document
developments might have on the cable television industry or on our operations.
As other companies begin to provide cable television services, we will face
additional competitors, many of which will have substantially greater resources
than we have.
   As of March 31, 1999, we had a total of approximately 346 employees.
Approximately 20 of our employees located in Michigan are represented by labor
unions or trade councils. We have experienced no work stoppages and believe
that our employee relations are good and will continue to be so after the
closing of the pending acquisitions.
   A cable television system consists of three principal operating components.
The first component is the signal reception processing and originating point
called a "headend." The headend receives television, cable programming service,
radio and data signals that are transmitted by means of off-air antennas,
microwave relay systems and satellite earth systems. Each headend includes a
tower, antennae or other receiving equipment at a location favorable for
receiving broadcast signals and one or more earth stations that receives
signals transmitted by satellite. The headend facility also houses the
electronic equipment which amplifies, modifies and modulates the signals,
preparing them for passage over the system's network of cables. The second
component of the system is the distribution network. The distribution network
originates at the headend and extends throughout the system's service area. A
cable system's distribution network consists of microwave relays, coaxial or
fiber optic cables placed on utility poles or buried underground and associated
electronic equipment. See the "Regulation--Pole Attachment" section of this
prospectus. The third component of the system is a "drop cable," which extends
from the distribution network into each customer's home and connects the
distribution system to the customer's television set.
   We own and lease parcels of real property for signal reception sites
(antenna towers and headends), microwave complexes and business offices,
including our principal executive offices. In addition, we own our cable
systems' distribution networks, various office fixtures, test equipment and
certain service vehicles. We will also acquire additional property in the
pending acquisitions. The physical components of our cable systems require
maintenance and periodic upgrading to keep pace with technological advances. We
believe that our properties, including those to be acquired in the pending
acquisitions, both owned and leased, are in good condition and are suitable and
adequate for our business operations.
Legal Matters
   In connection with the acquisition of Mercom, former shareholders of Mercom
constituting approximately 15.3% of all outstanding Mercom common shares gave
notice of their election to exercise appraisal rights as provided by Delaware
law. We and the companies we plan to acquire are currently party to various
legal proceedings. In addition, we expect that in the future we will have
various legal proceedings outstanding in the normal course of business. Our
management anticipates that these proceedings will not have a material adverse
effect on our results of operations or our financial condition.