ST. LOUIS, Jan 15, 2004 (BUSINESS WIRE) -- Charter Communications, Inc. (Nasdaq:CHTR) today announced activation of the first all-digital network in the United States by an established multi-system cable operator. The new service has been successfully delivered without an analog set-top box over an existing HFC (hybrid fiber-coaxial) network simultaneously with basic analog cable programming in Charter's Long Beach, California system.

Charter's new service incorporates the two defining elements of an all-digital system: a digital compression system that encodes the entire program line-up and digital program insertion system. The digital compression system, which is central to the service, is powered by Harmonic's DiviCom MV 50 variable bit-rate encoders and third-generation DiviTrackXE closed loop statistical multiplexing system. These CableLabs certified encoders embed the SCTE-35 compliant cue tones necessary to enable true digital program insertion.

The compression capabilities of the Harmonic-based digital headend makes it possible to provision multiple standard and/or high definition digital channels-each with a full resolution broadcast-quality picture-using the spectrum required to deliver a single analog channel. Converting from analog to digital recovers precious service carrying capacity that can be used to provide more high definition television as well as targeted services including video-on-demand and specialized subscription packages.

"With the introduction of our all-digital service, the future is now," said Wayne Davis, Charter Senior Vice President of Engineering and Advanced Technology. "This all digital delivery system will result in significant improvement in picture quality for our customers. The bandwidth savings made possible by Harmonic's digital video compression solution will allow the introduction of new services in a more expedient and economical way, often without needing to upgrade our network infrastructure. Our digital program insertion capability enables us to centralize the compression systems, while at the same time locally and dynamically insert ads, both simplifying the process and making our service more relevant to the viewer and valuable to advertisers. Most importantly, this secure digital service can be remotely and instantly activated, eliminating the need for a truck roll when adding a customer or service."

"Spectrum is a definitely a limited commodity. As operators introduce more advanced triple play services, this issue will become more pronounced," said Yaron Simler, President of Harmonic's Convergent Systems Division. "Charter has creatively applied Harmonic's high performance digital headend systems, which were originally developed for bandwidth sensitive network operators, to proactively future-proof their service. As a result, they will be able to consistently provision a compelling offering that raises the bar for potential competitors." An all-digital service makes it possible to realize significant capital savings by using lower cost digital only set-top boxes. Entry-level digital set-tops that support broadcast, interactive and on-demand services cost approximately 50 percent less than comparable analog/digital set-tops. At the high-end, removing both the analog receiver and internal digital video compression subsystem from set-tops with a digital video recorder (DVR) yields a solid cost reduction. Futhermore, the highly compressed MPEG-2 video distributed from the headend makes it possible for the DVR to store more content per gigabyte than in a mixed analog/digital service environment. When serving hundreds of thousands or millions of subscribers the aggregate savings are substantial.

About Charter Communications

Charter Communications, A Wired World Company(TM), is the nation's third-largest broadband communications company. Charter provides a full range of advanced broadband services to the home, including cable television on an advanced digital video programming platform via Charter Digital(R) and Charter High-Speed Internet Service(R). Commercial high-speed data, video and Internet solutions are provided under the Charter Business Networks(R) brand. Advertising sales and production services are sold under the Charter Media(R) brand. More information about Charter can be found at www.charter.com http://www.charter.com.

About Harmonic Inc.

Harmonic Inc. is a leading provider of digital video, broadband optical networking and IP delivery systems to cable, satellite, telecom and broadcast network operators. Harmonic's open standards-based solutions for the headend through the last mile enable customers to develop new revenue sources and a competitive advantage by offering powerful interactive video, voice and data services such as video-on-demand, high definition digital television, telephony and Internet access.

Harmonic (Nasdaq:HLIT) is headquartered in Sunnyvale, California with R&D, sales and system integration centers worldwide. The Company's customers, including many of the world's largest communications providers, deliver services in virtually every country. Visit www.harmonicinc.com for more information.

SOURCE: Charter Communications

Charter Communications, St. Louis
David Mack, 303-323-1392
dmack@chartercom.com
or
Harmonic AxiCom
Stephen Orr, 408-543-2360
stephen.orr@axicom.com

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