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Urban Systems Face Challenges, Opportunities

9/19/1999 8:00 PM Eastern

New York -- Always important for cable operators, target
marketing is crucial in urban markets, where the targets range from expensive high-rise
apartment towers to inner-city housing projects, all within a matter of miles.

The National Association of Minorities in Communications
addressed the challenges and opportunities of serving city-based cable customers at the 13th
Annual Urban Markets Conference here last week.

Because urban systems are typically underpenetrated
compared with their suburban counterparts, operators have the opportunity to grow their
customer base. But because there's such a diversity of cultural and ethnic markets in most
cities, the challenge is to find effective ways to reach -- and serve -- all of them.

Sherry Wells, advance-service-operation manager for
Washington, D.C.-based District Cablevision, recommended that operators preparing to
launch digital cable include a good representation of minority customers in their
beta-tests.

Spanish-language tier Canales ñ was not yet available when
District launched digital in March 1998, Wells said, adding that she would look to include
more Hispanics in any such beta-tests conducted in the future.

And now that District is launching the Excite@Home
high-speed-data service, the operator wants to see what Asians want from the service, too.

To better serve their diverse customer base, operators
should communicate not only with their customers, but also with their programming
partners, NAMIC panelists said.

"I think it's frustrating when our customers can't
find African-American or Latino talent on-air," AT&T Broadband & Internet
Services' Chicago regional vice president Steve White said. "As operators, we can sit
down with the programmers and say, 'Enough is enough. We want you to represent
us.'"

White said he's also challenged with convincing executives
at the MSO level that his system needs to address technical fixes that may not be
necessary in suburbia, because there are more -- and bigger -- multiple-dwelling units in
Chicago.

Although churn tends to be higher in some MDU buildings
than in single-family homes due to more frequent moves, that also has an upside, White
said. When new people move in, there are fresh opportunities to sell them on a whole suite
of new services when they're most apt to consider them.

With the advent of digital, operators said, it's more
important than ever to keep a tight handle on disconnects.

"We're putting lots of expensive boxes in people's
homes," Cox Communications Inc. executive vice president Maggie Belville said.

After all attempts at convincing a potential disconnect to
keep digital cable have failed, "we ask to retrieve the box immediately," Wells
said. She admitted that it's more difficult to track nonpays, but she added that the
operator now reports nonreturned boxes to credit bureaus. "That has allowed us to
retrieve more boxes," she added.

Several operators spoke candidly last week about the
challenges of serving customers in public-housing projects in particularly rough
neighborhoods.

In some of San Antonio's housing projects, "we go in
during daylight hours only, except during service outages," Paragon Cable president
Navarra Williams said. When it becomes necessary to go in after dark, "we send in
extra teams for protection," he added, noting that some technicians had experienced
attempted thefts in the past.

Belville said Cox tries to hire and train teams of
technicians from within public-housing communities, "so that people don't see cable
as something to attack."

AT&T Broadband in Chicago and Paragon in San Antonio
have each proposed to local governments to offer bulk cable at heavy discounts for
residents of city-run housing projects.

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