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Time Warner Makes Digital Leap

2/21/1999 7:00 PM Eastern

With a timetable running far behind other MSOs, Time Warner
Cable last week officially unveiled its plans to make Columbus, Ohio, one of the first
markets where it will commercially launch its digital-video service, with the rollout
slated for the fall.

In Columbus, Digital Cable is meant to give Time Warner
ammunition in its battle against not only direct-broadcast satellite but Ameritech New
Media, which launched a competing Americast cable system in the market in 1996.

"This is the competition capital of cable," Time
Warner spokeswoman Mary Jo Green said.

For its part, Ameritech officials said they're not
worried about Time Warner's digital assault in Columbus

"We're competing against digital right now,
against TCI [Tele-Communications Inc.] and MediaOne," said Brad Cumings, director of
marketing for Ameritech New Media, referring to Chicago and Detroit.

Most recently, for example, Ameritech debuted its cable
service in the Detroit suburb of Woodhaven, Mich., where it is going head to head against
TCI.

Columbus may not be the first market where Time Warner
launches digital.

Time Warner has been testing digital video, and its
"AthenaTV" digital satellite feed, for some time now at its system in Austin,
Texas.

Austin has been considered a shoo-in to be first to roll
out digital. But Time Warner corporate couldn't be reached for comment on where
Austin stands on the digital commercial-launch schedule -- or when, or which, other
markets might premiere the service first. Tampa, Fla., is also considered a Time Warner
market that will get an early digital roll out.

The Austin American-Statesman this week quoted Time
Warner Austin division president Bill Carey as saying the system would launch more than 70
channels of digital in the first-quarter. Carey did not return a call last week.

A number of cable operators aside from TCI and MediaOne,
such as Cox Communications Inc., Comcast Corp. and Jones Intercable Inc., have already
launched commercial digital-video services, long before Time Warner.

In fact, last week Comcast said it now has 100,000 digital
cable customers, and projected it will have more than 300,000 by the end of the year.
Comcast has been offering a 170-channnel digital service for less than a year, for about
$10 a month. It is now available in 13 Comcast systems.

During the next 60 days, the MSO will launch digital cable
in another 20 markets. With those rollouts, Comcast will have digital in front of 65
percent of its total subscribers, officials said.

Time Warner in Columbus, with 200,000 subscribers, has just
upgraded its plant to 750 megahertz with 1,330 miles of fiber-optic cable. Time Warner
already offers its Road Runner high-speed modem service in the market, where Digital Cable
will cost subscribers $3 to $9 a month on top of their old analog service.

"This is really the next level for us," Green
said.

She wouldn't comment on exactly what Time
Warner's prices will be for its varying digital packages. But the least expensive
package will be a digital standard tier of 10 to 15 channels, which haven't been
finalized yet, Green said.

The digital lineup will also include 30 pay-per-view
channels, with movies starting every half-hour, and 20 additional screens of Home Box
Office, Showtime, Cinemax and Starz!/Encore. Time Warner's digital package includes
an on-screen channel guide.

Green said her system hasn't decided which set-tops it
plans to use for its service, and added that it plans to start testing set-tops next
month. Time Warner used Scientific-Atlanta Inc.'s Explorer 2000 advanced set-top for
its Austin test.

Ameritech officials pointed out that in Columbus their
expanded basic service, 64 channels at $25 to $30 a month, already offers some networks
that Time Warner may charge subscribers extra for as part of digital. For example,
Ameritech carries FX, Ohio News Network, The Box Music Network and Toon Disney, as well as
the premium Sundance Channel.

And Ameritech's "Express Convenience" PPV
service already offers half-hour start times for movies, officials said. Ameritech said
its churn rate is fare below the industry average, too, which it claims is another
indication of customer satisfaction with its americast service.

Ameritech won't disclose how many subscribers it has
in Columbus, but said it has 200,000 total.

Time Warner has already gotten phone calls from Columbus
subscribers interested in signing up for Digital Cable, Green said.

"We're starting to take names, and we will keep a
database of them," she said.

Last week, Jones said it had launched its digital-video
service in its systems in Augusta and North Augusta, Ga., where it serves more than 91,000
homes. It's the MSO's second digital launch, and incorporates
Tele-Communications Inc.'s Headend in the Sky. The digital packages start at $46.25 a
month and offer up to 152 video and audio channels, including 77 basic service.

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