Adelphia Says Vermont Is Competitive

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Officials from Adelphia Communications Corp. said the MSO
will file with the Federal Communications Commission for an effective-competition ruling
affecting the entire state of Vermont, citing direct-broadcast satellite penetration.

Data from satellite-industry analyst SkyTRENDS showed that
DBS penetration in Vermont has bloomed in the past three years. In 1996, statistics showed
that 21,000 homes subscribed to satellite services. Now, that figure is about 69,000, or
30 percent penetration, and it is continuing to grow.

That DBS growth has come despite the fact that cable
operators have built out plant in areas as lightly populated as 15 homes per mile. Among
DBS users, 55 percent are in cabled areas.Rural, hilly regions have been especially ripe
markets for DBS, said Evie Haskell, managing director of SkyTRENDS. Homeowners in areas
with a choice of providers may still go for satellite because it is pure digital --
"a truly superior product," she added.

Further, when a homeowner has a choice, positive
word-of-mouth from neighbors tips the scales in favor of satellite, she indicated.

In the past, Canadians who buy U.S. technology and carry it
back across the border have inflated satellite figures for border states such as Vermont.
Randall Fisher, vice president and general counsel for Adelphia, said the MSO expects to
defend any figures that it presents to the FCC.

While most cable-programming tiers became deregulated as of
March 31, the effective-competition ruling would extend deregulation to basic cable, and
it could help later if cable becomes reregulated.

Meanwhile, local executives are fighting off a proposal in
the Vermont legislature to trim franchise terms from the current 11 years to seven-year
licenses. The change was precipitated by state officials from Bennington, where Adelphia
is under pressure to build out to some smaller neighboring communities.

While no members of the general public showed up to vent
over cable performance, the bill received support from several access producers throughout
the state. According to testimony, the producers believe that shorter terms mean more
opportunities to meet operators at the bargaining table and a greater chance to negotiate
for increased production support.

Adelphia serves 70 percent of cable homes in the state -- a
penetration that will increase by 10 percent when the MSO completes its acquisition of
FrontierVision Partners L.P.

Executives from regional lobbying group the New England
Cable Telecommunications Association testified that the current franchise length is needed
to ensure a financial return on the big investment in higher-technology plant.

Adelphia has begun an upgrade that should include the vast
majority of its properties, making them digital and two-way-compatible. But that upgrade,
in part, has fueled the legislative action, because some of the smallest towns are not on
the schedule.

Adelphia continues to argue against their inclusion: One
300-home community would have to generate $350 per month, per home in revenue during a
shortened, seven-year license to justify the rebuild expense. That's figure does not
include ongoing pole-attachment costs, make-ready and other avoidable expenditures, NECTA
executive vice president Bill Durand said.

The term should actually be lengthened to 15 years in order
to improve payback schedules and to reward "better actors," Durand added.

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