Competition Cuts Cable Plant

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The fragile truce between overbuilders and incumbent cable
operators is being tested by ongoing incidents of damage to aerial and underground cable
by overzealous competitors during overbuilds and rebuilds.

A full-throttle build-out strategy is leaving some
overbuilders with little choice other than to hire construction crews with questionable
experience and qualifications -- the main culprit in the cut-cable issue, according to
executives from both sides. And in some cases, cable has been cut without operators being
notified of the damage.

As overbuilders hastily build 750-megahertz-plus plant in
markets around the country, cable operators are scrambling to leapfrog their new
competitors' advanced technology and plant construction. As that happens, demanding
timetables will likely lead to the continued hiring of inexperienced construction crews,
heating up the issue of cut cable.

"We've had overbuilders cutting into cable," said
Dan Murphy, director of engineering for Tele-Communications Inc.'s TCI-Great Lakes, which
is being overbuilt by Ameritech Corp.'s Ameritech New Media, 21st Century Telecom Group
Inc. and a handful of municipalities in several Midwest markets.

Even with some local telephone companies, utilities and
cable operators meeting regularly to address the issue, overbuilders and cable operators
remained wary of each other's intentions.

"Yes, it's a problem," said Bill Morrow,
president and CEO of Knology Holdings Inc., a hybrid competitive local-exchange carrier in
West Point, Ga., with 225,000 homes served in five markets.

"We have good relationships with local telephone and
utility companies, but not with the local cable operators.

Morrow admitted that Knology has cut into local operators'
cable, yet he insisted that it's unavoidable.

"Anytime you go into thousands of backyards, you'll
cut cable. Sometimes, however, the local cable operator hasn't marked the cable," he
insisted.

For incumbent operators, however, cut cable means outages
and angry customers.

"It's a huge issue for us because [cut cable] reflects
on us," said Bill Black, director of public affairs for MediaOne's Midwest region.
"Early on, Ameritech would cut our cable and wouldn't contact us."

Ameritech now notifies MediaOne of any cut cable, Black
noted, but the relationship remains shaky.

"There was no malice intended on Ameritech's part
-- just inexperienced crews. Our advice for those being overbuilt is to notify the
overbuilder and to be sure that you get the proper reaction," Black added.

GTE Corp.'s GTE Video Services, which cut Jones Intercable
Inc.'s main trunk during its overbuild in Camarillo, Calif., showed a newfound spirit of
cooperation when it reacted swiftly in joining Jones' crews to fix the problem, which
lasted overnight.

"We had emergency procedures with TCI and Jones worked
out on the front end of our overbuild," said Ron Hummel, general manager of
California operations for GTE.

Following the Camarillo incident, GTE, Jones and TCI all
came to the same conclusion about overbuilds: cooperate.

"We'd be hurting ourselves with a noncooperation
attitude. Plus, it's expensive to rip up and destroy the work done by the other side. So
we're learning as we go to establish procedures and share costs," Hummel said.

For most overbuilders and cable operators, those procedures
now include the hiring of more experienced, competent construction crews."

"Early on, we selected some smaller construction crews
that weren't as knowledgeable or as good as we would have liked, because in our markets,
you have to start all over in hiring construction crews," Morrow said. "But once
we worked with better-quality people and equipment, we built long-term relationships.
We're not enemies, just competitors."

Murphy concurred, but with lingering skepticism.

"We've talked about developing guidelines, which
include our technicians being on the lookout for malicious activity," Murphy said.

Both sides said criminal activity is rare and it won't be
tolerated. But, according to Murphy, "We must be aware of it."

Being aware of other overbuilders, such as utility
companies, is also a priority, Murphy added.

"We have to work with local power companies and
utilities to help escalate them to do proper locates, to activate time windows for power
supply and such. Overbuilders are here, so if we can join forces, we'll all be better
off," he said.

The frenetic pace of overbuilds and rebuilds and the
ongoing threat of cable being cut by inexperienced construction crews and technicians are
also putting a premium on skilled personnel and quality training programs, noted Dave
Mahachek, vice president of engineering and operations for Ameritech.

"We train all of our own installers, and the work
prints that go to construction crews are done by our in-house design shop," Mahachek
said. "But it's a tough task finding and hiring quality engineers, technicians and
customer-service representatives."

That fact alone is prompting overbuilders and rebuilders to
elevate their training and recruiting policies in order to insure minimal damage to aerial
and underground cable.

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