Cox Denies Buy-Through Violation in San Diego

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Washington -- Three San Diego customers of Cox
Communications Inc. have filed a complaint against the operator alleging violations of the
federal tier buy-through prohibition.

An attorney representing Cox denied the charges and will
make that clear in a response due at the Federal Communications Commission by Nov. 9.

Under the 1992 Cable Act, cable subscribers are permitted
to buy premium and pay-per-view services without having to purchase another tier of
service besides basic.

However, until 2002 a cable operator is exempt if it lacks
addressable technology. After 2002 an operator can remain exempt if the FCC grants a
waiver after finding that compliance would cause an increase in cable rates.

The three San Diego county residents alleged that Cox
refused to sell them premium services such as Home Box Office unless they first purchased
basic and a $20 "middle tier."

In an Oct. 2 petition at the FCC, the three allege that Cox
should not be allowed to rely on a technology exemption because the MSO had publicly
proclaimed that its San Diego system had "100 percent addressability."

Cox attorney Peter Feinberg said statements regarding 100
percent addressability were lifted from Securities and Exchange Commission filings made by
Cox and the complainants "have generally taken those filings out of context."

He said Cox is complying with the buy-through prohibition.

"We're basically saying that where a system can comply
with the buy through rule, it is; and where it can't, the reason is that it
technologically infeasible to do so," Feinberg said.

With 490,000 subscribers, San Diego is Cox's second largest
system. The MSO has rolled high-speed Internet access and competitive local telephony in
the market, Cox spokeswoman Ellen East said.

East said the San Diego market is divided into two
geographic areas but only one has been upgraded so that subscribers may purchase premium
and PPV channels after buying just the basic tier.

The FCC is also being asked to fine Cox $250,000 as
punishment if the allegations are found to be true.

Fred Cary, a Rancho Santa Fe attorney who is co-counsel
representing the three complainants, said his clients were pursuing the Cox case because
they want the opportunity to reduce their monthly cable bills.

"There are a lot of people who would like to save $20
a month," Cary said. "We are not going away and we are going to see this
through."

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