International Nets Win, Lose in Philippines

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Cable-television operators in the Philippines are
accelerating a process of consolidation and flexing their muscles, as channels from Turner
International and ESPN reached new carriage accords, while a Star TV channel was taken off
the air by one operator.

Filipino operators have revolted against higher programming
fees, feeling the pinch from the fall of the peso versus the United States dollar, as well
as from static subscriber growth.

Hong Kong-based Turner International announced that Asian
Cable Communications Inc. (ACCION) would become the exclusive supplier of CNN
International and TNT and Cartoon Network to independent operators in the Philippines.

At the same time, Home Cable, the second-largest Filipino
MSO, and its affiliates will carry the two Turner channels. Turner already had an
agreement with the country's largest MSO, Sky Cable, which merged some time ago with
another large MSO, Sun Cable. The agreements mean that more than 300,000 households
nationally can see each Turner channel.

ESPN Star Sports also reached an accord with Home Cable,
completing the reconnection of the sports channel with Filipino operators serving some
500,000 subscribers. The operators had blacked out the service throughout the country at
the end of April to protest higher subscription rates.

Earlier, ESPN Star Sports had struck a similar deal with
Sky/Sun, and it also announced a deal for a company called Cable Boss to distribute its
services to independent cable operators.

Adam Zecha, director of international sales for ESPN Star
Sports, said the new rates would match those in 1997, with ESPN Star Sports absorbing the
"substantially" higher programming costs.

Meanwhile, Viva Cinema, the Star TV owned-and-operated
Tagalog-language movie channel, has been dropped from the Sky/Sun roster of channels. The
two operators merged in 1997 to cut costs and to boost their bargaining muscle by
increasing their size.

The merger also meant that Sun was offering Sky's
homegrown Tagalog-movie channel, and pressure from the senior partner in the joint venture
led to Viva being axed. Viva is still seen by about 100,000 Home Cable customers, as well
as by another 200,000 subscribers in smaller operations around the country.