LyncStar Applies for Cable Franchise

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Denver -- LyncStar Integrated Communications LLC, which
offers cable to multiple-dwelling units via open-video systems, has applied for a
traditional cable franchise in Austin, Texas.

Ordinarily, OVS operators are not obliged to obtain local
franchises, although they must comply with the same must-carry, retransmission-consent and
PEG-access (public, educational and government) requirements as incumbent cable operators.

In this case, however, the Lakewood, Colo.-based SMATV
(satellite-master-antenna television) outfit needs a franchise to install cable plant on
the city's rights-of-way, which will allow it to connect its OVS system at the
562-unit Canyon Oaks Apartments to other nearby MDUs.

"We have four more properties either under contract or
with which we have agreements in principle," said Jim Honiotes, LyncStar's vice
president of operations.

City officials are expected to hold the second of three
required readings on LyncStar's proposed franchise this week.

Under the proposed deal, LyncStar would be subject to the
same franchise requirements as the city's incumbent cable operator, Time Warner
Cable, and it would have to work out an agreement with Time Warner in order to deliver the
MSO's local-access programming.

Industry officials reported that Time Warner has raised
objections to LyncStar's request for a local franchise.

Neither Time Warner nor city officials returned calls for
comment.

Theoretically, however, the MSO may object to sharing its
local-access programming, which cable operators increasingly view as a valuable weapon
against competitors.

Honiotes said the pending Austin franchise does not require
LyncStar to serve the entire city. As it expands, however, LyncStar will have to build out
its system to reach consumers who request its service and who live a predetermined
distance from its network.

Once its franchise is approved, the company hopes to have
its Austin system built within six weeks, Honiotes said.

"After that, we'll expand to where the business
is," he added. "We expect to be building for years."

LyncStar has a similar franchise request pending in
Houston, where its 20 properties served constitute its largest cluster.

It has already secured a franchise in the west Texas
community of Midland and another in Little Rock, Ark.

With OVS systems already up and running in 15 states,
serving some 15,000 customers, LyncStar recently received its third OVS license in
Colorado when the Federal Communications Commission approved its application to serve Fort
Collins, a college town north of Denver.

The company also has OVS licenses to serve portions of
Denver and Aurora, Colo.

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