MediaOne Goes Digital in Metro Atlanta

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More than one year after launching its first digital-video
service in Detroit, MediaOne Group Inc. quietly began offering digital in its second
market: metropolitan Atlanta.

The "soft" launch June 1 -- which targeted
existing subscribers in suburban Cobb County -- trailed the introduction of high-speed
Internet access and cable telephony in some parts of the Atlanta market, where about 36
percent of the MSO's network has been upgraded to 750-megahertz, two-way capability.

Service is initially being offered under the "MediaOne
Digital NexTV" brand to about one-third of the 95,000 homes passed in Cobb County,
with plans for a gradual expansion of availability as the Englewood, Colo.-based MSO
believes it can comfortably support the service.

MediaOne has about 900,000 homes passed overall in Greater
Atlanta, with advanced analog being offered in virtually all rebuilt areas.

The Atlanta area was MediaOne's first market for cable
telephony, which it launched in February 1998. High-speed data preceded it in late 1997.

Spokesman Rob Stoddard noted that when telephony was
launched in Atlanta, it was initially offered to only about 5,000 homes passed.
"Digital will be somewhat similar in that it will roll out in something of a
methodical fashion, and it will grow carefully," he added.

The company has said that it will launch another
undisclosed digital market by the end of this month using open-platform equipment based on
the Digital Video Broadcasting standard. The Cobb County system will deliver service using
General Instrument Corp.'s "DCT-2000" digital set-top box.

MediaOne senior vice president for video Judi Allen said
Atlanta was chosen for the latest launch partly because the MSO faces direct digital-video
competition there, both from direct-broadcast satellite providers and from BellSouth
Corp.'s Americast programming, delivered via a multipoint multichannel distribution
service (wireless cable) system.

BellSouth also announced last week that it will begin a
trial of fiber optic networks running directly to 400 Atlanta-area homes, which will
include offerings of digital video and Internet access at speeds of up to 100 megabits per
second.

"We think not only will digital provide incremental
revenue from customers who upgrade, but the ability to offer digital has retention and
subscriber-acquisition benefits," Allen said.

Digital packages begin at $41.95 per month for an
entry-level tier that includes 37 pay-per-view channels and 40 channels of digital music.
The addition of premium-movie multiplexes would bring the total of analog and digital
channels available to more than 222, the company said.

As it has with the other services, MediaOne will offer
digital cable as part of a bundled-service package, although Allen said this did not
necessarily mean a discounted price for video if it is purchased along with telephony and
Internet access.

The MSO already gives cable-TV customers discounts on Road
Runner service, and it prices its phone product below that of incumbent BellSouth, she
noted.

"We believe there's enough interest in digital that we
don't need to discount this product to get it accepted," Allen said. "We think
offering bundles is the right thing, but we don't know yet that there's a compelling
business need to lower prices beyond what we already have."

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