TCI Vs. U S West at Lowry Site

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Denver -- AT&T Broadband & Internet Services has
launched a pre-emptive strike at the former Lowry Air Force Base here, where it's
under competitive attack from U S West.

AT&T's TCI of Colorado unit fired the first volley
by offering high-speed cable-modem service TCI@Home to 300 residences at Lowry, where a
750-megahertz network will soon make the @Home Network service available to 4,000 homes
and apartments at the redevelopment project.

"Construction will follow the course of the
redevelopment," said Matt Fleury, executive director of communications for TCI
Central Inc. "The plan is to reach homes as they're built."

The launch of @Home presumably gives AT&T a competitive
leg up on U S West, the Denver-based telco that has been named as the preferred provider
of telecommunications services by the Lowry Redevelopment Authority.

"Our objective is to be the customer's preferred
provider," Fleury said.

TCI is offering @Home at a cost of $39.95 per month, with a
one-time installation fee of $150. TCI is also marketing 18 additional channels of analog
cable programming through its "TCI Digital Cable" service, which sells for $10
per month.

Meanwhile, U S West -- which is in the midst of a $10
million construction project that will bring telephone and Internet-access service to
Lowry -- plans to counter with its "MegaBit"
asymmetrical-digital-subscriber-line service by the end of this month.

"TCI has a lot of work ahead of itself," U S West
spokesman David Beigie said, noting that the regional Bell operating company already has
some 25,000 MegaBit customers in 40 markets throughout its 14-state service territory.

"No other phone company is as aggressive as U S West
in going head-to-head with the incumbent cable operator when it comes to this
service," Beigie added.

The ADSL service -- which Beigie said will be
"competitively priced" with @Home -- allows consumers to surf the Internet while
talking on the same line.

TCI launched @Home by installing it at the new home of
Wayne W. Frelund, a Denver building contractor whose company, Windham Custom Homes, is
helping to redevelop the former air force base.

Locally, @Home is now available to 157,300 homes in six of
30 Denver-area communities served by TCI: Lowry, Aurora, Golden, Wheatridge, Edgewater and
Lakewood.

Although part of Lowry sits in Denver, subscribers in the
remaining portion of the city will not get @Home until TCI completes a $200 million
rebuild of its 112,000-subscriber system.

"That's because Lowry is 'new-build,'
while we're having to retrofit older plant everywhere else," Fleury said, adding
that the Denver upgrade is expected to begin after a new franchise is negotiated with city
officials and approved by local voters in November.

Meanwhile, it remains unclear when, or if, U S West will
choose to compete with TCI on the video side at Lowry.

The RBOC currently plans to focus on its "Choice
TV" and "Choice Online Service," which it recently launched commercially in
competition with Cox Communications Inc. in Phoenix and its surrounding suburbs. The
service is delivered over the telco's existing copper telephone lines using VDSL
(very high-speed DSL) technology.

Beigie said the RBOC has signed up
"several-hundred" customers since launching in Phoenix, and it hopes to have
1,000 subscribers on board by midyear.

"We'll stay focused on our current strategy in
Phoenix," Beigie said. "Once that's up and running well, we'll start
looking at the next logical markets [for video]."

Whether Denver will be one of those markets remains
problematic, however.

U S West's inquiries about offering cable service at
Lowry ran into a stumbling block last year, when Denver city officials insisted that it
would need a franchise that would obligate it to serve the entire city. Moreover, that
franchise would have to be approved by Denver voters.

City officials said that because the LRA had been given
broad decision-making authority to prevent the redevelopment at Lowry from bogging down, U
S West felt that its designation as the project's preferred telecommunications
provider would allow it to service the area exclusively.

Although U S West then seemingly backed away from adding
cable to its menu of services at Lowry, Dean Smits, executive director of the Denver
Office of Telecommunications, said TCI's launch of @Home may cause the telco to
reconsider.

"I fully anticipate that the other shoe is going to
drop," Smits added.

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