Time Warner Pulls Telecom IPO

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New York -- The suddenly soft market for initial public
offerings claimed another victim last week, as Time Warner Inc. pulled its planned IPO for
its competitive-local-exchange-carrier unit.

Instead, Time Warner Telecom doubled the size of a
previously planned public-debt sale, to $400 million. The company said the IPO delay was
temporary, blaming market conditions. Time Warner Telecom is also partly owned by MediaOne
Group and Advance/Newhouse Partnership, the MSO's partners in Time Warner
Entertainment.

"They'll fold their tent and come back another
day," said John Fitzgibbon, editor of the IPO Report newsletter. After a solid
spring, roughly coinciding with NASDAQ's early peak in mid-April, the IPO market
turned down, and "the month of June was just crummy," Fitzgibbon said.

Of 57 IPOs that were priced last month, only seven went off
at prices above the estimated range, while 24 were below the range. The pipeline of new
IPO registrations is drying up, too, and several have been delayed or canceled. But just
as NASDAQ moved into record territory last week, the tech-heavy IPO market is likely to
pick up again, Fitzgibbon said.

Time Warner Telecom had wanted to raise about $175 million
from the IPO, which was underwritten by Morgan Stanley Dean Witter and Lehman Bros. Time
Warner hadn't disclosed the size of the offering, which was to have been priced this
week, but it said it planned to sell a minority stake to the public.

The unit, which had $55.4 million in revenue in 1997 and a
reported net loss of $68.8 million, operates in 19 markets, and it wants to expand into
other cities where it can share fiber with cable systems.

In May, before the downturn, Adelphia Communications Corp.
successfully took its Hyperion Telecommunications Inc. CLEC unit public. Hyperion sold
12.5 million shares at $16 per share, which was at the upper end of its estimated pricing
range. It later sold another 350,000 shares at the IPO price, raising about $243 million,
to be used to expand existing networks and enter new markets, the company said.

Hyperion has continued to trade in the mid-teens. Its
closing price last Tuesday was $16.44.

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