Southern MultiMedia Communications, Inc. - Page 16




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              The language of Wometco's franchise agreements does reflect             
         various specific requirements for surety bonds, franchise fees,              
         and insurance coverage.  Specific language, however, regarding               
         rebuilds is conspicuously absent from the franchise agreements.              
         The only language in Wometco's franchise agreements expressly                
         referencing channel capacity, the key factor triggering rebuilds,            
         is the language that requires maintenance of a minimum channel               
         capacity.                                                                    
              Technology growth in the cable television industry has been             
         particularly rapid.  As of the time of trial, utilizing new                  
         digital video compression and fiber optic cable, the latest                  
         technology would enable cable television companies to rebuild                
         their systems to a capacity of 500 channels and to provide high              
         speed Internet access.  To maintain, during each year, completely            
         state-of-the-art systems, cable television companies would have              
         had to rebuild their systems every few years.2  To the contrary,             
         with regard to the six cable television systems in issue, Wometco            

          2    The schedule below reflects the changing cable television              
          technology available throughout the years with regard to channel            
          capacity:                                                                   
                                             Maximum                                  
                              Year      Channel Capacity                              
                              1967           23                                       
                              1979           40                                       
                              1981           54                                       
                              1982           60                                       
                              1984           80                                       
                              1993           115                                      
                              1995           136                                      
                              1999           500                                      




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Last modified: May 25, 2011