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To: Boplicity who wrote (8996)	5/4/1999 9:36:00 AM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 29970

Greg, at this moment the only thing that must carry is my arse off to work. I'd like to reply to this later in the day or tomorrow. Frank

To: Boplicity who wrote (8996)	5/4/1999 12:30:00 PM
From: ahhaha	Read Replies (3) \| Respond to of 29970

Digital Must-Carry May Carry Heavy Price By Karen J. Bannan INTER@CTIVEWEEK 4/19/99 AT&T has stated repeatedly that local telephone service is a serious goal for the company - using the cable infrastructures of its newly acquired Telecommunications Inc. unit and Time Warner, another leading cable system with which the company has an agreement. Yet, a new study released by industry research firm Cahners InStat Group hints that cable operators may not have the system capacity if an all-encompassing digital must-carry ruling is put into effect. Digital must-carry is a pending FCC regulation that would require cable systems to provide digital signals from over-the-air broadcasters. An AT&T spokeswoman said the company is studying digital must-carry, but she emphasized that AT&T is committed to providing local service. AT&T's troubles don't stop at digital must-carry. The company this month lost some of its control over its cable broadband service provider AtHome (www.home.net), which had been seen as one outlet for local services. But the more troubling prospects for AT&T (www.att.com) may be any regulations that tie up TCI's (www.tci.com) cable lines. "AT&T expects to sign up between 25 [percent] and 30 percent of its 10 million and Time Warner's 13 million customers; but if they are forced to carry up to 20 local stations digitally, it may not happen," said Gerry Kaufhold, principal analyst at Cahners In-Stat Group (wwwinstat.com). According to Kaufhold, the threat isn't limited to AT&T. "This is something that could affect every cable operator, even if they aren't planning local telephone service," he said. Cahners In-Stat Group predicts digital must-carry could cost the cable industry up to $3.3 billion in lost revenue over the next five years, with $1.1 billion of that coming directly from local telephone service revenue, according to Kaufhold. Cahners In-Stat is calling for a moratorium on any digital must-carry ruling until September 2001. AT&T faces another potential problem at AtHome. AT&T fell short of its subscriber commitments, leaving itself open for Comcast or Cox Communications- the other two major stakeholders in AtHome - to terminate their exclusivity agreements with At Home. Cox waived its right, but AtHome was forced to comply with concessions that limit AT&T's control over the board. In the past, AT&T could vote its three seats however it wanted. But, under the new plan, AT&T must have the majority vote as well as the single-seat vote of either Comcast or Cox to pass any ballots. Meanwhile, AtHome earlier this month was plagued by service outages in the Fremont, Calif., area. This is the second time in six months that it has had an extended outage. Cable To Get Hung Up on Digital Must-Carry From now through 2001 cable TV operators can absorb digital must-carry and offer phone service, but things will change starting in 2001. > By 2002, local TV stations are supposed to be on the air with their digital signals. > In major metropolitan areas where cable TV systems are likely to be the first to offer local phone service, this could mean the addition of 10 or more digital signals falling under digital must-carry regulations. > If cable TV systems are forced to carry these additional digital signals, they will not have the capacity to offer local phone service and could lose up to $1.3 billion in revenue.