FOR IMMEDIATE RELEASE                                                                               July 16, 2002

CARY, NC – The Town of Cary has decided to go toe-to-toe with Time Warner Cable again, this time challenging the company’s claims to the federal government that it should be exempt from all rate regulation by federal, state or local governments and be able to charge whatever it wants for basic services.

On July 1, 2002, attorneys for Time Warner Cable filed a petition with the Federal Communications Commission asking the agency to declare that "effective competition" now exists from satellite dishes in Cary and surrounding communities. Time Warner says that the satellite services are comparable to its own services and available to enough citizens to allow the FCC to declare that TWC is no longer acting like a monopoly, even though it’s the only cable television service in the area.

Effective competition is a regulatory term developed by the FCC to describe the markets in which cable companies operate relative to the number of service providers in that market. The FCC can make a determination of "effective competition" if the vast majority of a market is served by one provider (TWC) and part—15 percent--is served with comparable video service by a second provider that makes its services available to at least 50 percent of the households.

"Basic services of cable and satellite are not comparable," said Susan Moran, the Town of Cary’s Public Information Officer and cable administrator. "Satellite can be susceptible to reception problems during poor weather, and satellite service does not include public, education, or government access channels for our citizens. Until there is another cable communications company in town offering competitive services to our citizens, we have an obligation to do everything we can to keep basic rates low."

If the FCC rules in TWC’s favor, governments will have no authority to intervene on basic rate issues on behalf of citizens. For Cary, this is significant since the Town was able to use its regulatory authority to get basic service rates reduced to $8.45 in Cary in February, an action that would no longer be allowed if the FCC declares that the Triangle is subject to "effective competition".

The Town of Cary has contracted with Washington, DC consultants Rice, Williams Associates to develop its response and to represent the citizens of Cary before the FCC as necessary. The Town expects RWA to file its response within the next three weeks.

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