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CABLE TV BRACING FOR RE-REGULATION, FITCH SAYS -- FITCH FINANCIAL WIRE --

 NEW YORK, Aug. 2 /PRNewswire/ -- Re-regulation of the cable television industry will impact individual cable companies to varying degrees, Fitch says in a report published today, "Cable Braces For Re- Regulation." Success in the new arena will be based a company's ability to withstand a basic service rate rollback, operate within a regulated environment, and meet capital spending requirements necessary to maintain technologically advanced plant and equipment.
 While re-regulation alone does not present a doomsday scenario, it will impede most cable operators' ability to both deleverage and invest in technologically advanced plant and equipment. As a result, leverage and coverage improvements will be limited near term. In some instances, these measures may deteriorate further unless aided by equity infusions, refinancings, and/or rapid growth in unregulated revenues. Longer-term improvements are expected. However, these will be limited to companies that can invest in, develop, and market new services.
 To the extent a cable company does not have to rely on additional debt to finance the next generation of technology, it will have greater capacity to improve its competitive position and credit profile, particularly in a regulated environment. A company's ability to internally generate enough cash to finance its interest, dividend, and capital expenditure requirements, as well as meet scheduled debt maturities, becomes increasingly important as the cable industry faces more direct competition from local telephone companies and others.
 Cable operators least affected by re-regulation are investment-grade companies such as Time Warner Inc. (senior debt `BBB-'), Tele- Communications, Inc. (`BBB-'), and Viacom International Inc. (`BBB-'), entities that have the financial strength to absorb the expected basic rate rollbacks. Generally, these are the same companies that generate substantial cash flow after interest, dividends, and capital expenditures, have access to diversified sources of capital, and have extended debt maturities to more appropriately reflect their asset base. Highly leveraged companies with limited free cash flow generating ability will be hurt most by the rate rollback because their ability to make the capital expenditures needed to remain competitive will be weakened.
 -0- 8/2/93
 /CONTACT: Keith B. Foley, 212-908-0572, or Stuart M. Rossmiller, 212-908-0639, both of Fitch/


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MP -- NY060 -- 8346 08/02/93 11:59 EDT
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Publication:PR Newswire
Date:Aug 2, 1993
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