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PARAGON CABLE ANNOUNCES PRELIMINARY RESULTS OF SALES ACTIVITY INVESTIGATION

 PARAGON CABLE ANNOUNCES PRELIMINARY RESULTS
 OF SALES ACTIVITY INVESTIGATION
 MINNEAPOLIS, June 8 /PRNewswire/ -- Officials of Paragon Cable today announced the preliminary results of their investigation into allegations raised May 13 regarding activities in the company's direct sales operations. The investigation resulted from Executive Vice President and General Manager Wayne Knighton's commitments, communicated on May 14, to conduct "a thorough and complete review." The purpose of the investigation was to ensure that any breach of company policy to equitably market its services would be identified, corrected and remedied.
 Earlier today, Paragon Cable fully complied with document requests from the City of Minneapolis' Office of Telecommunications and its Civil Rights Department. The company also reiterated its pledge to cooperate with any continuing investigation by the city.
 "Paragon Cable is extremely serious about the public trust invested in us as the provider of cable programming to our service area," Knighton said. "We have taken thorough and appropriate action as quickly as due process would allow.
 "Based upon the preliminary results of our investigation, I believe that no laws or franchise commitments were broken, and that there was no intention on anyone's part to do so," continued Knighton. "At the same time, we take full responsibility, not only for the specific actions of employees, but also for a working environment that enabled those actions to occur. In particular, the use of the term 'redlining' in the memorandum referenced in May 13 news accounts, is deeply offensive to us and a violation of our own internal policy."
 PRELIMINARY RESULTS
 The investigation, conducted by outside legal counsel, included extensive review of company documents and interviews with more than 30 employees. Preliminary results of the investigation indicate that:
 -- neither the referenced memorandum, nor other communications directing Paragon sales activity, denied consumer access to cable service on the basis of race. For example, 15 percent of total sales, and 16.4 percent of direct sales, for the past 16 months occurred in zip codes 55411, 55407 and 55405 (those areas involved in the allegations). Those same zip codes account for 14 percent of homes in the company's service area.
 -- the intent of those sales and management staff was entirely related to increasing sales and sales retention; there is no evidence of intention to racially discriminate.
 -- there is no evidence that any company employees tried to circumvent the law, or had any such intention.
 -- there is no evidence that management, higher than the director of sales, was aware of the referenced memorandum prior to May 13, 1992.
 -- the previously referenced memorandum, and other communications in the same time frame by certain members of the Paragon sales management staff, were a violation of the company's commitment to equitably market its products.
 Corrective Actions and Remedies
 Knighton indicated that based upon the preliminary results of the investigation, two members of sales management were placed on suspension, pending completion of the company's investigation and in accordance with the existing disciplinary procedures.
 Additional corrective actions undertaken by the company include:
 -- immediate changes in the approval process within the company for development and implementation of all marketing and sales promotion programs. As a result, top management will be fully informed of the intentions and implications of all sales activities.
 -- exploration of programs to improve marketing to culturally diverse populations.
 -- plans to offer a free installation promotion in zip codes 55411, 55407 and 55405 to counteract any consumer perception that there has not been equitable marketing to those service areas. "Accusations related to the company's direct sales efforts in these zip codes have eroded public confidence in our commitment to equitably market throughout our service area," Knighton said. "We want to take this opportunity to underscore that commitment."
 -- renewed emphasis on programs to collaborate with neighborhood and civic organizations as part of its ongoing business practice. "These accusations are particularly painful because they concern the neighborhoods surrounding our company offices," Knighton said. "This is home for many of our employees. Having solid, trusting relationships with the neighborhoods has been and continues to be a foundation of our business philosophy."
 -- continuing discussions with city officials to assure that, particularly as it relates to access to service and marketing, the city is receiving all necessary information.
 Paragon Cable provides cable information and entertainment services to more than 106,000 customers in the Twin Cities area and employs more than 240 people. Paragon Cable is headquartered in Minneapolis and serves the cities of Minneapolis, Eden Prairie, Edina, Hopkins, Minnetonka and Richfield.
 -0- 6/8/92
 /CONTACT: Debra Cottone of Paragon Cable, 612-522-5200/ CO: Paragon Cable ST: Minnesota IN: ENT SU:


AL -- MN011 -- 8121 06/08/92 17:42 EDT
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Date:Jun 8, 1992
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