U.S. Bancorp Piper Jaffray Analyst Pegs Cable Operators as Winners in the Race

May 29, 2002

To Provide Integrated Video and High-Speed Data Services

MINNEAPOLIS, May 29 /PRNewswire-FirstCall/ -- In a recent in-depth report entitled Broadband Cable System Primer, U.S. Bancorp Piper Jaffray Senior Cable, Video and Entertainment Analyst Anthony Gikas asserts that cable operators (commonly referred to as MSOs -- multiple system operators) have a commanding lead in the growing video and residential high-speed data business, which may provide long-term investors with a favorable investment opportunity.

We believe this lead is sustainable, due in part to the cable industry's $60 billion-plus investment in upgrading its cable system infrastructure to a state-of-the-art, bi-directional, scalable residential broadband communications platform, said Gikas.

In addition, Gikas believes MSOs have a realistic perception of the market and business models that reflect achievable goals.  He estimates 13 percent to 14 percent revenue and operating cash flow growth-per-annum and strong and sustainable free-cash-flow long term.  To continue their lead, Gikas believes MSOs must market their services and step out as crusaders for residential broadband activity.

Having built out the necessary infrastructure, we believe MSOs must now focus on selling and marketing 'integrated broadband services' to leverage their robust broadband pipe into the customer's home, said Gikas.  In our opinion, cable's broadband platform differentiates it from the competition and ultimately provides a key competitive advantage over other broadband providers.

In Gikas' opinion, bundling video, voice and data services creates a significant value proposition for both the subscriber and the MSO due to increased customer loyalty, resulting in reduced customer churn and more efficient use of the broadband pipe.  Additionally, we believe the high-speed data service (HSD) industry standard known as DOCSIS (Data Over Cable Service Interface Specification) will enable tiered services and pricing options, enlarging the services' appeal to various demographic and user groups.

Finally, Gikas believes that the scalable nature of the latest cable system build-out will reduce the need for capital expenditures and ultimately excess capacity, a common killer of telecommunications companies.

In our opinion, the latest cable-system rebuild efforts will sustain the industry for several years to come with additional capacity in the future derived from the continued digitalization of cable and the adoption of the latest in data transmission technology, said Gikas.  We believe additional capacity can be added in a highly targeted manner due to the architectural configuration of the system infrastructure, reducing the need for blanket capital expenditures, and in turn, reducing excess capacity.

Gikas sees Charter Communications, Inc. (CHTR--$7.90, Outperform, #), Cox Communications, Inc. (COX--$33.55, Outperform, #) and Mediacom Communications Corporation (MCCC--$11.79, Outperform, #) as the winners in this space long term.

Charter Communications -- Under the new leadership of Carl Vogel, Charter is well positioned to grow its business and continue to be a dominant player in the residential broadband industry said Gikas.  We anticipate Charter will continue to push the technology envelope and lead the industry by aggressively rolling out enhanced new services including video-on-demand, interactive television and T-commerce applications.  In our opinion, Charter's strategy will serve its stockholders well over the long term.

Cox Communications -- Cox has the premier broadband platform for selling new services and we expect it will continue to be successful in bundling its video, data and residential telephone offering-the broadband triple play, said Gikas.  A high-quality subscriber base, combined with innovative marketing, makes Cox a core growth holding for long-term oriented investors, in our opinion.

Mediacom Communications -- With a fully funded business plan, ample liquidity, industry leading operating-cash-flow growth, and attractive valuation, we believe investors in Mediacom will be rewarded over the long-term, said Gikas.

U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based
U.S. Bancorp (NYSE: USB), provides a full range of investment products and services to businesses, institutions and individuals.  The company's investment banking business has grown significantly in the last several years by focusing on the needs of growth companies in the health care, technology, financial institutions, consumer and communications growth sectors.  U.S. Bancorp Piper Jaffray has a national reputation for its expertise in fundamental research and equity and debt financing. U.S. Bancorp offers a comprehensive range of financial solutions through U.S. Bank, U.S. Bancorp Asset Management, U.S. Bancorp Investments and U.S. Bancorp Piper Jaffray.

The following disclosures apply to stocks mentioned in this report if and as indicated: (#) U.S. Bancorp Piper Jaffray (USBPJ) makes a market in the company's securities. (ˆ) USBPJ analysts who follow this company, or members of their household, have a beneficial interest in the company's securities. USBPJ analysts or members of their household may sell such positions while a Strong Buy, Outperform, or Market Perform rating is maintained; however, they may do so only upon appropriate USBPJ management approval. (>) USBPJ analysts who follow this company, or members of their household, have a beneficial interest in the company's securities that were acquired in a private transaction pre-IPO. USBPJ analysts or members of their household may sell such positions while a Strong Buy, Outperform, or Market Perform rating is maintained; however, they may do so only upon appropriate USBPJ management approval. (@) Within the past three years, USBPJ was managing underwriter of an offering of, or dealer manager of a tender offer for, the company's securities or the securities of an affiliate. (˜) A USBPJ officer, director, or other employee is a director and/or officer of the company.

This material is based on data obtained from sources we deem to be reliable; it is not guaranteed as to accuracy and does not purport to be complete.  This information is not intended to be used as the primary basis of investment decisions.  Because of individual client requirements, it should not be construed as advice designed to meet the particular investment needs of any investor.  It is not a representation by us or an offer or the solicitation of an offer to sell or buy any security.  Further, a security described in this release may not be eligible for solicitation in the states in which the client resides.  U.S. Bancorp and its affiliated companies, and their respective officers or employees, or members of their families, may have a beneficial interest in the company's securities and may purchase or sell such positions in the open market or otherwise.  This report is a communication made in the United Kingdom by U.S. Bancorp Piper Jaffray to market counterparties or intermediate customers and is exclusively directed at such persons; it is not directed at private customers and any investment or services to which the communication may relate will not be available to private customers.  In the United Kingdom, no persons other than a market counterparty or an intermediate customer should read or rely on any of the information in this communication.  Additional information is available upon request.

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SOURCE  U.S. Bancorp Piper Jaffray

    -0-                             05/29/2002

/CONTACT:  Erin Freeman, Director of Public Relations, +1-415-277-1556, or Dana H. Wade, Public Relations, +1-650-838-1329, both of U.S. Bancorp Piper Jaffray/

/Web site:  http://www.piperjaffray.com  /


CO:  U.S. Bancorp Piper Jaffray; U.S. Bancorp; Charter Communications, Inc.;

Cox Communications, Inc.; Mediacom Communications Corporation

ST:  New York, Minnesota

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2218 05/29/2002 10:14 EDT http://www.prnewswire.com


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