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InvestorsAugust 28, 2001

Charter Alleges Southwestern Bell Ads `False & Misleading'

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ST. LOUIS, Aug 28, 2001 (BUSINESS WIRE) --

Federal Lawsuit Charges Ads Violate Truth in Advertising Law

Charter Communications, Inc. (Nasdaq:CHTR) filed a lawsuit today in U.S. District Court in Missouri charging Southwestern Bell Telephone with perpetrating a false advertising campaign that deceives and misleads consumers about cable modem Internet service.

In the lawsuit, Charter asks Southwestern Bell to discontinue its "Cable Modem Slowdown" advertising campaign, which promotes the telephone company's digital subscriber line (DSL) high-speed Internet service, by making false and misleading claims about high-speed cable modem Internet service. The lawsuit charges Southwestern Bell with violating the federal Lanham Act, which governs truth in advertising and unfair competition, and alleges the telephone company violated Missouri law.

"Southwestern Bell's ad campaign uses false and misleading television, radio and print advertising to unfairly compete with Charter in the promotion of the telephone company's DSL service," said Curt Shaw, senior vice president, general counsel and secretary of Charter. "Southwestern Bell won't compete on a level playing field, so they've resorted to deceiving consumers by making false statements about cable modem Internet service."

Mr. Shaw said Charter sent a letter in August to Edward E. Whitacre Jr., chairman & CEO of SBC Communications, the parent company of Southwestern Bell, asking the company to stop running the ads. "But SBC has never responded and the ads are still being used to deceive consumers," Mr. Shaw said.

"The ads convey a message that cable modem Internet service slows down during peak usage hours, and that DSL does not," Mr. Shaw said. "The truth is that cable modem speeds are not affected during peak Internet usage times any more than their DSL service speeds are. In fact, we guarantee our cable modem speeds in St. Louis."

"Southwestern Bell is misleading consumers because of the success we've achieved in our rollout of high-speed cable modem Internet service," Mr. Shaw said. "At the end of June, we provided cable modem Internet service to about 400,000 customers and are on track to serve more than 550,000 data customers by the end of this year."

Mr. Shaw said Charter believes "competition is in the consumer's best interest and that we have an obligation to be honest with the consumer. Apparently, Southwestern Bell doesn't feel it has the same obligation," he said.

About Charter Communications Charter Communications, a Wired World(TM) company, is among the nation's largest broadband communications companies, currently serving some 7 million customers in 40 states. Charter provides a full range of advanced broadband services to the home, including cable television on an advanced digital video programming platform marketed under the Charter Digital Cable(TM) brand and high-speed Internet access via Charter Pipeline(TM). Commercial high-speed data, video and Internet solutions are provided under the Charter Business Networks(TM) brand. Advertising sales and production services are sold under the Charter Media(TM) brand.

A Fortune 500 company, Charter is the 2001 recipient of the Outstanding Corporate Growth Award from the Association for Corporate Growth, the 2001 R.E. "Ted" Turner Innovator of the Year Award from the Southern Cable Telecommunications Association, and the 2000 Innovator Award for Technology from Cablevision Magazine.

CONTACT: Charter Communications, Inc.
Andy Morgan, 314/543-2217