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Chile MSO Partners Dispute Internet Biz

A dispute between the owners of Chilean MSO Metropolis
Intercom over the distribution of revenue from its planned Internet-over-cable business
could take more than six months to resolve, according to a source close to the situation.

The two warring factions are dominant Chilean telco
Compañía de Telecomunicaciones de Chile S.A. (CTC), which owns 40 percent of Metropolis,
and Cordillera Comunicaciones, which holds the remaining 60 percent.

Cordillera is a holding company 50 percent-owned by local
investor Ricardo Claro and 50 percent-owned by Tele-Communications International Inc.
(TINTA), which is now part of TCI Ventures Group.

A few months ago, it became known that both sides would
enter into arbitration over the Internet-services-provision business.

Since then, they have remained press-shy, not making any
official announcements.

An investor in the Cordillera camp who asked not to be
identified said the dispute centers around how "revenues should be shared. It has to
do with a clarification over our original agreement related to Internet over cable."

The matter is in a private court of arbitration in Chile
that is responsible for settling industrial disputes. For this reason, the companies have
kept a low profile.

According to the source, arbitration has only recently
begun, and the dispute could take well over six months to be resolved.

Metropolis and its main rival, VTR Cablexpress, account for
the bulk of Chile's 780,000 cable-TV and wireless cable-TV subscribers.

The Chilean cable market is projected to grow at 6 percent
to 7 percent per year after hitting a slowdown in 1997 and 1998.