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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2002

or

For the transition period from to                                      to                                     

        Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

        Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrants' knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.            

        Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

        Aggregate market value of voting stock held by nonaffiliates of Cablevision Systems Corporation based on the closing price at which such stock was sold on the New York Stock Exchange on June 28, 2002: $1,855,738,564.

Number of shares of common stock outstanding as of March 14, 2003:

        Documents incorporated by reference—The Registrants intend to file with the Securities and Exchange Commission, not later than 120 days after the close of their fiscal year, a definitive proxy statement or an amendment to this report containing the information required to be disclosed under Part III of Form 10-K under cover of Form 10-K/A.

TABLE OF CONTENTS

PART I

Item 1. Business

        This combined Annual Report on Form 10-K is separately filed by Cablevision Systems Corporation and CSC Holdings, Inc.

Cablevision Systems Corporation

        Cablevision Systems Corporation is a Delaware corporation which was organized in 1997. Cablevision's only asset is all of the outstanding common stock of CSC Holdings.

CSC Holdings

        CSC Holdings is a Delaware corporation which was organized in 1985 and is one of the largest cable operators in the United States. We also have investments in cable programming networks, entertainment businesses and telecommunications companies. As of December 31, 2002, we served about 2.96 million cable television subscribers in and around the New York City metropolitan area, making us the sixth largest cable operator in the United States based on the number of subscribers. Through our wholly-owned subsidiary, Rainbow Media Holdings, Inc., we own interests in and manage numerous national and regional programming networks, the Madison Square Garden sports and entertainment business and cable television advertising sales companies. Through Cablevision Lightpath, Inc., our wholly-owned subsidiary, we provide switched telephone services and high-speed Internet access to the business market. We also own or have interests in a number of other businesses and companies that include Clearview Cinemas (a chain of 57 movie theaters) and Northcoast Communications, LLC (a wireless personal communications services business).

        The following businesses and interests owned by Cablevision are concentrated primarily in the New York metropolitan area:

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the cable television business, including the high-speed data and residential telephone businesses,

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the commercial telephone and high-speed data services operations of Lightpath,

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the New York metropolitan area sports and entertainment business, including Madison Square Garden, professional sports teams, Radio City Music Hall, MSG Network and Fox Sports Net New York,

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the motion picture theater business of CCG Holdings, Inc., doing business as Clearview Cinemas,

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the MetroChannels, which feature local sports, news, educational and other programming in the New York City metropolitan area,

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News 12 Networks, a regional news business in the New York City metropolitan area, and

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the advertising sales representation business.

        Following are the Company's national and regional (outside the New York metropolitan area) programming assets and investments which are held by Rainbow Media Holdings:

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the interests in four nationally distributed 24-hour entertainment programming networks:



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AMC (80%),



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The Independent Film Channel (80%),



•

WE: Women's Entertainment (80%), and



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MuchMusic USA (100%),

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•

the 60% ownership interest in the following regional sports networks owned by Regional Programming Partners, both of which Rainbow Media Holdings manages under the Fox Sports Net name:



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Fox Sports Net Florida, and



•

Fox Sports Net Ohio,




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the 30% ownership interest in the following regional sports networks owned by Regional Programming Partners, all of which Rainbow Media Holdings manages under the Fox Sports Net name:



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Fox Sports Net Chicago,



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Fox Sports Net Bay Area, and



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Fox Sports Net New England,




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the 50% ownership interest in National Sports Partners, which owns and distributes Fox Sports Net,



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the 50% ownership interest in National Advertising Partners, which provides national advertising representation services to all of the Fox Sports Net regional sports networks,



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Rainbow Network Communications, a full service network programming origination and distribution company, and



•

Sterling Digital LLC, which operates Mag Rack, a company that develops new niche audience programming.

In addition, the Company owns the following assets:

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common stock of Charter Communications, Inc. received in September 2000 upon the sale of the Kalamazoo, Michigan cable television systems,



•

common stock of Adelphia Communications Corporation received in November 2000 upon the sale of the cable television systems in the greater Cleveland, Ohio metropolitan area,



•

common stock of AT&T Corp. received in January 2001 upon the sale of cable television systems in Boston and eastern Massachusetts, the AT&T Wireless Services, Inc. common stock received in July 2001 in a stock distribution by AT&T, and the Comcast Corporation common stock received in November 2002 as a result of the AT&T Broadband and Comcast merger,



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common stock of General Electric Company received in December 2002 upon the sale of our interest in the Bravo programming service,



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certain direct broadcast satellite assets, and



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the interest in Northcoast Communications, a wireless personal communications services business.

Tracking Stock

        In March 2001, we created and distributed to our stockholders one share of our Rainbow Media Group tracking stock for every two outstanding shares of Cablevision common stock and redesignated each share of Cablevision common stock into one share of our Cablevision NY Group common stock. The Rainbow Media Group Class A tracking stock traded on the New York Stock Exchange ("NYSE") under the symbol "RMG" and the redesignated Cablevision NY Group Class A common stock continued to trade on the NYSE under the symbol "CVC". The Rainbow Media Group tracking stock was intended to reflect the separate economic performance of certain of the businesses and interests of

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Rainbow Media Holdings, including its national and selected regional programming assets. Cablevision NY Group common stock was intended to reflect the performance of our assets and businesses not attributed to the Rainbow Media Group.

        In August 2002, Cablevision's board of directors approved the exchange of Rainbow Media Group common stock for shares of Cablevision NY Group common stock pursuant to the terms of Cablevision's certificate of incorporation. Each share of Rainbow Media Group common stock was exchanged for 1.19093 shares of Cablevision NY Group common stock on August 20, 2002. Fractional shares were paid in cash. From and after the date of the exchange, all rights of holders of shares of Rainbow Media Group common stock ceased except for the right, upon surrender of the certificates representing their shares of Rainbow Media Group common stock, to receive the shares of Cablevision NY Group common stock for which their shares of Rainbow Media Group common stock were exchanged, together with any fractional payment as provided above, without interest.

The Holding Company Reorganization

        Until March 4, 1998, CSC Holdings was known as Cablevision Systems Corporation. On that date, CSC Holdings completed a holding company reorganization whereby it formed a holding company (now named Cablevision Systems Corporation) and CSC Holdings became a subsidiary of Cablevision Systems Corporation.

        In the 1998 holding company reorganization, the Class A common stock and Class B common stock of CSC Holdings were converted into identical securities of Cablevision and the Class A common stock of Cablevision became listed on the American Stock Exchange and traded under the symbol "CVC". On December 7, 1999, Cablevision's Class A common stock began trading on the NYSE. Cablevision owns all of the common stock of CSC Holdings.

Telecommunications Services

General

        Cable television is a service that delivers multiple channels of television programming to subscribers who pay a monthly fee for the services they receive. Television signals are received over-the-air or via satellite delivery by antennas, microwave relay stations and satellite earth stations and are modulated, amplified and distributed over a network of coaxial and fiber optic cable to the subscribers' television sets. Cable television systems typically are constructed and operated pursuant to non-exclusive franchises awarded by local governmental authorities for specified periods of time.

        Our cable television systems offer varying levels of service which may include, among other programming, local broadcast network affiliates and independent television stations, certain other news, information and entertainment channels such as CNN, CNBC, ESPN, and MTV, and certain premium services such as HBO, Showtime, The Movie Channel, Starz and Cinemax.

        Our cable television revenues are derived principally from monthly fees paid by subscribers. In addition to recurring subscriber revenues, we derive revenues from the sales of pay-per-view movies and events, from the sale of advertising time on advertiser supported programming and from installation charges. Certain services and equipment provided by substantially all of our cable television systems are subject to regulation.

        As of December 31, 2002, our cable television systems served approximately 2,963,000 subscribers, primarily in and around the New York City metropolitan area.

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        The following table sets forth certain statistical data regarding our cable television and high-speed data services operations as of the dates indicated.

(1)

Homes passed is based upon homes actually marketed and does not include multiple dwelling units passed by the cable plant that are not connected to it.

(2)

Based on recurring service revenues for the last month of the period, excluding installation charges and certain other non-recurring revenues such as pay-per-view, advertising and home shopping revenues. See "Subscriber Rates and Services; Marketing and Sales."

(3)

Homes released are homes in areas that can be served by our high-speed data service. Homes in additional areas are being released as we complete our cable plant upgrade and add other necessary equipment to support the high-speed data business in those new areas. Homes released do not include multiple dwelling units passed by the cable plant that are not connected to it.

        The Company's cable television systems are concentrated in and around the New York City metropolitan area. We believe that these systems comprise the largest metropolitan cluster of cable television systems under common ownership in the United States (measured by number of subscribers).

Subscriber Rates and Services; Marketing and Sales

        Our cable television systems offer a package of services, generally marketed as "Family Cable", which includes, among other programming, news, information and entertainment channels such as CNN, CNBC, ESPN and MTV. For additional charges, our cable television systems provide certain premium services such as HBO, Showtime, The Movie Channel, Starz and Cinemax, which may be purchased either individually or in combinations or in tiers.

        In addition, our cable television systems offer a basic package ("Broadcast Basic") which includes broadcast network local affiliates, local independent stations and public, educational or governmental channels and certain leased access channels.

        We have a branded product offering called "Optimum TV", which packages all of the channels on Family Cable as well as all of the premium networks available on our cable television systems at discounted prices. Optimum TV includes the Broadcast Basic service noted above, as well as all of the premium a la carte programming available on the cable system, grouped into premium packages some of which include digital programming. Optimum TV also includes additional pay-per-view channels that offer movies and sporting events on a transactional basis.

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        In addition, we offer premium services on an individual basis and as components of different "tiers". Successive tiers include additional premium services for additional charges that reflect discounts from the charges for such services if purchased individually. For example, in most of our cable television systems, subscribers may elect to purchase Family Cable plus one, two or three premium services with declining incremental costs for each successive tier.

        We began the rollout of our digital cable service, branded "iO: Interactive Optimum", in September 2001. Our digital cable services include a mix of additional cable television programming, interactive services and multiple channels of commercial-free digital music as well as enhanced picture quality and CD quality sound. Digital cable programming and services include:

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additional cable channels only available to digital subscribers,



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additional channels including multiple channels ("multiplexes") of HBO, Showtime and other premium services,



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access to video on demand and subscription video on demand programming for all digital customers,



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Mag Rack, "magazine rack" channels offering content for niche audiences, and



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interactive services including news, sports, weather, traffic, email and MSG Game Director, which allows subscribers to select camera angles to watch New York Knicks and New York Rangers home games.

        iO: Interactive Optimum is available to over 3.4 million of the 4.4 million homes passed.

        Since our existing cable television systems are substantially fully built, our sales efforts are primarily directed toward increasing penetration and revenues in our franchise areas. We market our cable television services through in-person selling, as well as telemarketing, direct mail advertising, promotional campaigns and local media and newspaper advertising.

        Certain services and equipment (converters supplied to subscribers) provided by substantially all of our cable television systems are subject to regulation. See "Regulation—Cable Television."

System Capacity

        We are engaged in an ongoing effort to upgrade the technical capabilities of our cable plant and to increase channel capacity for the delivery of additional programming and new services. Our cable television systems have a minimum capacity of 42 channels. Currently 98% of our homes are served by at least 77 channels and 95% of the total plant is 750 MHz capable two-way interactive. As a result of ongoing upgrades, we expect that by December 2003, 100% of our subscribers will be served by systems having a capacity of at least 77 channels and 100% of the total plant will be 750 MHz capable two-way interactive. All of the system upgrades either completed or underway will utilize fiber optic cable.

Programming

        Adequate programming is available to the cable television systems from a variety of sources, including that available from Rainbow Media Holdings and affiliates of Fox Entertainment Group, Inc. Program suppliers' compensation is typically a fixed, per subscriber monthly fee based, in most cases, either on the total number of subscribers of the cable television systems and certain of its affiliates, or on the number of subscribers subscribing to the particular service. The programming contracts are generally for a fixed period of time and are subject to negotiated renewal. Cable programming costs have increased in recent years and are expected to continue to increase due to additional programming being provided to most subscribers, increased costs to produce or purchase cable programming and

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other factors. We believe that the cable television systems will continue to have access to programming services at reasonable price levels.

Franchises

        The cable television systems are operated primarily in New York, New Jersey and Connecticut under non-exclusive franchise agreements with state or municipal franchising authorities. Franchise authorities generally charge a franchise fee of up to 5% of certain of our revenues that are derived from the operation of the system within such locality. As permitted by law, these fees are generally collected from subscribers and remitted to the local franchising authority.

        Franchise agreements are usually for a term of ten to fifteen years from the date of grant, although some renewals have been for shorter terms, generally between five and ten years in length. Some of the franchises grant us an option to renew upon expiration of the initial term. Seven of our ten largest franchises expire between 2007 and 2010. Of the other three, two have expired and one expires in November 2003. One of the two expired franchises has been approved by the local franchising authority and is pending confirmation by the New York State Public Service Commission.

        In situations where franchises have expired or not been renewed, we operate under temporary authority granted by the state cable television regulatory agencies, while negotiating renewal terms with franchising authorities. The Cable Communications Policy Act of 1984 and the Cable Television Consumer Protection and Competition Act of 1992 provide significant procedural protections for cable operators seeking renewal of their franchises. See "Regulation—Cable Television." In connection with a renewal, a franchise authority may impose different and more stringent terms. We are currently operating under temporary authority in two of our ten largest franchises.

        Franchises usually require the consent of franchising authorities prior to the sale, assignment, transfer or change in ownership or control. Federal law generally provides localities with 120 days to consider such requests.

Cable Television System Sales

        In September 2000, we completed the sale of our cable television system serving Kalamazoo, Michigan (which served approximately 49,500 subscribers on the closing date) to Charter Communications in exchange for 11,173,376 shares of Charter Communications common stock valued at approximately $165.5 million at closing.

        In November 2000, we completed the sale of our cable television systems in the greater Cleveland, Ohio metropolitan area (which served approximately 312,700 subscribers on the closing date) to Adelphia Communications for total consideration of $1.35 billion ($991 million in cash and 10,800,000 shares of Adelphia Communications Class A common stock valued at approximately $359.1 million at closing).

        In January 2001, we completed the sale of our cable television systems in Boston and eastern Massachusetts (which served approximately 362,000 subscribers on the closing date) to AT&T in exchange for AT&T's cable television systems in certain northern New York suburbs (which served approximately 130,000 subscribers on the closing date), shares of AT&T stock valued at approximately $893.5 million at closing and approximately $289.9 million in cash.

        The stock received in the transactions described above was monetized through the execution of prepaid forward contracts. See "Liquidity and Capital Resources."

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High-Speed Data Services

        We provide residential high-speed data services in most of the greater New York City metropolitan area. High-speed data services are provided to customers through a cable modem device that we provide.

        The high-speed data service, marketed as "Optimum Online", served approximately 770,100 subscribers at December 31, 2002 for an overall penetration rate of 20.8% of homes released. Homes released are homes that can be serviced by our high-speed data service. We believe that our high-speed data service penetration has been driven, in part, by a large number of customers installing the necessary equipment without the need for a service call. Cable modems provided may include a self-installation kit that is designed to enable customers to install the cable modem without the need for a service call.

Telephony and Other Information Services

        Through Lightpath, a competitive local exchange carrier, we provide telecommunications services to the business market in the greater New York City metropolitan area. Lightpath provides a full range of switched services, private line and advanced networking features, including broadband access. As of December 31, 2002, Lightpath serviced over 1,505 buildings with approximately 146,200 access lines.

        As of December 31, 2002, we provided residential telephone services to approximately 12,240 subscribers in Long Island, New York and parts of southern Connecticut.

        The Company has launched Optimum Voice, Voice over Internet Protocol technology on a limited basis and plans to continue launching that product throughout 2003. Optimum Voice is a feature of our Optimum Online service.

Theaters

        Clearview Cinemas operates 57 motion picture theaters containing 275 screens in the New York metropolitan area, after the closure of one theater and the sale of one theater in 2002 in the New York metropolitan area. The theaters were acquired in December 1998 through 1999, as a result of the acquisition of all of the outstanding shares of stock of Clearview Cinema Group, Inc. and the acquisition of certain theaters from Loews Cineplex Entertainment Corporation. At December 31, 2002, the theaters are classified as held for sale, reflecting the Company's announcement, in the third quarter of 2002, of its intention to exit the motion picture theater exhibition business.

The WIZ

        At December 31, 2002, The WIZ, an electronics retailer selling primarily video and audio equipment, home office equipment, compact disks and other pre-recorded music, digital video disks, and VHS video and other pre-recorded movies, had 17 stores in the New York City metropolitan area. In March 2003, the Company transferred the stock of its subsidiary, Cablevision Electronics Investments, Inc. which owned The WIZ stores to GBO Electronics Acquisition, LLC, reflecting the Company's decision to exit the retail electronics business.

Personal Communications Service

        CSC Holdings holds a 49.9% interest, and certain preferential distribution rights, in Northcoast Communications. Northcoast Communications holds certain licenses to conduct a personal communications service business. CSC Holdings has contributed an aggregate of approximately $229.7 million as of December 31, 2002 to Northcoast Communications (either directly or through loans to Northcoast PCS, LLC, the other member in Northcoast Communications). In December 2002, Northcoast Communications entered into an agreement to sell its spectrum licenses covering 50 U.S.

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markets to Verizon Wireless for approximately $750 million in cash. Of the gross proceeds, a portion will be used to retire the Northcoast Communications FCC related debt of approximately $60 million at December 31, 2002. The balance of the proceeds will be distributed to Northcoast Communications' partners. Cablevision plans to use its share, approximately $635 million, to repay bank debt. The transaction is expected to close in the second quarter of 2003. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Related Party Transactions."

Other Investments

        In March 2002, Rainbow Media Holdings acquired Loral Space and Communications, Ltd.'s 50% interest in R/L DBS Company LLC for a purchase price of up to a present value of $33 million payable only from revenues of R/L DBS' business, if any, or from any future sale of all or part of the interests in or assets of R/L DBS. This purchase increased Rainbow Media Holdings' ownership of R/L DBS to 100%.

        In December 2000, the FCC granted an extension to R/L DBS' construction permit relating to the direct broadcast satellite frequencies held by R/L DBS. The extension required the launch of a satellite by March 29, 2003 and commencement of service offerings by not later than December 29, 2003, with specified six month interim construction milestones, non-compliance with which would result in the forfeiture of the construction permit. R/L DBS has entered into an agreement with a satellite manufacturer for the construction of a satellite. The contract with the manufacturer permits R/L DBS to terminate the contract at its option prior to May 2003 and receive a refund of a portion of amounts paid through the date of such termination. In March 2003, R/L DBS requested an extension of the launch date of a direct broadcast satellite to August 31, 2003 due to the satellite manufacturer's need for additional time for scheduling and testing of the launch vehicle for the satellite.

Other Assets

        We own 11,173,376 shares of Charter Communications common stock, 10,800,000 shares of Adelphia Communications class A common stock, 8,852,186 shares of AT&T common stock, 14,243,166 shares of AT&T Wireless Services common stock and 14,318,411 shares of Comcast common stock acquired in connection with the sale of certain cable television systems, all of which shares were monetized under collateralized prepaid forward contracts. See "Cable Television System Sales."

        We also own 12,477,055 shares of General Electric common stock acquired in connection with the sale of our interest in the Bravo programming service, which shares were monetized under collateralized prepaid forward contracts in January 2003. See "Liquidity and Capital Resources."

Programming and Entertainment Operations

General

        We conduct our programming activities through Rainbow Media Holdings, a wholly-owned subsidiary of CSC Holdings.

        In December 2002, we acquired the 17.2% interest in Rainbow Media Holdings held by National Broadcasting Company, Inc. in connection with the sale of Rainbow Media Holdings' 80% interest in the Bravo programming service for $1.0 billion payable in General Electric common stock and 53.2 million shares of Cablevision NY Group Class A common stock (31.4 million shares of which were issuable upon the conversion of shares of Rainbow Media Holdings common stock held by NBC).

        Rainbow Media Holdings' businesses include national and regional programming networks and the Madison Square Garden sports and entertainment business. Rainbow Media Holdings also owns interests in cable television advertising businesses.

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        Rainbow Media Holdings' national entertainment programming networks include AMC, WE: Women's Entertainment, MuchMusic USA and The Independent Film Channel.

        In April 2001, Metro-Goldwyn-Mayer Inc. ("MGM") acquired a 20% interest in four programming services of Rainbow Media Holdings (AMC, Bravo, The Independent Film Channel, and WE: Women's Entertainment) for $825 million in cash. In December 2002, NBC acquired MGM's 20% interest in the Bravo programming service.

        Rainbow Media Holdings owns a 60% interest in, and manages, Regional Programming Partners, a partnership with Fox Sports Networks, LLC. Regional Programming Partners owns Madison Square Garden, a sports and entertainment company that owns and operates the Madison Square Garden Arena and the adjoining Theater at Madison Square Garden, the New York Knickerbockers professional basketball team, the New York Rangers professional hockey team, the New York Liberty professional women's basketball team, the Hartford Wolf Pack professional hockey team, the Madison Square Garden Network, Fox Sports Net New York and Radio City Entertainment (which operates Radio City Music Hall in New York City under a long-term lease). Additionally, Madison Square Garden manages and operates the Hartford Civic Center in Connecticut. Regional Programming Partners also owns interests in regional sports networks that provide regional sports programming to the New England, Chicago, Cincinnati, Cleveland, San Francisco and Florida areas, in addition to Madison Square Garden Network and Fox Sports Net New York which provide regional sports programming to the New York City metropolitan area, as well as MetroChannels which provide regional and local sports, news, educational and other programming to the New York metropolitan area.

        National Sports Partners owns and operates the national sports network Fox Sports Net, which provides national sports programming to regional sports networks. National Sports Partners is 50% owned by Rainbow Media Holdings and is managed and 50% owned by Fox Sports Networks.

        Rainbow Media Holdings owns Rainbow News 12 which operates regional news networks servicing suburban areas surrounding New York City. Rainbow Media Holdings also owns and operates Rainbow Advertising Sales Corporation, a cable television advertising company, and owns a 50% interest in National Advertising Partners, which sells national advertising for regional sports networks and is managed and 50% owned by Fox Sports Networks.

        The following table sets forth ownership information and estimated subscriber information as of December 31, 2002 for each of the programming and related businesses whose ownership interest is held directly or indirectly by Rainbow Media Holdings. Regional Programming Partners is a 60% owned subsidiary of Rainbow Media Holdings, with the remaining 40% interest owned by Fox Sports Networks.

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(1)

Represents the number of subscribers to distributors' systems that receive the referenced programming network.

(2)

Represents the total number of basic subscribers available in systems that carry the service.

(3)

Various of these programming businesses, other than those which are wholly-owned by Rainbow Media Holdings, are subject to puts, calls, rights of first refusal and restrictions on transfer.

(4)

In January 2003, Fox Sports Networks exercised its option to require Regional Programming Partners to purchase its directly-owned interests in Fox Sports Net Bay Area and Fox Sports Net Chicago. In March 2003, Rainbow Media Holdings and Fox Sports Networks agreed on a $110 million purchase price for Fox Sports Networks' 50% interest in Fox Sports Net Bay Area and a $40 million purchase price for the 50% interest in Fox Sports Net Chicago.

(5)

In November 2002, AT&T Broadband merged with Comcast.

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National Entertainment Programming Networks

AMC

        With a comprehensive library of popular films, AMC offers contemporary entertainment for movie lovers.

        AMC is available on cable television and other distribution platforms such as direct broadcast satellite. It is carried on basic or expanded basic tiers for which subscribers do not have to pay a premium to receive the network. Affiliate revenues, which in 2002 accounted for about 84% of AMC's revenues, are based on fees paid by the distributors for the right to carry the programming.

        Distributors generally pay the network according to the number of subscribers actually receiving AMC. The network generally enters into three to seven-year distribution contracts with its distributors.

        AMC's film library consists of films that are licensed from major studios such as Columbia TriStar, Twentieth Century Fox, Paramount, Warner Brothers, Universal, MGM/UA and RKO under long-term contracts, with sufficient films under contract to meet its programming requirements through 2004. AMC generally structures its contracts for the exclusive cable television right to carry the films during identified windows.

The Independent Film Channel

        The Independent Film Channel is the first network dedicated to independent films, related features and programming. The Independent Film Channel presents feature-length films (domestically and internationally produced), documentaries, shorts, animation, new works, "cult classics" and originally produced programs which chronicle independent film trends.

        The Independent Film Channel's film library includes titles from leading independent film studios like Miramax, Sony Classic, October and Fine Line with sufficient films under contract to meet its programming requirements through 2005. The Independent Film Channel also features exclusive live coverage of notable international film events like the Cannes Film Festival, the Independent Spirit Awards and the Gotham Awards, as well as original programming. The network supplements this coverage with additional real-time information on Web and enhanced broadband.

WE: Women's Entertainment

        WE: Women's Entertainment (formerly Romance Classics), launched in 1997, is a 24-hour entertainment service for women. The programming features women's interest films and original series and specials.

        WE: Women's Entertainment has licensed exclusive film and television titles to supplement its slate of original programming, providing significant product volume through 2005. Exclusive deals have been concluded with major Hollywood studios such as Twentieth Century Fox, Universal and Columbia as well as independents like Castle Hill and Artisan.

MuchMusic USA

        MuchMusic USA is a 24-hour, all-music entertainment programming network which was launched in the United States in July 1994. Through 2000, MuchMusic USA featured a Canadian programming feed from Chum Limited. In 2001, MuchMusic USA began to produce a significant portion of the channel's programming in the United States. In 2002, MuchMusic USA began producing programming from a street-front studio across from Madison Square Garden. Effective January 1, 2003, MuchMusic USA's programming is 100% United States based.

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Madison Square Garden

        Rainbow Media Holdings, through Regional Programming Partners, has a 60% interest in Madison Square Garden, a sports and entertainment company that owns and operates the Madison Square Garden Arena and the adjoining Theater at Madison Square Garden, the New York Knickerbockers professional basketball team, the New York Rangers professional hockey team, the New York Liberty professional women's basketball team, the Hartford Wolf Pack professional hockey team, the Madison Square Garden Network, Fox Sports Net New York and Radio City Entertainment (which operates Radio City Music Hall in New York City under a long-term lease). Additionally, Madison Square Garden manages and operates the Hartford Civic Center in Connecticut.

Regional Sports Networks

        Rainbow Media Holdings, through Regional Programming Partners, has a 60% interest in two regional sports networks, in Ohio and Florida, operating under the Fox Sports Net name, and has a 30% interest in three other regional sports networks, in Chicago, New England and the Bay Area, also operating under the Fox Sports Net name. Rainbow Media Holdings manages each of these regional sports networks, which are distributed in their respective region in the United States through cable television as well as other distribution platforms such as direct broadcast satellite.

        In January 2003, Fox Sports Networks exercised its option to require Regional Programming Partners to purchase its 50% interest in each of Fox Sports Net Bay Area and Fox Sports Net Chicago that Fox Sports Networks held outside of Regional Programming Partners. In March 2003, Rainbow Media Holdings and Fox Sports Networks agreed on a $110 million purchase price for Fox Sports Networks' 50% interest in Fox Sports Net Bay Area and a $40 million purchase price for the 50% interest in Fox Sports Net Chicago, payable in each case in the form of three-year promissory notes of Regional Programming Partners, bearing interest at Prime plus 1% and secured by the interests being purchased. The transaction is expected to close in the second quarter of 2003 following receipt of customary regulatory approval.

National Sports Partners

        Fox Sports Net is distributed by National Sports Partners, a 50%/50% partnership between Rainbow Media Holdings and Fox Sports Networks that was formed in December 1997 and is managed by Fox Sports Networks. Fox Sports Net was launched during January 1998 and links 22 regional sports networks under the Fox Sports Net name, including the six Fox Sports Net networks in which Rainbow Media Holdings owns an interest described above, and delivers local, regional and national sports programming.

Other Services

National Advertising Partners

        National Advertising Partners is a 50%/50% partnership between Rainbow Media Holdings and Fox Sports Networks that was formed in December 1997 and operates under the management of Fox Sports Networks. National Advertising Partners provides national advertising representation services for Fox Sports Net and the Fox Sports Net regional programming networks, offering advertisers access to millions of sports fans in the nation's top television markets and covering most of the Major League Baseball, National Basketball Association and National Hockey League teams.

Rainbow Network Communications

        Rainbow Network Communications is a full service network programming origination and distribution company. Its services include origination, transmission, video engineering, uplinking,

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encryption, affiliate engineering, technology consulting, transponder negotiation, content ordering, quality control and editing. Rainbow Network Communications recently completed a state of the art technology center, which will consolidate all master control/playback and uplink facilities at one location. This new center is fully digital which will enable Rainbow Network Communications to process audio and video signals in both standard and high definition.

Sterling Digital LLC

        Sterling Digital or "Mag Rack" was established as the first branded VOD/SVOD service in the United States to develop new niche programming to be distributed and marketed using new media platforms, including digital video channels. Mag Rack offers documentary and entertainment style, special interest programs on topics such as photography, travel and heath and science. The programming is delivered as on-demand video magazines in numerous categories focused on hobbies, lifestyles and special interests. The service is currently on Cablevision's digital cable tier, and during 2002, affiliate agreements were also executed with Insight Communications and Charter Communications.

Ownership of Cablevision Common Stock by AT&T

        In 2001, AT&T sold shares of Cablevision NY Group Class A common stock and Rainbow Media Group Class A common stock held by it and, concurrently with those sales, subsidiaries of AT&T, through trusts, sold units of mandatorily exchangeable trust securities exchangeable into shares of Cablevision NY Group Class A common stock and Rainbow Media Group Class A common stock, respectively. Until termination of the trusts in 2004 and 2005, respectively, AT&T continues to beneficially own and vote those shares.

        Subsidiaries of AT&T have certain rights and obligations relating to Cablevision under Cablevision's stockholders agreement with AT&T, including registration rights. Upon the sale by AT&T of its shares of Cablevision NY Group Class A common stock as described above, the Stockholders Agreement ceased to be effective and will remain ineffective unless AT&T retains ownership of 5% or more of the shares of Cablevision NY Group Class A common stock upon termination of the trusts. Cablevision understands that AT&T has the right to cash settle the prepaid forward contracts under which the trusts agreed to purchase 26,918,195 shares of Cablevision NY Group Class A common stock and 9,791,336 shares of Rainbow Media Group Class A common stock. In that event, if certain conditions are satisfied, AT&T will continue to own those shares and may have certain registration rights with respect to those shares under the stockholders agreement.

        As a result of the merger of AT&T Broadband and Comcast, we have been informed that subsidiaries of Comcast now own the Cablevision stock formerly owned by AT&T.

Competition

Cable Television

        Our cable television systems compete with a variety of other television programming delivery systems, including broadcast television signals available to homes within our market by over-the-air reception.

        The primary competitor to our cable television systems is direct broadcast satellite (DBS). Two DBS systems, EchoStar and DirecTV, are now available to our customers. The federal copyright laws now permit DBS systems to retransmit local broadcast television signals to their customers. This has enhanced the competitive position of DBS.

        A telephone company may become a cable system operator, fully subject to the franchising, rate and other federal regulations applied to a cable system. Or it can operate an "open video system"

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(OVS) subject only to selected portions of the federal regulations applicable to our cable systems, but still subject to certain local municipal franchising powers. Companies have sought OVS status in areas in which our cable television systems operate and one, RCN Corporation, is currently operating OVS that compete with us in portions of New York City and New Jersey.

        Multichannel multipoint distribution services ("MMDS") deliver television programming over microwave super-high frequency channels received by subscribers with a special antenna. Satellite master antenna ("SMATV") systems, like MMDS, generally serve large multiple dwelling units under an agreement with the landlord. The statutory definition of a cable system excludes facilities that do not use public rights-of-way. This exempts SMATV and MMDS from local franchise and other requirements applicable to cable system operators.

        The FCC has established a wireless local multipoint distribution service ("LMDS") in the higher bands of the electromagnetic spectrum that could be used to offer multichannel video in competition with our cable television systems, as well as offer two-way communications services, but LMDS has not become a significant video competitor in our market.

        Although substantially all the franchises of our cable television system are non-exclusive, and municipalities are prohibited by law from unreasonably refusing to grant competitive franchises, most franchising authorities have granted only one franchise in each area we serve. Other cable television operators, however, could receive cable franchises for areas where our cable television systems are operated, or a municipality that regulates us could build its own cable system to compete with us.

        There can be no assurance that existing, proposed or as yet undeveloped technologies, including technologies that provide video over the Internet, will not become dominant in the future and render our cable television systems less profitable or even obsolete.

Programming and Entertainment

        Rainbow Media Holdings' programming networks compete in two highly competitive markets. First, our programming networks compete in the market for distribution of programming networks to cable television systems and other distributors of video services, such as DBS. For example, AMC and Fox Sports Net Chicago compete with other networks for the right to be carried on cable television systems and ultimately for viewing by each system's subscribers. Second, our programming networks compete with other video service distributors, including broadcasters and other programming entities to secure desired entertainment and sports programming. In each of these markets, some of our competitors are large publicly held companies that have greater financial resources than us.

        With the recent merger of AT&T Broadband and Comcast, it is likely that our networks will face increased competition both for the right to be carried, and the right to be carried on a preferential "tier," by the cable systems owned by the combined company.

Distribution of Programming Networks

        The business of distributing programming networks to cable television systems and other video service distributors is highly competitive, and most existing channel capacity is in use. In distributing a programming network, we face competition with other providers of programming networks for the right to be carried by a particular cable system and for the right to be carried by that cable system on a preferential "tier." Once our network is selected by a cable system or satellite distributor, that network competes not only with the other channels available on the cable network for viewers, but also with off-air broadcast television, pay-per-view and video-on-demand networks, online, radio, print, media, motion picture theaters, digital video disks, video cassettes and other sources of information, sporting events, and entertainment.

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        Important to our success in each area of competition it faces are the prices it charges for its programming network, the quantity, quality and variety of the programming offered on its network, and the effectiveness of the networks' marketing efforts. The competition for viewers in the context of non-premium programming networks is directly correlated with the competition for advertising revenues with each of our competitors.

        Competition with other programming networks may be hampered because the cable television systems through which distribution is sought may be affiliated with other programming networks. In addition, because such affiliated cable television systems may have a substantial number of subscribers, the ability of such programming networks to obtain distribution on affiliated cable television operators may lead to increased subscriber and advertising revenue for such networks because of their increased penetration compared to our programming networks. Even if such affiliated cable television operators were to continue to carry our programming networks, there is no assurance that such cable television operators would not move our networks to less desirable tiers in the operator's services offering while moving the affiliated programming network to a more desirable tier, thereby giving the affiliated programming network a competitive advantage.

        New programming networks with affiliations to desired broadcasting networks like NBC, ABC, CBS or Fox may also have a competitive advantage over our new networks in obtaining distribution through the "bundling" of affiliation agreements with the cable system's right to carry the broadcasting network.

        An important part of our strategy involves exploiting identified niches of the cable television viewing audience that are generally well-defined and limited in size. Rainbow Media Holdings has faced and will continue to face increasing competition as other programming networks are launched that seek to serve the same or similar niches.

Sources of Programming

        We also compete with other programming networks to secure desired programming. Although some of this programming is generated internally through our efforts in original programming, most of our programming is obtained through agreements with other parties that have produced or own the rights to such programming. Competition for this programming will increase as the number of programming networks increases. Other programming networks that are affiliated with programming sources such as movie or television studios, film libraries, or sports teams may have a competitive advantage over us in this area.

        Competition for Entertainment Programming Sources.    With respect to the acquisition of entertainment programming, such as syndicated programs and movies, which are not produced by or specifically for programming networks, our competitors include:

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national commercial broadcast television networks,



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local commercial broadcast television stations,



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the Public Broadcasting Service and local public television stations,



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pay-per-view programs



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other cable program networks

        Some of these competitors have exclusive contracts with motion picture studios or independent motion picture distributors or own film libraries.

        Competition for Sports Programming Sources.    Because the loyalty of the sports viewing audience to a sports programming network is driven by loyalty to a particular team or teams, access to adequate

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sources of sports programming is particularly critical to our sports networks. Our sports networks compete for rights for teams or events principally with:

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national cable networks that specialize in or carry sports programming,



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television "superstations" which distribute sports and other programming by satellite,



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the national commercial broadcast television networks,



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independent syndicators that acquire and resell such rights nationally, regionally and locally, and



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direct broadcast satellite operators.

        Our sports networks also compete for local and regional rights with the same group of competitors, with local commercial broadcast television stations, with other local commercial and regional sports networks and with the sports teams which hold such rights.

        Owners of distribution outlets such as cable television systems may also contract directly with the sports teams in their local service areas for the right to distribute a number of the teams' games on their systems. Some of our competitors may also have ownership interests in sports teams or sports promoters. This may give them an advantage in obtaining broadcast rights for such teams or sports.

        To remain competitive in acquiring rights to sports programming, our sports networks attempt to secure long-term rights agreements with teams and athletic conferences. We also attempt to include, in rights agreements with teams, terms that provide our sports networks with exclusive negotiation periods prior to the scheduled expiration of the term of such agreements and/or which provide our sports networks with the right to match an offer made by a competing distributor of sports programming. Our sports networks, however, are not always successful in attaining these objectives, and we cannot be assured that our strategy will enable our sports networks to offer sports programming of the type and in the quantity or quality necessary for such networks to remain competitive.

        In addition to the above considerations, we operate in an environment that is affected by changes in technology. It is difficult to predict the future effect of technology on many of the factors affecting our competitive position. For example, data compression technology may make it possible for most video programming distributors to increase their channel capacity, thereby reducing the competition among programming networks and broadcasters for channel space. As more channel space becomes available, the position of our programming networks in the most favorable tiers of these distributors would be an important goal.

        Numerous businesses compete with Madison Square Garden, Radio City Entertainment and CCG Holdings for the entertainment expenditures of consumers.

Telephone Services

        Lightpath faces substantial competition from incumbent local exchange carriers ("ILECs"), such as Verizon Communications, Inc. and SBC Communications, Inc., which are the dominant providers of local telephone services in their respective service areas. ILECs have significant advantages over Lightpath, including greater capital resources, an existing fully operational local network and long-standing relationships with customers.

        While Lightpath and the ILECs are competitors, Lightpath must enter into interconnection agreements with each ILEC so that Lightpath's customers can make and receive calls to and from customers served by the ILECs and other telecommunications providers. Federal and State law and regulations require ILECs to enter into such agreements and provide such facilities and services, at prices subject to regulation. The specific price, terms and conditions of each agreement, however, depend on the outcome of negotiations between Lightpath and an ILEC. Agreements are also subject to approval by the state regulatory commissions. Lightpath has entered into interconnection agreements

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with Verizon for New York, New Jersey and portions of Connecticut and with SBC for portions of Connecticut, which have been approved by the respective state commissions.

        Lightpath also faces competition from one or more competitive access providers and other new entrants in the local telecommunications marketplace, Competitive Local Exchange Carriers ("CLECs"), such as Teleport Communications Group, Inc., now part of AT&T, and MFS Communications Company, Inc., now part of WorldCom as well as many others. In addition to the ILECs and CLECs, other potential competitors capable of offering local, private line and special access services include electric utilities, long distance carriers, microwave carriers, wireless telephone system operators (such as cellular, PCS, and specialized mobile radio), and private networks built by large end users. A continuing trend toward business combinations and alliances in the telecommunications industry may create stronger competition for Lightpath.

Regulation

Cable Television

        Our cable television systems are regulated under congressionally imposed uniform national guidelines, first set in the 1984 Cable Act and amended by the Cable Television Consumer Protection and Competition Act of 1992 and the Telecommunications Act of 1996.

        This federal legislation authorizes states or localities to franchise our cable television systems but sets limits on their franchising powers. It sets a ceiling on cities imposing franchise fees of more than 5% of our gross revenues from our provision of cable services. It prohibits localities from requiring us to carry specific programming services, and protects us in seeking franchise renewals by limiting the factors a locality may consider and requiring a due process hearing before denial of renewal. Our franchising authorities cannot grant an exclusive cable franchise to us and cannot unreasonably refuse to award an additional franchise to compete with us.

        Localities may require free access to public, educational or governmental channels on our systems. We must make a limited number of commercial leased access channels available for potentially competitive video services. Federal law prohibits obscene programming and requires us to sell or lease devices to block programming considered offensive by a customer.

        Federal law requires us to establish a "basic service" package consisting, at a minimum, of all local broadcast signals that we choose to carry, as well as all public, educational and governmental access programming carried by our systems.

        The rates for our basic service package are still subject to regulation by local franchising authorities. Local municipalities or state cable television regulators may also still regulate the rates we charge for the installation and lease of the equipment used by subscribers to receive the basic service package, including equipment that may also be used to receive other packages of programming, and the installation and monthly use of connections for additional television sets.

        The FCC's rules prevent us, unless we can justify higher rates on the basis of our costs, from raising the rates we charge for the basic service package beyond an inflation indexed amount, plus increases in certain costs beyond our control, such as taxes, franchise fees and increased programming costs that exceed the inflation index. Increases in fees we pay to broadcast stations for the retransmission of their signals may also be passed through to our subscribers.

        The FCC also adopted guidelines for "cost-of-service" showings, pursuant to which we can attempt to justify rates in excess of the basic service package benchmarks. The FCC in addition permits rate adjustments attributed to the cost of a rebuild or a substantial upgrade of our cable systems plant.

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        The FCC's authority to reduce the rates for our service packages other than our basic service package has now sunset. Services that we offer on a per channel or per program basis, like HBO, have never been subject to rate regulation by either local municipalities or the FCC.

        We are required by federal law to carry all local broadcast stations, or, at the option of a local broadcaster, to obtain the broadcaster's prior consent for retransmission of its signal. A substantial number of local broadcast stations currently carried by our cable television systems have elected to negotiate for retransmission consent. Our cable television systems have reached retransmission consent agreements with most broadcast stations they currently carry, but the potential remains for broadcast station carriage to be discontinued if such an agreement is not renewed following its expiration.

        The FCC is currently considering whether to adopt similar "must carry" rules for broadcasters' new digital TV channels. The FCC in 2001 reached the tentative conclusion that "dual must carry" rules would be unconstitutional, if our systems were required to carry these digital channels, in addition to broadcasters' existing analog broadcast channels, before the broadcast station fully transitions from analog to digital broadcasting by 2006. But the FCC has asked for additional information to help it finally resolve this issue.

        In some instances, Rainbow Media Holdings has been ordered by the FCC to provide its satellite-delivered programming to multichannel video programmers after such programmers have filed complaints pursuant to federal "program-access" rules.

        Congress has required the FCC to set limits on the number of channels that we can program with programming services we control, and a national limit on the number of subscribers we can serve. The FCC established a 40% limit on the number of channels of one of our cable television systems that can be occupied by programming services in which we have an attributable interest. The FCC also set a national limit of 30% on the number of multichannel video households that we can serve.

        In 2001, a federal appellate court held unconstitutional the FCC's rules establishing the 30% national multichannel subscriber limit and the 40% channel occupancy limit. The FCC is reviewing the ownership rules in light of that decision. Last year, a different panel of the same court invalidated an FCC rule that barred us from owning a broadcast station in the same market in which we own a cable system.

        The Telecommunications Act of 1996, besides deregulating the rates for our non-basic tiers of service, also permitted our regulated equipment rates to be computed by aggregating our costs of broad categories of equipment at the franchise, system, regional or company level.

        Rate regulation, including regulation of our basic service package, is by federal law eliminated if one of our cable systems is subject to "effective competition" from another multichannel video programming provider, such as a telephone company, a DBS operator, or a competing OVS or cable company like RCN. Our cable television systems gain greater flexibility in packaging and pricing when the FCC makes a finding of "effective competition" based on such competition. We have been successful in obtaining from the FCC such an "effective competition" finding in certain communities in our market and are currently seeking such a finding in other communities.

        The FCC was required by federal law to develop standards to allow subscribers to use set top boxes purchased or leased from any distributor to access programming on their local cable system. Cable operators are prohibited from deploying digital boxes that do not meet these standards by 2005.

        FCC rules require that we black out certain network and sports programming on imported distant broadcast television signals upon request. The FCC also requires that we delete syndicated programming carried on distant signals upon the request of any local television/broadcast station holding the exclusive right to broadcast the same program within our local television market.

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        The FCC regulates us in such areas as customer service, technical standards, privacy, rates for leased access channels, and obscenity and indecency. The FCC is also tasked by Congress to promote compatibility between cable television systems and other consumer electronic equipment. The FCC is currently reviewing proposed standards for compatibility of digital equipment.

        The FCC also imposes restrictions on our origination cablecasting channels and rules governing political broadcasts; ownership and control of cable home wiring in single family residences and multiple dwelling units; and limitations on advertising contained in children's programming that we carry.

        The FCC requires us to pay annual "regulatory fees" for its services that we may pass on to subscribers. Other fees are assessed for the FCC licenses we hold for business radio, cable television relay systems and earth stations. These fees may not be collected from our subscribers.

        The FCC has authority to regulate utility company rates for cable rental of pole and conduit space unless states establish preemptive regulations in this area. The states in which our cable television systems operate have adopted such regulations. Utilities must provide cable television systems and telecommunications carriers with nondiscriminatory access to any pole, conduit or right-of-way controlled by the utility.

        The FCC has adopted regulations to govern the charges for pole attachments used by companies providing telecommunications services, including cable operators. The FCC's authority to set pole access rates for cable Internet access services have been upheld by the Supreme Court, reducing potential costs to us for such attachments. The states in which we operate have, to date, adopted the FCC regulations.

        Some parties have proposed in the past few years federal, state and local requirements that would force cable systems to provide carriage to third-party Internet service providers in addition to services the cable system itself provides, such as our Optimum Online cable modem service. Several federal court decisions have invalidated local franchising authority requirements that the cable system in the community provide access to all third-party Internet service providers. Some local franchising authorities where we operate might attempt to impose a similar requirement on us. Faced with this uncertainty, the FCC opened an inquiry into how to classify the provision of this service by a cable system for regulatory purposes. In March 2002, the FCC determined that services like Optimum Online should be classified as "information services." The FCC has traditionally subjected information services to a lesser degree of regulation than "telecommunications services," which are offered to the public for a fee on a common carrier basis. The FCC's classification of cable modem service also affects our rollout of Optimum Voice, a Voice over Internet Protocol ("VoIP") service that will be offered via our cable modem service as an add-on to our Optimum Online service. Although VoIP services have traditionally been treated as information services, the future regulatory treatment of VoIP services like Optimum Voice is uncertain. The FCC is continuing to l