We have decided to change our accounting policy regarding subscriber acquisition costs. “Subscriber acquisition costs” are the direct costs we pay for each new subscriber enrolled through our independent dealers. Up to now, we had capitalized subscriber acquisition costs only to the extent they exceeded any related revenues deferred from the acquisition of a subscriber, such as connection fees charged to a subscriber to initiate service. We had amortized these capitalized costs as a component of sales and marketing expenses on a straight-line basis over the estimated average subscriber life.

However, in response to numerous comments from telecommunications analysts and our shareholders, and to facilitate the comparison of our results with other companies in our sector, we have decided to change our accounting policy in this regard. This accounting change will be reflected as if the change had occurred as of the beginning of our current fiscal year. As a result of this change, we will expense the remaining balance of capitalized subscriber acquisition costs as of December 31, 2000, of approximately $30 million as a cumulative effect of an accounting policy change at the beginning of the fiscal year and, from that point forward, expense subscriber acquisition costs as incurred. We expect that the effect of this change in accounting policy on our net income (before income tax) for the six months ended June 30, 2001 will be approximately $26 million.

We believe that this accounting policy change will enhance the presentation contained in our financial statements and ease comparisons of our financial performance with those of other companies in our sector.