<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

[x]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934
                                       
                    FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

                                       OR

[      ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

             For the transition period from ------------to -----------

             Commission File Number 0-13333
                                       
                         ENSTAR INCOME PROGRAM 1984-1, L.P.
    ------------------------------------------------------------------------
              (Exact name of Registrant as specified in its charter)

             GEORGIA                                      58-1581136
-----------------------------------------------      --------------------------
   (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                      Identification Number)

  10900 WILSHIRE BOULEVARD - 15TH FLOOR
        LOS ANGELES, CALIFORNIA                                 90024
----------------------------------------------------         ------------
 (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code:              (310) 824-9990
                                                                 --------------
Securities registered pursuant to Section 12 (b) of the Act:          NONE
Securities registered pursuant to Section 12 (g) of the Act:
                                                           Name of each exchange
                     Title of each Class                    on which registered
                     -------------------                   ---------------------
            UNITS OF LIMITED PARTNERSHIP INTEREST                   NONE

       Indicate by check mark whether the Registrant (1) has 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
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes      X    No
        ---       ---

       Indicate by 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 Registrant's 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. [X]

       State the aggregate market value of the voting equity securities held by
non-affiliates of the registrant - 29,935 of the registrant's 29,940 units of
limited partnership interests, its only class of equity securities, are held by
non-affiliates. There is no public trading market for the units, and transfers
of units are subject to certain restrictions; accordingly, the registrant is
unable to state the market value of the units held by non-affiliates.

--------------------------------------------------------------------------------
                    The Exhibit Index is located at Page E-1
                                       

<PAGE>
                                       
                                     PART I

ITEM 1.       BUSINESS

INTRODUCTION

              Enstar Income Program 1984-1, L.P., a Georgia limited partnership
(the "Partnership"), is engaged in the ownership, operation and development,
and, when appropriate, sale or other disposition, of cable television systems in
small to medium-sized communities. The Partnership was formed on December 12,
1983. The general partner of the Partnership is Enstar Communications
Corporation, a Georgia corporation (the "General Partner"). On September 30,
1988, ownership of the General Partner was acquired by Falcon Cablevision, a
California limited partnership that has been engaged in the ownership and
operation of cable television systems since 1984 ("Falcon Cablevision"). The
general partner of Falcon Cablevision was Falcon Holding Group, L.P., a Delaware
limited partnership ("FHGLP"), until September 1998. On September 30, 1998,
FHGLP acquired ownership of the General Partner from Falcon Cablevision.
Simultaneously with the closing of that transaction, FHGLP contributed all of
its existing cable television system operations to Falcon Communications, L.P.
("FCLP"), a California limited partnership and successor to FHGLP. FHGLP serves
as the managing partner of FCLP, and the general partner of FHGLP is Falcon
Holding Group, Inc., a California corporation ("FHGI"). The General Partner has
contracted with FCLP and its affiliates to provide management services for the
Partnership. See Item 13., "Certain Relationships and Related Transactions." The
General Partner, FCLP and affiliated companies are responsible for the day to
day management of the Partnership and its operations. See "Employees" below.

              Based on its belief that the market for cable systems has
generally improved, the General Partner is evaluating strategies for liquidating
the Partnership. These strategies include the potential sale of substantially
all of the Partnership's assets to third parties and/or affiliates of the
General Partner, and the subsequent liquidation of the Partnership. The General
Partner expects to complete its evaluation within the next several months and
intends to advise unitholders promptly if it believes that commencing a
liquidating transaction would be in the best interests of unitholders.

              A cable television system receives television, radio and data
signals at the system's "headend" site by means of over-the-air antennas,
microwave relay systems and satellite earth stations. These signals are then
modulated, amplified and distributed, primarily through coaxial and fiber optic
distribution systems, to customers who pay a fee for this service. Cable
television systems may also originate their own television programming and other
information services for distribution through the system. Cable television
systems generally are constructed and operated pursuant to non-exclusive
franchises or similar licenses granted by local governmental authorities for a
specified term of years.

              The Partnership's cable television systems (the "systems"), offer
customers various levels (or "tiers") of cable services consisting of broadcast
television signals of local network, independent and educational stations, a
limited number of television signals from so-called "super stations" originating
from distant cities (such as WGN), various satellite-delivered, non-broadcast
channels (such as Cable News Network ("CNN"), MTV: Music Television ("MTV"), the
USA Network ("USA"), ESPN, Turner Network Television ("TNT") and The Disney
Channel), programming originated locally by the cable television system (such as
public, educational and governmental access programs) and informational displays
featuring news, weather, stock market and financial reports, and public service
announcements. A number of the satellite services are also offered in certain
packages. For an extra monthly charge, the systems also offer "premium"
television services to their customers. These services (such as Home Box Office
("HBO") and Showtime) are satellite channels that consist principally of feature
films, live sporting events, concerts and other special entertainment features,
usually presented without commercial interruption. See "Legislation and
Regulation."

                                       -2-

<PAGE>

              A customer generally pays an initial installation charge and fixed
monthly fees for basic, expanded basic, other tiers of satellite services and
premium programming services. Such monthly service fees constitute the primary
source of revenues for the systems. In addition to customer revenues, the
systems receive revenue from the sale of available advertising spots on
advertiser-supported programming. The systems also offer to their customers home
shopping services, which pay the systems a share of revenues from sales of
products in the systems' service areas, in addition to paying the systems a
separate fee in return for carrying their shopping service. Certain other
channels have also offered the cable systems managed by FCLP, including those of
the Partnership, fees in return for carrying their service. Due to a general
lack of channel capacity available for adding new channels, the Partnership's
management cannot predict the impact of such potential payments on the
Partnership's business. See Item 7., "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources."

              The Partnership began its cable television business operations in
1984 with the acquisition of certain cable television systems and expanded its
operations in 1985 with additional system acquisitions. The Partnership sold
certain of its cable television systems during 1986 and 1987. As of December 31,
1998, the Partnership offered cable service in South Carolina, North Carolina
and Tennessee. The two South Carolina systems are located in and around the
cities of Kershaw (Lancaster County) and River Hills (York County). The
Partnership's North Carolina system serves portions of Greene County, including
the municipalities of Grifton, Snow Hill, Hookerton and Walstonburg. The three
Tennessee systems cover portions of the municipalities of Covington, Bolivar,
Brownsville and Burlison. As of December 31, 1998, the Partnership served
approximately 10,800 basic subscribers in these areas. The Partnership does not
expect to make any additional material acquisitions during the remaining term of
the Partnership.

              FCLP receives a management fee and reimbursement of expenses from
the General Partner for managing the Partnership's cable television operations.
See Item 11., "Executive Compensation."

              The Chief Executive Officer of FHGI is Marc B. Nathanson. Mr.
Nathanson has managed FCLP or its predecessors since 1975. Mr. Nathanson is a
veteran of more than 30 years in the cable industry and, prior to forming FCLP's
predecessors, held several key executive positions with some of the nation's
largest cable television companies. The principal executive offices of the
Partnership, the General Partner and FCLP are located at 10900 Wilshire
Boulevard, 15th Floor, Los Angeles, California 90024, and their telephone number
is (310) 824-9990. See Item 10., "Directors and Executive Officers of the
Registrant."

BUSINESS STRATEGY

              Historically, the Partnership has followed a systematic approach
to acquiring, operating and developing cable television systems based on the
primary goal of increasing operating cash flow while maintaining the quality of
services offered by its cable television systems. The Partnership's business
strategy has focused on serving small to medium-sized communities. The
Partnership believes that given a similar rate, technical, and channel
capacity/utilization profile, its cable television systems generally involve
less risk of increased competition than systems in large urban cities. In the
Partnership's markets, consumers have access to only a limited number of
over-the-air broadcast television signals. In addition, these markets typically
offer fewer competing entertainment alternatives than large cities. Nonetheless,
the Partnership believes that all cable operators will face increased
competition in the future from alternative providers of multi-channel video
programming services. See "Competition."

              Adoption of rules implementing certain provisions of the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act") by the Federal Communications Commission (the "FCC") has had a negative
impact on the Partnership's revenues and cash flow. These rules are subject to
further amendment to give effect to the Telecommunications Act of 1996 (the
"1996 Telecom Act"). Among other changes, the 1996 Telecom Act provides that the
regulation of certain cable programming service tier ("CPST") rates will
terminate on March 31, 1999. There can be no assurance as to what, if any,
further action

                                       -3-

<PAGE>

may be taken by the FCC, Congress or any other regulatory authority or court, 
or the effect thereof on the Partnership's business. See "Legislation and 
Regulation" and Item 7., "Management's Discussion and Analysis of Financial 
Condition and Results of Operations."

              CLUSTERING

              The Partnership has sought to acquire cable television operations
in communities that are proximate to other owned or affiliated systems in order
to achieve the economies of scale and operating efficiencies associated with
regional "clusters." The Partnership believes clustering can reduce marketing
and personnel costs and can also reduce capital expenditures in cases where
cable service can be delivered through a central headend reception facility.

              CAPITAL EXPENDITURES

              As noted in "Technological Developments," the Partnership's
systems have no available channel capacity with which to add new channels or to
provide pay-per-view offerings to customers. As a result, significant amounts of
capital for future upgrades will be required in order to increase available
channel capacity, improve quality of service and facilitate the expansion of new
services such as advertising, pay-per-view, new unregulated tiers of
satellite-delivered services and home shopping, so that the systems remain
competitive within the industry.

              The Partnership's management has selected a technical standard
that incorporates the use of fiber optic technology where applicable in its
engineering design for the majority of its systems that are to be rebuilt. A
system built with this type of architecture can provide for future channels of
analog service as well as new digital services. Such a system will also permit
the introduction of high speed data transmission/Internet access and telephony
services in the future after incurring incremental capital expenditures related
to these services. The Partnership is also evaluating the use of digital
compression technology in its systems. See "Technological Developments" and
"Digital Compression."

              As discussed in prior reports, the Partnership postponed a number
of rebuild and upgrade projects because of the uncertainty related to
implementation of the 1992 Cable Act and the negative impact thereof on the
Partnership's business and access to capital. As a result, the Partnership's
systems are significantly less technically advanced than had been expected prior
to the implementation of deregulation. The Partnership is party to a loan
agreement with an affiliate which provides for a revolving loan facility of
$7,481,700 (the "Facility"). The Partnership expects to use borrowings under the
Facility to upgrade its systems. The Partnership's upgrade program is presently
estimated to require aggregate capital expenditures of approximately $8,300,000
and covers 12 franchise areas. These upgrades are currently required in six
existing franchise agreements covering eight franchise areas. The upgrades
required by the six existing franchise agreements are estimated to cost
approximately $4,900,000 and must be completed by June 2000, December 2001 and
February 2002. Capital expenditures budgeted for 1999 include approximately
$48,000 to begin the upgrades and $501,000 for the replacement of other assets.
See "Digital Compression," "Legislation and Regulation" and Item 7.,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

              DECENTRALIZED MANAGEMENT

              The General Partner manages the Partnership's systems on a
decentralized basis. The General Partner believes that its decentralized
management structure, by enhancing management presence at the system level,
increases its sensitivity to the needs of its customers, enhances the
effectiveness of its customer service efforts, eliminates the need for
maintaining a large centralized corporate staff and facilitates the maintenance
of good relations with local governmental authorities.

                                       -4-

<PAGE>

              MARKETING

              The Partnership's marketing strategy is to provide added value to
increasing levels of subscription services through "packaging." In addition to
the basic service package, customers in substantially all of the systems may
purchase an expanded group of regulated services, additional unregulated
packages of satellite-delivered services, and premium services. The Partnership
has employed a variety of targeted marketing techniques to attract new customers
by focusing on delivering value, choice, convenience and quality. The
Partnership employs direct mail, radio and local newspaper advertising,
telemarketing and door-to-door selling utilizing demographic "cluster codes" to
target specific messages to target audiences. In certain systems, the
Partnership offers discounts to customers who purchase premium services on a
limited trial basis in order to encourage a higher level of service
subscription. The Partnership also has a coordinated strategy for retaining
customers that includes televised retention advertising to reinforce the initial
decision to subscribe and encourage customers to purchase higher service levels.

              CUSTOMER SERVICE AND COMMUNITY RELATIONS

              The Partnership places a strong emphasis on customer service and
community relations and believes that success in these areas is critical to its
business. The Partnership has developed and implemented a wide range of monthly
internal training programs for its employees, including its regional managers,
that focus on the Partnership's operations and employee interaction with
customers. The effectiveness of the Partnership's training program as it relates
to the employees' interaction with customers is monitored on an ongoing basis,
and a portion of the regional managers' compensation is tied to achieving
customer service targets. The Partnership conducts an extensive customer survey
on a periodic basis and uses the information in its efforts to enhance service
and better address the needs of its customers. A quarterly newsletter keeps
customers up to date on new service offerings, special events and company
information. In addition, the Partnership is participating in the industry's
Customer Service Initiative which emphasizes an on-time guarantee program for
service and installation appointments. The Partnership's corporate executives
and regional managers lead the Partnership's involvement in a number of programs
benefiting the communities the Partnership serves, including, among others,
Cable in the Classroom, Drug Awareness, Holiday Toy Drive and the Cystic
Fibrosis Foundation. Cable in the Classroom is the cable television industry's
public service initiative to enrich education through the use of commercial-free
cable programming. In addition, a monthly publication, CABLE IN THE CLASSROOM
magazine provides educational program listings by curriculum area, as well as
feature articles on how teachers across the country use the programs.

                                       -5-

<PAGE>

DESCRIPTION OF THE PARTNERSHIP'S SYSTEMS

                  The table below sets forth certain operating statistics for
the Partnership's cable systems as of December 31, 1998.

<TABLE>
<CAPTION>

                                                                                                          Average
                                                                                                          Monthly
                                                                      Premium                           Revenue Per
                          Homes         Basic           Basic         Service          Premium             Basic
System                  Passed (1)   Subscribers   Penetration (2)    Units (3)    Penetration (4)     Subscriber (5)
------                  ----------   -----------   ---------------    ---------    ---------------     --------------
<S>                     <C>          <C>           <C>                <C>          <C>                 <C>
Snow Hill, NC              5,325        1,689           31.7%             522          30.9%              $39.25

Kershaw, SC                4,205        2,209           52.5%             891          40.3%              $36.51

Brownsville, TN           15,285        6,906           45.2%           2,991          43.3%              $40.62
                          ------      -------                           -----
Total                     24,815       10,804           43.5%           4,404          40.8%              $39.59
                          ------      -------                           -----
                          ------      -------                           -----
</TABLE>
----------------------

1    Homes passed refers to estimates by the Partnership of the approximate 
number of dwelling units in a particular community that can be connected to 
the distribution system without any further extension of principal 
transmission lines. Such estimates are based upon a variety of sources, 
including billing records, house counts, city directories and other local 
sources.

2    Basic subscribers as a percentage of homes passed by cable.

3    Premium service units include only single channel services offered for a 
monthly fee per channel and do not include tiers of channels offered as a 
package for a single monthly fee.

4    Premium service units as a percentage of homes subscribing to cable 
service. A customer may purchase more than one premium service, each of which 
is counted as a separate premium service unit. This ratio may be greater than 
100% if the average customer subscribes for more than one premium service.

5    Average monthly revenue per basic subscriber has been computed based on 
revenue for the year ended December 31, 1998.

                                       -6-

<PAGE>

CUSTOMER RATES AND SERVICES

              The Partnership's cable television systems offer customers
packages of services that include the local area network, independent and
educational television stations, a limited number of television signals from
distant cities, numerous satellite-delivered, non-broadcast channels (such as
CNN, MTV, USA, ESPN, TNT and The Disney Channel) and certain information and
public access channels. For an extra monthly charge, the systems provide certain
premium television services, such as HBO and Showtime. The Partnership also
offers other cable television services to its customers. For additional charges,
in most of its systems, the Partnership also rents remote control devices and
VCR compatible devices (devices that make it easier for a customer to tape a
program from one channel while watching a program on another).

              The service options offered by the Partnership vary from system to
system, depending upon a system's channel capacity and viewer interests. Rates
for services also vary from market to market and according to the type of
services selected.

              Pursuant to the 1992 Cable Act, most cable television systems are
subject to rate regulation of the basic service tier, the non-basic service
tiers other than premium (per channel or program) services, the charges for
installation of cable service, and the rental rates for customer premises
equipment such as converter boxes and remote control devices. These rate
regulation provisions affect all of the Partnership's systems not deemed to be
subject to effective competition under the FCC's definition. Currently, none of
the Partnership's systems are subject to effective competition. See "Legislation
and Regulation."

              At December 31, 1998, the Partnership's monthly rates for basic
cable service for residential customers, including certain discounted rates,
ranged from $20.05 to $26.75 and its premium service rate was $11.95, excluding
special promotions offered periodically in conjunction with the Partnership's
marketing programs. A one-time installation fee, which the Partnership may
wholly or partially waive during a promotional period, is usually charged to new
customers. Commercial customers, such as hotels, motels and hospitals, are
charged a negotiated, non-recurring fee for installation of service and monthly
fees based upon a standard discounting procedure. Most multi-unit dwellings are
offered a negotiated bulk rate in exchange for single-point billing and basic
service to all units. These rates are also subject to regulation.

EMPLOYEES

              The various personnel required to operate the Partnership's
business are employed by the Partnership, the General Partner, its subsidiary
corporation and FCLP. As of February 12, 1999, the Partnership had seven
employees, the cost of which is charged directly to the Partnership. The
employment costs incurred by the General Partner, its subsidiary corporation and
FCLP are allocated and charged to the Partnership for reimbursement pursuant to
the partnership agreement and management agreement. Other personnel required to
operate the Partnership's business are employed by affiliates of the General
Partner. The cost of such employment is allocated and charged to the
Partnership. The amounts of these reimbursable costs are set forth below in Item
11., "Executive Compensation."

TECHNOLOGICAL DEVELOPMENTS

              As part of its commitment to customer service, the Partnership
seeks to apply technological advances in the cable television industry to its
cable television systems on the basis of cost effectiveness, capital
availability, enhancement of product quality and service delivery and
industry-wide acceptance. Currently, the Partnership's systems have an average
channel capacity of 36 which was fully utilized at December 31, 1998. The
Partnership believes that system upgrades would enable it to provide customers
with greater programming diversity, better picture quality and alternative
communications delivery systems made possible by the introduction of fiber optic
technology and by the possible future application of digital

                                       -7-

<PAGE>

compression. See "Business Strategy - Capital Expenditures," "Legislation and 
Regulation" and Item 7., "Management's Discussion and Analysis of Financial 
Condition and Results of Operations."

              The use of fiber optic cable as an alternative to coaxial cable is
playing a major role in expanding channel capacity and improving the performance
of cable television systems. Fiber optic cable is capable of carrying hundreds
of video, data and voice channels and, accordingly, its utilization is essential
to the enhancement of a cable television system's technical capabilities. The
Partnership's current policy is to utilize fiber optic technology where
applicable in rebuild projects which it undertakes. The benefits of fiber optic
technology over traditional coaxial cable distribution plant include lower
ongoing maintenance and power costs and improved picture quality and
reliability.

DIGITAL COMPRESSION

              The Partnership has been closely monitoring developments in the
area of digital compression, a technology that will enable cable operators to
increase the channel capacity of cable television systems by permitting a
significantly increased number of video signals to fit in a cable television
system's existing bandwidth. Depending on the technical characteristics of the
existing system, the Partnership believes that the utilization of digital
compression technology will enable its systems to increase channel capacity in
certain systems in a manner that could, in the short term, be more cost
efficient than rebuilding such systems with higher capacity distribution plant.
However, the Partnership believes that unless the system has sufficient unused
channel capacity and bandwidth, the use of digital compression to increase
channel offerings is not a substitute for the rebuild of the system, which will
improve picture quality, system reliability and quality of service. The use of
digital compression will expand the number and types of services these systems
offer and enhance the development of current and future revenue sources. This
technology is under frequent management review.

PROGRAMMING

              The Partnership purchases basic and premium programming for its
systems from FCLP. In turn, FCLP charges the Partnership for these costs based
on an estimate of what the General Partner could negotiate for such services for
the 15 partnerships managed by the General Partner as a group (approximately
91,000 basic subscribers at December 31, 1998), which is generally based on a
fixed fee per customer or a percentage of the gross receipts for the particular
service. Certain other channels have also offered FCLP and the Partnership's
systems fees in return for carrying their service. Due to a lack of channel
capacity available for adding new channels, the Partnership's management cannot
predict the impact of such potential payments on its business. In addition, the
FCC may require that such payments from programmers be offset against the
programming fee increases which can be passed through to subscribers under the
FCC's rate regulations. FCLP's programming contracts are generally for a fixed
period of time and are subject to negotiated renewal. FCLP does not have
long-term programming contracts for the supply of a substantial amount of its
programming. Accordingly, no assurance can be given that its, and
correspondingly the Partnership's, programming costs will not increase
substantially in the near future, or that other materially adverse terms will
not be added to FCLP's programming contracts. Management believes, however, that
FCLP's relations with its programming suppliers generally are good.

              The Partnership's cable programming costs have increased in recent
years and are expected to continue to increase due to additional programming
being provided to basic customers, requirements to carry channels under
retransmission carriage agreements entered into with certain programming
sources, increased costs to produce or purchase cable programming generally
(including sports programming), inflationary increases and other factors. The
1996 retransmission carriage agreement negotiations resulted in the Partnership
agreeing to carry one new service in its Brownsville and Kershaw systems, for
which it expects to receive reimbursement of certain costs related to launching
the service. All other negotiations were completed with essentially no change to
the previous agreements. Under the FCC's rate regulations, increases

                                       -8-

<PAGE>

in programming costs for regulated cable services occurring after the earlier 
of March 1, 1994, or the date a system's basic cable service became 
regulated, may be passed through to customers. See "Legislation and 
Regulation - Federal Regulation - Carriage of Broadcast Television Signals." 
Generally, programming costs are charged among systems on a per customer 
basis.

FRANCHISES

              Cable television systems are generally constructed and operated
under non-exclusive franchises granted by local governmental authorities. These
franchises typically contain many conditions, such as time limitations on
commencement and completion of construction; conditions of service, including
number of channels, types of programming and the provision of free service to
schools and certain other public institutions; and the maintenance of insurance
and indemnity bonds. The provisions of local franchises are subject to federal
regulation under the Cable Communications Policy Act of 1984 (the "1984 Cable
Act"), the 1992 Cable Act and the 1996 Telecom Act. See "Legislation and
Regulation."

              As of December 31, 1998, the Partnership held 22 franchises. These
franchises, all of which are non-exclusive, provide for the payment of fees to
the issuing authority. Annual franchise fees imposed on the Partnership systems
range up to 5% of the gross revenues generated by a system. The 1984 Cable Act
prohibits franchising authorities from imposing franchise fees in excess of 5%
of gross revenues and also permits the cable system operator to seek
renegotiation and modification of franchise requirements if warranted by changed
circumstances.

              The following table groups the franchises of the Partnership's
cable television systems by date of expiration and presents the number of
franchises for each group of franchises and the approximate number and
percentage of homes subscribing to cable service for each group as of December
31, 1998.

<TABLE>
<CAPTION>

                                                 Number of        Percentage of
             Year of            Number of          Basic              Basic
      Franchise Expiration     Franchises       Subscribers        Subscribers
   -----------------------     ----------       -----------       -------------
   <S>                         <C>              <C>               <C>
    Prior to 2000                    6              5,947            55.0%
    2000 - 2004                      5              1,892            17.5%
    2005 and after                  11              2,965            27.5%
                                   ----            -------          ------
    Total                           22             10,804           100.0%
                                   ----            -------          ------
                                   ----            -------          ------
</TABLE>

              The Partnership operates cable television systems which serve
multiple communities. As of December 31, 1998, all areas were served by
franchises. In certain instances, where a single franchise comprises a large
percentage of the customers in an operating region, the loss of such franchise
could decrease the economies of scale achieved by the Partnership's clustering
strategy. The Partnership has never had a franchise revoked for any of its
systems and believes that it has satisfactory relationships with substantially
all of its franchising authorities.

              The 1984 Cable Act provides, among other things, for an orderly
franchise renewal process in which franchise renewal will not be unreasonably
withheld or, if renewal is denied and the franchising authority acquires
ownership of the system or effects a transfer of the system to another person,
the operator generally is entitled to the "fair market value" for the system
covered by such franchise, but no value may be attributed to the franchise
itself. In addition, the 1984 Cable Act, as amended by the 1992 Cable Act,
establishes comprehensive renewal procedures which require that an incumbent
franchisee's renewal

                                       -9-

<PAGE>

application be assessed on its own merit and not as part of a comparative 
process with competing applications. See "Legislation and Regulation."

COMPETITION

              Cable television systems compete with other communications and
entertainment media, including over-the-air television broadcast signals which a
viewer is able to receive directly using the viewer's own television set and
antenna. The extent to which a cable system competes with over-the-air
broadcasting depends upon the quality and quantity of the broadcast signals
available by direct antenna reception compared to the quality and quantity of
such signals and alternative services offered by a cable system. Cable systems
also face competition from alternative methods of distributing and receiving
television signals and from other sources of entertainment such as live sporting
events, movie theaters and home video products, including videotape recorders
and videodisc players. In recent years, the FCC has adopted policies providing
for authorization of new technologies and a more favorable operating environment
for certain existing technologies that provide, or may provide, substantial
additional competition for cable television systems. The extent to which cable
television service is competitive depends in significant part upon the cable
television system's ability to provide an even greater variety of programming
than that available over the air or through competitive alternative delivery
sources.

              Individuals presently have the option to purchase home satellite
dishes, which allow the direct reception of satellite-delivered broadcast and
nonbroadcast program services formerly available only to cable television
subscribers. Most satellite-distributed program signals are being electronically
scrambled to permit reception only with authorized decoding equipment for which
the consumer must pay a fee. The 1992 Cable Act enhances the right of cable
competitors to purchase nonbroadcast satellite-delivered programming. See
"Legislation and Regulation-Federal Regulation."

              Television programming is now also being delivered to 
individuals by high-powered direct broadcast satellites ("DBS") utilizing 
video compression technology. This technology has the capability of providing 
more than 100 channels of programming over a single high-powered DBS 
satellite with significantly higher capacity available if, as is the case 
with DIRECTV, multiple satellites are placed in the same orbital position. 
Unlike cable television systems, however, DBS satellites are limited by law 
in their ability to deliver local broadcast signals. One DBS provider, 
EchoStar, has announced plans to deliver a limited number of local broadcast 
signals in a limited number of markets and has initiated efforts to have the 
practice legalized. Legislation has been introduced in Congress which would 
permit DBS operators to elect to provide local broadcast signals to their 
customers under the Copyright Act. If DBS providers are ultimately permitted 
to deliver local broadcast signals, cable television systems would lose a 
significant competitive advantage. DBS service can be received virtually 
anywhere in the continental United States through the installation of a small 
rooftop or side-mounted antenna, and it is more accessible than cable 
television service where cable plant has not been constructed or where it is 
not cost effective to construct cable television facilities. DBS service is 
being heavily marketed on a nationwide basis by several service providers. In 
addition, medium-power fixed-service satellites can be used to deliver 
direct-to-home satellite services over small home satellite dishes, and one 
provider, PrimeStar, currently provides service to subscribers using such a 
satellite. DIRECTV has recently agreed to purchase PrimeStar.

              Multichannel multipoint distribution systems ("wireless cable")
deliver programming services over microwave channels licensed by the FCC and
received by subscribers with special antennas. Wireless cable systems are less
capital intensive, are not required to obtain local franchises or to pay
franchise fees, and are subject to fewer regulatory requirements than cable
television systems. To date, the ability of wireless cable services to compete
with cable television systems has been limited by channel capacity (35-channel
maximum) and the need for unobstructed line-of-sight over-the-air transmission.
Although relatively few wireless cable systems in the United States are
currently in operation or under construction, virtually all markets have been
licensed or tentatively licensed. The use of digital compression technology, and
the FCC's

                                       -10-

<PAGE>

recent amendment to its rules, which permits reverse path or two-way 
transmission over wireless facilities, may enable wireless cable systems to 
deliver more channels and additional services.

              Private cable television systems compete to service condominiums,
apartment complexes and certain other multiple unit residential developments.
The operators of these private systems, known as satellite master antenna
television ("SMATV") systems, often enter into exclusive agreements with
apartment building owners or homeowners' associations which preclude franchised
cable television operators from serving residents of such private complexes.
However, the 1984 Cable Act gives franchised cable operators the right to use
existing compatible easements within their franchise areas upon
nondiscriminatory terms and conditions. Accordingly, where there are preexisting
compatible easements, cable operators may not be unfairly denied access or
discriminated against with respect to the terms and conditions of access to
those easements. There have been conflicting judicial decisions interpreting the
scope of the access right granted by the 1984 Cable Act, particularly with
respect to easements located entirely on private property. Under the 1996
Telecom Act, SMATV systems can interconnect non-commonly owned buildings without
having to comply with local, state and federal regulatory requirements that are
imposed upon cable systems providing similar services, as long as they do not
use public rights of way.

              The FCC has initiated a new interactive television service which
will permit non-video transmission of information between an individual's home
and entertainment and information service providers. This service, which can be
used by DBS systems, television stations and other video programming
distributors (including cable television systems), is an alternative technology
for the delivery of interactive video services. It does not appear at the
present time that this service will have a material impact on the operations of
cable television systems.

              The FCC has allocated spectrum in the 28 GHz range for a new
multichannel wireless service that can be used to provide video and
telecommunications services. The FCC recently completed the process of awarding
licenses to use this spectrum via a market-by-market auction. It cannot be
predicted at this time whether such a service will have a material impact on the
operations of cable television systems.

              Cable systems generally operate pursuant to franchises granted on
a non-exclusive basis. In addition, the 1992 Cable Act prohibits franchising
authorities from unreasonably denying requests for additional franchises and
permits franchising authorities to build and operate their own cable systems.
Municipally-owned cable systems enjoy certain competitive advantages such as
lower-cost financing and exemption from the payment of franchise fees.

              The 1996 Telecom Act eliminates the restriction against ownership
(subject to certain exceptions) and operation of cable systems by local
telephone companies within their local exchange service areas. Telephone
companies are now free to enter the retail video distribution business through
any means, such as DBS, wireless cable, SMATV or as traditional franchised cable
system operators. Alternatively, the 1996 Telecom Act authorizes local telephone
companies to operate "open video systems" (a facilities-based distribution
system, like a cable system, but which is "open," i.e., also available for use
by programmers other than the owner of the facility) without obtaining a local
cable franchise, although telephone companies operating such systems can be
required to make payments to local governmental bodies in lieu of cable
franchise fees. Up to two-thirds of the channel capacity on an "open video
system" must be available to programmers unaffiliated with the local telephone
company. As a result of the foregoing changes, well financed businesses from
outside the cable television industry (such as public utilities that own the
poles to which cable is attached) may become competitors for franchises or
providers of competing services. The 1996 Telecom Act, however, also includes
numerous provisions designed to make it easier for cable operators and others to
compete directly with local exchange telephone carriers in the provision of
traditional telephone service and other telecommunications services.

                                       -11-

<PAGE>

              Other new technologies, including Internet-based services, may
become competitive with services that cable television systems can offer. The
1996 Telecom Act directed the FCC to establish, and the FCC has adopted,
regulations and policies for the issuance of licenses for digital television
("DTV") to incumbent television broadcast licensees. DTV is expected to deliver
high definition television pictures, multiple digital-quality program streams,
as well as CD-quality audio programming and advanced digital services, such as
data transfer or subscription video. The FCC also has authorized television
broadcast stations to transmit textual and graphic information useful both to
consumers and businesses. The FCC also permits commercial and noncommercial FM
stations to use their subcarrier frequencies to provide nonbroadcast services
including data transmission. The cable television industry competes with radio,
television, print media and the Internet for advertising revenues. As the cable
television industry continues to offer more of its own programming channels,
e.g., Discovery and USA Network, income from advertising revenues can be
expected to increase.

              Recently a number of Internet service providers, commonly known as
ISPs, have requested local authorities and the FCC to provide rights of access
to cable television systems' broadband infrastructure in order that they be
permitted to deliver their services directly to cable television systems'
customers. In a recent report, the FCC declined to institute a proceeding to
examine this issue, and concluded that alternative means of access are or soon
will be made to a broad range of ISPs. The FCC declined to take action on ISP
access to broadband cable facilities, and the FCC indicated that it would
continue to monitor this issue. Several local jurisdictions also are reviewing
this issue.

              Telephone companies are accelerating the deployment of Asymmetric
Digital Subscriber Line technology, known as ADSL. These companies report that
ADSL technology will allow Internet access to subscribers at peak data
transmission speeds equal or greater than that of modems over conventional
telephone lines. Several of the Regional Bell Operating Companies have requested
the FCC to fully deregulate packet-switched networks (a type of data
communication in which small blocks of data are independently transmitted and
reassembled at their destination) to allow them to provide high-speed broadband
services, including interactive online services, without regard to present
service boundaries and other regulatory restrictions. The Partnership cannot
predict the likelihood of success of the online services offered by these
competitors, (ISP attempts to gain access to the cable industry's broadband
facilities), or the impact on the Partnership's business.

              Premium programming provided by cable systems is subject to the
same competitive factors which exist for other programming discussed above. The
continued profitability of premium services may depend largely upon the
continued availability of attractive programming at competitive prices.

              Advances in communications technology, as well as changes in the
marketplace and the regulatory and legislative environment, are constantly
occurring. Thus, it is not possible to predict the competitive effect that
ongoing or future developments might have on the cable industry. See
"Legislation and Regulation."

                                       -12-

<PAGE>
                                       
                           LEGISLATION AND REGULATION

              The cable television industry is regulated by the FCC, some state
governments and substantially all local governments. In addition, various
legislative and regulatory proposals under consideration from time to time by
Congress and various federal agencies have in the past materially affected, and
may in the future materially affect, the Partnership and the cable television
industry. The following is a summary of federal laws and regulations affecting
the growth and operation of the cable television industry and a description of
certain state and local laws. The Partnership believes that the regulation of
its industry remains a matter of interest to Congress, the FCC and other
regulatory authorities. There can be no assurance as to what, if any, future
actions such legislative and regulatory authorities may take or the effect
thereof on the Partnership.

FEDERAL REGULATION

              The primary federal statute dealing with the regulation of the
cable television industry is the Communications Act of 1934 (the "Communications
Act"), as amended. The three principal amendments to the Communications Act that
shaped the existing regulatory framework for the cable television industry were
the 1984 Cable Act, the 1992 Cable Act and the 1996 Telecom Act.

              The FCC, the principal federal regulatory agency with jurisdiction
over cable television, has promulgated regulations to implement the provisions
contained in the Communications Act. The FCC has the authority to enforce these
regulations through the imposition of substantial fines, the issuance of cease
and desist orders and/or the imposition of other administrative sanctions, such
as the revocation of FCC licenses needed to operate certain transmission
facilities often used in connection with cable operations. A brief summary of
certain of these federal regulations as adopted to date follows.

              RATE REGULATION

              The 1992 Cable Act replaced the FCC's previous standard for
determining "effective competition," under which most cable systems were not
subject to local rate regulation, with a statutory provision that resulted in
nearly all cable television systems becoming subject to local rate regulation of
basic service. The 1996 Telecom Act, however, expanded the definition of
effective competition to include situations where a local telephone company or
an affiliate, or any multichannel video provider using telephone company
facilities, offers comparable video service by any means except DBS. A finding
of effective competition exempts both basic and nonbasic tiers from regulation.
Additionally, the 1992 Cable Act required the FCC to adopt a formula,
enforceable by franchising authorities, to assure that basic cable rates are
reasonable; allowed the FCC to review rates for nonbasic service tiers (other
than per-channel or per-program services) in response to complaints filed by
franchising authorities and/or cable customers; prohibited cable television
systems from requiring subscribers to purchase service tiers above basic service
in order to purchase premium services if the system is technically capable of
doing so; required the FCC to adopt regulations to establish, on the basis of
actual costs, the price for installation of cable service, remote controls,
converter boxes and additional outlets; and allowed the FCC to impose
restrictions on the retiering and rearrangement of cable services under certain
limited circumstances. The 1996 Telecom Act limits the class of complainants
regarding nonbasic tier rates to franchising authorities only and ends FCC
regulation of nonbasic tier rates on March 31, 1999.

              The FCC's regulations contain standards for the regulation of
basic and nonbasic cable service rates (other than per-channel or per-program
services). Local franchising authorities and/or the FCC are empowered to order a
reduction of existing rates which exceed the maximum permitted level for either
basic and/or nonbasic cable services and associated equipment, and refunds can
be required. The rate regulations adopt a benchmark price cap system for
measuring the reasonableness of existing basic and nonbasic service rates.
Alternatively, cable operators have the opportunity to make cost-of-service
showings which, in some cases, may justify rates above the applicable
benchmarks. The rules also require that charges for cable-related equipment
(E.G., converter boxes and remote control devices) and installation services be
unbundled from the provision of

                                       -13-

<PAGE>

cable service and based upon actual costs plus a reasonable profit. The 
regulations also provide that future rate increases may not exceed an 
inflation-indexed amount, plus increases in certain costs beyond the cable 
operator's control, such as taxes, franchise fees and increased programming 
costs. Cost-based adjustments to these capped rates can also be made in the 
event a cable operator adds or deletes channels. In addition, new product 
tiers consisting of services new to the cable system can be created free of 
rate regulation as long as certain conditions are met, such as not moving 
services from existing tiers to the new tier. These provisions currently 
provide limited benefit to the Partnership's systems due to the lack of 
channel capacity previously discussed. There is also a streamlined 
cost-of-service methodology available to justify a rate increase on basic and 
regulated nonbasic tiers for "significant" system rebuilds or upgrades.

              Franchising authorities have become certified by the FCC to
regulate the rates charged by the Partnership for basic cable service and for
installation charges and equipment rental. The Partnership has had to bring its
rates and charges into compliance with the applicable benchmark or equipment and
installation cost levels in substantially all of its systems. This has had a
negative impact on the Partnership's revenues and cash flow.

              FCC regulations adopted pursuant to the 1992 Cable Act require
cable systems to permit customers to purchase video programming on a per channel
or a per program basis without the necessity of subscribing to any tier of
service, other than the basic service tier, unless the cable system is
technically incapable of doing so. Generally, an exemption from compliance with
this requirement for cable systems that do not have such technical capability is
available until a cable system obtains the capability, but not later than
December 2002. At the present time, the Partnership's systems are unable to
comply with this requirement.

              CARRIAGE OF BROADCAST TELEVISION SIGNALS

              The 1992 Cable Act adopted new television station carriage
requirements. These rules allow commercial television broadcast stations which
are "local" to a cable system, I.E., the system is located in the station's Area
of Dominant Influence, to elect every three years whether to require the cable
system to carry the station, subject to certain exceptions, or whether the cable
system will have to negotiate for "retransmission consent" to carry the station.
Local non-commercial television stations are also given mandatory carriage
rights, subject to certain exceptions, within the larger of: (i) a 50-mile
radius from the station's city of license; or (ii) the station's Grade B contour
(a measure of signal strength). Unlike commercial stations, noncommercial
stations are not given the option to negotiate retransmission consent for the
carriage of their signal. In addition, cable systems must obtain retransmission
consent for the carriage of all "distant" commercial broadcast stations, except
for certain "superstations," I.E., commercial satellite-delivered independent
stations, such as WGN. The Partnership has thus far not been required to pay
cash compensation to broadcasters for retransmission consent or been required by
broadcasters to remove broadcast stations from the cable television channel
line-ups. The Partnership has, however, agreed to carry some services in
specified markets pursuant to retransmission consent arrangements which it
believes are comparable to those entered into by most other large cable
operators, and for which it pays monthly fees to the service providers, as it
does with other satellite providers. The second election between must-carry and
retransmission consent for local commercial television broadcast stations was
October 1, 1996, and the Partnership has agreed to carry one new service in
specified markets pursuant to these retransmission consent arrangements. The
next election between must-carry and retransmission consent for local commercial
television broadcast stations will be October 1, 1999.

              The FCC is currently conducting a rulemaking proceeding regarding
the carriage responsibilities of cable television systems during the transition
of broadcast television from analog to digital transmission. Specifically, the
FCC is exploring whether to amend the signal carriage rules to accommodate the
carriage of digital broadcast television signals. The Partnership is unable to
predict the ultimate outcome of this proceeding or the impact of new carriage
requirements on the operations of its cable systems.

                                       -14-

<PAGE>

              NONDUPLICATION OF NETWORK PROGRAMMING

              Cable television systems that have 1,000 or more customers must,
upon the appropriate request of a local television station, delete the
simultaneous or nonsimultaneous network programming of certain lower priority
distant stations affiliated with the same network as the local station.

              DELETION OF SYNDICATED PROGRAMMING

              FCC regulations enable television broadcast stations that have
obtained exclusive distribution rights for syndicated programming in their
market to require a cable system to delete or "black out" such programming from
certain other television stations which are carried by the cable system. The
extent of such deletions will vary from market to market and cannot be predicted
with certainty. However, it is possible that such deletions could be substantial
and could lead the cable operator to drop a distant signal in its entirety.

              PROGRAM ACCESS

              The 1992 Cable Act contains provisions that are intended to foster
the development of competition to traditional cable systems by regulating the
access of competing multichannel video providers to vertically integrated,
satellite-distributed cable programming services. Consequently, with certain
limitations, the federal law generally precludes any satellite distributed
programming service affiliated with a cable company from favoring an affiliated
company over competitors; requires such programmers to sell their programming to
other multichannel video providers; and limits the ability of such satellite
program services to offer exclusive programming arrangements to their
affiliates.

              FRANCHISE FEES

              Franchising authorities may impose franchise fees, but such
payments cannot exceed 5% of a cable system's annual gross revenues. Under the
1996 Telecom Act, franchising authorities may not exact franchise fees from
revenues derived from telecommunications services.

              RENEWAL OF FRANCHISES

              The 1984 Cable Act established renewal procedures and criteria
designed to protect incumbent franchisees against arbitrary denials of renewal.
While these formal procedures are not mandatory unless timely invoked by either
the cable operator or the franchising authority, they can provide substantial
protection to incumbent franchisees. Even after the formal renewal procedures
are invoked, franchising authorities and cable operators remain free to
negotiate a renewal outside the formal process. Nevertheless, renewal is by no
means assured, as the franchisee must meet certain statutory standards. Even if
a franchise is renewed, a franchising authority may impose new and more onerous
requirements such as upgrading facilities and equipment, although the
municipality must take into account the cost of meeting such requirements.

              The 1992 Cable Act makes several changes to the process under
which a cable operator seeks to enforce his renewal rights, which could make it
easier in some cases for a franchising authority to deny renewal. While a cable
operator must still submit its request to commence renewal proceedings within
thirty to thirty-six months prior to franchise expiration to invoke the formal
renewal process, the request must be in writing and the franchising authority
must commence renewal proceedings not later than six months after receipt of
such notice. The four-month period for the franchising authority to grant or
deny the renewal now runs from the submission of the renewal proposal, not the
completion of the public proceeding. Franchising authorities may consider the
"level" of programming service provided by a cable operator in deciding whether
to renew. For alleged franchise violations occurring after December 29, 1984,
franchising authorities are no longer precluded from denying renewal based on
failure to substantially comply with the material terms of the franchise where
the franchising authority has "effectively acquiesced" to such past violations.
Rather, the franchising authority is estopped if,

                                       -15-

<PAGE>

after giving the cable operator notice and opportunity to cure, it fails to 
respond to a written notice from the cable operator of its failure or 
inability to cure. Courts may not reverse a denial of renewal based on 
procedural violations found to be "harmless error."

              CHANNEL SET-ASIDES

              The 1984 Cable Act permits local franchising authorities to
require cable operators to set aside certain channels for public, educational
and governmental access programming. The 1984 Cable Act further requires cable
television systems with thirty-six or more activated channels to designate a
portion of their channel capacity for commercial leased access by unaffiliated
third parties. While the 1984 Cable Act allowed cable operators substantial
latitude in setting leased access rates, the 1992 Cable Act requires leased
access rates to be set according to a formula determined by the FCC.

              COMPETING FRANCHISES

              The 1992 Cable Act prohibits franchising authorities from
unreasonably refusing to grant franchises to competing cable television systems
and permits franchising authorities to operate their own cable television
systems without franchises.

              OWNERSHIP

              The 1996 Telecom Act repealed the 1984 Cable Act's prohibition
against local exchange telephone companies ("LECs") providing video programming
directly to customers within their local telephone exchange service areas.
However, with certain limited exceptions, a LEC may not acquire more than a 10%
equity interest in an existing cable system operating within the LEC's service
area. The 1996 Telecom Act also authorized LECs and others to operate "open
video systems." A recent judicial decision overturned various parts of the FCC's
open video rules, including the FCC's restriction preventing local governmental
authorities from requiring open video system operators to obtain a franchise.
The Partnership expects the FCC to modify its open video rules to comply with
the federal court's decision, but is unable to predict the impact any rule
modifications may have on the Partnership's business and operations. See
"Business-Competition."

              The 1984 Cable Act and the FCC's rules prohibit the common
ownership, operation, control or interest in a cable system and a local
television broadcast station whose predicted grade B contour (a measure of a
television station's signal strength as defined by the FCC's rules) covers any
portion of the community served by the cable system. The 1996 Telecom Act
eliminates the statutory ban and directs the FCC to review its rule within two
years. Such a review is presently pending. Finally, in order to encourage
competition in the provision of video programming, the FCC adopted a rule
prohibiting the common ownership, affiliation, control or interest in cable
television systems and wireless cable facilities having overlapping service
areas, except in very limited circumstances. The 1992 Cable Act codified this
restriction and extended it to co-located SMATV systems. Permitted arrangements
in effect as of October 5, 1992 are grandfathered. The 1996 Telecom Act exempts
cable systems facing effective competition from the wireless cable and SMATV
restriction. In addition, a cable operator can purchase a SMATV system serving
the same area and technically integrate it into the cable system. The 1992 Cable
Act permits states or local franchising authorities to adopt certain additional
restrictions on the ownership of cable television systems.

              Pursuant to the 1992 Cable Act, the FCC has imposed limits on the
number of cable systems which a single cable operator can own. In general, no
cable operator can have an attributable interest in cable systems which pass
more than 30% of all homes nationwide. Attributable interests for these purposes
include voting interests of 5% or more (unless there is another single holder of
more than 50% of the voting stock), officerships, directorships, general
partnership interests and limited partnership interests (unless the limited
partners have no material involvement in the limited partnership's business).
These rules are under review by the

                                       -16-

<PAGE>

FCC. The FCC has stayed the effectiveness of these rules pending the outcome 
of the appeal from a U.S. District Court decision holding the multiple 
ownership limit provision of the 1992 Cable Act unconstitutional.

              The FCC has also adopted rules which limit the number of channels
on a cable system which can be occupied by programming in which the entity which
owns the cable system has an attributable interest. The limit is 40% of the
first 75 activated channels.

              The FCC also recently commenced a rulemaking proceeding to
examine, among other issues, whether any limitations on cable-DBS
cross-ownership are warranted in order to prevent anticompetitive conduct in the
video services market.

              FRANCHISE TRANSFERS

              The 1992 Cable Act requires franchising authorities to act on any
franchise transfer request submitted after December 4, 1992 within 120 days
after receipt of all information required by FCC regulations and by the
franchising authority. Approval is deemed to be granted if the franchising
authority fails to act within such period.

              TECHNICAL REQUIREMENTS

              The FCC has imposed technical standards applicable to the cable
channels on which broadcast stations are carried, and has prohibited franchising
authorities from adopting standards which are in conflict with or more
restrictive than those established by the FCC. Those standards are applicable to
all classes of channels which carry downstream National Television System
Committee (the "NTSC") video programming. The FCC also has adopted additional
standards applicable to cable television systems using frequencies in the
108-137 MHz and 225-400 MHz bands in order to prevent harmful interference with
aeronautical navigation and safety radio services and has also established
limits on cable system signal leakage. Periodic testing by cable operators for
compliance with the technical standards and signal leakage limits is required
and an annual filing of the results of these measurements is required. The 1992
Cable Act requires the FCC to periodically update its technical standards to
take into account changes in technology. Under the 1996 Telecom Act, local
franchising authorities may not prohibit, condition or restrict a cable system's
use of any type of subscriber equipment or transmission technology.

              The FCC has adopted regulations to implement the requirements of
the 1992 Cable Act designed to improve the compatibility of cable systems and
consumer electronics equipment. Among other things, these regulations generally
prohibit cable operators from scrambling their basic service tier. The 1996
Telecom Act directs the FCC to set only minimal standards to assure
compatibility between television sets, VCRs and cable systems, and to rely on
marketplace competition to best determine which features, functions, protocols,
and product and service options meet the needs of consumers.

              Pursuant to the 1992 Cable Act, the FCC has adopted rules to
assure the competitive availability to consumers of customers premises
equipment, such as converters, used to access the services offered by cable
television systems and other multichannel video programming distributions
("MVPD"). Pursuant to those rules, consumers are given the right to attach
compatible equipment to the facilities of their MVPD so long as the equipment
does not harm the network, does not interfere with the services purchased by
other customers, and is not used to receive unauthorized services. As of July 1,
2000, MVPDs (other than DBS operators) are required to separate security from
non-security functions in the customer premises equipment which they sell or
lease to their customers and offer their customers the option of using component
security modules obtained from the MVPD with set-top units purchased or leased
from retail outlets. As of January 1, 2005, MVPDs will be prohibited from
distributing new set -top equipment integrating both security and non-security
functions to their customers.

                                       -17-

<PAGE>

              POLE ATTACHMENTS

              The FCC currently regulates the rates and conditions imposed by
certain public utilities for use of their poles unless state public service
commissions are able to demonstrate that they regulate the rates, terms and
conditions of cable television pole attachments. In the absence of state
regulation, the FCC administers such pole attachment rates through use of a
formula which it has devised. The 1996 amendments to the Communications Act
modified the FCC's pole attachment regulatory scheme by requiring the FCC to
adopt new regulations. These regulations become effective in 2001 and govern the
charges for pole attachments used by companies, including cable operators, that
provide telecommunications services by immediately permitting certain providers
of telecommunications services to rely upon the protections of the current law
until the new rate formula becomes effective in 2001, and by requiring that
utilities provide cable systems and telecommunications carriers with
nondiscriminatory access to any pole, conduit or right-of-way controlled by the
utility. In adopting its new attachment regulations, the FCC concluded, in part,
that a cable operator providing Internet service on its cable system is not
providing a telecommunications service for purposes of the new rules.

              The new rate formula adopted by the FCC and which is applicable
for any party, including cable systems, which offer telecommunications services
will result in significantly higher attachment rates for cable systems which
choose to offer such services. Any resulting increase in attachment rates as a
result of the FCC's new rate formula will be phased in over a five-year period
in equal annual increments, beginning in February 2001. Several parties have
requested the FCC to reconsider its new regulations and several parties have
challenged the new rules in court. A federal district court recently upheld the
constitutionality of the new statutory provision, and the utilities involved in
that litigation have appealed the lower court's decision. The FCC also has
initiated a proceeding to determine whether it should adjust certain elements of
the current rate formula. If adopted, these adjustments could increase rates for
pole attachments and conduit space. The Partnership is unable to predict the
outcome of this current litigation or the ultimate impact of any revised FCC
rate formula or of any new pole attachment rate regulations on its business and
operations.

              OTHER MATTERS

              Other matters subject to FCC regulation include certain
restrictions on a cable system's carriage of local sports programming; rules
governing political broadcasts; customer service standards; obscenity and
indecency; home wiring; equal employment opportunity; privacy; closed
captioning; sponsorship identification; system registration; and limitations on
advertising contained in nonbroadcast children's programming.

              COPYRIGHT

              Cable television systems are subject to federal copyright
licensing covering carriage of broadcast signals. In exchange for making
semi-annual payments to a federal copyright royalty pool and meeting certain
other obligations, cable operators obtain a statutory license to retransmit
broadcast signals. The amount of this royalty payment varies, depending on the
amount of system revenues from certain sources, the number of distant signals
carried, and the location of the cable system with respect to over-the-air
television stations. Any future adjustment to the copyright royalty rates will
be done through an arbitration process supervised by the U.S. Copyright Office.

              Cable operators are liable for interest on underpaid and unpaid
royalty fees, but are not entitled to collect interest on refunds received for
overpayment of copyright fees.

              Copyrighted music transmitted in programming supplied to cable
television systems by pay cable networks (such as HBO) and basic cable networks
(such as USA Network) is licensed by the networks through private agreements
with the American Society of Composers and Publishers ("ASCAP") and BMI, Inc.
("BMI"), the two major performing rights organizations in the United States. As
a result of extensive litigation,

                                       -18-

<PAGE>

both ASCAP and BMI now offer "through to the viewer" licenses to the cable 
networks which cover the retransmission of the cable networks' programming by 
cable systems to their customers. Payment for music performed in programming 
offered on a per program basis remains unsettled. The Partnership recently 
participated in a settlement with BMI for payment of fees in connection with 
the Request pay-per-view network. Industry litigation of this issue with 
ASCAP is likely.

              Copyrighted music transmitted by cable systems themselves, E.G.,
on local origination channels or in advertisements inserted locally on cable
networks, must also be licensed. Cable industry negotiations with ASCAP, BMI and
SESAC, Inc. (a third and smaller performing rights organization) are in
progress.

LOCAL REGULATION

              Because a cable television system uses local streets and
rights-of-way, cable television systems generally are operated pursuant to
nonexclusive franchises, permits or licenses granted by a municipality or other
state or local government entity. Franchises generally are granted for fixed
terms and in many cases are terminable if the franchise operator fails to comply
with material provisions. Although the 1984 Cable Act provides for certain
procedural protections, there can be no assurance that renewals will be granted
or that renewals will be made on similar terms and conditions. Upon receipt of a
franchise, the cable system owner usually is subject to a broad range of
obligations to the issuing authority directly affecting the business of the
system. The terms and conditions of franchises vary materially from jurisdiction
to jurisdiction, and even from city to city within the same state, historically
ranging from reasonable to highly restrictive or burdensome. The specific terms
and conditions of a franchise and the laws and regulations under which it was
granted directly affect the profitability of the cable television system. Cable
franchises generally contain provisions governing charges for basic cable
television services, fees to be paid to the franchising authority, length of the
franchise term, renewal, sale or transfer of the franchise, territory of the
franchise, design and technical performance of the system, use and occupancy of
public streets and the number and types of cable services provided. The 1996
Telecom Act prohibits a franchising authority from either requiring or limiting
a cable operator's provision of telecommunications services.

              The 1984 Cable Act places certain limitations on a franchising
authority's ability to control the operation of a cable system operator, and the
courts have from time to time reviewed the constitutionality of several general
franchise requirements, including franchise fees and access channel
requirements, often with inconsistent results. On the other hand, the 1992 Cable
Act prohibits exclusive franchises, and allows franchising authorities to
exercise greater control over the operation of franchised cable television
systems, especially in the area of customer service and rate regulation.
Moreover, franchising authorities are immunized from monetary damage awards
arising from regulation of cable television systems or decisions made on
franchise grants, renewals, transfers and amendments.

              Existing federal regulations, copyright licensing and, in many
jurisdictions, state and local franchise requirements, currently are the subject
of a variety of judicial proceedings, legislative hearings and administrative
and legislative proposals which could change, in varying degrees, the manner in
which cable television systems operate. Neither the outcome of these proceedings
nor their impact upon the cable television industry can be predicted at this
time.

ITEM 2.       PROPERTIES

              The Partnership owns or leases parcels of real property for signal
reception sites (antenna towers and headends), microwave facilities and business
offices, and owns or leases its service vehicles. The Partnership believes that
its properties, both owned and leased, are in good condition and are suitable
and adequate for the Partnership's business operations.

                                       -19-

<PAGE>

              The Partnership owns substantially all of the assets related to
its cable television operations, including its program production equipment,
headend (towers, antennas, electronic equipment and satellite earth stations),
cable plant (distribution equipment, amplifiers, customer drops and hardware),
converters, test equipment and tools and maintenance equipment.

ITEM 3.       LEGAL PROCEEDINGS

              The Partnership is periodically a party to various legal
proceedings. Such legal proceedings are ordinary and routine litigation
proceedings that are incidental to the Partnership's business and management
believes that the outcome of all pending legal proceedings will not, in the
aggregate, have a material adverse effect on the financial condition of the
Partnership.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

              None.





                                       -20-

<PAGE>
                                       
                                     PART II

ITEM 5.       MARKET FOR THE REGISTRANT'S EQUITY SECURITIES AND RELATED
              SECURITY HOLDER MATTERS

LIQUIDITY

              While the Partnership's equity securities, which consist of units
of limited partnership interests, are publicly held, there is no established
public trading market for the units and it is not expected that a market will
develop. The approximate number of equity security holders of record was 977 as
of December 31, 1998. In addition to restrictions on the transferability of
units contained in the Partnership Agreement, the transferability of units may
be affected by restrictions on resales imposed by federal or state law.

              Pursuant to documents filed with the Securities and Exchange
Commission on February 18, 1999, Madison Liquidity Investors 104, LLC
("Madison") initiated a tender offer to purchase up to approximately 9.9% of the
outstanding units for $210 per unit. On March 2, 1999, the Partnership filed a
Recommendation Statement on Schedule 14D-9 and distributed a letter to
unitholders recommending that unitholders reject Madison's offer.

DISTRIBUTIONS

              The Partnership Agreement generally provides that all Partnership
profits, gains, losses, credits, and cash distributions (all as defined) from
operations or liquidation be allocated one percent to the general partners and
99% to the limited partners until the limited partners have received
distributions of cash flow from operations and/or cash flow from sales,
refinancing, or liquidation of systems equal to their initial investment. After
the limited partners have received cash flow equal to their initial investment,
the general partner will receive a one percent allocation of cash flow from
liquidating a system until the limited partners have received an annual simple
interest return of at least 18% of their initial investment less any
distributions from previous system liquidations. Thereafter, allocations will be
made 15% to the general partner and 85% to the limited partners. All allocations
to individual limited partners will be based on their respective capital
accounts. Upon dissolution of the Partnership, any negative capital account
balances remaining after all allocations and distributions are made must be
funded by the respective partners.

              The policy of the General Partner (although there is no
contractual obligation to do so) is to cause the Partnership to make cash
distributions on a quarterly basis throughout the operational life of the
Partnership, assuming the availability of sufficient cash flow from Partnership
operations. The amount of such distributions, if any, will vary from quarter to
quarter depending upon the Partnership's results of operations and the General
Partner's determination of whether otherwise available funds are needed for the
Partnership's ongoing working capital and liquidity requirements. It is also the
General Partner's policy to distribute available net proceeds from sales of
cable television systems. However, on February 22, 1994, the FCC announced
significant amendments to its rules implementing certain provisions of the 1992
Cable Act. Compliance with these rules has had a negative impact on the
Partnership's revenues and cash flow.

              The Partnership began making periodic cash distributions to
limited partners during 1984 and discontinued distributions in January 1990. No
distributions were made during 1996, 1997 or 1998. For more information
regarding distributions, see Item 7., "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

              The Partnership's ability to pay distributions, the actual level
of distributions and the continuance of distributions, if any, will depend on a
number of factors, including the amount of cash flow from operations, projected
capital expenditures, provision for contingent liabilities, availability of bank

                                       -21-

<PAGE>

financing, regulatory or legislative developments governing the cable television
industry, and growth in customers. Some of these factors are beyond the control
of the Partnership, and consequently, no assurances can be given regarding the
level or timing of future distributions, if any. The Partnership's Facility does
not restrict the payment of distributions to partners unless an event of default
exists thereunder or the Partnership's ratio of debt to cash flow is greater
than 4 to 1.













                                       -22

<PAGE>


ITEM 6.       SELECTED FINANCIAL DATA

              Set forth below is selected financial data of the Partnership for
the five years ended December 31, 1998. This data should be read in conjunction
with the Partnership's financial statements included in Item 8 hereof and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in Item 7.

<TABLE>
<CAPTION>

                                                                              Year Ended December 31,
                                                -----------------------------------------------------------------------------------
OPERATIONS STATEMENT DATA                           1994              1995             1996              1997             1998
                                                --------------    -------------    --------------    -------------    -------------
<S>                                             <C>               <C>              <C>               <C>              <C>
   Revenues                                     $  4,532,800      $  4,919,300     $  5,243,500      $  5,369,200     $  5,221,100
   Costs and expenses                             (2,964,900)       (3,010,900)      (3,175,000)       (3,473,500)      (3,184,700)
   Depreciation and amortization                  (1,242,600)       (1,173,500)        (570,600)         (583,100)        (747,600)
                                                --------------    -------------    --------------    -------------    -------------
   Operating income                                  325,300           734,900        1,497,900         1,312,600        1,288,800
   Interest expense                                 (275,200)         (270,600)        (187,900)         (107,500)        (103,900)
   Interest income                                    29,800            53,200           43,500            34,700           25,700
   Gain on sale of cable assets                            -             3,300              100                 -                -
   Casualty gain (loss)                                    -                 -                -           202,400         (271,000)
                                                --------------    -------------    --------------    -------------    -------------
   Net income                                   $     79,900      $    520,800     $  1,353,600      $  1,442,200     $    939,600
                                                --------------    -------------    --------------    -------------    -------------
                                                --------------    -------------    --------------    -------------    -------------
PER UNIT OF LIMITED
   PARTNERSHIP INTEREST:
   Net income                                   $       2.64      $      17.22     $      44.76      $      47.69     $      31.07
                                                --------------    -------------    --------------    -------------    -------------
                                                --------------    -------------    --------------    -------------    -------------

OTHER OPERATING DATA

   Net cash provided by operating
     activities                                 $  1,380,200      $  1,712,900     $  1,804,800      $  1,830,400     $  2,084,800
   Net cash used in investing activities            (504,900)         (960,700)      (1,170,000)         (825,600)      (1,398,400)
   Net cash used in financing activities            (440,100)         (986,600)        (565,700)       (1,546,300)        (113,300)
   EBITDA (1)                                      1,567,900         1,908,400        2,068,500         1,895,700        2,036,400
   EBITDA to revenues                                 34.6%             38.8%            39.4%             35.3%            39.0%
   Total debt to EBITDA                                1.9x              1.0x              .5x               .1x             -
   Capital expenditures                         $    480,800      $    934,300     $  1,149,600      $    776,900     $  1,389,800

                                                                                As of December 31,
                                                ------------------------------------------------------------------------------------
BALANCE SHEET DATA                                  1994              1995             1996              1997             1998
                                                --------------    -------------    --------------    -------------    --------------
<S>                                             <C>               <C>              <C>               <C>              <C>
   Total assets                                 $  4,196,700      $  3,853,400      $ 4,605,200      $  4,696,100     $  5,417,400
   Total debt                                      3,011,000         1,942,800        1,042,800           250,000                -
   General partner's deficit                         (74,200)          (69,000)         (55,500)          (41,100)         (31,700)
   Limited partners' capital (deficit)               (80,300)          435,300        1,775,400         3,203,200        4,133,400

</TABLE>

--------------------

1    EBITDA is calculated as operating income before depreciation and 
amortization. Based on its experience in the cable television industry, the 
Partnership believes that EBITDA and related measures of cash flow serve as 
important financial analysis tools for measuring and comparing cable 
television companies in several areas, such as liquidity, operating 
performance and leverage. In addition, the covenants in the primary debt 
instrument of the Partnership use EBITDA-derived calculations as a measure of 
financial performance. EBITDA is not a measurement determined under GAAP and 
does not represent cash generated from operating activities in accordance 
with GAAP. EBITDA should not be considered by the reader as an alternative to 
net income as an indicator of the Partnership's financial performance or as an 
alternative to cash flows as a measure of liquidity. In addition, the 
Partnership's definition of EBITDA may not be identical to similarly titled 
measures used by other companies.

                                       -23-

<PAGE>

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
              RESULTS OF OPERATIONS

INTRODUCTION

              The 1992 Cable Act required the FCC to, among other things,
implement extensive regulation of the rates charged by cable television systems
for basic and programming service tiers, installation, and customer premises
equipment leasing. Compliance with those rate regulations has had a negative
impact on the Partnership's revenues and cash flow. The 1996 Telecom Act
substantially changed the competitive and regulatory environment for cable
television and telecommunications service providers. Among other changes, the
1996 Telecom Act provides that the regulation of CPST rates will terminate on
March 31, 1999. There can be no assurance as to what, if any, further action may
be taken by the FCC, Congress or any other regulatory authority or court, or the
effect thereof on the Partnership's business. Accordingly, the Partnership's
historical financial results as described below are not necessarily indicative
of future performance.

              This Report includes certain forward looking statements regarding,
among other things, future results of operations, regulatory requirements,
competition, capital needs and general business conditions applicable to the
Partnership. Such forward looking statements involve risks and uncertainties
including, without limitation, the uncertainty of legislative and regulatory
changes and the rapid developments in the competitive environment facing cable
television operators such as the Partnership, as discussed more fully elsewhere
in this Report.

RESULTS OF OPERATIONS

              1998 COMPARED TO 1997

              The Partnership's revenues decreased from $5,369,200 to
$5,221,100, or by 2.8%, for the year ended December 31, 1998 compared to 1997.
Of the $148,100 decrease, $326,700 was due to decreases in the number of
subscriptions for basic, pay, tier and equipment rental services. These
decreases were partially offset by a $467,300 increase due to increases in
regulated service rates that were implemented by the Partnership in 1997 and a
$7,500 increase in other revenue producing items. As of December 31, 1998, the
Partnership had approximately 10,800 basic subscribers and 4,400 premium service
units.

              Service costs decreased from $2,012,500 to $1,848,400, or by 8.2%,
for the year ended December 31, 1998 as compared to 1997. Service costs
represent costs directly attributable to providing cable services to customers.
Lower copyright fees accounted for most of the decrease as a result of the
industry-wide change in status of one satellite service that resulted in lower
fees. Copyright fees also decreased in direct relation to decreased revenues as
described above.

              General and administrative expenses decreased from $857,400 to
$676,000, or by 21.2%, for the year ended December 31, 1998 as compared to 1997,
primarily due to decreases in bad debt expense, personnel costs and customer
billing expenses.

              Management fees and reimbursed expenses increased from $603,600 to
$660,300, or by 9.4%, for the year ended December 31, 1998 as compared to 1997.
Management fees decreased in direct relation to decreased revenues as described
above. Reimbursed expenses increased as a result of transferring system
operating management of the Partnership's Tennessee systems from an affiliate to
the General Partner.

              Depreciation and amortization expense increased from $583,100 to
$747,600, or by 28.2%, for the year ended December 31, 1998 as compared to 1997,
primarily due to depreciation of asset additions

                                       -24-

<PAGE>

including expenditures to replace segments of the Partnership's North 
Carolina cable plant and subscriber connections that were damaged by a storm.

              Operating income decreased from $1,312,600 to $1,288,800, or by
1.8%, for the year ended December 31, 1998 as compared to 1997, primarily due to
increases in amortization and depreciation expense and decreases in revenues as
described above.

              Interest expense decreased from $107,500 to $103,900, or by 3.3%,
for the year ended December 31, 1998 as compared to 1997, primarily due to lower
average borrowings in 1998 caused by the repayment of the Partnership's note
payable in June 1998.

              Interest income decreased from $34,700 to $25,700, or by 25.9%,
for the year ended December 31, 1998 as compared to 1997, primarily due to lower
average cash balances available for investment.

              The Partnership recognized a $271,000 casualty loss during 1998
related to storm damage sustained by its North Carolina system in 1996 and 
1998. See Note 3 of Notes to Financial Statements.

              Due to the factors described above, the Partnership's net income
decreased from $1,442,200 to $939,600, or by 34.8%, for the year ended December
31, 1998 compared to 1997.

              EBITDA is calculated as operating income before depreciation and
amortization. See footnote 1 to "Selected Financial Data." EBITDA as a
percentage of revenues increased from 35.3% in 1997 to 39.0% during 1998. The
increase was primarily due to lower copyright fees and bad debt expense as
described above. EBITDA increased from $1,895,700 to $2,036,400, or by 7.4%, as
a result.

              1997 COMPARED TO 1996

              The Partnership's revenues increased from $5,243,500 to
$5,369,200, or by 2.4%, for the year ended December 31, 1997 compared to 1996.
Of the $125,700 increase, $358,500 was due to increases in regulated service
rates that were implemented by the Partnership in the second and fourth quarters
of 1996 and the fourth quarter of 1997, $64,800 was due to the July 1, 1996
restructuring of The Disney Channel from a premium channel to a tier channel and
$2,500 was due to increases in other revenue producing items. These increases
were partially offset by a $300,100 decrease due to decreases in the number of
subscriptions for basic, pay, tier and equipment rental services. As of December
31, 1997, the Partnership had approximately 11,200 basic subscribers and 4,900
premium service units.

              Service costs increased from $1,859,500 to $2,012,500, or by 8.2%,
for the year ended December 31, 1997 as compared to 1996. Service costs
represent costs directly attributable to providing cable services to customers.
Increases in copyright fees and decreases in capitalization of labor and
overhead costs accounted for the majority of the increase. Copyright fees
increased in direct relation to increased revenues as described above.
Capitalization of labor and overhead costs decreased as a result of fewer
capital projects in 1997.

              General and administrative expenses increased from $758,100 to
$857,400, or by 13.1%, for the year ended December 31, 1997 as compared to 1996,
primarily due to an increase in bad debt expense.

              Management fees and reimbursed expenses increased from $557,400 to
$603,600, or by 8.3%, for the year ended December 31, 1997 as compared to 1996.
Management fees increased in direct relation to increased revenues as described
above. Reimbursed expenses increased primarily due to higher allocated personnel
costs resulting from staff additions and wage increases.

                                       -25-

<PAGE>

              Depreciation and amortization expense increased from $570,600 to
$583,100, or by 2.2%, for the year ended December 31, 1997 as compared to 1996,
primarily due to depreciation of asset additions.

              Operating income decreased from $1,497,900 to $1,312,600, or by
12.4%, for the year ended December 31, 1997 as compared to 1996, primarily due
to increases in bad debt expense and copyright fees as described above.

              Interest expense decreased from $187,900 to $107,500, or by 42.8%,
for the year ended December 31, 1997 as compared to 1996, primarily due to lower
average borrowings during 1997.

              Interest income decreased from $43,500 to $34,700, or by 20.2%,
for the year ended December 31, 1997 as compared to 1996, due to lower average
cash balances available for investment.

              The Partnership recognized a $202,400 gain on involuntary
conversion of cable system assets during 1997 related to storm damage sustained
in its North Carolina system.

              Due to the factors described above, the Partnership's net income
increased from $1,353,600 to $1,442,200 for the year ended December 31, 1997
compared to 1996.

              EBITDA is calculated as operating income before depreciation and
amortization. See footnote 1 to "Selected Financial Data." EBITDA as a
percentage of revenues decreased from 39.4% during 1996 to 35.3% in 1997. The
decrease was primarily caused by higher bad debt expense and copyright fees.
EBITDA decreased from $2,068,500 to $1,895,700, or by 8.4%, as a result.

              DISTRIBUTIONS TO PARTNERS

              As provided in the partnership agreement, distributions to
partners are funded from income before depreciation and amortization after
providing for working capital and other liquidity requirements, including debt
service and capital expenditures not otherwise funded by borrowings. No
distributions were made during 1996, 1997 or 1998. No assurance can be given
regarding the level or timing of future distributions, if any.

LIQUIDITY AND CAPITAL RESOURCES

              The Partnership's primary objective, having invested its net
offering proceeds in cable systems, is to distribute to its partners all
available cash flow from operations and proceeds from the sale of cable systems,
if any, after providing for expenses, debt service and capital requirements. In
general, these capital requirements involve expansion, improvement and upgrade
of the Partnership's existing cable systems.

              Based on its belief that the market for cable systems has
generally improved, the General Partner is evaluating strategies for liquidating
the Partnership. These strategies include the potential sale of substantially
all of the Partnership's assets to third parties and/or affiliates of the
General Partner, and the subsequent liquidation of the Partnership. The General
Partner expects to complete its evaluation within the next several months and
intends to advise unitholders promptly if it believes that commencing a
liquidating transaction would be in the best interests of unitholders.

              The Partnership relies upon the availability of cash generated
from operations and possible borrowings to fund its ongoing expenses, debt
service and capital requirements. The Partnership's capital expenditures were
$1,389,800 in the year ended December 31, 1998. As of the date of this Report,
substantially all of the available channel capacity in the Partnership's cable
television systems is being utilized and each of such systems requires an
upgrade. The entire upgrade program is presently estimated to

                                       -26-

<PAGE>

require aggregate capital expenditures of approximately $8,300,000 and covers 
12 franchise areas. These upgrades are currently required in six existing 
franchise agreements covering eight franchise areas. The upgrades required by 
the six existing franchise agreements are estimated to cost approximately 
$4,900,000 and must be completed by June 2000, December 2001 and February 
2002. Capital expenditures budgeted for 1999 include approximately $48,000 to 
begin three of the upgrades and $501,000 for the replacement of other assets. 
The Partnership believes that borrowings under its credit agreement together 
with cash flow from operations will be adequate to fund capital expenditures 
and other liquidity requirements.

              The Partnership is party to a loan agreement with Enstar Finance
Company, LLC ("EFC"), a subsidiary of the General Partner. The loan agreement
provides for a revolving loan facility of $7,481,700 (the "Facility"). The
Partnership prepaid its outstanding borrowings of $250,000 on June 22, 1998,
although the Partnership's management expects to reborrow under the Facility in
the future for the upgrade of the Partnership's systems.

              The Partnership's Facility matures on August 31, 2001, at which
time all amounts then outstanding are due in full. Borrowings bear interest at
the lender's base rate (7.75% at December 31, 1998) plus 0.625%, or at an
offshore rate plus 1.875%. Under certain circumstances, the Partnership is
required to make mandatory prepayments, which permanently reduce the maximum
commitment under the Facility. The Facility contains certain financial tests and
other covenants including, among others, restrictions on incurrence of
indebtedness, investments, sales of assets, acquisitions and other covenants,
defaults and conditions. The Facility does not restrict the payment of
distributions to partners unless an event of default exists thereunder or the
Partnership's ratio of debt to cash flow is greater than 4 to 1. However, due to
the upgrade program discussed above, the General Partner believes it is critical
to conserve cash and borrowing capacity and, consequently, has concluded that it
would not be prudent for the Partnership to resume paying distributions at this
time.

              Beginning in August 1997, the General Partner elected to
self-insure the Partnership's cable distribution plant and subscriber
connections against property damage as well as possible business interruptions
caused by such damage. The decision to self-insure was made due to significant
increases in the cost of insurance coverage and decreases in the amount of
insurance coverage available.

              In October 1998, FCLP reinstated third party insurance coverage
for all of the cable television properties owned or managed by FCLP to cover
damage to cable distribution plant and subscriber connections and against
business interruptions resulting from such damage. This coverage is subject to a
significant annual deductible which applies to all of the cable television
properties owned or managed by FCLP.

              Approximately 64% of the Partnership's subscribers are served by
its system in Brownsville, Tennessee and neighboring communities. Significant
damage to the system due to seasonal weather conditions or other events could
have a material adverse effect on the Partnership's liquidity and cash flows.
The Partnership continues to purchase insurance coverage in amounts its
management views as appropriate for all other property, liability, automobile,
workers' compensation and other types of insurable risks.

              During the fourth quarter of 1998, FCLP, on behalf of the General
Partner, continued its identification and evaluation of the Partnership's Year
2000 business risks and its exposure to computer systems, to operating equipment
which is date sensitive and to the interface systems of its vendors and service
providers. The evaluation has focused on identification and assessment of
systems and equipment that may fail to distinguish between the year 1900 and the
year 2000 and, as a result, may cease to operate or may operate improperly when
dates after December 31, 1999 are introduced.

              Based on a study conducted in 1997, FCLP concluded that certain of
the Partnership's information systems were not Year 2000 compliant and elected
to replace such software and hardware with

                                       -27-

<PAGE>

applications and equipment certified by the vendors as Year 2000 compliant. 
FCLP installed a number of the new systems in January 1999. The remaining 
systems are expected to be installed by mid-1999. The total anticipated cost, 
including replacement software and hardware, will be borne by FCLP. FCLP is 
utilizing internal and external resources to install the new systems. FCLP 
does not believe that any other significant information technology ("IT") 
projects affecting the Partnership have been delayed due to efforts to 
identify and address Year 2000 issues.

              Additionally, FCLP has continued to inventory the Partnership's
operating and revenue generating equipment to identify items that need to be
upgraded or replaced and has surveyed cable equipment manufacturers to determine
which of their models require upgrade or replacement to become Year 2000
compliant. Identification and evaluation, while ongoing, are substantially
completed and a plan is being developed to remediate non-compliant equipment
prior to January 1, 2000. FCLP expects to complete its planning process by the
end of May 1999. Upgrade or replacement, testing and implementation will be
performed thereafter. The cost of such replacement or remediation, currently
estimated at $2,000, is not expected to have a material effect on the
Partnership's financial position or results of operations. The Partnership had
not incurred any costs related to the Year 2000 project as of December 31, 1998.
FCLP plans to inventory, assess, replace and test equipment with embedded
computer chips in a separate segment of its project, presently scheduled for the
second half of 1999.

              FCLP has continued to survey the Partnership's significant third
party vendors and service suppliers to determine the extent to which the
Partnership's interface systems are vulnerable should those third parties fail
to solve their own Year 2000 problems on a timely basis. Among the most
significant service providers upon which the Partnership relies are programming
suppliers, power and telephone companies, various banking institutions and the
Partnership's customer billing service. A majority of these service suppliers
either have not responded to FCLP's inquiries regarding their Year 2000
compliance programs or have responded that they are unsure if they will become
compliant on a timely basis. Consequently, there can be no assurance that the
systems of other companies on which the Partnership must rely will be Year 2000
compliant on a timely basis.

              FCLP expects to develop a contingency plan in 1999 to address
possible situations in which various systems of the Partnership, or of third
parties with which the Partnership does business, are not compliant prior to
January 1, 2000. Considerable effort will be directed toward distinguishing
between those contingencies with a greater probability of occurring from those
whose occurrence is considered remote. Moreover, such a plan will necessarily
focus on systems whose failure poses a material risk to the Partnership's
results of operations and financial condition.

              The Partnership's most significant Year 2000 risk is an
interruption of service to subscribers, resulting in a potentially material loss
of revenues. Other risks include impairment of the Partnership's ability to bill
and/or collect payment from its customers, which could negatively impact its
liquidity and cash flows. Such risks exist primarily due to technological
operations dependent upon third parties and to a much lesser extent to those
under the control of the Partnership. Failure to achieve Year 2000 readiness in
either area could have a material adverse impact on the Partnership. The
Partnership is unable to estimate the possible effect on its results of
operations, liquidity and financial condition should its significant service
suppliers fail to complete their readiness programs prior to the Year 2000.
Depending on the supplier, equipment malfunction or type of service provided, as
well as the location and duration of the problem, the effect could be material.
For example, if a cable programming supplier encounters an interruption of its
signal due to a Year 2000 satellite malfunction, the Partnership will be unable
to provide the signal to its cable subscribers, which could result in a loss of
revenues, although the Partnership would attempt to provide its customers with
alternative program services for the period during which it could not provide
the original signal. Due to the number of individually owned and operated
channels the Partnership carries for its subscribers, and the packaging of those
channels, the Partnership is unable to estimate any reasonable dollar impact of
such interruption.

                                       -28-

<PAGE>

              1998 VS. 1997

              Operating activities provided $254,400 more cash in the year ended
December 31, 1998 than in 1997. Collection of an insurance claim receivable
provided $304,500 more cash in 1998 due to receipt of the insurance settlement
during the year. Changes in accounts receivable and prepaid expenses provided
$25,500 more cash in 1998 than in 1997 due to differences in the timing of
receivable collections and in the payment of prepaid expenses. The Partnership
used $190,100 more cash in 1998 for the payment of liabilities owed to third
party creditors due to differences in the timing of payments.

                  The Partnership used $572,800 more cash in investing
activities in 1998 than in 1997 due to a $612,900 increase in capital
expenditures, partially offset by a $40,100 decrease in expenditures for
intangible assets. Financing activities used $1,433,000 less cash in 1998 than
in 1997. The Partnership used $780,300 less cash to pay deferred management fees
and reimbursed expenses owed to the General Partner, $542,800 less cash, net of
new borrowings, for the repayment of debt and $109,900 less cash for deferred
loan costs related to its Facility.

              1997 VS. 1996

              Operating activities provided $25,600 more cash in the year ended
December 31, 1997 than in 1996. The Partnership used $147,900 less cash to pay
liabilities owed to third-party creditors as a result of differences in the
timing of payments. Changes in receivables, prepaid expenses and other assets
used $56,900 more cash in 1997 due to differences in the timing of receivable
collections and in the payment of prepaid expenses.

              The Partnership used $344,400 less cash in investing activities in
1997 than in 1996 due to a $372,700 decrease in capital expenditures, partially
offset by a $24,600 increase in expenditures for intangible assets. The
Partnership received $3,700 less cash from the sale of cable assets in 1997 than
in 1996. Financing activities used $980,600 more cash in 1997 than in 1996. The
Partnership used $1,004,600 more cash to pay deferred management fees and
reimbursed expenses owed to the General Partner, $142,800 more cash to repay
debt under its previous credit agreement and $83,200 more cash for the payment
of deferred loan costs related to the new Facility. Borrowings under the
Facility provided $250,000 in 1997.

NEW ACCOUNTING PRONOUNCEMENT

              In 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5, "Reporting on Costs of Start-Up Activities."
The new standard, which becomes effective for the Partnership on January 1,
1999, requires costs of start-up activities to be expensed as incurred. The
Partnership believes that adoption of this standard will not have an impact on
the Partnership's financial position or results of operations.

INFLATION

              Certain of the Partnership's expenses, such as those for wages and
benefits, equipment repair and replacement, and billing and marketing generally
increase with inflation. However, the Partnership does not believe that its
financial results have been, or will be, adversely affected by inflation in a
material way, provided that the Partnership is able to increase its service
rates periodically, of which there can be no assurance. See "Legislation and
Regulation."

                                       -29-

<PAGE>

ITEM 7(A).    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

              The Partnership is not currently exposed to material market risks
associated with its financial instruments, although the Partnership would be
subject to interest rate risk were it to borrow under its Facility with EFC.

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

              The financial statements and related financial information
required to be filed hereunder are indexed on Page F-1.

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE

              Not applicable.

                                       -30-

<PAGE>
                                       
                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

              The general partners of a partnership may be considered for
certain purposes the functional equivalent of directors and executive officers.
Enstar Communications Corporation is the sole general partner of the
Partnership. Since its incorporation in Georgia in 1982, the General Partner has
been engaged in the cable-telecommunications business, both as a general partner
of 15 limited partnerships formed to own and operate cable television systems
and through a wholly-owned operating subsidiary. As of December 31, 1998, the
General Partner managed cable television systems serving approximately 91,000
basic subscribers.

              On September 30, 1998, FHGLP acquired ownership of the General
Partner from Falcon Cablevision. FHGI is the sole general partner of FHGLP.
FHGLP controls the general partners of the 15 limited partnerships which operate
under the Enstar name (including the Partnership). Although these limited
partnerships are affiliated with FHGLP, their assets are owned by legal entities
separate from the Partnership.

              Set forth below is certain general information about the Directors
and Executive Officers of the General Partner:

<TABLE>
<CAPTION>

NAME                                POSITION
----                                --------
<S>                                 <C>
Marc B. Nathanson                   Director, Chairman of the Board and Chief Executive Officer
Frank J. Intiso                     Director, President and Chief Operating Officer
Stanley S. Itskowitch               Director, Executive Vice President and General Counsel
Michael K. Menerey                  Director, Executive Vice President, Chief Financial Officer and Secretary
Joe A. Johnson                      Executive Vice President - Operations
Thomas J. Hatchell                  Executive Vice President - Operations
Abel C. Crespo                      Vice President, Corporate Controller

</TABLE>

MARC B. NATHANSON, 53, has been Chairman of the Board and Chief Executive
Officer of FHGI and its predecessors since 1975, and prior to September 19, 1995
also served as President. He has been Chairman of the Board and Chief Executive
Officer of Enstar Communications Corporation since October 1988, and also served
as its President prior to September 1995. Prior to 1975, Mr. Nathanson was Vice
President of Marketing for Teleprompter Corporation, then the largest cable
operator in the United States. He also held executive positions with Warner
Cable and Cypress Communications Corporation. He is a former President of the
California Cable Television Association and a member of Cable Pioneers. He is
currently a director of the National Cable Television Association ("NCTA") and
will Chair its 1999 National Convention. At the 1986 NCTA convention, Mr.
Nathanson was honored by being named the recipient of the Vanguard Award for
outstanding contributions to the growth and development of the cable television
industry. Mr. Nathanson is a 30-year veteran of the cable television industry.
He is a founder of the Cable Television Administration and Marketing Society
("CTAM") and the Southern California Cable Television Association. Mr. Nathanson
is an Advisory Board member of TVA, (Brazil) and also Chairman of the Board and
Chief Executive Officer of Falcon International Communications, LLC. Mr.
Nathanson was appointed by President Clinton on November 1, 1998 as Chair of the
Board of Governors for the International Bureau of Broadcasting which oversees
Voice of America, Radio/TV Marti, Radio Free Asia, Radio Free Europe and Radio
Liberty. Mr. Nathanson is a trustee of the Annenburg School of Communications at
the University of Southern California and a member of the Board of Visitors of
the Anderson School of Management at UCLA. In addition, he serves on the Board
of the UCLA Foundation and the UCLA Center for Communications Policy and is on
the Board of Governors of AIDS Project Los Angeles and Cable Positive.

                                       -31-

<PAGE>

FRANK J. INTISO, 52, was appointed President and Chief Operating Officer of FHGI
in September 1995. Between 1982 and September 1995, Mr. Intiso held the
positions of Executive Vice President and Chief Operating Officer, with
responsibility for the day-to-day operations of all cable television systems
under the management of Falcon. He has been President and Chief Operating
Officer of Enstar Communications Corporation since September 1995, and between
October 1988 and September 1995 held the positions of Executive Vice President
and Chief Operating Officer. Mr. Intiso has a Masters Degree in Business
Administration from UCLA and is a Certified Public Accountant. He currently
serves as Immediate Past Chair of the California Cable Television Association
and is on the boards of the Cable Advertising Bureau, Cable in the Classroom,
and the California Cable Television Association. He is a member of the American
Institute of Certified Public Accountants, the American Marketing Association,
the American Management Association and the Southern California Cable Television
Association.

STANLEY S. ITSKOWITCH, 60, has been a Director of FHGI and its predecessors
since 1975. He served as Senior Vice President and General Counsel of FHGI from
1987 to 1990 and has been Executive Vice President and General Counsel since
February 1990. Mr. Itskowitch has been Executive Vice President and General
Counsel of Enstar Communications Corporation since October 1988. He has been
President and Chief Executive Officer of F.C. Funding, Inc. (formerly Fallek
Chemical Company), which is a marketer of chemical products, since 1980. He is a
Certified Public Accountant and a former tax partner in the New York office of
Touche Ross & Co. (now Deloitte & Touche LLP). He has a J.D. Degree and an
L.L.M. Degree in Tax from New York University School of Law. Mr. Itskowitch is
also Executive Vice President and General Counsel of Falcon International
Communications, LLC.

MICHAEL K. MENEREY, 47, has been Executive Vice President, Chief Financial
Officer and Secretary of FHGI and Enstar Communications Corporation since
February 1998 and was Chief Financial Officer and Secretary of FHGI and its
predecessors between 1984 and 1998 and of Enstar Communications Corporation
since October 1988. Mr. Menerey is a Certified Public Accountant and is a member
of the American Institute of Certified Public Accountants and the California
Society of Certified Public Accountants, and he was formerly associated with BDO
Seidman.

JOE A. JOHNSON, 54, has been Executive Vice President of Operations of FHGI
since September 1995, and was a Divisional Vice President of FHGI between 1989
and 1992. He has been Executive Vice President-Operations of Enstar
Communications Corporation since January 1996. From 1982 to 1989, he held the
positions of Vice President and Director of Operations for Sacramento Cable
Television, Group W Cable of Chicago and Warner Amex. From 1975 to 1982, Mr.
Johnson held Cable System and Regional Manager positions with Warner Amex and
Teleprompter. Mr. Johnson is also a member of the Cable Pioneers.

THOMAS J. HATCHELL, 49, has been Executive Vice President of Operations of FHGI
and Enstar Communications Corporation since February 1998. From October 1995 to
February 1998, he was Senior Vice President of Operations of Falcon
International Communications, L.P. and its predecessor company and was a Senior
Vice President of FHGI from January 1992 to September 1995. Mr. Hatchell was a
Divisional Vice President of FHGI between 1989 and 1992. From 1981 to 1989, he
served as Vice President and Regional Manager for the San Luis Obispo,
California region owned by an affiliate of FHGI. He was Vice President of
Construction of an affiliate of FHGI from June 1980 to June 1981.

ABEL C. CRESPO, 39, has been Vice President, Corporate Controller of FHGI and
Enstar Communications Corporation since March 1999. He previously had served as
Controller since January 1997. Mr. Crespo joined Falcon in December 1984, and
has held various accounting positions during that time. Mr. Crespo holds a
Bachelor of Science degree in Business Administration from California State
University, Los Angeles.

                                       -32-

<PAGE>

OTHER OFFICERS OF FALCON

              The following sets forth certain biographical information with
respect to certain additional members of FHGI management.

LYNNE A. BUENING, 45, has been Vice President of Programming of FHGI since
November 1993. From 1989 to 1993, she served as Director of Programming for
Viacom Cable, a division of Viacom International Inc. Prior to that, Ms. Buening
held programming and marketing positions in the cable, broadcast and newspaper
industries.

OVANDO COWLES, 45, has been Vice President of Advertising Sales and Production
of FHGI since January 1992. From 1988 to 1991, he served as Director of
Advertising Sales and Production at Cencom Cable Television in Pasadena,
California. From 1985 to 1988, he was an Advertising Sales Account Executive at
Choice TV, an affiliate of FHGI.

HOWARD J. GAN, 52, has been Vice President of Regulatory Affairs of FHGI and its
predecessors since 1988. Prior to joining FHGI, he was General Counsel at
Malarkey-Taylor Associates, a Washington, D.C.-based telecommunications
consulting firm, from 1986 to 1988, and was Vice President and General Counsel
at CTIC Associates from 1978 to 1983. In addition, he was an attorney and an
acting Branch Chief of the Federal Communications Commission's Cable Television
Bureau from 1973 to 1978.

R.W. ("SKIP") HARRIS, 51, has been Vice President of Marketing of FHGI since
June 1991. Mr. Harris was National Director of Affiliate Marketing for The
Disney Channel from 1985 to 1991. He was also a sales manager, regional
marketing manager and director of marketing for Cox Cable Communications from
1978 to 1985.

MARTIN B. SCHWARTZ, 39, has been Vice President of Corporate Development of FHGI
since March 1999. Mr. Schwartz joined Falcon in November 1989 and has held
various finance, planning and corporate development positions during that time,
most recently that of Director of Corporate Development. Mr. Schwartz has a
Masters Degree in Business Administration from UCLA.

JOAN SCULLY, 63, has been Vice President of Human Resources of FHGI and its
predecessors since May 1988. From 1987 to May 1988, she was self-employed as a
management consultant to cable and transportation companies. She served as
Director of Human Resources of a Los Angeles-based cable company from 1985
through 1987. Prior to that time, she served as a human resource executive in
the entertainment and aerospace industries. Ms. Scully holds a Masters Degree in
Human Resources Management from Pepperdine University.

RAYMOND J. TYNDALL, 51, has been Vice President of Engineering of FHGI since
October 1989. From 1975 to September 1989, he held various technical positions
with Choice TV and its predecessors. From 1967 to 1975, he held various
technical positions with Sammons Communications. He is a certified National
Association of Radio and Television Engineering ("NARTE") engineer in lightwave,
microwave, satellite and broadband and is a member of the Cable Pioneers.

              In addition, FHGI has six Divisional Vice Presidents who are based
in the field. They are G. William Booher, Daniel H. DeLaney, Ron L. Hall, Ronald
S. Hren, Michael E. Kemph and Michael D. Singpiel.

              Each director of the Corporate General Partner is elected to a
one-year term at the annual shareholder meeting to serve until the next annual
shareholder meeting and thereafter until his respective successor is elected and
qualified. Officers are appointed by and serve at the discretion of the
directors of the Corporate General Partner.

                                       -33-

<PAGE>

ITEM 11.      EXECUTIVE COMPENSATION

MANAGEMENT FEE

              The Partnership has a management agreement (the "Management
Agreement") with Enstar Cable Corporation, a wholly owned subsidiary of the
General Partner (the "Manager"), pursuant to which Enstar Cable Corporation
manages the Partnership's systems and provides all operational support for the
activities of the Partnership. For these services, the Manager receives a
management fee of 5% of the Partnership's gross revenues, excluding revenues
from the sale of cable television systems or franchises, calculated and paid
monthly. In addition, the Partnership reimburses the Manager for certain
operating expenses incurred by the Manager in the day-to-day operation of the
Partnership's cable systems. The Management Agreement also requires the
Partnership to indemnify the Manager (including its officers, employees, agents
and shareholders) against loss or expense, absent negligence or deliberate
breach by the Manager of the Management Agreement. The Management Agreement is
terminable by the Partnership upon sixty (60) days written notice to the
Manager. The Manager has engaged FCLP to provide certain management services for
the Partnership and pays FCLP a portion of the management fees it receives in
consideration of such services and reimburses FCLP for expenses incurred by FCLP
on its behalf. Additionally, the Partnership receives certain system operating
management services from affiliates of the Manager in lieu of directly employing
personnel to perform such services. The Partnership reimburses the affiliates
for its allocable share of their operating costs. The General Partner also
performs certain supervisory and administrative services for the Partnership,
for which it is reimbursed.

              For the fiscal year ended December 31, 1998, the Manager charged
the Partnership management fees of approximately $261,100 and reimbursed
expenses of $399,200. The Partnership also reimbursed affiliates approximately
$26,900 for system operating management services. In addition, certain
programming services are purchased through FCLP. The Partnership paid FCLP
approximately $1,161,700 for these programming services for fiscal year 1998.

PARTICIPATION IN DISTRIBUTIONS

              The General Partner is entitled to share in distributions from,
and profit and losses in, the Partnership. See Item 5., "Market for Registrant's
Equity Securities and Related Security Holder Matters."

                                       -34


<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

              As of March 1, 1999, the only persons known by the Partnership 
to own beneficially or that may be deemed to own beneficially more than 5% of 
the units were:

<TABLE>
<CAPTION>
                                   Name and Address          Amount and Nature of    Percent
        Title of Class            of Beneficial Owner        Beneficial Ownership    of Class
-----------------------------    -----------------------    ----------------------   --------
<S>                              <C>                        <C>                       <C>
Units of Limited Partnership     Paul Isaacs                        1,510(1)            5.0%
   Interest                      7 Douglas Lane
                                 Larchmont, NY  10538
</TABLE>

(1) As reported to the Partnership by its transfer agent, Gemisys Corporation.

              The General Partner is a wholly-owned subsidiary of FHGLP. FHGI 
owns a 10.6% interest in, and is the general partner of, FHGLP. As of March 
3, 1999, the common stock of FHGI was owned as follows: 78.5% by Falcon Cable 
Trust, a grantor trust of which Marc B. Nathanson is trustee and he and 
members of his family are beneficiaries; 20% by Greg A. Nathanson; and 1.5% 
by Stanley S. Itskowitch. Greg A. Nathanson is Marc B. Nathanson's brother.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CONFLICTS OF INTEREST

              On September 30, 1998, FHGLP acquired ownership of Enstar 
Communications Corporation from Falcon Cablevision and FCLP assumed the 
management services operations of FHGLP. FCLP now manages the operations of 
the partnerships of which Enstar Communications Corporation is the General 
Partner, including the Partnership. FCLP began receiving management fees and 
reimbursed expenses which had previously been paid by the Partnership, as 
well as other affiliated entities, to FHGLP. The day-to-day management of 
FCLP is substantially the same as that of FHGLP, which serves as the managing 
partner of FCLP.

              Certain members of management of the General Partner have also 
been involved in the management of other cable ventures. FCLP may enter into 
other cable ventures, including ventures similar to the Partnership.

              The Partnership relies upon the General Partner and certain of 
its affiliates to provide general management services, system operating 
services, supervisory and administrative services and programming. See Item 
11., "Executive Compensation." The Partnership is also party to a loan 
agreement with a subsidiary of the Corporate General Partner. See Item 7., 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations-Liquidity and Capital Resources."

              Conflicts of interest involving acquisitions and dispositions 
of cable television systems could adversely affect Unitholders. For instance, 
the economic interests of management in other affiliated partnerships are 
different from those in the Partnership and this may create conflicts 
relating to which acquisition opportunities are preserved for which entities.

              These affiliations subject FCLP, FHGLP and the General Partner 
and their management to certain conflicts of interest. Such conflicts of 
interest relate to the time and services management will devote 


                                    -35-

<PAGE>

to the Partnership's affairs and to the acquisition and disposition of cable 
television systems. Management or its affiliates may establish and manage 
other entities which could impose additional conflicts of interest.

              FCLP, FHGLP and the General Partner will resolve all conflicts 
of interest in accordance with their fiduciary duties.

FIDUCIARY RESPONSIBILITY AND INDEMNIFICATION OF THE GENERAL PARTNER

              A general partner is accountable to a limited partnership as a 
fiduciary and consequently must exercise good faith and integrity in handling 
partnership affairs. Where the question has arisen, some courts have held 
that a limited partner may institute legal action on his own behalf and on 
behalf of all other similarly situated limited partners (a class action) to 
recover damages for a breach of fiduciary duty by a general partner, or on 
behalf of the partnership (a partnership derivative action) to recover 
damages from third parties. Section 14-9-1001 of the Georgia Revised Uniform 
Limited Partnership Act also allows a partner to maintain a partnership 
derivative action if general partners with authority to do so have refused to 
bring the action or if an effort to cause those general partners to bring the 
action is not likely to succeed. Certain cases decided by federal courts have 
recognized the right of a limited partner to bring such actions under the 
Securities and Exchange Commission's Rule 10b-5 for recovery of damages 
resulting from a breach of fiduciary duty by a general partner involving 
fraud, deception or manipulation in connection with the limited partner's 
purchase or sale of partnership units.

              The partnership agreement provides that the General Partner 
will be indemnified by the Partnership for acts performed within the scope of 
its authority under the partnership agreement if such general partner (i) 
acted in good faith and in a manner that it reasonably believed to be in, or 
not opposed to, the best interests of the Partnership and the partners, and 
(ii) had no reasonable grounds to believe that its conduct was negligent. In 
addition, the partnership agreement provides that the General Partner will 
not be liable to the Partnership or its limited partners for errors in 
judgment or other acts or omissions not amounting to negligence or 
misconduct. Therefore, limited partners will have a more limited right of 
action than they would have absent such provisions. In addition, the 
Partnership maintains, at its expense and in such reasonable amounts as the 
General Partner shall determine, a liability insurance policy which insures 
the General Partner, FHGI and its affiliates (which include FCLP), officers 
and directors and such other persons as the General Partner shall determine, 
against liabilities which they may incur with respect to claims made against 
them for certain wrongful or allegedly wrongful acts, including certain 
errors, misstatements, misleading statements, omissions, neglect or breaches 
of duty. To the extent that the exculpatory provisions purport to include 
indemnification for liabilities arising under the Securities Act of 1933, it 
is the opinion of the Securities and Exchange Commission that such 
indemnification is contrary to public policy and therefore unenforceable.


                                     -36-

<PAGE>

                                   PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)       1.       Financial Statements

                   Reference is made to the Index to Financial
                   Statements on page F-1.

(a)       2.       Financial Statement Schedules

                   Reference is made to the Index to Financial
                   Statements on page F-1.

(a)       3.       Exhibits

                   Reference is made to the Index to Exhibits on Page
                   E-1.

(b)                Reports on Form 8-K

                   None.


                                    -37-

<PAGE>


                                   SIGNATURES

              Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on March
29, 1999.

                                         ENSTAR INCOME PROGRAM 1984-1, L.P.
                                         By:  Enstar Communications Corporation,
                                              General Partner

                                              By: /s/ Marc B. Nathanson
                                                  ------------------------
                                                  Marc B. Nathanson
                                                  Chairman of the Board and
                                                    Chief Executive Officer

              Pursuant to the requirements of the Securities Exchange Act of 
1934, this report has been signed by the following persons on behalf of the 
Registrant and in the capacities indicated on the 29th day of March 1999.

<TABLE>
<CAPTION>
     Signatures                                      Title(*)
---------------------        -----------------------------------------------------
<S>                          <C>
/s/ Marc B. Nathanson         Chairman of the Board and Chief Executive Officer
--------------------------    (Principal Executive Officer)
Marc B. Nathanson            

/s/ Michael K. Menerey       Executive Vice President, Chief Financial Officer,
--------------------------   Secretary and Director
Michael K. Menerey           (Principal Financial and Accounting Officer)
                             

/s/ Frank J. Intiso          President, Chief Operating Officer and Director
--------------------------
Frank J. Intiso              

/s/ Stanley S. Itskowitch    Executive Vice President, General Counsel
--------------------------   and Director
Stanley S. Itskowitch        
</TABLE>

(*) Indicates position(s) held with Enstar Communications Corporation, the 
General Partner of the Registrant.


                                   -38-


<PAGE>

                        INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                            PAGE
                                                            ----
<S>                                                         <C>
Report of Independent Auditors                               F-2

Balance Sheets - December 31, 1997 and 1998                  F-3

Financial Statements for each of the three years in the 
period ended December 31, 1998:

     Statements of Operations                                F-4

     Statements of Partnership Capital (Deficit)             F-5

     Statements of Cash Flows                                F-6

Notes to Financial Statements                                F-7
</TABLE>

All schedules have been omitted because they are either not required, not 
applicable or the information has otherwise been supplied.


                                      F-1

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

Partners
Enstar Income Program 1984-1, L.P. (A Georgia Limited Partnership)

We have audited the accompanying balance sheets of Enstar Income Program 
1984-1, L.P. (A Georgia Limited Partnership) as of December 31, 1997 and 
1998, and the related statements of operations, partnership capital 
(deficit), and cash flows for each of the three years in the period ended 
December 31, 1998. These financial statements are the responsibility of the 
Partnership's management. Our responsibility is to express an opinion on 
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Enstar Income Program 
1984-1, L.P. at December 31, 1997 and 1998, and the results of its operations 
and its cash flows for each of the three years in the period ended December 
31, 1998, in conformity with generally accepted accounting principles.

                                                 /s/ ERNST & YOUNG LLP

Los Angeles, California
March 12, 1999


                                      F-2

<PAGE>
                                       

                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                                 BALANCE SHEETS

                       =================================

<TABLE>
<CAPTION>
                                                                               December 31,
                                                                    -------------------------------
                                                                       1997                 1998
                                                                    ----------           ----------
<S>                                                                 <C>                  <C>
ASSETS:

     Cash and cash equivalents                                      $  462,900           $1,036,000

     Accounts receivable, less allowance of $28,000 and
       $5,500 for possible losses                                      107,500               27,800

     Insurance claim receivable                                        399,700                    -

     Prepaid expenses and other assets                                 135,800              150,000

     Property, plant and equipment, less accumulated
       depreciation and amortization                                 3,387,200            4,048,700

     Franchise cost, net of accumulated
       amortization of $235,400 and $114,500                            74,600               66,000

     Deferred loan costs and other deferred charges, net               128,400               88,900
                                                                    ----------           ----------

                                                                    $4,696,100           $5,417,400
                                                                    ----------           ----------
                                                                    ----------           ----------

                              LIABILITIES AND PARTNERSHIP CAPITAL

LIABILITIES:

     Accounts payable                                               $  529,800           $  420,800
     Due to affiliates                                                 754,200              894,900
     Note payable - affiliate                                          250,000                    -
                                                                    ----------           ----------

                  TOTAL LIABILITIES                                  1,534,000            1,315,700
                                                                    ----------           ----------

COMMITMENTS AND CONTINGENCIES

PARTNERSHIP CAPITAL (DEFICIT):

     General partner                                                   (41,100)             (31,700)
     Limited partners                                                3,203,200            4,133,400
                                                                    ----------           ----------

                  TOTAL PARTNERSHIP CAPITAL                          3,162,100            4,101,700
                                                                    ----------           ----------

                                                                    $4,696,100           $5,417,400
                                                                    ----------           ----------
                                                                    ----------           ----------
</TABLE>


                                       
                 See accompanying notes to financial statements.


                                     F-3

<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                            STATEMENTS OF OPERATIONS

                       ==================================

<TABLE>
<CAPTION>
                                                      Year Ended December 31,
                                              --------------------------------------
                                                 1996          1997         1998
                                              ----------    ----------    ----------
<S>                                           <C>           <C>           <C>
REVENUES                                      $5,243,500    $5,369,200    $5,221,100
                                              ----------    ----------    ----------

OPERATING EXPENSES:
     Service costs                             1,859,500     2,012,500     1,848,400
     General and administrative expenses         758,100       857,400       676,000
     General Partner management fees
       and reimbursed expenses                   557,400       603,600       660,300
     Depreciation and amortization               570,600       583,100       747,600
                                              ----------    ----------    ----------

                                               3,745,600     4,056,600     3,932,300
                                              ----------    ----------    ----------

                  Operating income             1,497,900     1,312,600     1,288,800
                                              ----------    ----------    ----------

OTHER INCOME (EXPENSE):

     Interest expense                           (187,900)     (107,500)     (103,900)
     Interest income                              43,500        34,700        25,700
     Gain on sale of cable assets                    100             -             -
     Casualty gain (loss)                              -       202,400      (271,000)
                                              ----------    ----------    ----------

                                                (144,300)      129,600      (349,200)
                                              ----------    ----------    ----------

NET INCOME                                    $1,353,600    $1,442,200    $  939,600
                                              ----------    ----------    ----------
                                              ----------    ----------    ----------

Net income allocated to General Partner       $   13,500    $   14,400    $    9,400
                                              ----------    ----------    ----------
                                              ----------    ----------    ----------

Net income allocated to Limited Partners      $1,340,100    $1,427,800    $  930,200
                                              ----------    ----------    ----------
                                              ----------    ----------    ----------

NET INCOME PER UNIT OF LIMITED
     PARTNERSHIP INTEREST                     $   44.76     $    47.69    $    31.07
                                              ----------    ----------    ----------
                                              ----------    ----------    ----------

WEIGHTED AVERAGE LIMITED PARTNERSHIP
     UNITS OUTSTANDING DURING THE YEAR            29,940        29,940        29,940
                                              ----------    ----------    ----------
                                              ----------    ----------    ----------
</TABLE>

                 See accompanying notes to financial statements.


                                       F-4

<PAGE>



                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                   STATEMENTS OF PARTNERSHIP CAPITAL (DEFICIT)

                   ===========================================

<TABLE>
<CAPTION>
                                    General     Limited
                                    Partner     Partners       Total
                                   ---------   -----------   ----------
<S>                                <C>         <C>           <C>
PARTNERSHIP DEFICIT,
  January 1, 1996                  $(69,000)   $  435,300    $  366,300

    Net income for year              13,500     1,340,100     1,353,600
                                   --------    ----------    ----------

PARTNERSHIP DEFICIT,
  December 31, 1996                 (55,500)    1,775,400     1,719,900

    Net income for year              14,400     1,427,800     1,442,200
                                   --------    ----------    ----------

PARTNERSHIP CAPITAL (DEFICIT),
  December 31, 1997                 (41,100)    3,203,200     3,162,100

    Net income for year               9,400       930,200       939,600
                                   --------    ----------    ----------

PARTNERSHIP CAPITAL (DEFICIT),
  December 31, 1998                $(31,700)   $4,133,400    $4,101,700
                                   --------    ----------    ----------
                                   --------    ----------    ----------
</TABLE>


                 See accompanying notes to financial statements.


                                        F-5

<PAGE>



                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                            STATEMENTS OF CASH FLOWS

                       ===================================

<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                   ----------------------------------------
                                                                       1996           1997          1998
                                                                   -----------    -----------   -----------
<S>                                                                <C>            <C>           <C>
Cash flows from operating activities:
     Net income                                                    $ 1,353,600   $ 1,442,200  $   939,600
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation and amortization                                 570,600       583,100      747,600
         Amortization of deferred loan costs                            14,500        50,300       29,500
         Gain on sale of cable assets                                     (100)            -            -
         Casualty (gain) loss                                                -      (202,400)     271,000
         Increase (decrease) from changes in:
           Accounts receivable, prepaid expenses
             and other assets                                          (73,700)       40,000       65,500
           Insurance claim receivable                                    6,700      (163,900)     140,600
           Accounts payable                                            (66,800)       81,100     (109,000)
                                                                   -----------   -----------  -----------

              Net cash provided by operating activities              1,804,800     1,830,400    2,084,800
                                                                   -----------   -----------  -----------

Cash flows from investing activities:
     Capital expenditures                                           (1,149,600)     (776,900)  (1,389,800)
     Proceeds from sale of property, plant and equipment                 3,700             -            -
     Increase in intangible assets                                     (24,100)      (48,700)      (8,600)
                                                                   -----------   -----------  -----------

              Net cash used in investing activities                 (1,170,000)     (825,600)  (1,398,400)
                                                                   -----------   -----------  -----------

Cash flows from financing activities:
     Repayment of debt                                                (900,000)   (1,042,800)           -
     Borrowings from affiliate                                               -       250,000            -
     Repayment of borrowings from affiliate                                  -             -     (250,000)
     Deferred loan costs                                               (30,700)     (113,900)      (4,000)
     Due to affiliates                                                 365,000      (639,600)     140,700
                                                                   -----------   -----------  -----------

              Net cash used in financing activities                   (565,700)   (1,546,300)    (113,300)
                                                                   -----------   -----------  -----------

Net increase (decrease) in cash and cash equivalents                    69,100      (541,500)     573,100

Cash and cash equivalents at beginning of year                         935,300     1,004,400      462,900
                                                                   -----------   -----------  -----------

Cash and cash equivalents at end of year                           $ 1,004,400   $   462,900  $ 1,036,000
                                                                   -----------   -----------  -----------
                                                                   -----------   -----------  -----------
</TABLE>


                 See accompanying notes to financial statements.

                                      F-6
<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                       ==================================

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

FORM OF PRESENTATION

              Enstar Income Program 1984-1, L.P., a Georgia limited 
partnership (the "Partnership"), owns and operates cable television systems 
in rural areas of North Carolina, South Carolina and Tennessee.

              The financial statements do not give effect to any assets that 
the partners may have outside of their interest in the Partnership, nor to 
any obligations, including income taxes, of the partners.

CASH EQUIVALENTS

              For purposes of the statements of cash flows, the Partnership 
considers all highly liquid debt instruments purchased with an initial 
maturity of three months or less to be cash equivalents.

              Cash equivalents at December 31, 1996 include $884,000 of 
short-term investments in commercial paper.

PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION AND AMORTIZATION

              Property, plant and equipment are stated at cost. Direct costs 
associated with installations in homes not previously served by cable are 
capitalized as part of the distribution system, and reconnects are expensed 
as incurred. For financial reporting, depreciation and amortization is 
computed using the straight-line method over the following estimated useful 
lives:

              Cable television systems                     5-15 years
              Vehicles                                        3 years
              Furniture and equipment                       5-7 years
              Leasehold improvements                    Life of lease

FRANCHISE COST

              The excess of cost over the fair values of tangible assets and 
customer lists of cable television systems acquired represents the cost of 
franchises. In addition, franchise cost includes capitalized costs incurred 
in obtaining new franchises and the renewal of existing franchises. These 
costs are amortized using the straight-line method over the lives of the 
franchises, ranging up to 15 years. The Partnership periodically evaluates 
the amortization periods of these intangible assets to determine whether 
events or circumstances warrant revised estimates of useful lives. Costs 
relating to unsuccessful franchise applications are charged to expense when 
it is determined that the efforts to obtain the franchise will not be 
successful. The Partnership is in the process of negotiating the renewal of 
expired franchise agreements for six of the Partnership's 22 franchises.


                                    F-7

<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                       ==================================


NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

DEFERRED LOAN COSTS AND OTHER DEFERRED CHARGES

              Costs related to obtaining new loan agreements are capitalized 
and amortized to interest expense over the life of the loan. Other deferred 
charges are amortized using the straight-line method over two years.

RECOVERABILITY OF ASSETS

              The Partnership assesses on an ongoing basis the recoverability 
of intangible and capitalized plant assets based on estimates of future 
undiscounted cash flows compared to net book value. If the future 
undiscounted cash flow estimate were less than net book value, net book value 
would then be reduced to estimated fair value, which would generally 
approximate discounted cash flows. The Partnership also evaluates the 
amortization periods of assets, including franchise costs and other 
intangible assets, to determine whether events or circumstances warrant 
revised estimates of useful lives.

REVENUE RECOGNITION

              Revenues from customer fees, equipment rental and advertising 
are recognized in the period that services are delivered. Installation 
revenue is recognized in the period the installation services are provided to 
the extent of direct selling costs. Any remaining amount is deferred and 
recognized over the estimated average period that customers are expected to 
remain connected to the cable television system.

INCOME TAXES

              As a partnership, Enstar Income Program 1984-1, L.P. pays no 
income taxes. All of the income, gains, losses, deductions and credits of the 
Partnership are passed through to its partners. The basis in the 
Partnership's assets and liabilities differs for financial and tax reporting 
purposes. At December 31, 1998, the book basis of the Partnership's net 
assets exceeds its tax basis by $1,039,500.

              The accompanying financial statements, which are prepared in 
accordance with generally accepted accounting principles, differ from the 
financial statements prepared for tax purposes due to the different treatment 
of various items as specified in the Internal Revenue Code. The net effect of 
these accounting differences is that net income for 1998 in the financial 
statements is $751,200 more than tax income of the Partnership for the same 
period, caused principally by timing differences in depreciation expense.

COSTS OF START-UP ACTIVITIES

              In 1998, the American Institute of Certified Public Accountants 
issued Statement of Position 98-5, "Reporting on Costs of Start-Up 
Activities." The new standard, which becomes effective for the Partnership on 
January 1, 1999, requires costs of start-up activities to be expensed as 
incurred. The Partnership believes that adoption of this standard will not 
have an impact on the Partnership's financial position or results of 
operations.


                                      F-8

<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                       ==================================


NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

ADVERTISING COSTS

              All advertising costs are expensed as incurred.

EARNINGS PER UNIT OF LIMITED PARTNERSHIP INTEREST

              Earnings and losses have been allocated 99% to the limited 
partners and 1% to the general partner. Earnings and losses per unit of 
limited partnership interest are based on the weighted average number of 
units outstanding during the year. The General Partner does not own units of 
Partnership interest in the Partnership, but rather holds a participation 
interest in the income, losses and distributions of the Partnership.

USE OF ESTIMATES

              The preparation of financial statements in conformity with 
generally accepted accounting principles requires management to make 
estimates and assumptions that affect the amounts reported in the financial 
statements and accompanying notes. Actual results could differ from those 
estimates.

NOTE 2 - PARTNERSHIP MATTERS

              The Partnership was formed December 12, 1983 to acquire, 
construct, improve, develop and operate cable television systems. The 
partnership agreement provides for Enstar Communications Corporation (the 
"General Partner") and Robert T. Graff, Jr. to be the general partners and 
for the admission of limited partners through the sale of interests in the 
Partnership. Sale of interests in the Partnership began in February 1984, and 
the initial closing took place in May 1984. The Partnership continued to 
raise capital until $7,500,000 (the maximum) was sold by September 1984. The 
Partnership acquired its first property subsequent to the initial closing. 
The Partnership acquired several other operating properties during 1984 and 
1985.

              On September 30, 1988, Falcon Cablevision, a California limited 
partnership, purchased all of the outstanding capital stock of the General 
Partner. On September 10, 1993, Enstar Communications Corporation, the 
General Partner, purchased the general partnership interest held by Robert 
Graff, Jr., the individual general partner, in Enstar Income Program 1984-1, 
L.P. and five affiliated partnerships. The purchase was made pursuant to an 
agreement dated August 9, 1988 and amended September 10, 1993, by and among 
Enstar Communications Corporation, Falcon Cablevision and Robert Graff, Jr. 
Following the purchase, Enstar Communications Corporation became the sole 
general partner of Enstar Income Program 1984-1, L.P.

              On September 30, 1998, Falcon Holding Group, L.P., a Delaware 
limited partnership ("FHGLP"), acquired ownership of the General Partner from 
Falcon Cablevision. Simultaneously with the closing of that transaction, 
FHGLP contributed all of its existing cable television system operations to 
Falcon Communications, L.P. ("FCLP"), a California limited partnership and 
successor to FHGLP. FHGLP serves as the managing partner of FCLP. The General 
Partner has contracted with FCLP and its affiliates to provide management 
services for the Partnership.


                                     F-9

<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                       ==================================


NOTE 2 - PARTNERSHIP MATTERS (CONTINUED)

              The partnership agreement generally provides that all 
partnership profits, gains, losses, credits, and cash distributions (all as 
defined) from operations or liquidation be allocated 1% to the general 
partner and 99% to the limited partners until the limited partners have 
received distributions of cash flow from operations and/or cash flow from 
sales, refinancing, or liquidation of systems equal to their initial 
investment. After the limited partners have received cash flow equal to their 
initial investment, the general partner will only receive a one percent 
allocation of cash flow from liquidating a system until the limited partners 
have received an annual simple interest return of at least 18% of their 
initial investment less any distributions from previous system liquidations. 
Thereafter, allocations will be made 15% to the general partner and 85% to 
the limited partners. All allocations to individual limited partners will be 
based on their respective capital accounts. Upon dissolution of the 
Partnership, any negative capital account balances remaining after all 
allocations and distributions are made must be funded by the respective 
partners.

              The partnership agreement limits the amount of debt the 
Partnership may incur.

NOTE 3 - INSURANCE CLAIM RECEIVABLE

              Insurance claim receivable at December 31, 1997 represents an 
uncollected claim arising from storm related system damage which occurred in 
1996. The Partnership recognized a gain of $202,400 in 1997 reflecting the 
anticipated insurance reimbursement over the net carrying value of the 
damaged assets. The insurance carrier disputed elements of the claim. In 
1998, the Partnership negotiated a settlement of the insurance claim in which 
the Partnership collected $140,600 in full settlement of the claim. The 
remaining receivable amount of $259,100 was recorded as a casualty loss.

              The Partnership's Snow Hill, North Carolina cable system 
sustained damage due to a hurricane on August 26, 1998. The cost of replacing 
and upgrading the damaged assets amounted to approximately $26,500. As 
discussed in Note 7, the Partnership was self-insured for damage caused by 
this storm. The cost of repairs was funded from available cash reserves 
and operating cash flow. The Partnership recognized a casualty loss of 
$11,900 in 1998.

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

              Property, plant and equipment consist of:

<TABLE>
<CAPTION>
                                                  December 31,
                                        -----------------------------
                                             1997            1998
                                        -------------    ------------
<S>                                     <C>              <C>
Cable television systems                $ 13,596,700     $ 14,752,500
Vehicles, furniture and
  equipment, and leasehold
  improvements                               268,400          390,700
                                        ------------     ------------

                                          13,865,100       15,143,200
Less accumulated depreciation and
  amortization                           (10,477,900)     (11,094,500)
                                        ------------     ------------

                                        $  3,387,200     $  4,048,700
                                        ------------     ------------
                                        ------------     ------------
</TABLE>


                                     F-10

<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                       ==================================


NOTE 5 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

              The following methods and assumptions were used to estimate the 
fair value of each class of financial instruments for which it is practicable 
to estimate that value:

CASH AND CASH EQUIVALENTS

              The carrying amount approximates fair value due to the short 
maturity of those instruments.

NOTE PAYABLE - AFFILIATE

              The carrying amount approximates fair value due to the variable 
rate nature of the note payable.

NOTE 6 - NOTE PAYABLE - AFFILIATE

              On September 30, 1997, the Partnership completed new financing 
arrangements with a subsidiary of the General Partner, Enstar Finance 
Company, LLC ("EFC"). EFC obtained a secured bank facility of $35 million 
from two agent banks in order to obtain funds that would in turn be advanced 
to the Partnership and certain of the other partnerships managed by the 
General Partner. The Partnership entered into a loan agreement with EFC for a 
revolving loan facility (the "Facility") of $7,481,700 of which $250,000 was 
advanced to the Partnership at closing. Such funds together with available 
cash were used to repay $619,000 of previously deferred management fees and 
reimbursed expenses due the General Partner. The Partnership prepaid its 
outstanding borrowings of $250,000 in June 1998.

              The Partnership's Facility matures on August 31, 2001, at which 
time all amounts then outstanding are due in full. Borrowings bear interest 
at the lender's base rate (7.75% at December 31, 1998) plus 0.625%, or at an 
offshore rate plus 1.875%. The Partnership is permitted to prepay amounts 
outstanding under the Facility at any time without penalty, and is able to 
reborrow throughout the term of the Facility up to the maximum commitment 
then available so long as no event of default exists. If the Partnership has 
"excess cash flow" (as defined in its loan agreement) and has leverage, as 
defined, in excess of 4.25 to 1, or receives proceeds from sales of its 
assets in excess of a specified amount, the Partnership is required to make 
mandatory prepayments under the Facility. Such prepayments permanently reduce 
the maximum commitment under the Facility. The Partnership is also required 
to pay a commitment fee of 0.5% per annum on the unused portion of its 
Facility, and an annual administrative fee. Advances by EFC under its 
partnership loan facilities are independently collateralized by individual 
partnership borrowers so that no partnership is liable for advances made to 
other partnerships. Borrowings under the Partnership's Facility are 
collateralized by substantially all assets of the Partnership. At closing, 
the Partnership paid to EFC a $76,100 facility fee. This represented the 
Partnership's pro rata portion of a similar fee paid by EFC to its lenders.

              The Facility contains certain financial tests and other 
covenants including, among others, restrictions on incurrence of 
indebtedness, investments, sales of assets, acquisitions and other covenants, 
defaults and conditions. The Facility does not restrict the payment of 
distributions to partners unless an event of default exists thereunder or the 
Partnership's ratio of debt to cash flow is greater than 4 to 1. The General 
Partner believes the Partnership was in compliance with the covenants at 
December 31, 1998.


                                     F-11

<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                       ==================================


NOTE 6 - NOTE PAYABLE - AFFILIATE (CONTINUED)

              The General Partner contributed $462,300 of its receivable 
balance due from the Partnership for deferred management fees and reimbursed 
expenses as an equity contribution to EFC. This balance remains an 
outstanding obligation of the Partnership.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

              The Partnership leases buildings associated with the franchises 
under operating leases expiring in various years through 2006.

              Future minimum rental payments under non-cancelable leases 
having remaining terms in excess of one year as of December 31, 1998 are as 
follows:

<TABLE>
<CAPTION>
                    Year                      Amount
               ---------------               --------
               <S>                           <C>
               1999                          $12,600
               2000                           12,500
               2001                            8,300
               2002                            6,100
               2003                            5,400
               Thereafter                     16,200
                                              -------

                                             $61,100
                                              -------
                                              -------
</TABLE>

              Rentals, other than pole rentals, charged to operations 
amounted to $30,400, $31,800 and $33,000 in 1996, 1997 and 1998, 
respectively. Total expense charged to operations for pole rentals was 
$98,600, $99,900 and $105,800 in 1996, 1997 and 1998, respectively.

              Other commitments include approximately $4.9 million at 
December 31, 1998 to upgrade the Partnership's cable systems in eight 
franchise areas, but management intends to spend approximately $8.3 million 
in total to upgrade its systems. Franchise agreements for the eight required 
upgrades specify completion dates ranging from June 2000 to February 2002.

              The Partnership is subject to regulation by various federal, 
state and local government entities. The Cable Television Consumer Protection 
and Competition Act of 1992 (the "1992 Cable Act") provides for, among other 
things, federal and local regulation of rates charged for basic cable 
service, cable programming service tiers ("CPSTs") and equipment and 
installation services. Regulations issued in 1993 and significantly amended 
in 1994 by the Federal Communications Commission (the "FCC") have resulted in 
changes in the rates charged for the Partnership's cable services. The 
Partnership believes that compliance with the 1992 Cable Act has had a 
significant negative impact on its operations and cash flow. It also believes 
that any potential future liabilities for refund claims or other related 
actions would not be material. The Telecommunications Act of 1996 (the "1996 
Telecom Act") was signed into law on February 8, 1996. As it pertains to 
cable television, the 1996 Telecom Act, among other things, (i) ends the 
regulation of certain CPSTs in 1999; (ii) expands the definition of effective 
competition, the existence of which displaces rate regulation; (iii) 
eliminates the restriction against the ownership and operation of cable 
systems by telephone


                                     F-12

<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                       ==================================


NOTE 7 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

companies within their local exchange service areas; and (iv) liberalizes
certain of the FCC's cross-ownership restrictions.

              Beginning in August 1997, the General Partner elected to 
self-insure the Partnership's cable distribution plant and subscriber 
connections against property damage as well as possible business 
interruptions caused by such damage. The decision to self-insure was made due 
to significant increases in the cost of insurance coverage and decreases in 
the amount of insurance coverage available.

              In October 1998, FCLP reinstated third party insurance coverage 
for all of the cable television properties owned or managed by FCLP to cover 
damage to cable distribution plant and subscriber connections and against 
business interruptions resulting from such damage. This coverage is subject 
to a significant annual deductible which applies to all of the cable 
television properties owned or managed by FCLP.

              Approximately 64% of the Partnership's subscribers are served 
by its system in Brownsville, Tennessee and neighboring communities. 
Significant damage to the system due to seasonal weather conditions or other 
events could have a material adverse effect on the Partnership's liquidity 
and cash flows. The Partnership continues to purchase insurance coverage in 
amounts its management views as appropriate for all other property, 
liability, automobile, workers' compensation and other types of insurable 
risks.

NOTE 8 - EMPLOYEE BENEFIT PLAN

              The Partnership has a cash or deferred profit sharing plan (the 
"Profit Sharing Plan") covering substantially all of its employees. The 
Profit Sharing Plan provides that each participant may elect to make a 
contribution in an amount up to 15% of the participant's annual compensation 
which otherwise would have been payable to the participant as salary. The 
Partnership's contribution to the Profit Sharing Plan, as determined by 
management, is discretionary but may not exceed 15% of the annual aggregate 
compensation (as defined) paid to all participating employees. There were no 
contributions charged against operations of the Partnership for the Profit 
Sharing Plan in 1996, 1997 or 1998.

NOTE 9 - TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES

              The Partnership has a management and service agreement with a 
wholly-owned subsidiary of the General Partner (the "Manager") for a monthly 
management fee of 5% of gross receipts, as defined, from the operations of 
the Partnership. Management fee expense was $262,200, $268,500 and $261,100 
during 1996, 1997 and 1998, respectively.

              In addition to the monthly management fee, the Partnership 
reimburses the Manager for direct expenses incurred on behalf of the 
Partnership, and for the Partnership's allocable share of operational costs 
associated with services provided by the Manager. All cable television 
properties managed by the General Partner and its subsidiaries are charged a 
proportionate share of these expenses. The General Partner has contracted 
with FCLP and its affiliates to provide management services for the 
Partnership. Corporate office allocations and district office expenses are 
charged to the properties served based primarily on the respective percentage 
of basic customers or homes passed (dwelling units within a system) within 
the designated service areas. The total amount charged to the Partnership for 
these services was $295,200, $335,100 and $399,200 during 1996, 1997 and 
1998, respectively.


                                     F-13

<PAGE>


                       ENSTAR INCOME PROGRAM 1984-1, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                       ==================================


NOTE 9 - TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES (CONTINUED)

              Payments of management fees and reimbursed expenses were 
deferred in prior years pursuant to restrictions imposed by the Partnership's 
previous note payable agreement. The cumulative amount deferred was 
approximately $1,081,300. On September 30, 1997, the Partnership obtained new 
financing and subsequently used such borrowings and other available cash to 
pay $619,000 of previously deferred management fees and reimbursed expenses. 
The remainder of these deferred amounts was contributed as an equity 
contribution by the General Partner to EFC. In the normal course of business, 
the Partnership pays commitment fees to EFC. See Note 6.

              The Partnership also receives certain system operating 
management services from affiliates of the General Partner in addition to the 
Manager. The Partnership reimburses the affiliates for its allocable share of 
the affiliates' operational costs. The total amount charged to the 
Partnership for these costs approximated $118,100, $104,300 and $26,900 in 
1996, 1997 and 1998, respectively. No management fee is payable to the 
affiliates by the Partnership and there is no duplication of reimbursed 
expenses and costs paid to the Manager.

              Substantially all programming services have been purchased 
through FCLP. FCLP, in the normal course of business, purchases cable 
programming services from certain program suppliers owned in whole or in part 
by affiliates of an entity that became a general partner of FCLP on September 
30, 1998. Such purchases of programming services are made on behalf of the 
Partnership and the other partnerships managed by the General Partner as well 
as for FCLP's own cable television operations. FCLP charges the Partnership 
for these costs based on an estimate of what the General Partner could 
negotiate for such programming services for the 15 partnerships managed by 
the General Partner as a group. The Partnership recorded programming fee 
expense of $1,172,500, $1,195,900 and $1,161,700 in 1996, 1997, and 1998, 
respectively. Programming fees are included in service costs in the 
statements of operations.

NOTE 10 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

              During the years ended December 31, 1996, 1997 and 1998, cash 
paid for interest amounted to $189,300, $107,100 and $94,800, respectively.


                                     F-14

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT
NUMBER        DESCRIPTION
-------       -----------
<S>           <C>
3             The Sixteenth Amended and Restated Agreement of Limited
              Partnership of Enstar Income Program 1984-1, L.P., Dated as of
              August 1, 1988(3) 

10.1          Management Agreement between Enstar Income Program 1984-1 and
              Enstar Cable Corporation(1)

10.2          Revolving Credit and Term Loan Agreement dated April 10, 1985,
              between Enstar Income Program 1984-1, L.P. and Rhode Island
              Hospital Trust National Bank, as amended(2)

10.3          Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for Greene
              County, North Carolina(2)

10.4          Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for the City
              of Hookerton, North Carolina(2)

10.5          Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for the City
              of Kershaw, South Carolina(2)

10.6          Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for York
              County, South Carolina(2)

10.7          Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for the City
              of Covington, Tennessee(2)

10.8          Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for Tipton
              County, Tennessee(2)

10.9          Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for the City
              of Brownsville, Tennessee(2)

10.10         Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for the City
              of Bolivar, Tennessee(2)

10.11         Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for the City
              of Riverhills, South Carolina(2)

10.12         Amendment No. 6 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1, L.P. and
              Rhode Island Hospital Trust National Bank, dated as of January 26,
              1990(4)

10.13         Service Agreement between Enstar Communications Corporation,
              Enstar Cable Corporation and Falcon Holding Group, Inc. dated as
              of October 1, 1988(4)

10.14         Easement agreement and related documents thereto granting an
              agreement for the purpose of constructing, maintaining and
              operating a community antenna television system in River Hills
              Plantation, South Carolina.(5)

10.15         Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for the Town
              of Heath Springs, South Carolina.(5)

10.16         Amendment No. 6 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated January 26, 1990.(5)
</TABLE>


                                      E-1

<PAGE>

                                  EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER        DESCRIPTION
-------       -----------
<S>           <C>
10.17         Amendment No. 7 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated November 30, 1990.(5)

10.18         Amendment No. 8 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated April 1, 1991.(6)

10.19         Franchise Ordinance and related documents thereto granting a
              non-exclusive community antenna television franchise for Hardeman
              County, Tennessee.(6)

10.20         Amendment No. 9 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated June 17, 1992.(7)

10.21         Amendment No. 10 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated March 29, 1993.(7)

10.22         Amendment No. 11 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated March 29, 1994. (8)

10.23         Amendment No. 12 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated March 31, 1995.(9)

10.24         Amendment No. 13 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated March 27, 1996.(10)

10.25         Amendment No. 14 to Revolving Credit and Term Loan Agreement dated
              April 10, 1985 between Enstar Income Program 1984-1 and Rhode
              Island Hospital Trust National Bank, dated October 31, 1996.(11)

10.26         Loan Agreement between Enstar Income Program 1984-1, L.P. and
              Enstar Finance Company, LLC dated September 30, 1997.(12)

10.27         Franchise Ordinance granting a non-exclusive community antenna
              television franchise for Greene County, North Carolina.(13)

10.28         Franchise Ordinance granting a non-exclusive community antenna
              television franchise for the Town of Grifton, North Carolina.(14)

10.29         Franchise Ordinance granting a non-exclusive community antenna
              television franchise for the Town of Heath Springs, the Town of
              Kershaw and Lancaster County, South Carolina.
</TABLE>

                                       E-2

<PAGE>
                                  EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER        DESCRIPTION
-------       -----------
<S>           <C>
21.1          Subsidiaries: None.
</TABLE>

                              FOOTNOTE REFERENCES

(1)  Incorporated by reference to the exhibits to the Registrant's Annual
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended
     December 31, 1986.

(2)  Incorporated by reference to the exhibits to the Registrant's Annual
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended
     December 31, 1987.

(3)  Incorporated by reference to the exhibits to the Registrant's Annual
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended
     December 31, 1988.

(4)  Incorporated by reference to the exhibits to the Registrant's Annual
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended
     December 31, 1989.

(5)  Incorporated by reference to the exhibits to the Registrant's Annual
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended
     December 31, 1990.

(6)  Incorporated by reference to the exhibits to the Registrant's Annual
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended
     December 31, 1991.

(7)  Incorporated by reference to the exhibits to the Registrant's Quarterly
     Report on Form 10-Q, File No. 0-13333 for the quarter ended June 30,
     1993.

(8)  Incorporated by reference to the exhibits to the Registrant's Annual 
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended  
     December 31, 1993.

(9)  Incorporated by reference to the exhibits to the Registrant's Annual
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended
     December 31, 1994.

(10) Incorporated by reference to the exhibits to the Registrant's Annual
     Report on Form 10-K, File No. 0-13333 for the fiscal year ended
     December 31, 1995.

(11) Incorporated by reference to the exhibits to the Registrant's Quarterly
     Report on Form 10-Q, File No. 0-13333 for the quarter ended September
     30, 1996.

(12) Incorporated by reference to the exhibits to the Registrant's Quarterly
     Report on Form 10-Q, File No. 0-13333 for the quarter ended September
     30, 1997.

(13) Incorporated by reference to the exhibits to the Registrant's Quarterly
     Report on Form 10-Q, File No. 0-13333 for the quarter ended March 31,
     1998.

(14) Incorporated by reference to the exhibits to the Registrant's Quarterly
     Report on Form 10-Q, File No. 0-13333 for the quarter ended June 30,
     1998.


                                     E-3