 of the "natural" variety. By the early 1990s, cable service had moved out of its rural roots and become widespread across the country. New cable-only channels helped make cable popular in urban areas that had good television reception. As cable pene- tration increased, SO did system valuation. The promise of cable telephony and cable data services was also beginning to look quite real. HFC's promise was being validated by several large telephone companies, including GTE, Southern New England Telephone, Pacific Bell, and Ameritech, which began to build their own HFC networks. In the mid-1990s, they found cable telephony to be a bit harder than expected-the equipment of the day was primitive and power- ing customer-premise telephony adapters was proving troublesome. But those four large ILECs did not abandon HFC until they were acquired by HFC-averse Bell Atlantic and SBC. Bell Atlantic was not always SO wary of cable. In 1993, it offered $33 mil- lion for TCI, the largest MSO with 9.7 million subscribers. The deal collapsed, though, in the face of regulatory difficulties. TCI's network was among the most primitive-the company had been cobbled together from a long string of acqui- sitions, and its chairman, John Malone, was known for his interest in program- ming, not system maintenance. Some wags suggested that Bell Atlantic's CEO, Ray Smith, an amateur thespian himself, had wanted to bask in the glory of a Hollywood-centric industry. But one RBOC moved into cable in a big way. Denver-based US West first got its feet wet by acquiring two cable companies in Atlanta, safely distant from its telephony service area, in 1994. The 446,000 subscriber acquisition The Great Telecom Meltdown cost about $1.2 billion, about $2,700 per subscriber. The company's cable unit adopted the name MediaOne. It also paid $2.5 billion for a 25% interest in Time Warner Entertainment, the Time Warner unit that included a large MSO. In 1996, shortly after the Telecom Act passed, it dove in head first, buy- ing Continental Cablevision, with