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<br />Memorandum <br />October 25, 2005 <br />Page 2 <br /> <br />74/1-7 <br /> <br />LEGISLATIVE DEVELOPMENTS <br /> <br />Over the course of the renewal process many changes have occurred in the cable industry <br />including attempts by regional Bell Operating Companies to affect changes in state and <br />federal laws to allow them to provide competitive cable television services. In particular, <br />many of the remaining baby Bells have aggressively pursued the elimination of local <br />franchising seeking instead to be granted authority at the state or federal level. <br /> <br />In the State of Texas the Bell's were successful in changing state law to allow a state- <br />wide franchise grant, bypassing local franchising authority. This same debate is presently <br />occurring in California and in draft legislation at the federal law. <br /> <br />Should changes occur in state or federal law it is possible that Comcast would no longer <br />need to obtain a local franchise to provide cable services in the 8 Agencies. While there <br />is no certainty that legislation will be adopted nor what the contents of such legislation <br />may be, many industry observers expect action at either the state and federal level in the <br />first half of 2006. With these issues in mind the negotiation committee believes it is <br />particularly important to consider an take action on the proposed franchise agreement as <br />soon as possible prior to any legislative changes. <br /> <br />HIGHLIGHTS OF FRANCHISE <br /> <br />1. <br /> <br />Franchise Term - 15 years commencing February 1,2006 <br /> <br />2. <br /> <br />Customer Service Standards. <br />a. Comcast will comply with the Federal Communications Commission's <br />customer service obligations as outlined in the franchise. <br />b. Comcast will provide quarterly compliance reports. <br />c. Comcast will establish written procedures regarding complaints and <br />disputes. <br /> <br />3. <br /> <br />Franchise Fee. <br />a. 5% of Comcast's gross revenues will be paid to each agency. <br />b. The franchise fee is due quarterly accompanied by a report showing the <br />basis for the computation. <br /> <br />4. <br /> <br />Public, Educational and Governmental ("PEG") Access Programming. <br />a. Two channels initially; two additional upon request. <br />b. Capital grants distributed to agencies upon the effective date of the <br />Franchise, on or before 1/31/06, on or before 1/31/07; on or before 60 months <br /> <br />8I805IvI <br />