COPE - Legislation

1. COPE - Legislation • Federal Legislation • Communications Opportunity, Promotion, and Enhancement Act of 2006 (“COPE”) • National Franchising • Issued by FCC • 10 year terms with automatic renewal • City may receive a franchise fee up to 5% • Definition of Gross Revenues will cause a decline in Franchise Fees in many jurisdictions • Existing Providers Eligible For National Franchise once a competitor begins to provide service • Competitor eligible immediately

2. COPE - Legislation • COPE Act of 2006 • PEG Support – Limited to 1% of Cable Ops Gross Revenues • Significant Loss of Funding for many Cities • Current Institutional Network Commitments Will Continue • Although unclear for how long • No New Institutional Network Commitments • Authorizes Occupation in the Local PROW by Federal agency (Constitutional issue) • Cities still allowed to Manage the PROW

3. COPE - Legislation • COPE Act of 2006 • New Customer Service Protections - Unknown • Subject to New Rulemaking Procedure • City Still Expected to Address Complaints • Authorized to Issue Compliance Orders • May Recover “Nominal Fee” • Companies have interpreted this to mean $1.00 • City may Audit Fees • Provision to Recover Costs • Applies to IP Video • Important because this is the technology phone cos are using to provide video service

4. COPE - Legislation • Major Concerns with COPE • Redlining • SBC Project Lightspeed (p13-14 SBC Investor Update) • Serve 90% of High Value Customers • Serve 5% of Low Value Customers (35% of Total Customer Households – OVER 1/3 of ALL HH!) • Abandonment of Existing Franchises • No Grandfathering • Insufficient Enforcement Authority • Review by FCC rather than Courts • Lower Franchise Fees – Exclusions from Definition of Gross Revenues • PEG and I-Nets • Loss of Local Control – Washington will oversee local streets

5. Action Items • Contact Minnesota Congressional Delegation • Follow Lead of Local Government Organizations • U.S. Conference of Mayors • NLC • NACO • NATOA • IMLA