Legislative Update _______________________________ May 11, 2006 Slide # 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

Legislative Update _______________________________ May 11, 2006 Slide # 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

Legislative Update _______________________________ May 11, 2006 Slide # 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

Legislative Update _______________________________ May 11, 2006 Slide # 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

Legislative Update _______________________________ May 11, 2006 Slide # 5 Action Items Contact Minnesota Congressional Delegation Follow Lead of Local Government Organizations –U.S. Conference of Mayors –NLC –NACO –NATOA –IMLA