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Ms. Coralie A. Wilson January 10, 2003 Page 3 Franchisee cease making franchise fee payments on cable modem • service revenues. The Minnesota right-of-way statute flatly prohibits the City from assessing franchise fees on providers of interstate information services. -Thus, even if federal law did not apply, state law would still preclude the imposition of franchise-fees on cable modem services. Our reporting of gross revenues to accurately reflect the permissible scope of gross revenues permitted under federal law is also consistent with the Franchise. Nonetheless, in order to cooperate with the Commission and its member cities to the maximum extent possible, and though reserving all rights with respect to this and any future submissions, enclosed. are reports detailing the cable modem service/Internet access revenues that were received during the first, second and third quarters of 2002. These reports satisfy any requirements for cure set forth in the Notice with respect to any violation of Section 8.5. Accordingly, there is no existing violation of the Franchise and no basis for further enforcement action on the part of the Commission. PROCESS AND FINDINGS In addition, we have some initial concerns regarding the timing and process of the Notice. First, the Notice purports to constitute a finding of violation of each • Franchise with each of the Commission's member cities. Yet, to the best of our knowledge, there have been no hearings, resolutions, ordinances or other official action on the part of the individual member cities with respect to this Notice. Rather,- we are only aware of a Commission vote on this matter pursuant to a summary staff recommendation. We therefore request that you forward to us all documentation regarding the consideration or action of the member cities regarding this matter, as well as any documents, data or any other records relating to Commission findings or actions in this matter. To that end, attached is a formal request for all such documentation pursuant to Minnesota Data Practices Act, a version of which -has also been sent to each of the member cities. NOTICE OF DISPUTE OF SPECIFIC VIOLATIONS ALLEGED IN THE NOTICE Franchisee disputes the Notice as unfounded, unlawful, and defective in a number of respects, both factually and legally. For the following reasons, there is no existing violation of the Franchise and, therefore, no basis for further action on the Notice. •