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Ms. Coralie A. Wilson January 10, 2003 Page 9 In addition to the specific language of Section 8.3 referenced above, Section 13.4 of the Franchise further provides that franchise fee payments must conform to federal law. Section 13.4 states that "Grantee and City ...shall conform to federal laws and regulations regarding cable as they become effective."19 Section 13.4 therefore imposes on Franchisee and the City an affirmative obligation to automatically conform their performance under the Franchise to the requisites of .any- future changes in federal law. In fact, the Franchise further recognizes that this requirement may result in Franchisee having to cease performing a service or act otherwise required under the Franchise by requiring. Franchisee to provide prompt notice of any such conflicts.20 The Declaratorv Ruling was a federal regulatory rulemaking that was adopted on March 14, 2002. Under the express requirements of Section 13.4, both Franchisee and the member cities agreed and were required to conform to this rulemaking. Franchisee's decision to stop paying franchise fees on cable modem service was therefore in full compliance with, and in fact required by, the Franchise.- Indeed, under the language of Section 13.4, if Franchisee had ignored the requirements of federal law and continued to pay franchise fees on cable modem service, it would have violated the Franchise. As demonstrated above, the Franchise clearly provides that the Franchisee may, and must, cease making payments on cable modem .service revenues in accordance with the requirements of Section 622 of the Communications Act and . the Declaratory Rulinq. Thus, under the language of the Franchise itself (and in addition to obligation to comply with preemptive federal law. irrespective of any franchise language), Franchisee's non-payment of franchise fees on cable modem service revenues does not constitute a Franchise violation. 3. State Law Prohibits the Commission or its Member Cities from Imposing Franchise Fees on Interstate Information Services. In comments before the FCC (though not in the Notice), the Commission has argued that local franchising authorities have additional authority to franchise or otherwise regulate cable modem services under state law and that such authority is not restricted by Section 622 or any of the other federal law provisions applicable to cable franchises under Title VI of the Communications Act.2" As an '9 Franchise at § 13.4(a) 20 Id. Pursuant to this requirement, Franchisee notified the Commission of its obligation to conform to the Declaratory Rulin,~c by a letter dated March 28, 2002 (attached hereto}. 21 See Appropriate Regulatory Treatment for Broadband Access to the Internet over Cable Facilities, CS Docket No. 02-52, Initial Comments of Metropolitan Government of the City of Nashville et al. (filed June 17, 2002).