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Ms. Coralie A. Wilson January 10, 2003 Page 11 Nonetheless, in an effort to cooperate with the Commission, enclosed are reports detailing the cable modem service/Internet access revenues that were received during the first, second and third quarters of 2002. By submitting these reports, Franchisee has met the requirements for cure set forth in the Notice with respect to any violation of Section 8.5. However, we note that these reports are being submitted in this instance as part of Franchisee's desire to fully address the larger issue in dispute. Franchisee expressly does not concede that such reports may be required under the Franchise and reserves any and all rights with respect to future reports. C. .Franchisee .Reserves All Rights and .Disputes Commission's or Member Cities' Rights to Collect or Assess .Damages or Penalties Based On the Notice. Finally, Franchisee reserves all substantive and due process rights with respect to the Notice and the subject matter thereof, and expressly asserts entitlement to all such rights. Neither this letter nor any other representations or actions of Franchisee shall constitute a waiver of any defenses to or claims or due process rights regarding the Notice, all of which are expressly reserved. In light of this letter, Franchisee disputes any entitlement of Commission or member cities to withdraw, collect or assess any damages or penalties .pursuant to the Notice. LJ CONCLUSION The above analysis fully and conclusively demonstrates that the actions addressed in the Notice do not constitute a violation of the Franchise. Both federal law and the Franchise re uired that Franchisee cease paying franchise fees on cable modem service revenues. Moreover, state law precludes any imposition of such fees on cable modem services.. As for reporting cable modem service revenues, though we disagree that there is any such obligation, information meeting the requirement for cure of any alleged violation of Section 8.5 is provided herewith. Accordingly, there is no existing violation of the Franchise and no basis for further action on the Notice. As indicated above, we would appreciate the opportunity to discuss these matters at an upcoming Commission or City Council meeting or with Commission or member city representatives prior to any further action by the Commission or member cities. In any event, please feel free to call with any questions or if you wish to discuss this matter further. Also, as I will be leaving my position in the next few days, all future contact with Franchisee on this matter which would otherwise be directed to me should be directed to Jon Kreucher, Division Vice President, Regulatory Affairs. His contact information is as follows: