1. Legislative/Litigation Update Do You Believe in Magic? NATOA Regional Workshop Los Angeles, California June 5, 2003 Michael R. Bradley Creighton Bradley & Guzzetta, LLC 444 Cedar Street, Suite 950, Saint Paul, MN 55101 P/(651) 379-0900 ext. 2 F/(651) 379-0999 bradley@creightonbradley.com____________________________

2. Legislative/Litigation Update _______________________________ June 5, 2003 Slide # 2 Franchise Fees on Cable Modem Service Comcast v. North Suburban Cable Commission –Facts Cable Franchise – 5% franchise fee on all revenue derived from the operation of the Cable System Definition of Gross Revenues specifically includes Cable Modem Service Commission brought noncompliance proceedings Held Comcast in violation of franchise Drew on Letter of Credit –Minnesota Court of Appeals, Court of Appeals No. ____ Petition for Writ of Certiorari Filed May 27, 2003 –U.S. District Court Complaint for Declaratory and Injunctive Relief Filed May 27, 2003

3. Legislative/Litigation Update _______________________________ June 5, 2003 Slide # 3 Franchise Fees on Cable Modem Service City of Chicago v. AT&T Broadband –Facts Cable Franchise requires franchise fee on all revenues derived directly or indirectly from the operation or use of all or part of a cable television system FCC Declaratory Ruling –Cook County Circuit Court City brought Complaint for Declaratory Judgment Procedure and Venue issues Removed to U.S. District Court –U.S. District Court City Motion to Remand to State Court Denied Pre-trial

4. Legislative/Litigation Update _______________________________ June 5, 2003 Slide # 4 Local Authority over Open Video Systems (OVS) Lakedale Telephone –Claim that OVS is not subject to any local regulation –Filed for OVS certification Sherburne/Wright Cable Commission –Filed Comments Local Government Authority Challenged Lakedales Candor in the Application –Failure to explain why it was not a cable operator –Failure to list all affiliates

5. Legislative/Litigation Update _______________________________ June 5, 2003 Slide # 5 Local Authority over Open Video Systems (OVS) FCC Decision –In the Matter of Lakedale Telephone, DA-03-921 Released April 3, 2003 Denied OVS Certification –"Nevertheless, we note that the Commission has stated that "management of the right-of-way is a traditional local government function. Local governments should be able to manage the rights-of-way in their usual fashions without the imposition of unique requirements for open video systems. Thus, the Commission has made clear that the open video system certification process does not usurp the authority of local governments to control use of the public rights-of-way."

6. Legislative/Litigation Update _______________________________ June 5, 2003 Slide # 6 State Legislative Initiatives Elimination of Franchising Authority Open Video Systems Limited Area Franchises Level Playing Field Cable Modem Service

7. Legislative/Litigation Update _______________________________ June 5, 2003 Slide # 7 Telecommunications Section 253 AT&T v. City of Eugene, 35 P.2d 1029 (Ore. Ct. App. 2001) City of Auburn v. Qwest, 260 F.3d 1160 (9 th Cir. 2001) Qwest v. City of Santa Fe, 224 F.Supp.2d 1305 (D. New Mex. 2002)

8. Legislative/Litigation Update _______________________________ June 5, 2003 Slide # 8 Telecommunications Section 253 Qwest v. City of Portland, 200 F.Supp.2d 1250 (D. Ore. 2002) TCG New York, Inc. v. City of White Plains, 305 F.3d 67 (2 nd Cir. 2002)

9. Legislative/Litigation Update _______________________________ June 5, 2003 Slide # 9 Telecommunications Section 253 City of Rome v. Verizon, 240 F. Supp.2d 176 (N.D. N.Y. 2003) TC Systems v. Town of Colonie, 2003 U.S. Dist. LEXIS 8263 (N.D. N.Y. 2003) Qwest v. City of Berkley, 2003 U.S. Dist. LEXIS 5863 (N.D. CA. 2003)

10. Legislative/Litigation Update Do You Believe in Magic? NATOA Regional Workshop Los Angeles, California June 5, 2003 Michael R. Bradley Creighton Bradley & Guzzetta, LLC 444 Cedar Street, Suite 950, Saint Paul, MN 55101 P/(651) 379-0900 ext. 2 F/(651) 379-0999 bradley@creightonbradley.com____________________________