As ordered by the DPUC, an Agreement was entered into between SVCM and Cablevision for the transfer of PEG access control, and the Agreement was approved by the DPUC. A provision in this Agreement prohibits Cablevision from making SVCM’s PEG access channels town-specific, unless otherwise approved and authorized by SVCM.

Throughout the transfer, Cablevision never provided SVCM with any written contracts for town-specific P, E, or G access channels. There were no “grand Fathered” town-specific access channels transferred by Cablevision to SVCM. If there were E & G town-specific access contracts between Cablevision and the towns using the PEG access channels, they would have had to been negotiated into the Agreement.

When Cablevision transferred PEG access to SVCM, there was no specific E & G access funds transferred to SVCM. During the period when Cablevision operated PEG access, it had a program offering towns a choice of either a character generator or $3,000.00 for I-Net or town specific purposes. Cablevision never indicated nor was there any evidence that PEG access funds were used for that program.

Cablevision did not relinquish funds to SVCM for any town-specific initiatives, nor could they. Cablevision does not subsidize SVCM for the E & G access channels. The DPUC designated SVCM as the third-party PEG access provider for Area 2 and ordered Cablevision to transfer its PEG access equipment and PEG access funds to SVCM. Cablevision does not have any PEG access authority over SVCM.

Each July the DPUC establishes the PEG access subscriber fee. The cable operator does not. The DPUC does not assign any portion of the PEG access subscriber fee to P, E, or G access. The PEG access provider determines the manner I which it expends its PEG access funds and must account for its PEG access expenditures annually to the DPUC. The DPUC additionally requires an annual independent audit of all third-party PEG access expenditures.

In the case of third party PEG access providers, the cable operator sends to the third party provider the PEG access subscriber fee in quarterly installments, based upon the number of cable TV subscribers within the franchise. For July 1, 2002 thru June 30, 2003 the PEG access subscriber fee is $5.49 (a nine-cent increase over 2001-02). Starting July 1, 2003 thru June 2004, the subscriber fee is expected to be $5.65, a sixteen cent increase over the current year.

As the designated P, E, and G access provider for Area 2, SVCM does not apply percentages or specific dollar amounts separately to P, E, and G access. SVCM’s budget covers our entire PEG access operation.