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Mayor David Grant November 30, 2015 Page 2 of 3 as where CenturyLink must build and no clear way to ensure CenturyLink meets that standard. At the very least, the City must impose actual binding and enforceable requirements to serve equitably throughout the community. This will protect competitive and consumer equity and prevent selective service deployment. It will equalize the investment that all providers will be required to make in return for access to the public rights of way. It will ensure that competition develops according to which provider can best serve subscribers and not according to which provider enjoys the most advantageous regulatory requirements. Finally, it will meet both state and federal requirements. PEG funding will also be inequitable and more burdensome on Comcast, and all cable customers, if the CenturyLink franchise is adopted as proposed. Again, Minnesota statute is clear on this issue. Minnesota Statutes 238.08, subd. 1(b) requires that the City cannot grant an additional franchise with "terms and conditions more favorable or less burdensome than those in the existing franchise pertaining to (2) public, educational, or governmental access requirements..." Inequitable PEG funding is a clear example of creating more favorable franchise conditions to a new entrant, and in turn, a more advantageous regulatory environment. Comcast is required to pay three significant up-front annual grants to the Commission: a $50,000 annual equipment grant; a $100,000 annual scholarship grant that increases annually and was $109,693.66 in 2015; and an annual PEG grant (paid quarterly) that also increases annually and was $1,347,166.47 in 2015. The amount of these grants, in total, is what the Commission has claimed is required to run its PEG operations. This total PEG funding amount, which was $1,606,860.13 in 2105 and is growing every year, is paid to the Commission as up- front cash grants, regardless of how many subscribers Comcast has in the Commission area. Comcast subsequently recovers the total amount from subscribers as a per-month, pass through amount. This means that a lower numbers of Comcast subscribers in the Commission area results in a higher per-month pass-through for all Comcast customers. Section 6(4) of CenturyLink's proposed franchise does not require CenturyLink to participate in any of the current up-front grants that Comcast is required to provide the Commission but requires only that CenturyLink match our monthly per-subscriber PEG fee in which Comcast uses to recover the grants. It is absolutely more burdensome on Comcast to have to contribute its own capital as up-front cash grants as opposed to the collecting and remitting regime that is being offered to CenturyLink. As important, not requiring CenturyLink to participate in the up-front grant funding means that instead of both cable operators and cable customers sharing the burden of the PEG funding, the