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· The MOU further states in Section 1 (0) that the Member Cities and Commission agree that the PEG Fee, the $300,000 capital funding and the transfer of PEG programming operations "are made for, and in full satisfaction of PEG and any related programming obligations upon m_~__~__renewal . .-._." ....n_n_~_~__. ...~__m__~~ n_~~___mm_~__~_~ _ __n___.____~_ The text of the MOU, and the fact that it occurred while the parties were negotiating the renewal of the franchise, make very plain the fact that the parties have already reached closure on the PEG and any related programming obligations for purposes of the renewal. The clause in the MOU which states that the Company's commitments to collect the PEG Fee, to make the capital grants in 1996 and 1997, and to transfer PEG programming facilities to the Commission constitute the entire PEG support for the renewal is a fundamental component of the agreement. If the Commission believes that this provision is no longer valid, then it is repudiating the entire agreement. This would be particularly troubling in light of the substantial expenditures under the MOU that have been incurred by the Company to date. The Company cannot accept a unilateral change to a fundamental component of the MOU. If the Commission wishes to discuss an amendment of the MOU, then all aspects of the MOU must be included, including deletion of the requirement for Universal service and a reduction of the PEG Fee to eliminate operational support, which, but for the MOU agreement, must be paid out of franchise fees in a renewed franchise. It is the Company's position that the PEG support provisions of the renewal have already been resolved by the MOU. The Company has honored and will continue to stand by the terms of that agreement. Your letter states that the Commission's offer would be considered withdrawn if not accepted by 4:00 p.m. on March 19, 2001. We think that such an ultimatum is regrettable, but since the Commission seeks an increase to the PEG Fee and nearly $350,000 in PEG grants in addition to the PEG provisions of the MOU, we cannot agree to the Commission's proposal. As the Commission has withdrawn its offers effective 4:00 p.m. today, the Company must also withdraw all offers beyond the terms of the MOU which we have previously made toward negotiating a franchise renewal. As we see the current situation, we still have the MOU, which resolves a large portion of the renewal. We are ready to sit down with the Commission again to take a fresh effort to negotiate the terms of a franchise renewal. However, by this response we are not waiving any rights under applicable law, we continue to reserve all rights under the Standstill Agreement to Pursue Informal Renewal Procedures dated November 15, 1995, and we expressly reserve all other rights with respect to renewal under applicable law. P.3