STATE OF VERMONT PUBLIC SERVICE BOARD SUMMARY OF INITIAL PREFILED TESTIMONY OF MICHAEL S. WASSENAAR

Transcription

1 STATE OF VERMONT PUBLIC SERVICE BOARD In Re: Renewal of the Certificate of Public ) Good of The Helicon Group, L.P., d/b/a ) Docket No Charter Communications, to provide cable ) television service in 46 Vermont municipalities ) SUMMARY OF INITIAL PREFILED TESTIMONY OF MICHAEL S. WASSENAAR Mr. Wassenaar s prefiled testimony addresses the following matters in support of the Vermont Access Network ( VAN ): Inclusion of PEG Access Program schedules on Interactive Program Guide; Expanding Operator Support and Funding beyond cable television revenues to revenues of all video service program providers; PEG Access High Definition Channels; new PEG Access Channel signal quality standards. The following Exhibits are submitted in support of Mr. Wassenaar s testimony. 1. WASSENAAR-1.01, Lee Afflerbach, PE, 2/17/2004, Technical Considerations Related to Implementing the Requirements of the Twenty-First Century Communications and Video Accessibility Act of 2010, MB Docket Nos , ; FCC WASSENAAR-1.02, Leichtman Research Group, Press Release for On Demand TV 2013: A Nationwide Study of VOD and DVRs, December 6, WASSENAAR-1.03, OVUM, White Paper on Consumer Trend Research: Quality, Connection and Context in TV Viewing, July 2013.

2 4. WASSENAAR-1.04, CAN TV, Cable Subscriber Study, October 2010, conducted by Group W Communications and The Buske Group. 5. WASSENAAR-1.05, Group W Communications Study of Montgomery County MD cable subscribers, May 2012, presented Ex Parte to the FCC (MB Docket No ), September 6, 2013, page WASSENAAR-1.06, Comments to the FCC, The Alliance for Communications Democracy, MB Docket Nos , , February 18, WASSENAAR-1.07, Reply Comments to the FCC, The Alliance for Communications Democracy, MB Docket Nos , , March 20, WASSENAAR-1.08, Letter from Cor Trowbridge, Executive Director, Brattleboro Community Television to the FCC, August 7, 2013, filed in MB Docket WASSENAAR-1.09, S. Derek Turner, Combating the Cable Cabal: How to Fix America s Broken Video Market, Free Press, May 2013, page 15. Turner s data is derived from the industry analyst group SNL Kagan. 10. WASSENAAR-1.10, Robin Flynn, US Multichannel Subscriber Update and Programming Cost Analysis, SNL Kagan, June WASSENAAR-1.11, Video Subscriptions dropped for the first time in 2013, Broadband Subs increased, Portada Online, March 13, Portada here cites reports from SNL Kagan and Leichtman Research Group.

3 12. WASSENAAR-1.12, David Talbot, When Will the Rest of Us Get Google Fiber? MIT Technology Review, February 4, 2013, Pg WASSENAAR-1.13, Franchise Agreement for Cable Services between Comcast of Oregon II, Inc. and the City of Portland, Oregon, effective January 1, WASSENAAR-1.14, Franchise Agreement for Cable Services between Comcast of Illinois/Ohio/Oregon, LLC and The Cities of Fairview, Gresham, Troutdale, Wood Village and Multnomah County, effective January 1, WASSENAAR-1.15, Chicago Franchise Renewal Agreement with RCN, March 14, WASSENAAR-1.16, New York City Franchise Agreement with Time Warner for Southern Manhattan, Sept 16, WASSENAAR-1.17, New York CIty Franchise Agreement with Cablevision for Brooklyn, Sept 6, WASSENAAR-1.18, New York City Franchise Agreement with Cablevision for The Bronx, Sept 6, 2011

4 STATE OF VERMONT PUBLIC SERVICE BOARD In Re: Renewal of the Certificate of Public ) Good of The Helicon Group, L.P., d/b/a ) Docket No Charter Communications, to provide cable ) television service in 46 Vermont municipalities ) PREFILED TESTIMONY OF MICHAEL S. WASSENAAR Q1. What is your name? A1. My name is Michael Wassenaar. Q2. What is your occupation? A2. I am the Public Policy Advocate for the Alliance for Community Media. The ACM is a national trade association for PEG providers and channels. Q3. What are your qualifications to testify in this matter? A3. I was Executive Director of St Paul Neighborhood Network, a PEG Access organization in Minnesota, for thirteen years, and have studied industry trends in that role and as a member of the Board of Directors with the Alliance for Community Media. In those capacities, I have monitored the cable industry and worked with hundreds of PEG channels and organizations across the United States in the last decade. In my current capacity, I work with over 400 member organizations throughout the United States on their public policy concerns. Q4. What is your connection to the Vermont Access Network? A4. The Vermont Access Network, or "VAN," is a state affiliate of the Alliance for Community Media, and about a dozen of VAN's PEG access organizational members also hold

5 organizational memberships in the Alliance. In fact, two executive directors of what Vermont calls PEG Access Management Organizations, or PEG AMOs, hold leadership positions in the Alliance's Northeast Regional Board of Directors. They are Rob Chapman of ORCA in Montpelier, and Patrick Cody of LPCTV in Ludlow, Vermont. Q5. In general terms, what is the purpose of your prefiled testimony? A5. The Alliance is concerned that although Vermont is one of the few states in our country where the local franchising authority, which is the State of Vermont in this case, has built-in protections against cable operators from abolishing PEG access, there are two problematic trends that unless solved threaten the long-term viability of PEG access and consequently its ability to respond to the nonprofit, noncommercial communication needs of their communities. They are (1) the placement of the program schedule of PEG access channel programs on the cable operator s electronic program guide, and (2) the inevitable migration of cable TV-related revenues to broadband-related revenues. And in Vermont, as is the case across the country, PEG access funding is indexed to the dollars generated by the cable operator s cable television revenues. The third issue (3) is recognizing High Definition as the emerging standard for PEG Access Channels. Q6. Please briefly first describe an interactive electronic program guide, its purpose and functions and why PEG access channels should be included on it. A6. Electronic Video Programming Guides, widely called VPGs, are a universal function of cable television systems, allowing consumers to interactively navigate channels and find programs of interest, providing essential information about programs. Inclusion of program level information (program name, program description and accessibility options) in VPGs is necessary for all channel providers to fully reach potential audiences--audiences made up of both those watching live television, as well as those increasing number of viewers who use Digital Video Recorders (DVRs) to capture programs and watch them at their convenience. Further, inclusion of program information in VPGs is vital for consumers with visual and hearing disabilities to find programs they need on cable systems to which they subscribe. In sum, Public Educational and Government Access channels need to have program level information included in such VPGs to effectively perform their missions as does any channel provider.

6 Q7. Would you give us a more technical description of the functionality and use of VPGs for local programming? A7. The architecture and application of VPGs for PEG systems were clearly described recently in a proceeding before the FCC by engineer Lee Afflerbach. [See Wassenaar.1-01: Lee Afflerbach, PE, 2/17/2004, Technical Considerations Related to Implementing the Requirements of the Twenty-First Century Communications and Video Accessibility Act of 2010, MB Docket Nos , ; FCC ] In his summary of cable systems, Afflerbach describes the technical ability of cable systems to accommodate local program needs, including all major systems such as Charter. [Afflerbach, pages 2-3.] He stated that typically all such systems have already installed and maintained the equipment needed to control and transport VPG guide information from a third party provider, generally through the Internet, to the subscriber. [Afflerbach, page 3.] As Afflerbach notes: ".[T]here is no technical barrier to requiring a video service provider to provide full VPG functionality for PEG access programming in a manner consistent with [that] provided to other video services carried on the cable system." [Afflerbach, page 4.] He goes on to say that program information can be provided in the the same way that it is entered for other channels carried on a cable system [Ibid.] Q8. Earlier you mentioned the use of DVRs in relation to the VPG. What is its connection to the VPG, and its importance to PEG access? A8. With regard to the connection of a DVR with the VPG, DVR s depend on the program information in VPGs to record individual programs and series for later viewing. DVRs thus allow program channels to increase audience use of their programs. Industry analysis from the Leichtman Research Group shows that 47% of all U.S. TV households have at least one DVR, and of those households, fully half have more than one DVR in the household to record programs. [See Wassenaar.1-02: Leichtman Research Group, Press Release for On Demand TV 2013: A Nationwide Study of VOD and DVRs, December 6, 2013.] In a 2013 survey, the marketing group OVUM found that up to 30% of the cable viewers try to record shows and watch them when it is convenient, as opposed to simply watching what appears live on a channel (30%) or making sure they are watching television programs at an appointed time (destination viewing 26%). [See Wassenaar.1-03: OVUM, White Paper on Consumer Trend Research: Quality, Connection and Context in TV Viewing, July 2013.]

7 Q9. And what is the importance of this data to the listing of PEG access programs on the VPG? A9. The inability to record programs individually on DVRs provides a market barrier to PEG access programmers, and reduces their potential audience by a substantial amount. Further, cable viewers have said they value this type of information about PEG access channels as they make their viewing choices. A cable viewership study in Chicago, Illinois found in 2010 that the vast majority of viewers want to find program listings in VPGs, and want to easily find and record access programs. [See Wassenaar.1-04: CAN TV, Cable Subscriber Study, October 2010, conducted by Group W Communications and The Buske Group.] Another consumer survey conducted in 2012 found 32% of viewer Always use VPGs to decide what they watch, and another 31% Frequently use VPG to choose programs, while another 45% of all residents said they were Very Interested in local programs being shown onscreen through the VPG. [See Wassenaar.1-05: Group W Communications Study of Montgomery County MD cable subscribers, May 2012, presented Ex Parte to the FCC (MB Docket No ), September 6, 2013, page 1.] Q10. You mentioned the importance of having the PEG access program schedule on the VPG as it relates to viewers with disabilities. Please explain. A10. A further value of insertion of program-specific information in VPGs is the increased access it provides for customers with hearing and visual disabilities. As has been documented by the Alliance for Communications Democracy in its filings before the FCC regarding implementation of the Twenty-First Century Communications and Video Accessibility Act of 2010, the inclusion of closed caption information and program descriptions in VPG listings is of vital importance to consumers who are deaf, hard of hearing, or have visual disabilities that can be aided by speech-generating devices. [See Wassenaar.1-06: Comments to the FCC, The Alliance for Communications Democracy, MB Docket Nos , , February 18, 2014; and Wassenaar.1-07: Reply Comments to the FCC, The Alliance for Communications Democracy, MB Docket Nos , , March 20, 2014.] In brief, without such program listings, a deaf or visually-disabled viewer lacks access to programming information necessary to search and make viewing choices, record programs of interest and, indeed, to search for closed captioned programs in the first place.

8 Q11. Are you aware of any PEG access management organization in Vermont that has expressed similar concerns about posting its program schedule on the electronic program guide? A11. Yes. A particular instance of this is in Brattleboro, where BCTV is the access management organization. BCTV, in a comment filed with the FCC, states that Brattleboro has a higher than average percentage of the population with auditory disabilities, as it is home to the Vermont Center for the Deaf and Hard of Hearing and features daily programs that are closed captioned. And yet, no program specific information about these services are listed by the local cable provider. [See Wassenaar.1-08: Letter from Cor Trowbridge, Executive Director, Brattleboro Community Television to the FCC, August 7, 2013, filed in MB Docket ] Q12. Do you happen to know that the dominant cable operator in Vermont, Comcast, is not offering access to its VPG by its designated AMOs? A12. Yes, I am aware of that, because Comcast is also a dominant provider around the United States and the Alliance s members in Comcast systems have reported they have had the same problem. This is why the Alliance mounted a campaign to its membership to file comments in the FCC in its MB Docket to describe their situations and needs with regard to access to the VPG. Q13. Are you aware that the Petitioner in this Docket, Charter, already provides access to its VPG by the two PEG access operations in its service area in Vermont? A13. Yes, and it is a highly commendable practice, as well as unfortunately not the norm for the cable industry. Large cable operators build a great deal of technically-sophisticated innovations into their systems, and helping PEG access providers to get their program schedules on the VPG should be the rule, not the exception. Q14. What is another concern that the Alliance has for PEG Access, regarding the fact that it has been funded primarily by cable television revenues for over the past 30 years? A14. Here is the problem, in general, as we see it. The revenue model for cable television companies has changed dramatically over the past 15 years with their deployment of voice, broadband and video services and the development of a more diverse video distribution market. Revenue growth has been stronger for those cable company services that are not regulated, such as is cable television, and an increasing percentage of income for cable companies is derived

9 from broadband. The long term stagnation or decline - of cable video subscribers and growth of broadband subscription services provide a regulatory and financial challenge PEG access providers and local franchising authorities. Q15. What are the challenges? A15. If the current business model for cable television remains the same, the relatively recent introduction of revenue-generating innovations such as HD, 3D and DVRs will plateau, subscribers will continue to move their dollars from cable TV to broadband to take advantage of video services found there, and as a result the revenues upon which PEG access depends for its viability will inevitably decline. Compounding this problem is that most PEG access providers are finding it increasingly difficult to gain access to the cable TV industry's technological innovations that have been deployed over the past several years, and thus unable to keep pace to meet subscriber expectations and community needs. Q16. Why are PEG access providers finding it increasingly difficult to keep pace with technology and expectations? A16. For one thing, franchising authorities have to negotiate firmly and insistently with cable operators to enable PEG access groups to get access to, and funding for, features that subscribers have come to expect and even take for granted. Moreover, technological changes occur faster in the field than periodic legal negotiations allow. PEG access groups should be able to cablecast in HD, list their schedules on the VPG so DVRs can be programmed to record PEG access programs, stream live programming on their websites, and include their recorded programs on the cable operator's Video On Demand (VOD) menu. Q17. Is this list of features that PEG access groups should be enabled to provide intended to be comprehensive? A17. No. Because a cable operator's franchise agreement is typically for nine to eleven years long or longer, the franchising authority should take great care in crafting conditions that are flexible and strong enough to require the cable operator to bring along the PEG access groups into those new directions it moves over the next decade. Local community programming, if not enfeebled through neglect and underfunding by the cable operator cum video program services provider, will continue to prove itself as a valuable community communication asset.

10 Q18. Please expand on this trend you described where the traditional cable television model has moved from television only to one that offers other telecommunication services, and how that has affected revenues. A18. Since the rollout of broadband and voice products by cable companies in the last fifteen years, cable pricing growth has continued to grow at a consistent pace (above the rate of inflation) - but the growth of the number of subscribers has slowed. This has occurred as companies have gained customers and revenue in the voice and broadband markets. Revenue growth in broadband has been much greater for cable companies, and while it represent a smaller percentage of total revenue than cable TV at present, broadband represents the major growth sector for the industry. Q19. Do you have any data to back up your statements? A19. Yes. media researcher S. Derek Turner has noted that in 2003, video comprised 82 percent of total cable revenues, but by 2012, it comprised only 59 percent. [See Wassenaar.1-09: S. Derek Turner, Combating the Cable Cabal: How to Fix America s Broken Video Market, Free Press, May 2013, page 15. Turner s data is derived from the industry analyst group SNL Kagan.] This has occurred as the total number of subscribers for video through cable has plateaued, mostly because of competition from satellite providers, the relative cost of program services, and the emergence of so-called over-the-top video providers that deliver video as an added service on top of broadband. [See Wassenaar.1-10: Robin Flynn, US Multichannel Subscriber Update and Programming Cost Analysis, SNL Kagan, June 2013.] In 2013, the overall trend in subscriber numbers for cable has shown a net loss for video services (approximately 2 million) and a net growth of broadband subscribers (2.6 million). [See Wassenaar.1-11: Video Subscriptions dropped for the first time in 2013, Broadband Subs increased, Portada Online, March 13, Portada here cites reports from SNL Kagan and Leichtman Research Group.] Cable companies generally have continued to be profitable enterprises however, because while the program costs for channel content cut into profit margins, the overall profit margin for broadband is very high. In fact, one researcher suggests that the margin may be as high as 97 percent. [See Wassenaar.1-12: David Talbot, When Will the Rest of Us Get Google Fiber? MIT Technology Review, February 4, 2013, Pg 18.]

11 Q20. You just used the term 'over-the-top." Please explain that term. A20. The increasing speed of broadband available to consumers has spurred the development of so-called over-the-top (OTT) subscription services. These are services such as Netflix and Amazon Prime Video that are available to a consumer who pays one subscription fee to them (the OTT provider) as well as another subscription fee to the broadband provider that delivers the video programming through a broadband connection. Q21. How could this OTT development affect future PEG access funding? A21. In spite of the fact that an OTT video program may be delivered to the consumer through the broadband connection that relies on the public-right-of-way (PROW)--the same PROW that cable television does, none of the revenue for the OTT service is subject to gross revenue definitions for the purposes of determining franchise fees or support for PEG access program services. This presents a problem as greater audience market share use these services, and indeed as the broadband and OTT economy grows. Up to the present, cable companies have sought agreements with program providers to insure that broadband viewers using OTT must also be cable subscribers through authenticated subscription services, deemed TV Everywhere. For example, one must be an HBO cable TV subscriber to be able to use HBO Go applications, which are primarily HBO's video programs, on one s phone or home computer. This has slowed the erosion of the cable TV subscriber base, but whether this model will last until next month or for eleven years is uncertain. Therefore, franchising authorities should insist that public benefit, such as PEG access, should be conditioned upon any use of the PROW for video services. Q22. Is there any current development that has the potential of accelerating the collapse of the "TV Everywhere" model? A22. Yes. Of particular interest on this issue is the development of OTT services from competitors such as Dish TV, which is developing an OTT service that would be available on a national basis. Such an entrant would likely force competitors in the cable industry to seek relief from regulators to be able to similarly provide more program services over-the-top with no revenues subject to local or state fees or taxes. Q23. Do you have any knowledge of the status of High Definition, or "HD" Channels

12 that are available for PEG AMOs in Vermont? A23. Yes, I am aware that only one AMO in the State of Vermont currently has an HD channel. VCAM, the public access AMO in Burlington is seen in standard definition on Channel 15 of the basic tiers of both Burlington Telecom and Comcast; however, it simulcasts its programming in HD only on Burlington Telecom's system's Channel 315. An HD channel of their programming was apparently requested of both Burlington Telecom and Comcast; however, only Burlington Telecom has responded positively to VCAM's request. Q24. Do you know of instances where HD PEG Access channels are being required by other local franchising authorities around the US? A24. Yes. Language can be found in several franchise agreements, side letters or MOUs that either trigger the activation of HD PEG access channels when certain conditions have been met, state a date when the need for HD channels shall be discussed, or outright require HD PEG access channels. Q25. Before describing in detail the specifics of this language, please name the franchising authorities and their respective cable operators that have agreed to these HD PEG access channel conditions. A25. Agreements between a local franchising authority and a cable operator regarding provision of HD PEG access channels include the City of Portland, Oregon and Comcast (which also includes an agreement between the City and Portland Community Media); Multnomah County (Oregon) and Comcast; the City of Chicago and RCN; the Borough of Manhattan and Time Warner; and, the Borough of Brooklyn and Cablevision Systems. There are others as well, and although these examples are from major metropolitan areas, that does not detract from the argument that this is an unstoppable transition and that even the smallest providers, such as Burlington Telecom as I just mentioned, have begun to dedicate HD channels for PEG access use. Q26. Please state what the City of Portland, Oregon has arranged with Comcast regarding the provision of HD PEG access channels. A26. The PEG access section, taken as a whole, in the Franchise Agreement for Cable Services between Comcast of Oregon II, Inc. and the City of Portland, Oregon, effective January 1, 2012 [See Wassenaar.1-13], the parties were obviously concerned about how to coordinate the transition from analog to digital, and standard definition to high definition (HD) signals of

13 the PEG access channels on the Basic Tier. The Agreement anticipates that eventually all the Basic Tier channels, including PEG access channels will be HD digital. Q27. How does the Portland-Comcast Agreement handle the PEG Access channel transition from analog standard definition to digital HD definition? A27. It is a staged transition in which each party has to give the other party at least a 120-day notice before any changes are made. The Agreement also allows for periods of time during the transition when PEG access channels might have to be simulcast in two different formats, thus temporarily almost doubling the number of PEG access channels on the subscriber's channel lineup until all the subscribers and the technology has caught up. For example, Section (F) HD Channels Upon Digital Transition (page 8) states that when Comcast no longer offers Basic Service in an analog format, it shall simultaneously carry two (2) of the existing PEG Access Channels in high definition (HD) format, while, in addition, simultaneously carrying the standard digital Access Channels. Q28. Are there other requirements imposed by the City of Portland, Oregon on the cable operator, Comcast, related to this transition? A28. Yes, and those requirements, too, reflect the desire of the City of Portland to make certain that functionalities and expectations of cable subscribers regarding broadcast and commercial channels will also be made available to the PEG access channels. For example, the Agreement clearly and repeatedly states that at each stage of the transition to all HD digital channels Comcast "shall carry all components of the HD format Access Channel Signals provided by the Designated Access Provider including, but not limited to, closed captioning, stereo audio and other elements associated with the Programming." [Ibid, Sections 5.2 (D) and (F)] These same sections also contain safeguards against degradation of the quality of the PEG access channels during these transitions, as well as future-proofing PEG access channels by requiring all parties to sit down to discuss how transitions to even more sophisticated innovations such as 3-D might be handled. Q29. What is contained in the Multnomah County, Oregon franchise agreement that triggers HD PEG Access channels?

14 A29. Because the City of Portland is the county seat of Multnomah County, the franchise agreement drawn up between Comcast and the County and the municipalities in that County, other than Portland, is substantively identical, as well as using the identical section numbering. [See Wassenaar.1-14, Franchise Agreement for Cable Services between Comcast of Illinois/Ohio/Oregon, LLC and The Cities of Fairview, Gresham, Troutdale, Wood Village and Multnomah County, effective January 1, 2012.] Q30. Well then, are there any other salient features about these Agreements with regard to the HD channel transition that you'd like to point out? A30. Yes. These Agreements, in their Sections 5.2 (G), lay out when, in 12-month intervals after the first two HD format Access Channels are activated, the next six HD format PEG Access channels are to be activated, up to a total of eight (8) channels. In Section (G)(4)(a), it is made clear that this activation schedule will only be triggered if and when at least 80% (eighty percent) of the access programming on the SD format channel that has been designated as the first in line to become HD format has been produced by the PEG Access provider in HD format for a three-month period. This 'trigger' language appears to be the result of reasonable and studied negotiation between the parties that balances a responsibility for readiness by the AMO with adequate warning for planning and implementation by the cable operator. Q31. What is the language regarding HD PEG Access channels in the franchise agreement between the City of Chicago and RCN? A31. RCN is a triple-play telecom competitor to Comcast in Chicago, and its franchise renewal agreement, which is actually in the form of a City Ordinance, states the following in Section 18.1, Page 25 (See Wassenaar.1-15, Chicago Franchise Agreement, RCN). The acronym "CAC" is the Chicago Access Corporation, effectively the PEG AMO for the municipality, and "Grantee" is RCN Cable TV of Chicago, Inc. The Grantee will provide CAC channels to subscribers on the Grantee's basic cable offerings or tiers. CAC channels will also be transmitted in High Definition ("HD") during the franchise period at a time and in an order determined by CAC with a minimum of six (6) months notice for the first signal's transmission and a minimum of two (2) months notice for transmission of

15 subsequent channels consistent with the obligations set forth in Section 18.4 of this Agreement. HD resolution will be equivalent to the resolution used in the Grantee's HD tier. The Grantee will continue to carry CAC channels in SD format in addition to HD format as long as there are SD channels in its basic channel lineup. Q32. How has the Borough of Manhattan and Time Warner Cable dealt with HD PEG channels? A32. Time Warner Entertainment Company, L.P. serves Southern Manhattan, and in its Cable Franchise Agreement with the City of New York (See Wassenaar.1-16), it states the following in Section , Page 31: High Definition Access Channel: Upon no less than ninety (90) days written notice from the City to Franchisee, one of the Government/Educational Access Channels being provided by Franchisee pursuant to this Section 8 shall, at the City s option, be provided in high-definition format (with a minimum resolution of 720p or 1080p resolution, the choice of such resolution to be at the City s option, provided such format is being used by Franchisee for at least five other high-definition programming services on the System). If the City is not capable of producing and delivering programming in the selected high definition format by the date described in the preceding sentence, then the obligation of Franchisee to transmit such programming in said format shall be delayed until such capability is achieved. It is interesting that the City of New York has placed such high importance on its PEG access channels that the threshold for Time Warner to provide HD to PEG is to only have a minimum of five (5) other HD channels on its lineup, and that it is the readiness of the City to provide HD signal upon request of Time Warner that triggers the 90-day deadline to deliver. Q33. What are the conditions placed upon Cablevision Systems to provide HD PEG Access channels in the Boroughs of Brooklyn and the Bronx? A33. As Boroughs of the City of New York served by the same cable operator, both franchise agreements for the Borough of Brooklyn and the Borough of the Bronx read identically at Section 8.3 as Section that I just quoted from the franchise agreement between the Borough of Manhattan and Time Warner. I have attached them as Exhibits WASSENAAR.1-17 and WASSENAAR.1-18, respectively.

16 Q34. Given the examples you have just cited from around the country, and based upon your conversations with member AMOs of VAN, what would be your recommended language for HD PEG access channels conditions in this CPG? A34. Because it is my understanding that CVTV and KATV are, like most Vermont AMOs, already producing HD programming with HD production equipment, I would recommend the following condition for the Charter CPG: Charter shall provide its AMOs with PEG access channels in High Definition (capable of supporting up to 1080p or higher resolution), under the following conditions: 1. Charter shall, within 120 days of receiving a reasonable request from an AMO, activate an HD channel for the AMO s use. A request shall be deemed reasonable that provides the following information: a. An expression of readiness to provide HD signal to Charter for testing purposes at least 30 days prior to channel activation; b. the AMO has, or will be achieving in a timely fashion, the ability to acquire, edit and encode for system transmission of locally-produced programming in HD, widescreen format; c. A request meeting the preceding requirements shall be considered adequate to satisfy Rule So long as Charter is providing Basic Tier in SD, PEG Access channels must be included in that tier. 3. The AMOs may provide content in either SD or HD format and it is Charter s responsibility to convert it appropriately into SD or HD. 4. Any request from an AMO for a fourth or more SD or HD PEG Access channels shall follow the Rule procedure.

17 Q35. You cited examples of how local franchising authorities were concerned about PEG Access channel signal quality. Do you have any recommendation about this? A35. Yes, but the concern about signal quality does not only apply to new HD channels. Language should be general, yet specific enough so that any PEG channel provided in any platform and in HD or in any future technology, should be protected against falling behind in its signal quality when compared to neighboring channels or video services. Here is language I recommend: As part of any digital or HD transition, PEG access channels must be viewable by the subscriber under the following conditions: a. Any required set-top box for reception of a Basic Tier PEG Access channel, such as but not limited to a Digital QAM, shall be provided and maintained at no charge to the subscriber; b. A menu application that requires subscriber navigation to a digital PEG access channel shall not be permitted; c. PEG Access channels of each AMO shall be grouped in such a way that they are simple to find and view by the subscriber. d. Pursuant to the previous Condition (HD, above), Charter shall provide its AMOs with PEG access channels in High Definition capable of 1080p or higher resolution. d. Charter shall carry all components of an HD-formatted PEG Access channel signal provided by the AMO including, but not limited to, closed captioning, stereo audio and other elements associated with the Programming. e. PEG AMOs shall be responsible for providing the PEG Access channel signal in an HD format to the point of demarcation at the designated point of origination for the Access Channel. f. Charter shall transport and distribute the PEG Access signal without degradation. Consistent with this requirement, Charter shall provide all necessary equipment outside the point of demarcation at the AMO s origination point, at its Headend and throughout its distribution system to deliver the Access Channel(s) in the HD format to Subscribers. g. Charter shall not discriminate against PEG Access Channels with respect to the functionality, signal quality, and features from those of the local Broadcast HD Channels carried on the Cable System. h. With respect to signal quality, Charter shall not be required to carry a PEG Access channel in a higher quality format than that of the channel signal delivered to Charter, but rather shall distribute the PEG Access channel signal without degradation.

18 Q36. Does this conclude your testimony? A36. Yes. Thank you for the opportunity to testify on behalf of public, educational and governmental access in Vermont.