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February 24, 2009

RETN / Comcast Ink Funding Deal

The growing battle between telecom giant Comcast and the small non-profit Regional Educational Technology Network (RETN) is cooling off — for now.

The two sides, yesterday, successfully negotiated in principle a short-term funding agreement. They hope to have a signed agreement by Friday.

As first reported in “Fair Game” three weeks ago, Comcast has criticized RETN and other providers of Public Educational and Governmental (PEG) services before the PSB and in the public arena. Comcast claims that RETN has mismanaged and misspent the money Comcast is required to give back to communities for the right to use the public airwaves. State and federal law enables Vermont to make cable companies use 5 percent of their gross revenues to finance this kind of programming.

RETN and other PEG channels claim Comcast is trying to find ways to cut its operating costs, and hopes to wriggle out from PEG funding requirements by manufacturing problems. Comcast has explicitly stated that it does not believe PEG channels should spend money on websites and other emerging technology to deliver services to residents.

Yesterday's deal allows RETN to continue providing educational access services and programming while the two sides resolve Comcast's complaints about RETN. Comcast brought has petitioned the state Public Service Board, trying to back out of its two contracts with RETN.

The exact wording of the stipulated agreement has not been finalized. However, RETN officials said both parties have agreed to proceed with an “agreed-upon procedures” report (rather than an audit) performed by an independent accounting firm. RETN also agreed to several new financial reporting measures and to temporarily grant Comcast approval authority over certain capital expenditures.

“We firmly believe that decisions about how our community’s money is spent should be made by our community-based board. However, we have agreed to these significant, but temporary concessions to ensure the important services we provide the community continue uninterrupted while this process moves forward,” said RETN spokesperson, Doug Dunbebin. RETN has always been OK with having a financial review, but it was reticent to give up control of spending to Comcast.

Under the agreement, Dunbebin said, RETN will have to get Comcast's approval before making more than $4,000 in capital expenditures. RETN had originally asked that figure be $7,000, while Comcast wanted $2,000.

Since the dispute became public several weeks ago, some school boards have passed resolutions, residents have written letters, and others have offered their support to RETN, including more than 130 members of the Vermont Youth Orchestra who signed a petition.

"This clearly affirms the value the community places on our service," said Bob Owens, president of RETN's board of directors. "We are doing everything we can to ensure our community's future educational access needs are fully met and fully funded."

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