COMMUNICATIONS SUPPORT GROUP, INC. (JOHN RISK) 1

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Proposal Letter City of Santa Ana Communications Support Group, Inc. Project 1 — Time Warner Due -Diligence Review PEG fees 2008-2010. CSG proposes to assist the City in a comprehensive review of PEG fee accounting by Time Warner. Under review specifically is whether the original $450,000 PEG fee grant was amortized by the company and whether Time Warner owes to the City additional PEG fees pursuant to the 2005 Franchise Agreement and the 2008 PEG/DIVCA Ordinance. Additionally, the project will seek Time Warner's explanation for why PEG fees have not been paid to date. CSG will also review Time Warner's PEG fee calculation should Time Warner remit to the City a PEG fee for calendar year 2010 (expected along with franchise fee payments on or about February 15, 2011) In order to complete this review, CSG will assist the City in requesting information and other accounting support documents from Time Warner dating back to January 1, 2008 as allowed under DIVCA (three years), and dating back to January 1, 2006 (five years under the former franchise agreement — see page 27-28 Section 9.7 Right to Audit). Additionally, CSG will assist the City Attorney in reviewing the critical dates stipulated by the Digital Video Infrastructure and Competition Act (DIVCA) in determining the exact timing that the City's 2005 Cable Television Agreement Exhibit F(B)(7) PEG Capital Support Payment provisions apply and when the provisions of the City's PEG Ordinance and DIVCA's 1% PEG fee provisions apply. CSG will also be available to assist the City in determining a response to Time Warner's recent correspondence regarding state franchise fees as an off -set against local franchise fees. CSG will draft correspondence securing the City's rights to review franchise fees and PEG fees for the three year period beginning January 1, 2008 and ending December 31, 2010. CSG will deliver the audit review letter to Time Warner before the deadline of February 14, 2011. Delivery will be accomplished by email, certified mail and 1st class U.S. mail with a certificate of mailing. CSG will request specific accounting documents showing subscriber billing details for all months of billing system reports maintained by the company's third -party billing system company. CSG will also obtain copies of records showing Time Warner's specific calculations for franchise fees and PEG fees (quarterly franchise fee worksheets) in order to: a. Review Time Warner's internal controls and systems and procedures for accounting for gross revenues associated with Franchise fees and PEG fees. We will identify the various types of revenue recorded by Time Warner. ©2011 Communications Support Group, Inc. Page 3 of 8