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Gwen Harvey -The 1235 story... I was asked to summarize my findings Page 2 <br />After TW opined that they were under NO obligation to supply this <br />information, 20+ NC communities issued a Rate Order which denied TW's <br />ability to collect the 1235 upgrade fee and ordered the production of <br />the financial accounting related to the network upgrade. <br />Meanwhile, I began performing some calculations of my own and determined <br />that TW had over recovered (2x, 3x and 4x times) their original upgrade <br />investment. TW continued to say that they were following the rate rules. <br />One NC community engaged their Congressman and his office convened a <br />meeting between TW, the city and myself. It was during this meeting, <br />pursuant to direct questioning, and in a complete moment of candor, that <br />a TW spokes person admitted that TW simply kept the Social Contract <br />upgrade revenues, and did not apply the revenue against the cost of the <br />total upgrade, but instead treated the Social Contract upgrade revenues <br />as 'profit.' The room became silent and the Congressman asked, given <br />this information, what course of action did the City wish to pursue? <br />The City replied that it wanted TW to apply the Social Contract revenues <br />to the total network upgrade cost and recalculate the 1235 recovery <br />fee.. TW's chief spokes person, Gary Matz, declined to perform any such <br />adjustment, <br />The misapplication of the Social Contract revenues by TW represents an <br />unjust enrichment to the Company of -$1.4 billion. <br />So now the questions <br />1 Is this the source of the money TW is using to purchase <br />Adelphia? or pay dividends to shareholders? <br />2 Assuming the TW/Adelphia transaction is completed and a new <br />company is formed (as planned), what responsibility will the new entity <br />have for returning the Social Contract revenues to its customers? (I <br />believe NONE is the correct response,) <br />3 With knowledge of the AOL accounting 'irregularities' and the <br />network upgrade accounting 'irregularities,' what LFA could in good <br />conscience would transfer an Adelphia franchise to TW knowing that TW <br />knowingly misapplied revenues and has hoodwinked its customers into <br />paying 2x, 3x or 4x times for the 'network upgrade'. <br />Where do we go from here? Certainly, the magnitude of this indiscretion <br />constitutes awake-up' call to Congress, which must become involved in <br />re-regulating the cable industry. Alternatively, the Justice Department <br />can break up the cable companies into separate signal transportation and <br />content providers, much like AT&T was dissolved into regional local <br />companies and a single long distance company 25 years ago, <br />bob <br />PS. I do not believe this phenomenon is isolated to Time Warner Cable <br />alone. <br />Robert F.Sepe <br />Action Audits, LLC <br />