LINDA LINGLE LAWRENCE M.

REIFURTH
GOVERNOR DIRECTOR

CLYDE S. SONOBE
JAMES R. AIONA, JR. CABLE TELEVIS€ON ADMINISTRATOR
LT. GOVERNOR

STATE OF HAWAII
CABLE TELEVISION DIVISION
DEPARTMENT OF COMMERCE & CONSUMER AFFAIRS
335 MERCHANT STREET
P. 0, BOX 541
HONOLULU, HAWAII 96809
(808) 586-2620
FAX (808) 586-2625

VIA FACSIMILE and U.S. Mail

January 2, 2009

The Honorable Les Ihara, Jr.

The Senate
Hawaii State Capitol
415 South Beretania Street, Room 220
Honolulu, HI 96813

Dear Senator Ihara:

Re: RFP Provision Re Free Webcast Archives by Olelo for Legislature

This is in response to your request that the Department provide you the basis for its
December 23, 2008 email to you on DCCA's contract with Olelo regarding Olelo's charges for
fees for P, E, and/or G services. A copy of my December 23, 2008 email is attached for your
reference.

Government Access Services

Hawaii Administrative Rules ("HAR") 16-131-34, cable operators are required to

maintain at least one specially designated channel for government use. Pursuant to
Decision and Order ("D&O") No.154, as amended, Time Warner Entertainment
Company L.P. ("TWE") is required to designate and provide five (5) full-time access
channels to Oleic). By Letter Order dated December 31, 2008, TWE is also required to
provide a sixth (6 th) access channel to Olelo on a temporary basis to June 30, 2009.
Included in these six (6) access channels are the channel for government use and two
(2) channels dedicated to educational programming by the Department of Education
and the University of Hawaii. Other than with the exception of the educational
channels, DCCA has allowed Olelo discretion in how it cablecasts programming on the
Senator Les Ihara, Jr.
January 2, 2009
Page 2

• Olelo is responsible for the provision of facilities and equipment for the
production of programming to be cablecast on PEG access channels (which
would include government type programming). ¶B.2.

• Olelo is responsible to train government organizations and entities in the use

of access production facilities and equipment. ¶B.3.

• Olelo is responsible for the provision of support services to the users of PEG
access facilities and equipment (which would include government
organizations and entities). ¶B.5.

The free pilot proposed by Olelo as well as the recording of meetings for later
cablecast on PEG channels are services that Olelo could provide to government entities
as part of its current contract with DCCA, and at no cost to the government entities.

Olelo's Receipt of Access Funding

Under the December 24, 1998 contract, as amended, ¶D, Olelo receives and
holds amounts paid by TWE for support of PEG access as required by the Department.
Pursuant to D&O No. 154, as amended by D&O No. 261, the access operating fee
"shall be used for public, educational, and governmental ("PEG" or "Access") uses and
for such other public purposes as shall be designated by the Director." [underlined for
emphasis]. In exchange for access fees and capital fund payments from Oceanic,
Olelo agreed in ¶G to perform all services, duties, responsibilities and obligations
required under the DCCA contract.

Basis for Olelo to Charge Fees for PEG access services

Although the contract is silent on whether Olelo is allowed or prohibited from

charging fees for its services, DCCA has long contended both publicly and privately,
that Olelo/PEGs should not charge users for the PEG access services provided (with
the exception of nominal fees for workshops).

Olelo was created to manage the PEG access finances and to operate the PEG
facilities, channels and other resources for the island of Oahu. Olelo agreed to perform
these services under the DCCA contract in exchange for payment of the access fees
and capital fund payments from Oceanic. It is DCCA's position that Olelo should not
Senator Les Ihara, Jr.
January 2, 2009
Page 3

companies could complain that PEG organizations have an unfair competitive

advantage over private companies since PEGs have acquired equipment, facilities and
staffing through government directed funding.

The 2004 DCCA PEG Access Plan acknowledged that PEG access
organizations have been involved in activities that some have deemed non-traditional,
such as, responding to local government RFPs for video and captioning services which
results in competition with private organizations. Historically, DCCA has allowed PEG
access organizations discretion when responding to RFPs issued by County
governments and the Legislature, and under the PEG Plan, DCCA continued this
policy, despite concerns raised by a private contractor that PEGs have an inherent
unfair advantage since they are publicly funded.

Please call me if you have further questions or require further information on this
matter. Thank you.

Sincerely,

( 7&X126
Clyde S. Sonobe
Cable Television Administrator

Enclosures

c: Lawrence M. Reifurth,
Kealii Lopez