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THE EOCCARDI::J LAw FIRM
ATIOANEYS AT LAW
,... O. _0)( USOOt
SAN JOSl:. CALIFORNIA IUU.OOOl
ATTOR.."iEYS FOR
Plaintiffs
.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CALIFORNIA
PREFERRED COMMUNICATION, INC., ) NO: 83-5846 CBM (Bx)
a California corporation, )
}
Plaintiff }
)
v } ANSHERS TO INTERROGATORIES
)
C:TY OF LOS ANGELES, CALIFORNIA, )
a municipal corporation, et al., )
)
Defendants. }
--------------------------------)
PROPOUNDING PARTY: CITY OF LOS ANGELES, a municipal
corporation, and DEPARTMENT OF WATER AND
?OwLR, a municipal utility
R:::SPONDING PA.RTY: PREFERRED INC., a California
corporation
SET NUMBER: ONE
PRELIMINARY
It should be noted that the plaintiff have not fully
completed investigation of the facts relating to this case, have
not comp12ted oiscovery in this action, and has not completed
prep r 2. :. ion for .t. ria1 . All of the answers contained herein are
based only upon such inforwat.:ii:,!1 anc -:<8cu;:-.e:1.ts ;;!;ich are
presently available to and know71 to p2aintiff:.:, and
ANSWERS TO
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disclose only those contentions which presently occur to
plaintiffs. It is anticipated that further discovery,
independent investigation, legal research and analysis will
su?ply additional facts, add meaning to the known facts, as well
as establish entirely new factual conclusions and legal
contentions, all of which may lead to substantial additions to,
changes in and variations from the contentions herein set forth.
The following interrogatory responses are given without
prejudice to plaintiffs' right to produce evidence to any
subsequently discovered fact or facts which plaintiff may later
recall. Plaintiffs accordingly reserve the right to chan;e any
a nd a 11 an s w e r 5 her e inasadd i t iona 1 fa c t s are as c e r t a i ned,
analyses are made, legal research is completed and contentions
are made. The answers contained herein are made in a goed faith
effort to supply as much factual information and as much specifi
cation of legal contentions as is presently known, but should in
no way be to the prejudice of plaintiffs in relation to further
discovery, research or analysis. Additionally, whenever in order
to answer an interrogatory it is necessary to make a compilation,
abstract, audit or summary of records and such a doculnent is
equally available to you, does not exist or is not in the posses
sion or control of the plaintiffs, and the inquiry is answered by
referring you to certain records with persons listed on an
attached eXhibit, those records are identified so that you can
subpoena them through any copying service of your choice and
thereby obtain the information you desire.
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of .... ____- ..
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INTERROGATORY NO.1:
State when, where anj by whom Preferred was formed.
ANSHER:
i
Preferred was formed in July, 1983, in the State of
California by Clinton and Carl Galloway.
INTERROGATORY NO.2:
State whether Preferred has ever constructed, owned or
operated a cable television system or otherwise been involved in
ihe cable television business. If so, describe such activity or
activities.
ANSWER:
Since 1933 Preferred has continually sought to exercise
its First Amen6ment to electronically publish using cable
television systems. So far our efforts have been frustrated by
the City of Los Ange les and '..;e have not been ab Ie to cons tru ct,
own or operate a system.
INTERROGATORY 3:
State whether Preferred has ever constructed, owned or
operated a system, station or facility for the production,
transmission, retransmission or distribution of television
signals other than a cable television system. If so, describe
such activity or activities.
".NS;';E R:
No.
INTERROGATORY ;4:
Identify each person who has ever served as an officer
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od director of Preferred. For each such person:
A.. State the cbtes he/she was an officer of director
of Preferrc;d .
B. Provide his/her current address.
C. Describe his/her experience and background in the
cable television industry or other business or professional
ex,?erience.
ANSWER:
Carl Galloway, Director (Since 1983) 6664 Lakeridge
Rd., Hollywood, Ca 90068; Carl Galloway is a licensed Medical
Doctor and has practiced in this re-;ion for approximately ten
years. Dr. Galloway's experience with electronics dates back to
his teenage days Dr. Galloway obtained his first communications
license at approximately age 16. Since that time Or. Galloway
has continually maintained his 1n .... eres .... 1n the commun ica ti ons
'... ..'
industry. In college he work at the campus radio station.
Clinton Galloway, Director, President (Since 1983) 4139
Via Marina, Marina del Rey, Ca 92092; Clinton Galloway, C.F.A.,
is a licensed Certi:ied Public }.. ccountant. Mr. Galloway is also
a licensed securities broker and securities principal. Mr.
Galloway has previou s ly been eni?loyed by Coope r s & Lybr and, one
of the "Big 8" accounting firms. He has al so been employed by
two dif:erent members of the New York Stock Exchange. Mr.
has also produced financial programs which were shown on
both bro cast television and cable television.
Perry ?arks, Director (.Sir.ce 1983) 1325 !.'iasselin St.,
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Los Angeles, Calif; Mr. Parks has been active in community
affairs in the South Central area of Los A.ngeles for more than
forty years. Mr. Parks was formerly the President of Parks
International Import/Export. Mr Parks has served as a consultant
and assistant to several federal and state elected officials.
INTERROGATORY NO 5:
Identify each person who has ever been a shareholder of
Preferred. For each such person:
A State the dates during which he/she was a
shareholder and the of shares held.
B. Provide his/her current address.
.l\N Sf;' ER:
See answer to i4
I NTS RROG ATORY NO.6:
Identify each person who is or who has been a
representative, agent, employee, or independent contractor for
Preferred. For each such person:
A. Provide the person's job title and a description of
the duties performed.
B. State the dates during which he/she held such
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C. Provide his/her current address.
ANSWER:
Clinton Galloway, President (Since 1983).
NO.7:
Identify any real property that Preferred owns, leases
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or rents. For each such property, state the location and
descriDe the property.
ANSWER:
one.
NO.8:
Identify any personal property that Preferred owns,
leases or rents. Descri the general nature, location and value
of such personal property.
A.NSWER:
None.
INTERROGATORY NO.9:
Do you contend that competition between two or more
caDle television systems is economically feasible in the South
Central District? If so:
?. State how many cable you contend could
successfully in the South Central District.
B. State whether you contend that competition by way
of overbuild is feasible; that is, .... hether two or ::lore companies
can corcpete by physically the it systems to compete
for and serve the same potential subscribers.
C. State each and every fact that supports your
contentions.
D.. Identify all documents including all market studies
and economic studies that support such contentions.
Yes.
a. At least two.
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b. Yes.
c. The area is large enough, is concentrated
geographically and has the potential market of socio-economic
groups which seek their news and entertainment at home via
televisions.
d. The marke't studies and economic studies have not
been completed.
INTERROGATORY NO. 10:
Do you contend that the utility poles available for use
in cons tru ct ing a cab television system in the South Central
District have surplus space that will accomrr.odate more than one
cable television operator? If so:
A. State how many cable television operators you
contend could be a c c o ~ ~ o d a t e d on such utility poles in the South
Central District.
B. Identify what alterations or mOdifications to the
poles i:1 the South Central District, if any, ,.;ould be necessary
to a c c o ~ ~ o d a t e more than one cable television operator.
C. 'State each and every fact that sup?orts your
contentions.
D. Identify all documents that support your
contentions.
Yes.
a. At least two.
b. The amount of alteration or modification would vary
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with each pole and is not determinable at this time.
c. The existing poles by visual inspection appear to
have sufficient space available for at least two and perhaps as
many as four additional cables.
d. Discovery is just beginning and we do not yet have
the documents to identify. However, all correspondence provided
by defendant to date from Pacific Telephone Co. would indicate no
INTERROGATORY NO. 11:
Identify every communication, written or oral, that
Preferred has had with any person or entity with respect to pole
attachments regarding the South Central District.

Oral with Pacific Telephone on July II,
1983, regarding pole attachments. Oral communication with
Department of Water and Power of the City of Los Angeles on July
II, 1983.
NO. 12: Identify all licenses, permits
and other similar documents, s.tate or local, that Preferred has
sought or obtained with respect to the construction or operation
of a cable television system.
Business license permit obtained from the City of Los
Angeles in July, 1983.
Sought license to operate a cable television company
from the Department of Transportation in July, 1983.
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INTERROGATORY NO. 13:
Describe with particularity the physical and technical
features of the cable television system Preferred allegedly
intends to construct and operate in the South Central District.
Include 1n the Jescri?tion the nUo,ber of aerial and underground
plant miles, the numbers and location of hubs and headends, the
number of channels, the se03raphical boundar i2s, the types of
ar:1plifiers and other equip;nent to be used, and the anticipated
construction time.
A. Identify the persons responsible for planning the
phy s ical and te chn iC31 f ea tur es of the sy s tern and prov ide the ir
current addresses.
3. Identify all documents that describe or discuss the
physical and technical features of the system.
ANSWER:
Approximately 760 plant miles of which approximately 86
will be underground with the balance overground. One headend and
three service hubs. Eeadend and hubs to locate in or near the
City of Los Angeles. 54 Channels to serve the South Central
'franchise area identified as area 10K" in City of Los Angeles
cable television maps. THe types of equipment to be used may
vary depending upon the state of the art at such time as
? ref err e dis a 11 owed topu r sue its Fir s t ATIl endmen t righ t s t 0
publish via cable television in the City of Los Angeles. The
length of t i ~ e necessary for construction may vary depending upon
t!le cooperation of the City of Los Angeles and its co
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conspirators.
a. Engineering assistance was provided by COITu'1luniCom,
a California corporation.
b. Original documents were submitted in 1981 in
accordance with bid requirements. New have not yet
been drafted and will not be until a starting oate for
construction is estab1isheo, at which time plaintiffs will put
together the then-current state of the art technical features to
be incorporateo.
INTERROGATORY NO. 14:
State the anticipateo capital costs, operating costs,
non-operating costs, anticipated revenues, ana the sources of
such revenues, for the cable television system Preferred
allegedly intends to construct and operate in the South Central
District from the of construction through the first
five years of operation.
A. Identify all documents that describe or -discuss
such anticipated costs, expenditures and revenues and the basis
for each such figure.

At the time of the original bidding by Universal Cable
Systems, Ltd., the details of cost were included in the bids.
Due to the cha:.ges in state of the art and in costs since that
time, the overall costs have increased. With the vagaries of
time delays of litigation no time for the beginning of
construction of a cable system has been yet aetermined. ;.ihen a
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starting date has been established, plaintiff will determine then
the construction and operating costs, revenues, etc. based on
current information.
NO. 15:
Identify and describe any market1n9, financial, market
?enetration, audience or demographic studies or analyses that
Preferred has undertaken, or ordered with respect to
the cable television system it allegedly intends to construct and
operate in the South Central District.
A. Identify the pers::Jns who prepared each such study
or analysis and the date of preparation.
B. Identify all documents that describe such studies
or analyses.
Preferred has conducted numerous informal
surveys of the market area by orally corrmunicating with citizens
of the South area. Formal surveys will be done before
construction.
INTERROGATORY NO 16:
Describe the method and source of financing (i.e., debt
and equity participation) that Preferred intends to use to
finance the construction and o?eration of a cable television
in the South Central District. To the extent such methods
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or sour=es of financing have changed over time, identify the \..lme
period each was in effect.
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Preferred intendS to use a co:nbination of equity and
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debt financing to construct and operate a cable television system
in the South Central area. ?reEerred has had oral communications
with hundreds of individuals who live inside and outside of the
South Central franchise area.
I tis ant i c i pat edt hat the e g u i t Y fin a n c ing will be
provided by investors from inside and outside the South
franchise area.
It is anticipated that the debt financing will be
provided by institutional sources, including Farrick, Ltd., who
has agreed to provide $24 million by letter of May 7, 1982.
ISTERROGATORY
Identify each person that you have contacted with
regard to ?roviding equity financing to Preferred or any related
entity for the construction and operation of a cable television
system in the South Central District. For each such person:
A. Identify each written 0: oral cO::'J;lunication, the
date on which it occurred, and aescribe the substance of the
cor.","':!u ni ca ti on.
B. State whether each pe!:'son agreed to provide
equity financing and, if so, t amount, and conditions, and
if not, the reasons why not.
a. Preferred has had numerous oral communications with
?ersons who identified ther..selves as having an interest in
investing in a cable television system in the South Central area.
Since most were informal, there exists no record .
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b. Preferred will not seek firm until such
time as they have resolved the matters to be settled by the
pending litigation.
INTERROGATORY
Identify each/person you have contacted with regard to
providing debt financing to Preferred for the construction and
operation of a cable television system in the South Central
District. For each such person:
A Ide n t i f yeac h w r itte nor 0 r a 1 c 0 U n i cat ion, the
date on which it occurred, and descri!Je the substance of the
communication.
B. State whether each such person agreed to provide
financing, and if so, the amount, terms and conditions of such
financing, ana, if not, the reasons why not.
P.NSHER:
a. Preferred has had oral communications with various
organizations and individuals on an informal basis regarding the
potential for debt financing. Since :nost corr... llunications were
infor:-nal, there exists no record, other than the 5/7/82 letters
from Farrick, Ltd.
b. Preferred will not seek firm until such
tii:le as they have resolved the matters to be settled by the
pending litigation.
INTERR'JGP.T'JRY
Identify each person that you have contacted with
regard to providing any other form of financing or financial
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assistance to Preferred regard to the South Central District
(e:-:cluding t.hose contact.s with regard to equity and debt
financinj identified in the to Interrogatories 17 and 18
above). For each such person:
A. Identify each or oral communication, the
.1ate on which it occurred, and describe the s'Jbstance of the
communication.
B. Describe the form of financing or financial
assistance suggested, discussed or considered.
c . S tat e whe the reac h s u c h pe r son a 9 r e edt0 prov ide
any form of fina.:1cing or fina.:1cial assistance a.:1d, if so, the
amount, terms and conditions, and, if not, why not:
Not applicable.
Identify each person or entity by name, address and
telephone possesses an ownership interest, contingent
or otherwise, in ?referred Communications, Inc. !-.s of the
a::s.... er to this' Inte==ogatory state the amount i.:1 dollars of the
ownership interest, explain the nature of the oW.:1ership i.:1terest
and explain the details of any contingent interest.
Continge.:1t interest.
Marshall Reading, H.D., undetermined at this time with
the interest being the equivalent of 20,000 shares of the
common stock of Preferred. Current address and telephone number
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unknown.
Russell and Donna Grisanti, 3801 Crestwood Dr., Tucson,
."A.r izona. Contingent interest of up to 7,00 shares of the common
stock of Preferred.
Clinton Galloway, 27,500 shares.
Car13a 11 0 way, 27, 5 0 a shares.
Perry Parks, Sr., 8,000 shares.
INTERRO::;';TORY 21:
Has Preferred ever originated or produced any
programming for transmission over a cable television system? If
so, describe such prograrruning and identify the persons involved
in the origination or production of such programming.
ANSWER:
No.
INTERROGATORY NO.22:
State whether Preferred has ever owned, leased, rented
or otherwise had access to facilities for the production of
that can be transmittec through a cable television
system? If so; identify each such facility by name and location,
and describe the nature of Preferred's access to such facilities.

Preferred has had access. to video tape recording
equipment from equipment ownec by directors of Preferred and
their associates.
INTERROGATORY NO. 23:
State whether Preferred intends to originate or produce
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programing for the cable television system it alleg 11' intends
t.o constru;::t and operate in the South Central District. I f so,
describe all steps Preferre0 has taken to plan to orisinate such
programming. Identify all persons contacted with r ard thereto,
and specify all other actions that Preferred has taken with
respect to the original of such programming.
ANSWER:
Yes. Planning for programming has not yet been done
because it is premature. With the vagaries and time delays of
litigation no time for the beginning of construction of a cable
system has been yet determined. Since it takes years to
construct the cable system, the specifics of will not
undertaken until t time of broadcasting is closer at hand.
INTERROGATORY NO. 24:
Set forth each provision of the City's Cable Television
Ordinance and each provision, if any, of the Cable Communications
Policy Act of 1984 t Preferred contends is unconstitutional or
otherwise unlawful, and state separately for each such provision
the basis for such contention.
The entire Ordinance aild Act are in violation of
plaintif='s First Amendment rights b that they purport '=.0 give
City a right to grailt an exclusive franchise for cable TV for
any section of t city. A.dditionally, it violates plaintiff's
rights by purporting to monitor and edit plaintiff's
to provide free services to the politicians
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of Los Angles, and requiring a periodic re-franchising so as to
retain political control over plaintiff's and
editorial comment.
NO. 25: State the amount of damages that
Preferred contends it is entitled to in its litigation. Set
forth with particularity the theory or :::easure of dar.lages, the
method of computation and types of damages Preferred contends it
is entitled to.
A. Identify all persons with knowledge of the theory,
me3.sure, computatiO:1 or type of da:nages that Preferred contends
it 1S entitled to and describe the substa:1ce of each such
perso:1's knowledge.
3. Provide current addresses for all such persons.
c. Identify all documents that refer to or relate to
the measure or cornputatio:1 of the damages that Preferred contends
it is entitled to.
S'i-i""ER: The total amount of da::1ages have not yet bee:1
ascertained but ",'ill cO:1sist of the loss of profits from being
precluded froin the cable TV market, the additio:1al expense
involved in the higher cost of construction of a system this much
later, a:1d ca::1ages fo;: violatio:1 of constitutional rights. The
expert witnesses defendant is seeking have not yet been
determi:1ed. Docu:ne:1ts are just now bei:1g provided by defendants
so plaintiff can:1ot yet identify them with particularity.
ISTSRRC(;ATORY NO. 26:
Identify each person whom Preferred intends to call as
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a witness at trial and for each such person ?referred intends to
call as an expert witness state:
A. The subject matter on which the expert is expected
to testify;
B. The substance of the facts and opinions to ';,'hich
the expert is expected to testify; and
C. A of the grounds for each opinion.
D. A resume and/or other information to establish the
witness's expert credentials.
ANSWER:
Since discovery is just beginning, plaintiff has not at
this time determined who the witnesses will be.
May 15, 1987
BY: ROBERT H. BORN
TO
18
Y E R I FIe A T ION (446, 2015.5. C.c.P.)
STA TE OF CALIFORNIA
COUNTY OF SANTA CLARA
am the

in the. above entitled action; have read the foregoing
to Interroaatories
and know the contents thereof; and I certify (or ceclare) that the same is true of my
own knowledge, except those matters which are therein stated upon my info:-mation
or belief, and those matters I believe to be true.
I certIfy (or declare) under penalty of perj'Jry that the foregoing is true
and correct.
Executed on 11, 1987

Callfornia.
(date) (place)
Carl Signature 0
Gallov,'ay
;'.J',\S'i';::::?,S TO I:.JTERROGATORIES
V E R I FIe A T ION (446, 2015.5. c.c.P.)
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
I am the laintiff
In the above entitled action; have read the foregoing
to Interrogatories
and know the contents thereof; and I certify (or declare) that the same is true of my
own knowledge, except those matters which are therein stated upon my Information
or belief, and those matters I believe to true.
)
certify (or declare) uncer penalty of perjury that the foregoing is true
and correct.
on 1987 , at _<;__ ________, CalIf or nia. Execu:ed May 11,
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(Gate) (place)
Signature
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I, the undersigned, declare as follows:
I am now and at all times herein mentioned have been a
citizen of the United States, over the age of eighteen years, a
resident of Santa Clara County, California, and not a party to
the action cause; that my business is 111 h'est
St. John Street, San Jose, California; that I served a copy of
the attached Answers to Interrogatories
by placing said copy in an envelope addressed to:
Edward Perez
Asistant City Attorney
200 North Main St. #1800
Los Angeles, Calif 90012
which envelope was then sealed and, with postage !ully prepaid
thereon, was on May 21, 1987 deposited in the United
States mail at San Jose, Californiai that there is delivery
service by Unit States mail at the place so addressed, or
there is regular by r:lail be,twee:1. the place of mail
ing and the place so address
I declare under penalty of perjury that fo:::-egoing
is true and co:::-:::-ect. Executed on May 21, 1987
at San Jose, California.
Carol
ANSWERS TO INTERROGATORIES