Responding to petitions filed by local franchise authorities and public interest groups, AT&T and Comcast told the FCC that their respective methods of delivering public, educational and governmental (PEG) channels to video service customers comply fully with FCC rules and with federal law. Filed by the City of Lansing, Michigan, the City of Dearborn, Michigan and a group of 14 organizations led by the Alliance for Community Media (ACM), the petitions seek amendment and/or clarification of the FCC’s PEG channel carriage rules to require AT&T, Comcast and other multichannel video program distributors to carry PEG channels within the basic service tier and to treat PEG channels “equally with other basic service tier channels.” The proceeding has generated more than 500 comments with heavy opposition emanating from key players throughout the cable industry. At issue is AT&T’s practice of requiring U-Verse network subscribers to access PEG channels through special PEG equipment that also requires subscribers to select their market and community. The City of Dearborn—which is embroiled in a legal dispute with Comcast over the shifting of PEG channels to the digital tier—has also asked the FCC to rule on the question of whether digitized PEG channels can be considered part of the basic service tier if special equipment is required to view those channels. Arguing that “AT&T is not a cable operator providing cable,” AT&T told the FCC that its IPTV-based U-Verse service “is not subject to any legacy PEG requirements.” Nevertheless, AT&T said that, even if its U-Verse service was subject to the PEG rules, it is in “full compliance with federal law . . . because its PEG product is available to all subscribers as part of its most basic tier of programming.” AT&T further stressed that “petitioners’ narrow focus on current technical issues with AT&T’s PEG product” overlooks advantages over traditional PEG programming “that would be sacrificed if AT&T were forced to redesign its innovative network to accommodate petitioners’ demands.” Denying that it has targeted PEG channels for unfair treatment, Comcast explained that it merely moved the channels in question “from random and scattered analog locations to a neighborhood of consecutive and technically superior digital PEG channels” and that such an approach is “entirely consistent with the Communications Act and Commission rules.”