Panel votes to pursue suit against Adelphia

County claims cable giant owes more than $200,000

March 28, 2004|By Hanah Cho | Hanah Cho,SUN STAFF

For three years, Carroll County's cable commission has been trying to resolve disagreements over unpaid franchise fees and other issues with Adelphia Communications Corp.

The commission has had enough.

Commission members last week voted to pursue legal action against the cable company for breach of contract. They say Adelphia is refusing to renegotiate its 10-year franchise agreement with the county and allow a technical audit of the cable system.

"From the first meeting, we've been trying to get Adelphia to abide by the contract," said Ken Decker, chairman of the Carroll County Cable Regulatory Commission. "It's been a culmination of three years."

Kristy Hall, director of governmental affairs for Adelphia's central region, said the cable provider has been working diligently with the commission to settle concerns.

"We understand the commission has to look at all its options and take a course of action it believes is best," Hall said. "We still are hopeful that we will resolve the issues surrounding the conflict in Carroll County."

Adelphia, the nation's fifth-largest cable provider, entered into a franchise agreement to provide cable television service in the county in 2000. The company, which filed for Chapter 11 bankruptcy protection in June 2002, serves about 20,000 Carroll County customers.

Under the franchise agreement, the county and its municipalities, except Manchester, receive 5 percent of the fees that subscribers pay for cable television. The county uses the money to pay for local-access television.

But an independent audit ordered by the cable commission found that Adelphia owes Carroll County more than $200,000 in unpaid franchise fees accrued over the past two years.

For Adelphia, the amount in question is "significantly less than $200,000," Hall said, adding that company representatives are scheduled to meet with the commission this week to discuss the issue.

The latest scuffle involves disagreements over whether the commission can request an audit of the cable provider's technical system and enter into contract renegotiations, said Robert Wack, vice chairman of the cable commission.

Any significant changes in the Federal Communications Commission rules should trigger renegotiations, according to the franchise agreement, Wack said.

In 2002, the FCC ruled that cable-modem Internet access is not a telecommunications service, exempting Adelphia's Internet-service revenues from the franchise agreement. That decision, which reduced revenues to the county, constitutes a need for a new contract, Wack argued.

Hall declined to discuss the specifics of the commission's concerns, but she added, "these are very complex issues, and Adelphia takes that pretty seriously."

"We're working toward resolution and believe we can," she said.

Adelphia filed for bankruptcy in 2002 after revealing that billions of dollars were borrowed - off the books - by the family of founder John J. Rigas, who is on trial for fraud.

The county cable commission will determine whether it needs to go to bankruptcy court first before its lawyers file a complaint, which could come as early as May, Decker said.

In the meantime, customers in Carroll County who subscribe to Adelphia's classic cable service will see a $2 rate increase to $45.95 a month, beginning in May. Digital cable subscribers, however, will see a $2 monthly reduction.

Hall attributed the increase to the escalating costs of programming experienced by other cable providers across the country.

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