Sale of Adelphia May Benefit Southland Cable-TV Watchers

If Time Warner Inc. succeeds in taking over Adelphia Communications Corp.’s cable properties in Los Angeles, local legislators and regulators vow to extract improvements for customers.

The largest cable provider in Southern California, Adelphia has the worst service among the five operators in Los Angeles, according to city regulators.

City officials are thrilled that Adelphia’s franchises could soon be in the hands of Time Warner, which boasts the city’s best service record.

“Time Warner has been one of our poster children,” said Dean Hansell, president of the board of the Information Technology Agency, which regulates the city’s cable TV providers.

Councilman Dennis Zine, whose West San Fernando Valley district is divided into Adelphia and Time Warner areas, said: “The consumer is going to be better served by Time Warner.”

Time Warner and its joint bidding partner, Comcast Corp., agreed this week to take over Adelphia for $17.7 billion in stock and cash, dividing up the assets in a way that would make Time Warner the No. 1 cable company in Southern California. A Bankruptcy Court judge and Adelphia’s unsecured creditors must sign off on the deal. Adelphia filed for Chapter 11 bankruptcy protection in 2002 amid an accounting scandal.

Under the agreement, Time Warner would serve about 70% of cable customers in Los Angeles and Orange counties and about 98% in the city of Los Angeles alone.

The company currently serves about 120,000 West Valley customers, and more than 200,000 in Orange County.

It would add Adelphia’s 1.1 million subscribers in Eagle Rock, Hollywood, Sherman Oaks, Santa Monica, Manhattan Beach and parts of Orange County.

Time Warner would also take over some 850,000 served by Comcast in exchange for giving its takeover partner subscribers in other parts of the country.

All told, Time Warner would serve about 2 million subscribers in Southern California. Time Warner declined to comment.

Los Angeles city regulators said a sale of Adelphia would give them rare leverage to influence service and rates. Any new owner must get approval from the city before a local franchise can be transferred.

“If Time Warner wants Adelphia’s franchises, we’re going to hold them to a very high standard of service,” said Councilman Jack Weiss, whose San Fernando Valley and West Los Angeles district is largely served by Adelphia.

He would not outline specific demands, but indicated they could involve rate relief.

“I’ve thought Adelphia was greenlining,” he said, accusing the company of “gouging” affluent customers while charging lower rates elsewhere.

Adelphia, however, says its rates are competitive with other area cable providers.

Since its bankruptcy filing, Adelphia has had a testy relationship with the city. Officials rolled back rate increases, collected unpaid franchise fees and pressured Adelphia’s management to speed their upgrades.

“Everything they’ve promised hasn’t been delivered,” Zine said. “I’ve had nothing but a wonderful experience with Time Warner and nothing but aggravation and complaints dealing with Adelphia. It’s been very painful and frustrating.”

Hansell said Adelphia had been plagued by complaints about picture quality, long customer waits on telephone help lines and out-of-state service representatives unfamiliar with local conditions. He said the city would consider asking Time Warner to have local customer representatives.

“Time Warner’s call center is not local either and that’s been somewhat of a problem,” he said.

Adelphia has made strides in improving its local service over the last two years. Customer complaints in Los Angeles, where it serves about 226,000 customers, have dropped more than 50% annually.

The company says that by the end of the year, nearly all of its systems in the region will be equipped with digital technologies capable of delivering such advanced services as high-speed Internet and video-on-demand.

“Southern California customers are experiencing a very different Adelphia than they had two to three years ago,” spokesman Bob Gold said.

Yet city regulators say Adelphia’s consumer complaints remain the highest in Los Angeles, and are 10 times higher than Time Warner’s in some areas.

Since 2001, Adelphia has lost 11% of its local subscribers to satellite rivals. Hansell attributes the migration to Adelphia’s rate increases and its poor customer service.

By comparison, Time Warner is one of the few local operators that has increased its customer base, inching up 2% since 2001.

Unlike debt-burdened Adelphia, Time Warner is the world’s largest media giant and has deep pockets.

Time Warner has been at the forefront in converting its cable systems to offer customers digital cable, high-speed Internet access, video-on-demand, personal video recorders and telephone service via cable.

But transforming Adelphia will be a challenge, Hansell predicted.

“They are going to have their hands full,” he said. “Adelphia’s systems are the least state of the art in the city.”