Los Angeles Times

City, Charter Cable begin second legal fight

More than year after Glendale emerged victorious from a legal fight with Charter Communications over its planned cable channel changes, the two are at it again.

This time, Charter is accusing Glendale officials of illegally using strands of company-owned fiber optics cables and laundering access fees through a city agency to use them for purposes that violate state law.

In Los Angeles County Superior Court on Tuesday, Charter’s attorney Richard Patch said the city has been using strands of optical fiber in the company’s system even after its local franchise obligation to provide them for free expired.

Charter has been serving Glendale through a state franchise since 2008. Prior to that, the company had a local franchise agreement with Glendale dating back to 1995.

Charter is seeking a commercial monthly rate of $100,000 from the city retroactive to Feb. 1, 2009, a month after Charter claims its local franchise obligation to provide free fibers expired, court records state.

The city counters that it’s entitled to indefinite use of the fibers provided by a settlement agreement reached with Charter in September 1999.

The agreement was reached following a dispute between the city and — at the time — Marcus Cable Associates because of a change in corporate control of its parent entity to Vulcan Cable Inc., which did business as Charter Communications, according to court documents.

Also, Glendale contends it is immune from the damages Charter is seeking under a federal cable consumer protection law.

Charter has been paying a franchise fee to the city that amounts to 5% of the company’s gross revenues generated from the operation of its cable system in Glendale since January 2008, court records show.

The company has also been paying an additional 2% of the same revenues in what the city claims are access fees, according to court documents.

Patch said that the access fees are “laundered” through the Glendale Financing Authority. The access fees are given back to the city as a lease payment for office space that, Charter claims, has no authority employees working there.

The governing board of the authority consists of members of Glendale City Council.

Patch also said the returned funds are spent on operating costs, which is in violation of a state law.

Because the city has allegedly been using the access fees improperly, Charter claims that it has been overpaying its franchise fee by 2%, Patch said.

Attorney Jeffrey Melching, who is representing the city, said the funds are used for capital expenses, which is permitted.

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