El Segundo Case Throws a Hitch Into Cable TV Sale

A federal judge has opened a crack in the massive nationwide sale of Group W Cable by ordering its former parent company to resume operating the cable television system in El Segundo until a full court hearing later this month on a lawsuit filed by the city alleging that the sale was illegal.

The order encouraged three other South Bay cities--Torrance, Hawthorne and Lawndale--that also have filed suits to stop the transfer of ownership of their Group W systems to Century Communications Corp. All four cities claim that the sale was illegal because they did not approve it, as required in their franchise agreements.

Bill Marticorina, a private attorney representing Hawthorne and Lawndale, said he is studying the judge’s order to see if he should seek a similar order for those cities.

Similar Order Sought

Nicholas P. Miller, a Washington, D.C., attorney representing Torrance, was not available for comment. Torrance City Atty. Stanley E. Remelmeyer said his city’s suit seeks a similar order, but that the suit is pending in the hope of reaching a settlement. He said the El Segundo court decision would be “helpful,” and said there is a reasonable chance of reaching a settlement for Torrance.

U.S. District Judge Manuel Real in Los Angeles on Monday issued a preliminary injunction ordering Westinghouse Electric Corp., which had sold its Group W Cable subsidiary in June to a consortium of five cable firms, to resume management of the 14-year-old, 30-channel system in El Segundo. A full hearing on El Segundo’s suit, which seeks to revoke the franchise agreement and is asking for $10 million in damages, will be held Oct. 29.

“I am absolutely delighted that the (legal) system still works, that the big guys can’t disregard the little guy,” said El Segundo Mayor Jack Siadek, who added that the city will pursue its quest to purchase the system from Westinghouse or build its own system.

Siadek said that since Century took over operation of the system on June 20, problems have gotten worse. “It went from bad to worse,” he said, noting that Century shortened business hours and has repeatedly ignored requests for hook-ups and cancellations.

Leverage in Court Case

Siadek said he does not expect service to improve under Westinghouse, but he said forcing Century out of El Segundo will help the city’s case when it goes to court. El Segundo and the three other South Bay cities have balked at approving the sale to Century because they fear Century will reduce services and raise rates. Century, which cable consultants say is deeply in debt, currently operates the cable system in Redondo Beach, which has the highest rates in the South Bay.

Leonard Tow, president of Century Communications Corp. in New Canaan, Conn., said he was not aware of the ruling but said it sounded “strange . . . it doesn’t make sense.”

William Koplovitz, a New York attorney coordinating the transfer of Group W to Century, said he is still studying the judge’s order. He said he may seek to reverse the order, contending that it is confusing. However, he added, “As we (initially) read the decision, we are not overly thrilled with it.”

Torrance Official Encouraged

Torrance Cable Administrator Warren Carter called the decision “encouraging.”

“Judge Real has put the cable companies on notice . . . that a deal is a deal and they should live up to it,” Carter said. “If they don’t, then they should be prepared to pay the consequences.”

Despite the setback and the other pending suits, Century’s Tow said he is optimistic that his company will ultimately operate the South Bay systems.

“It’s the American way. You don’t stop people from suing,” he said. “Things are moving along. I continue to be optimistic. If you plan good things, they happen. I feel comfortable.”

Gardena was among the majority of Group W systems nationally that approved the sale of Group W. Gardena, however, has not yet given final approval for Century as its eventual operator.