City Hall Gives Adelphia Cool Reception

Bruce Springsteen has complained that cable television is 57 channels with nothin’ on. Too many voices with not much to say. That’s how some people might describe what’s going on at Los Angeles City Hall as bankrupt Adelphia Communications Corp. negotiates with the city to continue providing cable to 250,000 customers here.

Since Adelphia filed for bankruptcy protection in June, Mayor James K. Hahn and nearly all 15 council members have spoken out about Southern California’s largest cable company and its contract. City Atty. Rocky Delgadillo has held two news conferences--one outside an Adelphia office--and has done several radio and TV interviews. All the elected officials have mixed their opinions and suggestions with indignation toward the company.

Adelphia lobbyist Howard Sunkin speculates that L.A. politicians have become so interested in the company’s cable TV contract because the bankruptcy and the arrest of its founders present a local opportunity for decrying recent corporate scandals.

“The L.A. City Council has only been able to get their teeth into Adelphia, and that is why it has become a political football here in Los Angeles,” Sunkin said.

Adelphia’s franchise agreements with Los Angeles came up for renewal Aug. 2, nine days after many of its subscribers saw the founder of the Pennsylvania company and his sons being led away in handcuffs, accused of bleeding the company dry to finance their own lavish lifestyles.

Adelphia and the city have worked out an extension of the five franchises through Sept. 15, pending a review by a City Council committee. A longer-term agreement would likely require Adelphia to upgrade its cable networks to deliver digital services such as high-speed Internet access.

Federal law leaves a city with little leverage in renewing cable franchises, and some of the politicians’ comments during the negotiations have irritated the city’s cable regulators and Adelphia.

The company says Los Angeles is the only market where elected officials have been so vocal.

Delgadillo has taken the most aggressive approach against Adelphia, but with mixed results. He got the company to set aside $2 million while it determines how much it owes the city in overdue franchise fees dating to 1996. But when Delgadillo demanded that Adelphia give Los Angeles subscribers a rebate, the company ignored the city attorney and later raised rates by nearly 6%.

Delgadillo’s insistence on playing a role in negotiations with Adelphia, and his fondness for news conferences, have annoyed the cable regulators in the city’s Information Technology Agency. They complained to the mayor and the City Council that Delgadillo was being “counterproductive” and, as the city’s lawyer, was releasing information about his client’s business that any private attorney would be bound to keep quiet.

Delgadillo justifies his tactics by pointing out that he also is charged with representing consumers. “The people who elected me expect me to stand up for them and their interests,” he said. “People take their cable very seriously.”

Councilman Jack Weiss also has urged the city to be a “squeaky wheel” to ensure the bankrupt company continues to provide television service in its five franchise areas and pays its fees to the city, which amount to about $7 million a year. Under Adelphia’s bankruptcy agreement, franchise fees must be paid before all other debts. The company sent the city its most recent installment July 31, on time.

“If we are not a squeaky wheel in the bankruptcy court, we will be the victims of the company and the process,” Weiss said, adding he would like a healthier cable company to take over for Adelphia in Los Angeles.

Weiss and others on the council who represent areas served by Adelphia say constituents from Boyle Heights to Sherman Oaks are calling to complain about poor service and the $2-a-month rate hike that surprised most of them earlier this month.

“It’s just astonishing to me that they’d have the incredible nerve to do that,” said Kathy Cook, an Adelphia subscriber in West Los Angeles who complained to Mayor Hahn’s and Delgadillo’s offices.

Councilman Mark Ridley-Thomas, chairman of the Information Technology and General Services committee, wants city staff in the future to alert the council when a cable company plans to raise its rates.

For Adelphia to raise rates so soon after its founders were arrested was arrogant, Delgadillo says. He is considering suing Adelphia’s former chairman and chief executive, John Rigas, and his family.

Adelphia already has sued the Rigases. Regarding the rate hike, federal regulations allow cable companies an annual increase based on a standardized formula. Adelphia told the city the increase was coming four months ago, before the company filed for Chapter 11 bankruptcy protection.

Under federal communications law, cities cannot refuse to renew cable franchises simply because the company raises its rates, said Liza Lowery the city’s chief information officer. She said Delgadillo’s staff has been telling council members and constituents that the city has that power, and it does not.

“We cannot hold [Adelphia] hostage like that,” she said.

To deny Adelphia’s renewal would require a multi-step analysis of the company’s performance. “It’s like a trial,” Lowery said.

Adelphia says the monthly increase will offset rising programming costs, and it will not rescind it or offer customers a onetime rebate. The company plans to remain in the valuable Southern California market, where it has 1.2 million customers, and pursue delayed expansions of digital TV and high-speed Internet service, spokesman Eric Andrus said.

“We’re committed to providing uninterrupted service throughout our restructuring process,” he said.

Had Adelphia not been bankrupted by its founding family just before the company’s cable contract came up for renewal, a negotiated agreement probably would have sailed through the City Council with little discussion. However, anything related to cable TV is now getting special scrutiny.

The City Council’s summer vacation, which started Friday, could not come at a better time, said Adelphia lobbyist Sunkin. For two weeks, all the elected voices might be quiet while the company continues to negotiate at least a short-term extension with the city.

“Everybody,” Sunkin said, “needs to take a deep breath.”