The Los Angeles City Council voted Friday to roll back rates for Adelphia cable TV customers, and chastised the beleaguered company for raising rates shortly before it filed for bankruptcy protection last year.
In a unanimous vote, the council passed an ordinance to cut basic cable rates by about $2 per month, a rebate that could amount to $4.3 million for consumers. The rate cut could affect about 235,000 Adelphia customers in West Los Angeles, the San Fernando Valley and Eagle Rock.
Councilman Bernard Parks, chairman of the council’s Information Technology Committee, said the rate cut was necessary because the company could not certify that financial documents it had filed with the city were accurate. The rollback is “merely correcting what we believe is an error and something inappropriate that was done a year ago,” Parks said.
Pennsylvania-based Adelphia Communications Corp. filed for bankruptcy protection last June. Federal prosecutors have indicted the company founder, John J. Rigas, along with two of his sons, on charges that include looting company coffers.
Adelphia’s new executives said they would appeal the rate cut to the Federal Communications Commission.
Tom Carlock, vice president of law and public policy, said the company has hired outside auditors to confirm the financial documents it gave to the city, and will provide that information as soon as it is available.
“Our point has always been, work with us a little bit longer,” said Carlock, who has been on the job for only nine days. “If things weren’t correct, we would be prepared to make the appropriate refunds.”
But Councilman Jack Weiss said the city, along with the company’s shareholders and customers, have been victimized by Adelphia.
“Adelphia was run and plundered by people who are now under federal criminal indictments,” he said. “If this is a new Adelphia, show us that you’re new by rolling back these unfounded rate increases.”