Santa Monica won’t change the channel on residents’ cable service.
The City Council renewed its franchise agreement this week with Adelphia Cable. It also settled a two-year dispute with the company over service problems for $3 million.
When Adelphia purchased the city’s previous cable company, Century, in 1999, it failed to apply for approvals and didn’t uphold parts of the city’s cable contract, officials say.
Adelphia has recently run into some financially hard times, and is now being investigated by the Federal Securities Exchange Commission for allegedly loaning itself money and not recording it.
Some council members said the situation and Adelphia’s poor customer service made them reluctant to agree to the new contract.
“I find it distasteful that we are considering this agreement,” said Councilman Herb Katz. “But it’s the best deal for the situation at our time.”
Adelphia officials intend to sell off its systems in Southern California — estimated to be worth almost $6 billion. It has 1.2 million basic cable subscribers in the Los Angeles and San Diego areas.
The Commission is investigating Adelphia for loaning itself $2.3 billion from a company partnership. But the transaction never showed up in the company’s records. The family-owned company reportedly loaned itself money to buy more shares, in hopes of retaining control of the company.
City attorneys said inking a deal signed now could mean a lot if Adelphia goes under. If the company files for bankruptcy, the city would be in a stronger position with a signed contract outlining specifically what services it agreed to.
“Even if Adelphia files for bankruptcy, which is the worst case scenario being discussed in the press, we would still make the same recommendation to approve this franchise agreement,”said Deputy City Attorney Joe Lawerence.
The five-year contract gives Adelphia complete access to Santa Monica’s market on the condition the company provide better customer service, as well as wire 44 public buildings for cable and cable modem service — including City Hall, public school buildings and Santa Monica College. Adelphia also has to provide three public access channels for local and regional government.
Also as part of the contract, the increased costs stemming from the agreement’s conditions or from the settlement can’t be passed along to local consumers.
“It was a landmark agreement for us only because we hadn’t had an agreement for 15 years with our cable operator,” said Mayor Pro Tem Kevin McKeown. “It was good for us because we got back many of the things taken away from us over the years.”
“It was a landmark agreement for us only because we hadn’t had an agreement for 15 years with our cable operator.” — — KEVIN MCKEOWN Santa Monica Mayor Pro Tem
The city also voted to also upgrade a 1980’s-era ordinance outlining what it expects from a cable operator. Under the new guidelines, cable operators must provide modern equipment and a responsive service department to answer complaints with in 48 hours.
Originally published in the Santa Monica Daily Press print edition on May 25, 2002. Read the original PDF.