During its meeting Monday, the Charlottesville City Council settled a dispute over fees with Adelphia Communications and is set to reach a new 10-year franchise agreement with the company.
Under the terms of the settlement, Adelphia will pay the city $21,632 in unpaid franchise fees from 1999 to 2001, instead of the $41,037 the city asserted the company owed. In exchange, Adelphia agreed not to pass along the cost of the payment to subscribers.
The settlement comes after months of negotiations involving the city, the independent accounting firm it hired to examine Adelphia's records and Adelphia, which currently is undergoing bankruptcy proceedings but also has been the only cable company providing service to the city during the past 10 years.
The accounting firm initially used national estimates and came up with a figure of over $80,000 that Adelphia owed to the city. After Adelphia provided specific data, the figure was revised downward to $41,037. Adelphia, however, continued to dispute that figure, according to Vice Mayor Meredith Richards.
"We were aware that it was really a technical issue of how advertising revenue was reported, and we were simply disagreeing with them," Richards said.
During negotiations, representatives from the committee appointed by City Council to agree on a settlement said they believed that ensuring that city subscribers did not have to pay for the fees was more important than determining the exact amount owed by Adelphia.
The settlement "was negotiated primarily because the committee felt that the subscribers would end up paying for this," Richards said.
The bankruptcy court handling Adelphia's case still must approve of the deal, but representatives from the city and Adelphia agreed that the court would not object to the settlement.
The settlement paves the way for the new franchise agreement, which dictates how Adelphia will provide cable television for Charlottesville residents over the next decade.
While many customers have complained about the rates they must pay and the channels available to them, federal law prevents Charlottesville and other cities from regulating those functions, according to Assistant City Attorney Renee Knake.
"The city is very limited in what it can do," she said.
The city, however, was able to insert a number of provisions into the agreement. Adelphia now will have to completely upgrade its technical system in the area by 2006, provide advanced technological services such as HDTV when possible and provide standby power in case of a power failure.
"The committee said, 'If we can't regulate the rates, let's do everything possible to make sure the subscribers have excellent service,'" Knake said.
In an effort to make Adelphia attentive to customer needs, the agreement also requires that Adelphia keep a customer complaint log and conduct a programming survey every five years.
Lon Carruth, the district manager for Adelphia's Central Virginia District, said the company was pleased with the agreement.
"I think that it's a very workable agreement," Carruth said. "It sets the stage for long term involvement by Adelphia and the city over the next 10 years."
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