Comcast Wins Case Over Late Fees

6/15/2003 8:00 PM Eastern

Comcast Corp. scored another win in what is perhaps the industry's longest-running dispute over late-fees.

The Maryland Court of Special Appeals has affirmed the company's right to charge a $5 late fee to subscribers of its Baltimore system.

Attorney for consumers (and frequent late-fee litigator) Philip Friedman challenged the policy in Baltimore Circuit Court, contending that a ruling in a 1995 late-fee case enjoins the operator from charging more than 50 cents as a penalty for consumers who pay their cable bills late.

Comcast spokesman David Nevins said the MSO is very pleased with the latest ruling. The company has been and will continue to fine late-payers $5 per month, a fee he described as a "fair and appropriate deterrent" to untimely payment.

"This ruling is pro-consumer, for the overwhelming majority of our consumers who pay on time. The more that pay late means higher rates for the rest of consumers," he added.

Consumers and Baltimore's cable operator have been haggling since 1995, when the city's system was owned by United Cable Television of Baltimore.

Friedman filed a class-action suit asserting the $5 fee exceeded what the operator actually spends to administer late accounts.

The state court agreed with consumers, ruling that United owed its subscribers refunds. It also set the late-fee payment at 50 cents.

The Baltimore system's next owner, Tele-Communications Inc, eventually paid the refunds, which Friedman said amounted to $12 million.

But in 1997, the cable industry floated a bill in the General Assembly to set Maryland's standard for late fees at $5. The bill led to more controversy, as it contained language that made the fee policy retroactive.

Opponents challenged the bill in court, alleging it was a blatant attempt to scuttle other late-fee challenges that had popped up throughout the state.

That year, United also brought its own challenge in Baltimore Circuit Court. Jaime Bianchi of White & Case, outside counsel for current owners Comcast, argued the injunction against its $5 franchise fees be set aside due to the state law change. Friedman argued Baltimore is an exception to the state policy for it was the target of a specific injunction before the state bill passed.

Last September, the circuit court ruled in favor of the operator, and the Baltimore system resumed charging its late payers $5. That ruling was upheld June 5 by the state's Court of Special Appeals.

And it's not over yet.

"This is just one step in a long process," Friedman said. He expects another appeal, this time to the state Court of Appeals, Maryland's version of a state Supreme Court.

Friedman is also reviving the late fee claims in other jurisdictions which the cable company tried to make moot with the change in state policy, he said.

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