Policy

Comcast, Modesto Settle Up

5/21/2004 11:00 AM Eastern

Comcast Corp. and the city of Modesto, Calif., have settled their legal dispute over grounding deficiencies in the cable plant that city officials feared could have lead to electrical shocks to consumers.

In 2003, a report commissioned for the city from Kramer.Firm Inc. found that more than 22,000 drops in the city were dangerous. The city ruled that each drop represented a separate contract violation and voted to fine Comcast $5,000, plus $1 per day, per gig. The fine would escalate every two months that the operator remained out of compliance.

Comcast filed suit in federal court last June challenging the “excessive” fine, while Modesto countered with a claim of more than $4 million in fines. But while the suit was pending, Comcast repaired 95% of the gigs, bringing itself into substantial compliance by last October.

The two parties have reached a settlement, according to a staff report for the May 25 City Council meeting.

Comcast will pay $50,000 in fines and another $100,000 for youth-recreation grants. The company will also fund the city’s cost -- estimated at $1 million-$3 million -- to build an institutional network, as required in the local franchise. And the operator will honor the 2003 cost estimate it quoted local schools for their share of the I-net cost.

Comcast must be totally code compliant by Jan. 31.

In return, the city will give Comcast a five-year extension, moving its franchise-expiration date to 2016, according to the city report.

The settlement will end the lawsuit, but it must still be approved by the City Council.

September