Policy

Minneapolis Sues Time Warner Cable

4/28/2005 3:49 AM Eastern

Faced with the prospect of a new operator in town, the city of Minneapolis has filed suit to resolve its franchise-fee dispute with its current operator, Time Warner Cable.

Minneapolis is one of the markets where Time Warner Cable and Comcast Corp. plan to swap systems as part of their acquisition of Adelphia Communications Corp. Comcast reportedly will operate Minneapolis when the deal is concluded next year.

The suit, filed Monday in Hennepin County District Court, targets KBL Cablesystems of Minneapolis LP, of which Time Warner Cable is the controlling partner.

According to the filing, the city and operator have been squabbling since 2002 over whether the local franchise language requires Time Warner Cable to pay franchise fees on cable-modem revenue. Like most operators, Time Warner Cable stopped paying fees on data service once a legal opinion was rendered in a lawsuit in San Francisco in 2002 that classified high-speed data as an information service, rather than a data service.

Although that opinion created precedent in the Western states, operators throughout the country cited the ruling and stopped paying franchise fees on cable-modem service.

The parties have been discussing a resolution as part of informal franchise negotiations, but the city apparently felt compelled to seek a declaration of its rights to the fees once the Adelphia deal, with its included system swaps, was announced last week.

Time Warner Cable spokesman Mark Harrad said the company, as a matter of policy, does not discuss pending litigation.

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