Adelphia Communications Corp. has decided to withdraw its attempt to appeal a
rate-rollback order in Los Angeles, and it will refund $5 million to consumers
in the franchises it serves there.
The Federal Communications Commission, acting earlier this year on a request
for a stay of the rate order by Adelphia, had already signaled that the
company's chance of prevailing on the challenge was poor. Local Adelphia
executives decided to change strategy in order to change the company's
reputation with its constituents.
The refund will impact 220,000 customers.
"Although we strongly disagree with the city's rate order, our goal is to put
this dispute, associated with financial statements prepared by prior management,
behind us," said Tom Carlock, regional vice president of law and public
The city conducted an audit earlier this year and challenged basic-rate hikes
for the franchises based on questionable accounting dating back to previous
owner Century Communications Corp. Due to the corporate bankruptcy filing,
Adelphia's current management could not certify the financials on which rate
increases were based.
The refund will impact four of the five franchises operated by the company:
East San Fernando Valley, West Los Angeles, Sherman Oaks and Eagle Rock. East
Los Angeles customers, and those outside of the city, are not impacted.
Adelphia is still working out the refund methodology with the city, such as
the fate of refunds of former cable customers.