Charlotte and Mecklenburg County, N.C., spent millions on municipal communications systems, and now the city-county government wants those funds back from local operator Time Warner Cable.
In a suit filed in the General Court of Justice, District Court Division in Charlotte, the locality asserts it had to buy services and build some infrastructure because Time Warner and its predecessor, Vision Cable of North Carolina Inc., failed to live up to the institutional-network requirements in its cable franchise.
Local Time Warner executives branded the suit, filed June 24, as “frivolous” and “delusional.” The court action is “an obvious public-relations ploy to blackmail us into giving the county something it clearly isn’t entitled to,” said Charlotte Division president David Auger in a statement. “Frankly, we’re appalled that the county is spending millions of taxpayer dollars on such spurious tactics.”
Doris Boris, cable communications administrator for the city-county government, said regulators have been negotiating with Time Warner since 1995, trying to get the operator to provide an I-net that meets the franchise requirement to provide upstream and downstream transmission of high- and low-speed data; interactive video and audio; and closed-circuit information delivery on dedicated channels.
The suit asks the court to compel Time Warner to perform on its obligation to provide four upstream and five downstream channels for exclusive county use. It also seeks an order to build out the I-net or pay damages equal to the construction cost, plus interest from the date of the breach.
The suit notes that Vision originally won the regional franchise based on its unique I-net offer. Time Warner has been working under a franchise extension since 1997. Last December, county authorities tentatively denied a new pact, claiming the operator was in material breach of contract because it has not built the I-net.
Other violations cited: Time Warner’s use of its plant in the county right-of-way for delivery of products other than cable, without compensation; and demands that the county insert language into a refranchise document mandating that no competitors shall obtain a franchise at terms not “more or less burdensome” than those applied to Time Warner.
Use of that phrase would impede the region’s ability to lure competitors, regulators said.
Charlotte-Mecklenburg County also claims Time Warner has misappropriated capacity on the cable system that should have been reserved exclusively for county use. In his statement, Auger said a $20 million dedicated fiber network for municipal use was not part of the company’s commitment to the county.
Time Warner agreed in the franchise to provide a managed solution, through which municipal data traffic travels securely on Time Warner’s plant, Auger said. A managed solution can be adapted easily as technology and needs change, he said, adding that such a system is used successfully by Fortune 500 companies, banks and other government entities, including several in the Charlotte region.
“We believe we will win this case in any forum and look forward to getting the real facts out into the open,” he said.