Charter Communications Inc. said Friday that it has been subpoenaed by a
federal grand jury regarding the way it counts its subscribers.
'Charter believes the issues under investigation are similar to those raised
in previously reported class actions pending against the company and certain
individual defendants, and we will cooperate fully with the subpoena,' Charter
senior vice president of communications David Andersen said in a prepared
The MSO said in the statement that it received a subpoena from the U.S.
Attorney's Office for the Eastern District of Missouri requesting documents
relating to its current and disconnected customers and its policies and
procedures relating to the capitalization or expense of various costs and
Charter continued that in response to the issues under investigation, on Feb.
11, it announced an increase in reserves for uncollected customer accounts
receivable as of Dec. 31, 2001; it tightened its collection policy and
procedures relating to these marginal customers; and it expected to remove
approximately 120,000 marginal customers from its basic-customer account in the
first quarter of 2002.
In its 10-Q report for the quarter ended March 31, 2002, Charter updated this
estimate and reflected the disconnection of a total of 145,000 marginal
customers during the quarter.
Those customers were primarily those that have failed to pay for service.
In an interview, Andersen stressed that the subpoena was for documents, and
'We're taking this very seriously,' he added. 'We are cooperating fully.'
This month, at least five class-action suits have been filed in various
courts against Charter, alleging that the operator made materially false and
misleading representations concerning its financial condition, that it
overstated revenue, that it failed to appropriately account for installation
costs and that it artificially inflated the number of subscribers to its