Charter Hoping for Reversal

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Charter Communications Inc. is waiting to see if the U.S. Court of Appeals
for the Ninth Circuit in San Francisco will reconsider its decision upholding
Santa Cruz County's denial of transfer.

The cable operator has petitioned for an en banc hearing -- a hearing before
all of the courts' judges -- of a Sept. 20 ruling by the appeals court.

Attorneys for the operator argued that the court was in 'clear error of law'
when it handed a franchise dispute victory to the local franchising
authority.

The central California coastal county declined a transfer of ownership from
Sonic Communications Inc. to Charter in 1997. The action was based on community
concerns that Charter had paid so much for the 5,000-subscriber system that the
new owner would be forced to raise rates to consumers in order to recover its
investment.

Charter's petition, filed earlier this month, asserted that the panel was in
error because it did not acknowledge federal Cable Act timetables in its
decision. Federal policy requires that cities act on transfer requests within
120 days and puts caps on franchise and other fees at 5 percent of gross
revenue.

The operator has argued that the county's actions violated these standards.
Charter refused to comply with demands that violated the act -- such as
requiring a 'processing' fee to compensate bureaucrats for the paperwork
involved in examining Charter's transfer application -- which led to the denial,
the company claimed.

Attorneys for the company also challenged court assertions that Charter
'knowingly and voluntarily' waived its First Amendment rights when it entered
its franchise agreement in Santa Cruz.

The court was wrong in relying on county counsel's word that assertions made
during court arguments were factual, Charter's petition said.

A court clerk said the panel must gather to vote on whether to take en-banc
petitions, and that process, once begun, could take several
days.

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