Charter Seizes Modem Opportunity


While many operators say they are waiting for lawyers to digest last week's
declaratory ruling regarding the applicability of franchise fees on cable
modems, Charter Communications jumped at the chance to cut out the costs.

Company spokesman Andy Morgan said executives decided last Friday that their
operations will no longer collect the 5-percent fee for local regulators.

That's based on the fact the FCC ruling defined cable modems as an interstate
information service, not a cable service.

Charter had been voluntarily paying fees on modem revenue, except in the
West. Last month, it began notifying cities that it was following the lead of
Cox Communications Inc. to drop fees on modems.

Both companies cite a 2000 decision of the 9th U.S. Court of Appeals,
involving Portland, Ore., and AT&T Broadband, that classified high-speed
data delivery as a telecommunications service.

California cities got letters notifying them of the fee drop, and Charter's
decision to credit itself for the modem-related franchise fees it paid in 2001.
It will deduct the past fees from cable fees currently due to cities.

Morgan said it would take a few weeks for the fees to disappear from consumer
bills. There's been no final decision whether the company will rebate fees to