Charter Will Seek Arbitration vs. Telco

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Charter Communications Inc. has dropped its lawsuit against
U S West Media Group (UMG), and it will instead seek an arbitrated settlement of its
dispute with the Colorado-based MSO.

The St. Louis-based operator has asked the American
Arbitration Association to hear its claim that U S West Inc.'s video arm violated a
contract calling for it to sell its Twin Cities cable properties to Charter for $600
million.

Charter alleged that UMG breached the agreement when it
refused to close on the deal Feb. 19. At the time, Charter said, it had met all of the
contract requirements, including obtaining the necessary franchise transfers.

That was one week before the Federal Communications
Commission's Cable Services Bureau extended a U S West waiver from federal
cross-ownership requirements. The bureau ruled that the telco could keep its Minneapolis
systems by splitting telephony unit U S West Communications and UMG into separate public
companies.

U S West immediately terminated the Charter deal.

"The bottom line is that we beat them to the finish
line," said Charter president Jerry Kent. "We met all of the terms of the
contract before the FCC issued its ruling."

Kent said Charter has not decided whether it will ask for a
review of the bureau's decision, or whether it will ask the full commission to review
the matter.

However, he said arbitration will provide a quicker
resolution to the dispute than the lawsuit that Charter filed in the Circuit Court for St.
Louis County would have.

"We're talking months, rather than dragging it
out in court for years," Kent said. "And the arbitrator's decision is final
and nonappealable."

UMG spokesman Steve Lang said the company was not aware of
any request for arbitration.

"But if its true, that's what the contract calls
for, and that is what we've been seeking," Lang said.

Meanwhile, after announcing that it would pay Charter $30
million to get out of the deal, U S West still had not delivered the money as of last
week, Kent said.

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