The question of who holds the cable franchise for Moreno Valley, Calif.-a community of 150,000 east of Los Angeles-could be answered this week.
Barring a last-ditch settlement on the courthouse steps, the Moreno Valley City Council will decide whether AT&T Broadband violated its cable franchise by shifting control of its local system-and all profits-to Adelphia Communications Corp.
Sources predict Moreno Valley will declare that AT&T violated its franchise and give the MSO 30 days to untangle the agreement with Adelphia.
"If not, [franchise] termination would be the next step," one source said of a decision that could lead to a court battle.
Adelphia reportedly believes the city gave tacit approval to the April 1999 transfer when it rejected AT & T's transfer request "without prejudice," a legal term which means the city took no action.
The MSO believes that because the city did not act, the transfer is considered approved under federal law.
"But it hasn't been AT&T's lawyers who have offered that defense, probably because they couldn't get a lawyer to say that with a straight face," said the source.
Adelphia regional vice president Bill Rosendahl declined to discuss any arguments the company might make, but insisted the two sides were "close" to a settlement.
"I believe that when the lawyers stop posturing, reasonable people will see that the only thing Adelphia wants is to give its customers a state-of-the-art system," Rosendahl said.
Rosendahl called Moreno Valley a single spot in a "sea of Adelphia customers" that amounts to 240,000 area residents. "And our commitment to the community is as strong to the surrounding communities," he said.
But Adelphia has used local newspaper adds to blame city officials for standing in the way of a $12 million upgrade that would place Moreno Valley on equal footing with those neighboring communities.
Moreno Valley spokeswoman Angela Rushen said the city can decide that no violation has occurred and close the matter, or rule that a violation has occurred and go from there.
Rushen blasted local media reports which contended the city was pursuing this matter because city council members were upset about rates.
"That has never been part of the issue," she said. "Cities don't set cable rates, cable companies set rates."