The Federal Communications Commission rejected Adelphia Communications Corp.'s request for a stay of a rate rollback and refund order that Los Angeles had issued to the city's four cable franchisees.
The July 29 order boosts the city's efforts to obtain $5 million in refunds, and to reimpose July 2002-level rates on 200,000 city cable customers.
The city ordered the rollback on May 30 because Adelphia's new management said it could not, in good faith, verify the rate forms submitted by the company in the past. Current executives asked the city to wait until August, at which time they indicated they might be able to offer an accurate accounting for costs to justify the rate hikes.
The city council rejected the plea and added that the company should refund the amount the city believes was overpaid by the operator's customers during the disputed period.
Instead, Adelphia asked the federal agency for an emergency stay of implementation of the order.
The FCC sided with the city, denying the stay request. The commission ruled it was unlikely that Adelphia's appeal could prevail on its merits when the full commission hears the matter at a later date.
Subscribers bear no responsibility for the company's current financial difficulties and should not suffer losses because of Adelphia and its parent, the commission added.
Officials for the MSO's Southern California division issued a statement expressing their disappointment in the FCC ruling.
Adelphia is "working diligently to develop a cooperative course of action" regarding the rebates, a spokesman said. Adelphia should meet with city officials soon to provide a plan on how it intends to deal with the local rate order, he added.
City officials were elated, especially city attorney Rocky Delgadillo, who frequently criticized the company's high rates, poor service and the parent company's misconduct. His was the lead agency in the push to make Adelphia accountable.
"The FCC ruling is a very important step in our efforts to make Los Angeles' cable subscribers whole," the city attorney said in a prepared statement.
In a prepared statement, Councilman Jack Weiss added: "Now that the FCC has agreed that Los Angeles cable customers were being overcharged by Adelphia, customers can expect rebates and we will continue to fight for better service."
Weiss represents one of the Adelphia franchise areas, which include West Los Angeles, East Los Angeles and communities in the San Fernando Valley.