Kansas Shields Ops from Late-Fee Suits

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Kansas lawmakers have passed legislation sparing cable
operators from "nuisance lawsuits" designed to prevent them from assessing late
fees on delinquent accounts.

Gov. Bill Graves recently signed an enabling statute that
permits operators to impose late fees equal to 5 percent of the overdue bill, or up to $5
per month -- whichever is greater.

The law applies to cable television and "related
services."

Sponsored by the Kansas Cable Telecommunications
Association, the statute is a pre-emptive strike against the same kind of potential
lawsuits filed in other states where operators have come under fire due to their late-fee
practices.

Kansas' operators were worried about being caught up in the
same type of class-action litigation filed against Tele-Communications Inc. (now AT&T
Broadband & Internet Services) in Baltimore and Washington, D.C.

TCI came up on the short end of those decisions, as the
courts ruled that the MSO's late fees exceeded the cost of recovering the debt.

"It's not that this has been a forbidden practice
[by Kansas operators], or that anybody is doing anything untoward," Mid-America Cable
Telecommunications Association executive director Rob Marshall said.

But, he added, "there's been a small cadre of
folks going around and generating these lawsuits in states where the law doesn't
specifically address the issue. So we thought that it would be a good idea to have a
statute addressing the treatment of delinquent accounts by cable operators."

Under the new law, operators must notify subscribers in
writing 10 days before late fees are imposed. The notice must specify the date after which
the fee will be assessed and the amount of the late fee.

"I wouldn't say that delinquent accounts have
been a big problem in Kansas," Marshall said, "but people didn't want it to
become a problem, either."

Even with late fees now set at up to $5 per month, Marshall
said, he doesn't expect operators to boost what they currently charge on overdue
accounts.

"The purpose was to recover the cost of collecting the
debt," he said, "and we're probably not even going to do that at $5 -- not
when you consider that you have to send somebody out to collect or to turn off the
service."

Marshall noted that operators in neighboring Oklahoma also
managed to squeeze a late-fee bill through that state's legislature.

Oklahoma's bill capped the fees that operators can
collect at 5 percent of the past-due account, or $1.50 on a $30 monthly bill. Moreover,
bills must exceed $12 per month before late fees can be imposed on subscribers who only
take basic service.

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