Mediacom Communications has agreed to settle a lawsuit brought by the city of Columbia, Mo., which alleged the operator underpaid franchise fees and public access support payments.
The provider will pay the community $200,000 to settle the suit. The city had sought repayment of $1.34 million.
“It's always better for parties to reconcile,” the MSO's vice president of legal and regulatory affairs Bruce Gluckman said. “I'm happy and pleased to have reached a settlement,” he added, noting that the payment was a fraction of the amount the city sought at trial.
The root of the suit goes back to 2004, when the city hired an outside consultant, The Buske Group, to cull the payment records of Mediacom and the community's other provider, Charter Communications, in preparation for refranchise negotiations. That firm examined the books for 2001 through 2004, and in the case of Mediacom, asserted the company's local subsidiary, MCC Missouri LLC, underpaid its franchise fees by $93,105 during those years.
The consultant also asserted that Mediacom was responsible for $1.25 million in fees to support the production of local programming.
The issue became more complicated last year when franchising authority was taken out of the hands of Columbia officials. The state legislature passed the 2007 Video Services Providers Act into law, moving responsibility for oversight of telecommunications providers to the state level.
Columbia's officials had anticipated resolving the alleged underpayments in refranchise discussions, but once the law changed the landscape, Mediacom stopped negotiations. The city sued to protect its rights to the past payments in August 2007.
Gluckman noted it is cheaper to settle than to litigate. The company admitted no liability and he said Mediacom disputed the city's interpretation of the access support language.
City officials told the local Columbia Missourian they anticipate settling the dispute with Charter, too, but at a smaller amount than they collected from Mediacom.