Tale of Two Ops' California Transfers

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Adelphia Communications Corp. and Cable One Inc. were headed in different directions last week in separate bids to resolve disputes with two California communities.

In Moreno Valley, a town of 150,000 east of Los Angeles, city officials passed a resolution ordering that a management agreement that transferred control of the local cable system from AT&T Broadband to Adelphia be dissolved.

Cable One fared better in Modesto, where a $1.1 million settlement with the city cleared the way for a swap of 108,000 of its customers in the San Joaquin Valley for 107,000 AT&T customers in three states.

Moreno Valley also passed an "urgency ordinance" that requires Adelphia to continue operating the system until a settlement is reached.

"That prevents them from pulling the plug," said Moreno Valley spokeswoman Angela Rushen. "In the meantime, we'll try and get this settled."

City officials have been briefed on their options, which include terminating the franchise if the system does not revert back to AT&T.

With its management agreement in question, Adelphia has threatened to take legal action if Moreno Valley refuses to conduct public hearings on the dispute.

"Public hearings suggest government in the sunshine, an open process," said Adelphia spokesman Bill Rosendahl. "In the long run, their constituents have to brought into the process, so they can realize that we're good corporate folks that are benefiting the community."

The city is reportedly demanding that Adelphia pay to maintain the town's institutional network, and that any new franchise contain a "most favored nation" clause that guarantees Moreno Valley will receive any benefits offered to other area communities.

Adelphia is presumably balking at those terms out of fear that other local jurisdictions will then demand the same terms.

In agreeing to the settlement with Modesto, Cable One did not admit to franchise violations. But it did agree to resolve hundreds of electrical problems at the system in preparation for a projected $23 million upgrade AT&T plans to launch.

Under its new franchise, AT&T will have three years to complete the upgrade. It will receive a five-year extension of its deal if it completes the project in 24 months.

"We're getting indications that they are really shooting for that 24-month mark," Modesto spokeswoman Donna Hansen said of the AT&T officials. "We all made compromises and think this is a fair deal."

The settlement agreement also resolves $61,000 in fines assessed against Cable One last month for service problems that included poor picture quality and back franchise fees.

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