Time Warner Cuts Deal with L.A.


Los Angeles -- Time Warner Cable, dunned for rate
overcharges by the city, has negotiated itself out of an immediate rebate of $464,000.

Instead, executives for the company successfully pitched
city officials on a plan to cut the amount of basic-rate increases for 1999.

In August, the city determined that the operator's basic
charges were too high, and it told Time Warner to return funds to subscribers by Dec. 1.
But executives said a rebate would be costly on an operational basis and confusing to
consumers because they would get a normal bill, then a discounted one, than one that would
be inflated by the rate increase that was planned for January.

That would increase call volume and diminish service, the
operator complained.

Time Warner argued that by discounting rates for 22-channel
basic-only households going forward, it would benefit the largest amount of people because
that is the fastest-growing subscription tier. Buyers include low-income seniors;
non-English-speaking Hispanics who just want the off-air Spanish stations; and those
looking only for better off-air reception.

Rolling the rebate into basic-tier costs in 1999 will cut
the rate to $9.58 per month in nonrebuilt areas (a 40-cent cut) and $9.87 in rebuilt areas
(a 17-cent cut).

City officials accepted the plan, but the parties are still
at odds over equipment charges. Time Warner indicated that it would file an appeal with
the Federal Communications Commission, but the city relented and said that it would hold
off on enforcement while it analyzed new data from the company.