Time Warner Cuts Deal With L.A.

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

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

In August, the city determined that the basic charges weretoo high and told Time Warner to return funds to subscribers by Dec. 1. But executivessaid a rebate would be costly, operationally, and confusing to consumers because theywould get a normal bill, then a discounted one, than one inflated by the rate increaseplanned for January.

That will increase call volume and diminish service, theoperator complained.

Time Warner argued that by discounting rates for 22-channelbasic-only households going forward, it will benefit the largest amount of people becausethat is the fastest growing subscription tier. Buyers include low-income seniors andnon-English speaking Hispanics who just want the off-air Spanish stations as well as thoselooking only for better off-air reception.

Rolling the rebate into basic tier costs in 1999 will cutthe rate to $9.58 in non-rebuilt areas (a 40-cent cut) or $9.87 in rebuilt areas (a 17cent cut per household).

City officials accepted the plan, but the parties are stillat odds over equipment charges. Time Warner indicated it would file an appeal with theFederal Communications Commission, but the city relented and said it would hold offenforcement while it analyzed new data by the company.

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