U.S. Official Opposes Charter Appeal - Multichannel

U.S. Official Opposes Charter Appeal

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The U.S. Supreme Court should avoid a cable franchise-transfer dispute between Charter Communications Inc. and Santa Cruz County, Calif., until additional lower courts have confronted similar cases, according to a Bush administration official.

In a brief sought by the court, U.S. Solicitor General Theodore Olson that although the Charter-Santa Cruz case involved important cable-franchising issues worthy of court review at some point, "it would not be inappropriate to postpone such review until the issues can be fleshed out by the courts of appeals in future cases."

What's Reasonable

Olson urged the court to reject Charter's appeal.

A key legal question in the case centers on the extent to which demands placed on cable companies by local governments during a transfer proceeding are considered reasonable though probably illegal under 1984 Cable Act.

Charter and Santa Cruz clashed when the county decided to give extra close scrutiny to Microsoft Corp. co-founder and billionaire Paul Allen's purchase of the company. Charter sued the county when the county made exorbitant demands, such as a $500,000 payment, in order to obtain transfer approval.

County Won Appeal

A lower court found in late 1998 that Santa Cruz violated several provisions of federal cable law. However, Santa Cruz won on appeal, with a panel of the 9th U.S. Circuit Court of Appeals holding that the county acted reasonably in attempting to determine Allen's real financial situation and in extracting a promise from Charter to maintain a pre-existing rate freeze.

In his Nov. 19 brief, Olson lamented that the 9th Circuit's upholding of the transfer denial "invites circumvention of federal law by local franchising authorities and would fail to vindicate important federal rights."

According the Supreme Court's web page, the justices are scheduled to decide whether to take the case at their Jan. 9, 2004 conference.

William Marticorena, who is representing Santa Cruz, said it was unlikely the Supreme Court would take the case, in light of Olson's opposition.

"Typically, the Supreme Court does not like to take cases of first impression," Marticorena said.

Charter is operating the Santa Cruz cable system. The county has decided not to proceed with an enforcement action against the cable company while litigation is pending, Marticorena said.

Obtaining Supreme Court review is never easy. Each year, about 5,000 cases reach the high court seeking review, but only about 2% are accepted for oral argument.

Over the last decade, the court has tackled cable issues involving carriage of local TV signals and the scrambling of pornographic cable networks.

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