Vermont Agency Wants Adelphia Fined

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Vermont's Department of Public Service, the advocate
for state residents, has recommended that the state Public Service Board fine Adelphia
Communications Corp. up to $5.26 million for failure to comply with some cable-franchise
requirements.

Mike Rigas, executive vice president of Adelphia, said the
fine recommendation is "out of line" with the minor nature of the disputed
items.

"The unfortunate part is that [the recommendation]
connotes poor-quality service, and that's not true," he said, adding that the
company is in the midst of a rebuild of systems that serve approximately 70 percent of the
state's households to a 750-megahertz standard with two-way capability.

Adelphia is also building a fiber interconnect of systems
that serve 130,000 homes. Adelphia's market will increase to 80 percent of the state
when it completes its acquisition of FrontierVision Partners L.P.

The dispute with the DPS actually began in 1997, when the
people's advocate analyzed Adelphia as it was acquiring another operator, First
Carolina Cable TV L.P. State regulators judged that Adelphia was in noncompliance with as
many as 30 requirements of its franchise.

State law allows regulators to impose fines of $40,000 per
violation, plus $10,000 for each day that the violation continues. Each violation is
capped at $100,000, or one-tenth of a company's Vermont revenue.

Regulators settled that dispute with the stipulation that
Adelphia would not be fined if it met legal obligations. However, the DPS determined that
the operator has rung up nine new violations.

Some of the complaints are easily rectifiable, such as a
late response to the state's year-2000-readiness inquiry.

Another gaffe -- removing a premium FM-radio option from
the channel lineup without notice -- will be rectified with the rebuild. Adelphia took the
bandwidth to add digital channels until the upgrade is completed and the FM option is
restored.

Other complaints may be the subject of miscommunication.

Adelphia asks digital customers for credit-card information
as a financial guarantee against the loss of expensive set-tops. Rigas said if the
customer declines to provide the information, the request is dropped. But the state said
the policy is not included in tariff filings, and regulators believe that Adelphia demands
the information from customers who have proven themselves creditworthy.

But one complaint may not be resolved: The DPS dunned the
operator for failure to include three communities -- Rochester, Pawlet and Reading -- on
its rebuild schedule.

Rigas said the communities -- which range in size from 42
to 150 cable connections -- are still not on the master rebuild schedule because they are
too far away from existing plant to be connected economically.

A DPS commissioner said the fines were recommended because
of Adelphia's "pattern and persistence" of noncompliance.

Deena Frankel, director of consumer affairs and public
information for the DPS, said Adelphia has improved customer care since the original
complaints, but she noted that new deficiencies have cropped up since 1997.

Rigas noted that Adelphia's 11-year-old operating
license is up for renewal, and the fine recommendation, "I suspect, is an opening
salvo."

"Any time you're hit with an allegation, you are
concerned," he said, but discussions will continue between the parties. Rigas added
that he was not worried that the dispute would impact on the completion of the
FrontierVision acquisition.

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