Viacom Inc. will pay $13 million to settle a class-action lawsuit challenging
12-year-old rate hikes by systems in the San Francisco Bay area that the company
no longer owns.
The legal challenge, filed in Alameda County Superior Court, was brought on
behalf of about 650,000 area cable consumers who saw their rates increase 14%
beginning in 1991.
Then-Viacom Cable blamed the hikes on the tax assessors in 10 Northern
California counties it served.
In the mid-1980s, Californians approved an initiative called Proposition 13,
which rolled back property taxes and capped annual hikes. But the sale of
property -- or, in the case of Viacom, its $3 billion merger with National
Amusements Inc. -- triggered reassessment.
Viacom saw its cable-property-tax bill soar from $387,100 to about $2.6
million annually. The company passed the hike along to consumers, but it vowed
rebates if and when it prevailed in its legal challenge of 10 county tax
assessors and their calculations.
Viacom won its challenge in 1999, but consumers alleged that the corporation
did not make good on its rebate promise. The class action was filed in 2000.
A Viacom spokeswoman said, "We are very pleased that we are able to resolve
this matter particularly in a way that benefits the community at large." She
declined further comment, such as how the company would get the rebate back into
the hands of former subscribers.
The region formerly served by Viacom Cable is now in the hands of Comcast
The court must still approve the settlement. That hearing is currently set
for late October.