Los Angeles sues Time Warner Cable for nearly $10 million in franchise fees
City Attorney Mike Feuer filed a federal lawsuit on Friday against Time Warner Cable, accusing the company of failure to pay nearly $10 million in franchise and public, educational and government fees owed from 2008 and 2009.
“For years, the city obtained payments from Time Warner a franchise fee and an obligation for education,” Feuer said. “In 2008, Time Warner failed to provide that fee … It protested it did not have to pay that fee.”
Time Warner issued a statement noting it was disappointed in the city’s action.
“As a major job creator, tax contributor and service provider in the City of Los Angeles, Time Warner Cable is an active and responsible corporate citizen,” the statement read. “We believe (the legal action) is without merit. It will now be resolved through the legal process.”
Feuer said state law changed in 2008 regarding the franchise fee, shifting it to the state from local jurisdictions. But Los Angeles was allowed to keep a formula where it continues to charge for the use of right of way, telephone poles and the network of cable wires and boxes on city streets.
The company’s decision to withhold the funds came at the height of the recession, a particularly difficult time for the city, Feuer said. “This is money that could have paid for 100 cops on the street, repaired 50 miles of streets and trimmed hundreds of trees.
“The suit alleges that at the same time Time Warner was withholding payments to the city, it was raking in billions of dollars in revenue. They had a virtual monopoly for the provision of cable service in Los Angeles.”
Feuer said the timing of his legal action had nothing to do with the ongoing dispute Time Warner has with other operators over access to Los Angeles Dodgers games or the negotiations between it and Comcast, adding that the city has been in negotiations with Time Warner since 2011, without any progress in resolving the dispute.
By Rick Orlov, Los Angeles Daily News Rick on Twitter: @Rickorlov.