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LA to Time Warner Cable: What Did You Do With Our $10 Million Dollars?

Phillip Dampier March 17, 2014 Consumer News, Public Policy & Gov't No Comments

moneyLos Angeles has filed a $10 million lawsuit accusing Time Warner Cable of skimming off money owed to the city as part of its franchise fee agreement with the cable operator.

The Los Angeles Times reports Time Warner has been allegedly stiffing the city for years when money was desperately needed to help ease budget problems during the Great Recession.

“Time Warner owes L.A.’s taxpayers millions of dollars for the privilege of having its franchise,” city attorney Michael Feuer said during a City Hall news conference announcing the lawsuit. “This is a day where we are standing up and saying enough is enough.”

The 24-page lawsuit claims despite earning more than $500 million a year from Los Angeles-area customers, Time Warner blatantly refused to live up to its obligations to the city by not paying $2.5 million in franchise fees and public, education and governmental channel fees in 2008 and 2009 and an additional $7.2 million in fees in 2010 and 2011. The city contends that once in 2008 and again in 2011, Time Warner Cable withheld more than $5 million in fees the city said it was owed. The company finally paid a portion of the disputed fees, Feuer said, but then subtracted the same amount from its franchise fee payment, resulting in another underpayment, reports the newspaper.

timewarner twcThe city has negotiated with the cable company over the dispute for some time, to no effect.

“The negotiations haven’t been fruitful and we have to do something about that,” Feuer said. “Time Warner pocketed the money from its subscribers and then did not turn it over to the city of Los Angeles.”

The cable company will soon pocket more than 6% more revenue from customers across Southern California after announcing its rate hike for 2014.

Time Warner Cable contends the lawsuit is without merit.

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Stop the Cap!