Time Warner Cable Sued by Los Angeles for Nearly $10 Million

Media giant is accused of underpaying City franchise fees, not providing adequate public access infrastructure

Last Updated: August 4, 2014 @ 10:57 AM

Los Angeles is suing Time Warner Cable for nearly 10 million dollars, claiming that the media giant “stubbornly continues to flout its statutory obligations to compensate” the City for its cable television franchise “privilege.”

The City accuses the defendant of enjoying “a virtual monopoly,” but not forking over the proper sum for franchise fees. TWC apparently earns more than $1 billion in revenue every two years from residents, according to the court docs, but has not always paid its fair share to the government.

The cable company is also accused of not providing proper access to public, governmental and educational programming — i.e. public access studios — the Central California U.S. District Court case alleges.

Also read: Your Unfair Cable Bill: Most Expensive Channels Aren’t the Most Watched

Per Friday’s filing, the plaintiff accuses the cable company and related subsidiaries of withholding more than $5 million each in fees from the City on two separate occasions — once in 2008 and again in 2011.

Franchise fees of up to five percent of gross revenue can be charged annually under California law. The City claims that Time Warner Cable had previously agreed to those terms, as did they agree to satisfy the Public Access Support Obligations. The documents detail the specific underpayments and call for a repayment of $9,687,896 — though that will increase in time due to interest.

At its peak, TWC held 12 local franchises recognized by Los Angeles, and later, one state franchise.

Also read: Comcast, Time Warner Cable Executives Raise $21M For New Cable Company

Not surprisingly, the media company is displeased with the filing and will take it on in court.

“As a major job creator, tax contributor and service provider in the City of Los Angeles, TWC is an active and responsible corporate citizen in the City of Los Angeles,” Time Warner Cable said in a statement. “We are disappointed the City has chosen to bring this action, which we strongly believe is without merit. It will now be resolved through the legal process.”


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