Well, I have heard and seen quite a bit of excuses for a telecom company screwing over a city. But, this is a new one even for me.
A quick backstory:
- In 2005, the city of Fairfield, Maine, signed a cable franchise agreement with Adelphia whereby the city received a fee of “3 percent of basic cable service revenues“.
- Later in 2005, the city of Fairfield notified Adelphia that they were raising that fee to the highest amount available to them: 5 percent of all gross revenues for the year (including premium cable TV packages and channels, not just basic service).
- In 2006, Time Warner Cable bought Adelphia and assumed their obligations.
- Since 2006, Time Warner Cable has been paying the city 5 percent of basic cable service revenues rather than 5 percent of all gross revenues for the year.
- This means that since 2006, the city has gotten $353,000 less than they were supposed to receive from Time Warner Cable.
Starting last year, the city of Fairfield began asked a federal court to make Time Warner Cable pay the $353,000 in unpaid franchise fees.
How did Time Warner Cable respond to this?
(Fairfield Town Manager Josh Reny) said he had been told by Time Warner that the company was told by former Town Manager Paul Blanchette to pay the lower amount or 5 percent of basic cable services rather than 5 percent of gross revenue…Reny became Fairfield’s town manager in 2010 after the death of Blanchette.The company never provided documentation of its claimed agreement to pay the lower rate, Reny said, claiming the conversations came up when the town sought to renew the franchise agreement, which expired in 2011. – CentralMaine.com
So, Time Warner Cable is telling us that even though the agreement says otherwise AND there is no paper work backing up their claim, they were told to pay less? In what world do they think that this would be legally allowed?
I tried finding the actual franchise agreement between Adelphia and Fairfield but was unable to get access to it. I did, however find a franchise agreement signed in 1999 between Adelphia and a number of different cities in Maine. Fairfield is not named in this agreement.
But the language in this franchise agreement mirrors exactly what Fairfield city officials are claiming is in their franchise agreement: