Friday, February 13, 2009

Greenwood Village-based Adelphia Communications suing cable TV

In an effort to keep Falcon Broadband from cutting in on the city's cable television market, Adelphia Communications has filed a federal lawsuit against the cable provider and the City of Colorado Springs.Adelphia, the city's largest cable TV provider, claims that Falcon Broadband violated federal and city law by refusing to obtain a franchise license from Colorado Springs before entering into a contract to provide cable services to the planned Gold Hill Mesa community.Falcon Broadband owner Randy De Young says the litigation is merely a tactic by the national cable giant to strongarm competition.Adelphia says it's a measure taken to protect its investments, according to the lawsuit.He has filed a counter suit requesting that Adelphia's litigation be dismissed.
The U.S. District Court in Denver has not said when it will issue a ruling.They just don't want any competition, De Young said,Adelphia is doing everything and anything in its power to slow the process. Now we're caught up in this quagmire of litigation.Adelphia representatives declined to comment about the issue, citing the pending litigation.Adelphia's lawsuit does not ask for monetary relief. It seeks a declaratory judgment about whether cable TV providers without city franchise licenses should be allowed to provide services within Colorado Springs. Adelphia contends that what the city requires of it should hold true for other companies. It matters that cable companies have a level playing field. Franchise agreements in a given city ensure that same rate will be given to every customer, said Patrick Boyle of the Colorado Cable Telecommunications Association, a cable TV trade group that lobbies for the industry.Cities can't just let a bunch of small companies that have no contract with them begin offering service in different parts of the city, he said.If Falcon Broadband is allowed to offer cable services in Colorado Springs, it could threaten Adelphia financially, causing financial disaster and massive losses, according to the suit.De Young said he gets a kick from statements like that, considering how much of the city's cable market Adelphia controls, which is an estimated 60 percent of cable services.But Adelphia says in the lawsuit that Colorado Springs' assurance that only city-licensed franchise operations would be able to compete with them guided the company's $75 million investment, made in the last five years, to upgrade and expand services.In addition, having a contract to provide only a portion of the city with service is a violation of a federal law intended to prevent cable companies from offering services only in affluent areas, according to the lawsuit. Adelphia claims that Falcon Broadband is intentionally skirting the law by bypassing low-income neighborhoods.Falcon intends to 'cherry pick' lucrative customers within the city and at the same time avoid compliance with federal and municipal law that requires Falcon (Broadband) to be subject to the same benefits and burdens as Adelphia, the lawsuit says.Boyle said noncompliance would provide an unfair advantage to non-franchise holders.The franchise makes money in the wealthy neighborhoods and loses money in the poor neighborhoods, and that's the way it should be for other businesses, too, Boyle said.The suit also says that Adelphia approached the city about the matter before taking legal action, but city officials said they intended to stay neutral. The city is named in Adelphia's litigation for not taking action.It's not so much that we want to stay neutral. It's that there's a big legal question here as to what is defined as a cable company under the franchise agreement, said Pat McDivitt, a city attorney. The courts will have to decide that. The city's stuck in the middle.We just don't have a dog in the fight, McDivitt said. And besides, they've (Adelphia) got pit bulls and we've only got Chihuahuas.Jeff Tarbert started offering cable service in the Springs about 35 years ago through Century Communications. Century was sold to Adelphia in 1998.Tarbert said there are some requirements for cable providers to have franchise status, but he also said that state legislation, which became law last year and was intended to open competition among providers, could have some bearing in this issue.Small cable businesses and subscribers in Colorado Springs have claimed that Adelphia has an unfair monopoly in the city. However, the license Adelphia has with the city does not prohibit other businesses from entering the market.It's more like an economic monopoly, Tarbert said, adding that installing cable lines in the ground with utility lines is so costly - up to $50,000 a mile - that few small companies can even begin to challenge Adelphia's market share.De Young started Falcon Broadband last year when he bought SunWest Communications. His intention was to offer cable services to the booming community of Falcon, northeast of Colorado Springs.He then began working with developers of the Gold Hill Mesa community to provide service in Colorado Springs.Developers plan to build the Gold Hill Mesa community atop a 210-acre former gold mill, just west of downtown and U.S. Highway 24. Construction is expected to begin in February.
Thank to

No comments:

Post a Comment