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Papas Fritas writes:
"Time Warner Cable Inc. has stirred anger over its hike in subscription rates for customers and its efforts to extract hefty fees from rivals to air the L.A. Dodgers channel. Now Meg James reports at the LA Times that the city of Los Angeles has sued the cable giant, alleging Time Warner Cable stiffed the city on franchise fees over four years through 2011. The city seeks nearly $10 million in fees, money it said could have helped ease its budget problems during the financial crisis. 'Time Warner owes L.A.'s taxpayers millions of dollars for the privilege of having its franchise,' says City Attorney Michael Feuer. 'This is a day where we are standing up and saying enough is enough.' The 24-page lawsuit, filed in U.S. District Court in Los Angeles, contends that Time Warner Cable "blatantly refused to live up to its obligations to the city" (PDF) to pay franchise fees to operate its cable network over city-owned rights of way while collecting more than $500 million a year from customers in the city. The city is seeking $9.7 million from Time Warner Cable which includes $2.5 million in franchise and PEG (public, educational and government channel) fees and support for 2008 and 2009, plus another $7.2 million owed for 2010 and 2011.
The lawsuit comes just a few weeks after Time Warner Cable alerted its Southern California customers that it planned to hike rates by an average of about 6% a month for homes that are not covered by a promotional package. Time Warner Cable, in a statement, denied the allegation that it had cheated the city. '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 company said in a statement. 'We are disappointed the city has chosen to bring this action, which we strongly believe is without merit.' Jonathan Kramer, a Los Angeles-based telecom attorney and a member of the California chapter of the National Association of Telecommunications Officers and Advisors, said it was 'inevitable that [more] of these types of lawsuits will be filed' and that other cities are considering similar action, but that 'Los Angeles is first to pull the trigger.' 'It's the devil you know,' Kramer said. 'We know Time Warner. But Comcast is much more aggressive when it comes to pushing back (against) local jurisdictions.'"
(Score: 1) by mgcarley on Monday March 17 2014, @03:03PM
I'm not entirely sure that it's a monopoly or ever was, except maybe by default.
In the complaint, the wording is "virtual monopoly" which suggests "for practical purposes it was a monopoly because nobody else has strung up their own wires and no unbundled infrastructure was in place so competitors couldn't even lease the infrastructure", and in section IV it notes that the franchise rights are non-exclusive, as in, another entity could get a franchise if it wanted.
However, what normally seems to happen (in my own experience building cables in a much smaller city which has two incumbent operators) is that if an entity wants to string up it's own wires, in the permits the city will require them to be attached to poles - which is fair enough - in my case I have Ameren or Frontier owned poles and I'm not allowed to place my own (that would require a separate permit, but it would not be likely to be granted anyway due to the fact that poles already exist).
Then, if either one of those entities decides it doesn't want to let me use it's poles (this is the response I got from Frontier - despite the fact that the competitor, Mediacom, uses them) I only have one choice left, which is Ameren.
In my case, I got lucky in that Ameren said yes and the conditions weren't *too* hard to meet, but there is every chance that in a place like L.A. competitors may not have had 2 options for poles and/or the owner of the poles would require ridiculous rates for connecting to them or they might impose some ridiculous requirement which would render the whole thing either pointless, unprofitable or both. And they probably either didn't think about or didn't want to let anyone run cables in the sewers or use micro-trenching.
The only other option: underground.
But there are already a bunch of underground cables in the area (I seem to recall a figure of 7 entities having laid fiber being thrown around by this particular city - many of which aren't even in use, and none of which are accessible to anybody who might want to provide services to the adjacent residents, businesses and MDUs), and due to the fact that those cables already exist the city won't issue any more permits for underground cabling - and even if they did I have to deal with avoiding other utilities in addition to the existing wires AND it's also quite expensive (and I do want to keep the cost of my services reasonable).
So while TWC is very likely to be the bad guy in this case, there's probably a good reason that they could be considered (for practicality's sake) a monopoly, and for that, part of the blame would probably have to go to the city (or state or country) for probably not requiring that communications systems being built must be accessible to competitors.
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