Cable service curtailed; city out franchise fees
From our weekly issue dated April 1, 2009
Employees of XL Cable Construction, a Medford-based contracting firm working for Charter Communications, removed cable-system lines from utility poles in and around Cave Junction last week. In spite of the line’s physical removal, some cable customers report receiving a bill for cable service through April. See story on page 3. (Photo by Michelle Binker, Illinois Valley News)
A series of ownership changes and bankruptcy filings continue to complicate efforts to recoup franchise fees owed the city of Cave Junction.
The situation came to a head last week, when subcontractors for the Washington-based company, Charter Communications, began removing equipment from utility poles throughout the franchise area. All Cave Junction cable service was discontinued as a result.
Frank Antonovich, vice president of Charter’s northwest properties, said that the franchise was transferred to Rapid Communications on Dec. 31, 2006 after eight years of service. Cave Junction was one of several Oregon cities included in the service area. The rest were Adams, Athena, Brownsville and Weston.
Cave Junction City Recorder Jim Polk said that the franchise ran through August 2007. However, the chain of ownership became much more complicated after that.
Antonovich said his “understanding” is that Rapid subsequently sold the system to PC One, a New Jersey-based company. The franchise then was sold to Texas-based Almega Cable. That company was registered in Washington state on Jan. 16, 2009, but is not registered to do business in Oregon.
But according to Polk, the franchise agreement on file with the city is through PC One.
“We have nothing to reflect it was transferred to Almega,” he said.
When the system was owned and operated by Charter, that company had an agreement with Pacific Power and Frontier that allowed its equipment to be placed on their utility poles.
“The initial sales agreement to transfer obligation was to assign current contracts or get a new contract with those pole owners,” Antonovich said. “That was part of the initial sales agreement that did not happen.
“Because that did not happen, Charter was left as the company that held the pole contract with Frontier and Pacific Corp.”
A recent Charter press release states that, “Almega Cable failed to negotiate the requisite pole attachment agreements.” Charter issued a final notice to Almega on March 4 regarding the pole agreements, the release states, but those requests were ignored as of March 23.
“We, during the sale, worked with the cities on the franchise transfer at the time of the sale. That was done,” Antonovich said. “We did everything by the book, as far as being a franchise transfer and filing the right documents.”
Polk has referred the matter to City Attorney Patrick Kelly over the failure of the companies to renegotiate a franchise contract with the city. But Kelly said that may be easier said than done.
“There’s a 95 percent chance it’s futile,” he said. “We’re dealing with the remnants of a dying company.”
Kelly said he plans to research Almega to determine if there are any judgments against the company, and to see if it owns any property.
“I have to analyze if it’s practical to seek a judgment,” Kelly said.
It typically costs between $3,000 and $4,000 to file a lawsuit, Kelly said. As such, he said, “there would have to be a way of getting paid before I can assume it’s practical to pursue.
“I don’t do things that are worthless and I don’t want to waste taxpayer money,” Kelly added. “Are we willing to expend your money on me to sue to get a judgment I have to determine is collectable or not?”
To further complicate matters, Charter filed for a prearranged Chapter 11 bankruptcy on Friday, March 27 to restructure approximately $8 billion of bad debt. The company still would have around $13 billion of debt on its books after bankruptcy proceedings concluded.
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