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L.A. Insists Adelphia Cut Rates, Reimburse

May 02, 2003|Peter Nicholas | Times Staff Writer

City officials are demanding that Adelphia cable company cut its rates and return $5.5 million to about 200,000 Los Angeles cable TV subscribers, contending that the troubled company hasn't given assurances that last year's rate hikes were warranted.

In a joint news conference Thursday, Mayor James K. Hahn and City Atty. Rocky Delgadillo said they were beginning what could be a lengthy campaign to force Adelphia Communications Corp. to roll back basic cable rates as much as $2.02 per month and to repay the fees collected under an increase imposed last July in West L.A., Sherman Oaks, Eagle Rock and Van Nuys.

Hahn said the Pennsylvania-based company failed to certify, under penalty of perjury, the truth of financial statements submitted as justification for the rate hike. Without an accurate picture of the company's books -- and in a climate in which the company has been tainted by financial scandal -- the city cannot accept Adelphia's claims that it needed more subscriber fees, the mayor said.

"They couldn't find anyone in their company who wanted to certify their financial records," Hahn said. "I can understand that, since they've had problems with their accounting practices.... To protect the consumers of L.A., we have to know the information provided to us is accurate. If we can't certify it, we can't approve the rate increase."

The Coudersport, Pa., company filed for bankruptcy protection last June. Two executives, one in charge of the accounting department, have pleaded guilty to charges of securities fraud. Federal prosecutors have indicted the company founder, John J. Rigas, and two of his sons on charges that included looting company coffers.

A spokesman for the company said Adelphia is trying to give the city more financial records.

"We've been working with the city and have provided a substantial amount of financial information in a short period of time," said Larry Windsor, Adelphia's regional director of governmental affairs. "And we're in the process of compiling additional information for them. We'd like to continue working with the city on this, and we're prepared to do so."

It could be some time before cable customers see a reduced bill, if ever. The City Council would need to pass an ordinance returning rates to last year's level. Adelphia could then file an appeal with the Federal Communications Commission.

The city contends that it is owed nearly $4 million in franchise fees on top of the $5.5 million it says the company owes customers in the form of rebates.

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