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February 13, 2006 // UPDATED 2:05 pm - April 26, 2007
By: Sarah McKenzie
Sarah McKenzie

City, Time Warner trade barbs over cable contract

The city of Minneapolis laid out its case that Time Warner Cable has violated its franchise agreement in hearings last week and is expected to seek millions of dollars in penalties.

Councilmember Paul Ostrow (1st Ward), chair of the Ways and Means/Budget Committee, presided over two days of hearings that continue Monday, Feb. 13.

Before the hearings began, Time Warner filed a federal lawsuit against the city, claiming it is illegally seeking tens of millions of dollars from the cable company in exchange for approving a franchise transfer to Comcast. Time Warner, the area’s chief cable provider, is negotiating to transfer its franchise rights to Comcast under a proposed market swap.

Mike Bradley, a St. Paul lawyer representing the city, argued that Time Warner violated the franchise agreement in four instances: failing to build an institutional cable network for the city; reserving 25 percent of its system capacity for public use; failing to provide annual customer service surveys; and using the public right-of-way for its “exclusive benefit.” The company was given permission to public infrastructure, such as utility poles, to create its network.

The alleged violations have occurred since 2000 when Time Warner upgraded its cable system, he said. It has had a franchise agreement with the city since 1995.

“We have a bad neighbor on our hands,” Bradley said of Time Warner. He went on to say that the hearings come at a “natural time to reconsider its cable agreement” given the franchise agreement has expired.

The two-day hearings, held Feb. 6-7, took on the tone of the formal court proceedings and often included heated debate between the two sides.

Randall Tietjen, an attorney with the Minneapolis firm Robins, Kaplan, Miller & Ciresi, said Time Warner has been in full compliance with the franchise agreement and can’t understand why the city took so long to air its concerns.

“Time Warner has always strived to provide the best possible service to its subscribers in Minneapolis,” he said. “… The city cannot sit on its rights all these years if it thinks it has some.”

He accused the city of “trying to extract as much money from Time Warner as it can” as it prepares to transfer its franchise rights to Comcast.

The Feb. 13 hearing will begin at 8:30 a.m. in Council Chambers at City Hall, 350 S. 5th St. Once the hearings are over, Ostrow will review the arguments and make a recommendation to the full Ways and Means/Budget Committee.