TWC ordered to make good on subscriber overcharges


Time Warner CableNew York Attorney General Eric Schneiderman has gotten Time Warner to agree to pay consumer redress and state processing costs associated with charges made in violation of local franchise agreements in a number of New York communities. It will be mark the second round of related payments for the MSO.

In all, $2.2M in billing credits will be going to 18,437 subscribers, about $119 apiece on average; and TWC will also pay $200K to cover cost incurred by the State of New York as it pursued the matter.
“For too long, Time Warner Cable has been overcharging fees to its customers in direct violation of their local franchise contracts. This agreement brings millions of dollars in refunds to upstate consumers who overpaid their bills,” saidAttorney General Schneiderman. “Many New York families operate on a tight budget and every dollar counts. My office will not tolerate cable companies that ignore their contractual obligations and overcharge New York subscribers.”

The problem was laid out like this:  “A Franchise Agreement is a contract that local governments negotiate with cable companies granting the right to offer services and use public facilities. Some of the Franchise Agreements at issue limited the fee Time Warner Cable paid the town to 3% of gross revenues, and prohibited the cable company from billing subscribers any part of this cost. Other Franchise Agreements required Time Warner Cable to pay a 5% franchise fee and permitted Time Warner Cable to pass-through two-fifths of this fee to subscribers.  The municipalities also had the option to voluntarily allocate two-fifths of the fee to a fund subsidizing the cost of expanding the cable network in their communities, in which case none of the fee was permitted to be passed-through to consumers. The Attorney General’s investigation found that Time Warner Cable violated both types of Franchise Fee restrictions.”

TWC is said to have voluntarily repaid consumers $1.4M to make amends for earlier related overcharges.

RBR-TVBR observation: So TWC is only occasionally motivated to keep customer costs down. It gets all high and mighty about protecting its subscribers when it has pushed yet another local broadcast retransmission consent negotiation all the way to the breaking point.

But hitting consumers in the wallet seems to be just fine when TWC is spending billions for the rights to the Los Angeles Dodgers and pinning the costs on its subscribers, as it just did in California; or just outright overcharging consumers as has apparently happened in New York.