Los Angeles Sues Time Warner Cable

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By Trey Thoelcke Published
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The Los Angeles Times reported over the weekend that the city of Los Angeles has filed a lawsuit against Time Warner Cable Inc. (NYSE: TWC) for allegedly cheating on its franchise fees to the city for more than four years.

According to the 24-page lawsuit, filed in U.S. District Court in Los Angeles, the city is seeking $9.7 million from Time Warner Cable, which it said “blatantly refused to live up to its obligations to the city” over city-owned rights of way, even though the cable provider got $500 million a year from customers there.

Time Warner Cable is said to owe some $2.5 million in franchise fees and public, education and governmental channel fees in 2008 and 2009, as well as $7.2 million in 2010 and 2011. Time Warner Cable has of course denied the allegations, and it said in a statement, “We are disappointed the city has chosen to bring this action, which we strongly believe is without merit.”

Los Angeles charges cable companies franchise fees of 5% of a cable operators’ revenues, in lieu of charging rent for the public right-of-way to install and maintain the necessary wires and equipment.

The lawsuit comes weeks after Time Warner Cable announced that it plans to hike rates on some Southern California customers by an average of about 6%.

Time Warner Cable shares were down fractionally in premarket trading Monday to $137.69, in a 52-week range of $89.81 to $147.28.

Photo of Trey Thoelcke
About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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