The proposed settlement in a consumer lawsuit against TCI Cablevision is wholly inadequate, according to a filing made Friday by the State of Washington.
In fact, said the objection signed by Paula Selis of the Attorney General's Office, the cable television provider could actually made a profit on the deal negotiated in Okanogan County.
The suit was brought in 1994 as a class action by two subscribers challenging TCI's $5 late fee. They lost, but TCI settled the case while it was on appeal.
The settlement calls for a roll-back in the late fee to $3. The late-payment period would be extended to 40 days from 30.
In Spokane, where fees date back to Cox Cable ownership, late fees are $7.50, but do not kick in for 60 days. Spokeswoman Alison Ruckhaber said the settlement will bring the local system into compliance with those elsewhere in the state.
TCI also would grant its 500,000 Washington subscribers three coupons good for a $2.50 discount on pay-per-view movies.
TCI estimates the coupons alone are worth $3.8 million.
Not so, the attorney general says, because a $2.50 per-movie fee to be paid by subscribers who redeem the coupons will more than cover TCI's cost of providing the service.
And only a very small portion of TCI customers will likely use the TCI coupons, the state adds.
As for the reduction in late fees, the attorney general says the revenue TCI loses as a result will be more than covered by imposition of a new $15 disconnnect fee.
"The agreement purports to lower the late fee," the filing says. "It in fact provides a windfall to TCI."
The attorney general suggests Superior Court Judge Jack Burchard consider rulings in Baltimore and Washington, D.C., that imposed a total of $14 million in fines on TCI.
Testimony in one of those cases, the filing notes, pegged the actual costs to TCI of late payments as low as 33 cents.
"It's the attorneys and TCI who come out on the top of this settlement, not the subscribers," said Selis, noting the two attorneys who represented the class stand to receive fees of as much as $650,000.
The filing says the two, Richard Price and Scott Kane, failed to present any evidence that countered TCI's justification of its late fees.
Kane said Friday he and Price objected to any late payment penalties, putting the burden of proving a fee was necessary on TCI.
The state, Kane said, must convince the judge that he and Price did not do an adequate job in order to step into the case.
TCI attorney Brian Everle said Burchard determined subscribers had been properly represented when he made his initial ruling in the case.
Everle said the state also was wrong in claiming the disconnect fee is new. In Wenatchee, he said, TCI charges a minimum of $18.75 to roll a truck.
"The settlement would result in a reduction of that disconnect fee," Everle said. He said he does not know what fees are charged in other TCI service areas.
In Spokane, a $10.53 field collection fee is charged if subscribers bring their account current when an employee is sent to a home to disconnect service, Ruckhaber said.
Washington, D.C., attorney Phil Friedman, who brought the TCI case to the attorney general's attention, said the state's filing reinforces his contention the settlement is a bad deal for subscribers.
He plans to represent subscribers who objected to the settlement at a March 6 hearing before Burchard. If granted status as an intervenor, he said he will try to get the deal thrown out.
He would then file a new case in King County, said Friedman, who has more than 30 cases ongoing against TCI around the country.
He said Washington subscribers could receive as much as $11.5 million in cash relief if the final settlement was patterned after the rulings won in Baltimore and Washington, D.C.
