Cable-franchise company overpaid city, records show

Intermedia and three other cable-franchise holders overpaid Asheville some $5.2 million since 1967, according to a consultant’s report released last week.

The city’s cable contract requires the franchise holder to pay the city 6 percent of service charges, but for years, parties to the contract have argued about which revenues should be included in calculating those charges.

The discovery of the overpayments comes after years of accusations by activists and media, who have claimed the cable companies underpaid the city. A 1997 audit by consultants Rice, Williams estimated that the city had been underpaid by about a half-million dollars between 1992 and 1995.

However, the recent audit, paid for by former franchise holder Cableview, found the opposite to be true.

“This report clearly shows that the city owes us significant back payments,” said Cableview General Manager Joe Love. “We have billed the city, plus interest.”

Asheville City Council met in closed session last Tuesday to discuss how to respond. That night, a secret videotape of the proceedings was aired on the local public-access channel, showing Council members arguing over whether to hire another consultant to study the two earlier consultants’ studies.

Asheville Vice Mayor Edward Hay said, “Maybe we should have signed that contract renewal when we had the chance.”

The previous City Council had deadlocked several light years ago over whether to renew the contract.

Mayor Leni Sitnick said Council members felt violated by the airing of the secret videotape. “I’m all for open government, but I don’t want Big Brother looking over my shoulder all the time,” she complained.

Love said Cableview decided to air the tape in the public interest. “It was clearly an authentic tape, and clearly something the public had a right to know about,” he argued.

The tape shows several Council members expressing concern that the city won’t be able to come up with the $5.2 million.

Love said Cableview is willing to allow alternate payment plans. “We can raise cable rates, the city can forgo its 6 percent, or we can just black out subscribers’ sets until next April 1,” he said. “We’re easy.”

For the video version of this story, tune in to Channel 10 at 9 p.m. on April 1.

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