City claims franchise fee underpayment by Charter

By Thomas Wilson

STAR STAFF
twilson@starhq.com

   Forget MTV, the city of Elizabethton wants its franchise fee.
   Following an internal audit, the city is seeking tens of thousands of dollars from Charter Communications that the city claims the company owes in delinquent cable franchise fees after assuming the franchise from a former cable television provider.
   City Manager Charles Stahl said Monday the city had commissioned a telecommunications consultant to audit the monthly franchise fee payments for Charter and predecessors from previous years as part of a compliance evaluation process.
   The city alleges that Charter, which assumed the Marcus franchise in a merger two years ago, is delinquent in franchise fees to $67,993. Factoring in a penalty of 8 percent annually for the 20-month period in question, the total rises to $98,139 in delinquent fees.
   The audit covered fee payments made by Charter between Jan. 1, 2000 and June 30, 2002.
   In a letter to Charter's senior vice president David McCall dated Feb. 4, 2003, city attorney Roger Day referenced a letter to Charter's Tri-Cities-area general manager Craig Perica from Stahl in Oct. 2002. Stahl's correspondence included three franchise fee summaries for 1995, 1996, and 1997 when the franchise was held by the Marcus cable television company.
   Perica said Tuesday he had received the letter from Stahl and had forwarded it to the company's legal department for review. He also said the franchise statement of transfer waived any outstanding liabilities to Charter that could be assumed from Marcus.
   "They waived any liabilities at that time because the statement of the transfer stated that the city stated there were no outstanding liabilities," Perica told the Star on Tuesday.
   Marcus was paying a franchise fee of 5 percent for total revenues, according to their agreement with the city. Then Stahl states that, in Jan. 1996, Marcus had paid franchise fees on "Basic Tier service only" while the company was negotiating a new franchise agreement with the city.
   Day's letter requests the company to notify the city of their intention to resolve the matter within 15 days. The issue will likely be raised at Thursday night's City Council meeting.
   The Council is also expected to consider on second reading an ordinance that would rezone a portion of property on Riverside Drive from industrial to high density residential use.
   The council approved rezoning of the Mack Roller property from M-2 industrial to R-3 residential zone in January. The city Planning Commission voted 6-0 to approve the rezoning request in August.