FAIRFIELD — Time Warner Cable has moved to have a federal court hear a suit filed by the town of Fairfield that claims the town has been shortchanged on its cable television franchise fees.

The suit was filed Oct. 23 in Somerset County Superior Court in Skowhegan, but Time Warner has asked that it be moved to U.S. District Court in Bangor. Fairfield’s lawyer, William Lee of Waterville, said Monday he will file a motion to have the case remanded to Superior Court and believes the town “has good grounds” to make that happen.

The town is seeking what it claims are payments owed as far back as 2005 when a new franchise agreement was inked with the cable supplier at the time. A franchise agreement calls for annual payments to be made by the service provider — currently Time Warner — to the town for the right to install its utility poles and transmission lines in the town’s public right of way.

Federal law allows the town to charge up to 5 percent of the annual gross revenues earned by the company for the right to do business in Fairfield, Town Manager Joshua Reny said Monday.

Reny said the company has paid annual fees in the $18,000 to $20,000 range, but that should have been more — perhaps three times more.

The town contends that in 2005 the Town Council voted and the town manager formally requested that the franchise fee be increased to the maximum allowed. The cable company at the time was Adelphia Communications Corp. Time Warner acquired the local system from Adelphia in 2006 and assumed its obligations.

The franchise fee had been 3 percent of basic cable service revenues. The town claims it notified the cable company in 2005 that it was exercising its right to raise that fee to 5 percent of all gross revenues for the year, including premium cable TV packages and channels, not just basic service.

“Instead, what happened was, they increased it from 3 percent of basic service to 5 percent of limited basic cable service — not all gross revenues,” Reny said. “That was a smaller dollar amount than it otherwise would have been.”

Reny said if the company had lived up to the agreement voted on by the Town Council by paying the full 5 percent of gross revenues, the franchise fee would have been closer to $70,000 a year.

Time Warner has not yet answered the claims brought by the town of Fairfield. The cable company’s attorney in Maine, Thomas B. Federle of Augusta, did not immediately return a call or an email for comment.

The company responded in court by filing papers to move the case to U.S. District Court in Bangor based on the amount of money in dispute and the fact that it is an out-of-state company.

Reny said he realized earlier this year when the town started to negotiate a new agreement with Time Warner that there was a “red flag” in the franchise fee agreement.

Reny said he had been told by Time Warner that the company was told by former Town Manager Paul Blanchette to pay the lower amount or 5 percent of basic cable services rather than 5 percent of gross revenue. Reny became Fairfield’s town manager in 2010 after the death of Blanchette.

The company never provided documentation of its claimed agreement to pay the lower rate, Reny said, claiming the conversations came up when the town sought to renew the franchise agreement, which expired in 2011.

In its nearly 40-page filing in Superior Court, the town claimed it is due compensation in three areas: breach of contract, recovery for services performed and unjust enrichment for the money not paid to the town over a period of years.

“This absolutely needs to be reconciled,” Reny said. “They have not been responsive to that request. Finally it’s to the point that the town was forced to file suit to try and reconcile this. There is a very significant difference of opinion on the position of the town and the position of Time Warner.”

Reny said the town is willing to talk about resolving the case.

“The town is looking for a negotiated settlement,” Reny said. “We might not be able to recoup all of the franchise fees that would have been owed to the town, but if we did it would be a few hundred thousand dollars.”

Doug Harlow — 612-2367

[email protected]

Twitter: @Doug_Harlow


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