FAIRFIELD — The town is asking a federal court to make Time Warner Cable Northeast pay $353,000 in unpaid franchise fees, while the cable company has filed its own motion asking the court to rule in its favor and calling Fairfield’s claims baseless.

In a motion for summary judgment filed Wednesday in U.S. District Court in Bangor, the town said that the company had not paid it 5 percent of the gross revenue it collected in town, as required by a 2005 agreement.

By failing to pay its share of the revenue, Time Warner has “materially breached the terms of the agreement, and by virtue of its breach, Fairfield has been monetarily injured,” the town states in its motion.

The town filed a lawsuit against Time Warner in October to recoup the unpaid fees. A municipality can arrange for a cable company to pay a franchise fee to the local government in exchange for using the town’s infrastructure. The cable company can pass those fees through to consumers as part of their cable bill.

According to the town, Time Warner was paying it 5 percent of only the revenue it collected for basic cable services, not its gross revenue from the town. The difference between the two amounts was $55,000 to $60,000 per year since 2009, for a total of $352,981.

“Much of the matter involves interpretation of the contract language,” said Bill Lee, Fairfield’s town attorney.

But Time Warner, in its own motion filed on Wednesday, said the town misinterpreted the franchise agreement and was unauthorized to increase the fees “unilaterally” to 5 percent of the gross.

“Time Warner Cable’s franchise agreement with the town makes it clear franchise fees are to be collected and paid on revenue from limited TV service only,” company spokeswoman Nathalie Burgos said in an email Thursday, “and our annual filings with the town show we have collected and paid franchise fees appropriately.”

In 2005, the Town Council authorized then-Town Manger Paul Blanchette to request that Adelphia, then the cable provider in town, increase its franchise fee from 3 percent of the gross revenue from basic cable service to 5 percent of gross revenue, as it believed it was entitled to under the franchise agreement.

Blanchette wrote a request to the company, outlining the council’s request. Blanchette died in 2010

According to the town, the issue didn’t come up again until last year, when Town Manager Josh Reny obtained a copy of Blanchette’s letter and determined that Time Warner, which bought Adelphia, had been paying the town 5 percent of gross revenue from only basic cable, setting off the dispute, Lee said Thursday.

Effectively, the claim goes back nine years, but the statute of limitations on the case is only six years, so it would prevent the town making a claim for any lost fees prior to 2009, Lee added.

However, Time Warner Cable says Fairfield misinterpreted the franchise agreement. The terms of the agreement never gave the town the authority to request a percentage of its gross revenue, only an increase on basic cable revenue, it argued in its own motion for summary judgment.

According to Time Warner, one of its local managers spoke to Blanchette after receiving his request, and when informed of the magnitude of the fee increase on customer’s bills, Blanchette agreed to limit the request to basic cable only.

In its motion, the town states that even if there was such a phone call, Blanchette was unauthorized to make a change to the council’s order.

Time Warner also argues that it has offered consistently to increase the franchise fees on a “going-forward basis,” but the town has declined because it does not want to be held responsible for increases in residents’ cable rates, wanting a retroactive lump-sum payment instead.

Even if the town’s claims had any basis, the statute of limitations on the case has passed, according to Time Warner.

Lee, on Thursday, said the town and Time Warner probably will respond to each other’s motions over the next several weeks, at which point the case could be set for oral argument.

Peter McGuire — 861-9239

[email protected]

Twitter: PeteL_McGuire


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