The town of Glenville was right to hold off approving a new contract with Time Warner Cable last year after a resident showed how it had overcharged customers around $1.3 million. It did so by passing through to subscribers all of the franchise fee, rather than just the percentage allowed under the old contract.
But the company claims that no matter what the old contract (which it inherited from a predecessor) said, federal law preempts — and federal law allows it to pass through the entire franchise fee. So it will keep the $1.3 million, thank you.
Since then the two sides have been stuck on “pause” as the state attorney general investigates this and similar situations involving Time Warner and other municipalities. Town officials say the attorney general’s office agrees with them, but they expect the case eventually to go before the state Public Service Commission (PSC).
The trouble with that is, even if the decision goes the town’s way, it will take more time. Meanwhile the town would continue to lose out on larger franchise fees it would be due under the new contract, thanks to an expanded definition of gross revenues and other changes.
So it makes sense for the town to hit the “play” button again, update the new contract and approve it.
Unfortunately that contract is the company’s standard one, allowing it to pass through the entire franchise fee. The town will be acknowledging that Time Warner has a right to do so in the future, but shouldn’t give up its own rightful claim for the past. This should include the possibility of a lawsuit if the PSC rules against it.