Comcast settles in suit over franchise fees

By Péralte C. Paul

The Atlanta Journal-Constitution

Cable provider Comcast Corp. has reached an agreement with Georgia customers who filed a class-action suit accusing the company of overcharging them on franchise fees while assessing those fees on other customers for time periods before they even had service.

For one or more Georgia charities, the settlement is worth $50,000 in Comcast donations.

For the plaintiffs' attorneys, it's a payday of $462,962.50 in fees for the nearly 4-year-old suit.

The plaintiffs themselves? They get zero.

A Comcast spokesman said going through every bill for each of its Georgia customers would be time-consuming and laborious, given that the disputed charges go back to Oct. 20, 1999. That spokesman, Andy Macke, said while customers may have been overcharged in some years, they were undercharged in others.

"From a practical standpoint, you'd have to go through every customer's bill, see when they connected and when they disconnected and calculate the bill," Macke said, explaining in metro Atlanta alone, the company has 800,000 cable subscribers, the bulk of its Georgia customers.

"It would be an impractical exercise considering the amount of money on a per-subscriber basis that we're talking about. We'd be talking about less than one dollar."

In the future, however, the settlement -- which still must be approved by a federal judge -- requires Comcast to conduct quarterly reviews of franchise fees on invoices of its current customers and return any overages to subscribers.

It also says the company must send notices to those current Georgia customers in the settlement class notifying them that they may be charged franchise fees preceding the time they became subscribers.

The settlement covers those subscribers who were Comcast customers from Oct. 20, 1999, to the present. It also includes the cable companies preceding Comcast, including AT&T Broadband.

The federal Cable Communications Policy Act allows local governments to collect franchise fees from cable providers -- capping them at 5 percent of those firms' gross revenues. The fees, collected by cable subscribers, are turned over to the local governments where the companies operate.

A hearing is scheduled Dec. 21 before a federal judge in Atlanta who may approve, modify or reject it.

Both sides hammered out the agreement Aug. 14.

That the lawyers' fees are nine times that of the actual settlement is not uncommon, one litigation expert says.

"It's a case of consumers accusing a company of unfair practices," said Jessica Gabel, an assistant professor of law at Georgia State University.

Those cases are typically harder to prove compared with other types of class actions, such as workers who claim not being paid for hours worked, she said.

"It's nothing that shocks the conscience," Gabel said about the amount awarded to the lawyers.

So if those types of cases are hard to prove, why settle?

"That's going to be far cheaper for the company," she said. A company going to trial in a lawsuit could be looking at charges of $300 an hour for a junior associate up to $1,000 for a partner.