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LA Story

Time Warner Cable Inc. (NYSE: TWC)'s troubles in Los Angeles have finally caught up in the form of a lawsuit filed by the city on Thursday.

The city alleges that the MSO caused "major havoc and distress" after Time Warner Cable became the dominant cable provider in Los Angles after taking over properties formerly owned by bankrupt Adelphia Communications and swapping some systems with Comcast Corp. (Nasdaq: CMCSA, CMCSK). (See Adelphia Acquisition Completes.)

The operational problems there (and in Dallas, via another swap with Comcast) had been a drag on Time Warner Cable, though company president and CEO Glenn Britt noted in February that the operator had "turned a corner" in those markets in the fourth quarter of 2007, with both properties "poised to make a meaningful contribution in 2008." (See Time Warner Cable Survives Q4.)

But the city of Los Angeles claims the changes have been a bigger drag has been on cable customers. The lawsuit alleges that upgrade activities and operational and backoffice changes helped to contribute to shoddy service and excruciatingly long customer service hold times, thus violating the MSO's franchise agreement with the city.

Although TWC has since ironed out most of those problems, the City of Angels wants more than an apology. The Los Angeles Times said Time Warner Cable could be on the hook for "tens of millions of dollars" in reparations.

Heavy Reading senior analyst Alan Breznick told KPCC 89.3's Patt Morrison that the MSO "expected it to be a big mess" as it switched customers over to the new platform. "But it looks like it was an even bigger mess than they expected."

But it was the customer service failings that stuck in the city's craw. "That's what really enraged people, and I think that's probably what's really enraging the city about this," Breznick told Morrison on Thursday.

— Jeff Baumgartner, Site Editor, Cable Digital News




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