Time Warner Cable’s Trouble in Tinseltown

Entertainment is vital to Los Angeles, especially video entertainment. So it has to be embarrassing for Time Warner Cable to be told by the city, in a lawsuit, that its cable TV service sucks.

Nobody likes to be told this sort of thing. But looking past the public relations hit, the question is: How damaging could this lawsuit be? At this point, it looks like a pesky nuisance, and not much more, for the cable giant.

Here’s why: Assuming Los Angeles City Attorney Rocky Delgadillo can prove his case, he wants Time Warner Cable, and parent company Time Warner, to make some customer service improvements and pay some money to the city and LA cable subscribers. The LA Times said civil penalties from the suit could be in the “tens of millions of dollars.” For Time Warner Cable, a $29 billion company, that liability is manageable.

Two years ago, Time Warner became the dominant cable TV provider in LA after city leaders approved an acquisition of Adelphia Communications and an asset swap with Comcast. As part of the deal, Time Warner agreed to LA’s unique customer service standards for cable TV companies, including a 30-second time limit for answering consumers’ phone calls and a 24-hour time limit for fixing TV service problems. (Hey FCC! Why don’t you have standards like those?!)

If Time Warner fell short of LA’s subscriber standards, it seems the company has probably violated the local franchise agreement that allows it to dominate the market, too. But the suit against Time Warner doesn’t raise a dispute over the franchise agreement. So Time Warner will likely maintain control over the TV market in LA, even if it loses the customer service suit in court.