Adelphia Owes Rebates, City Says

Adelphia Communications Corp. should provide rebates to its cable customers to compensate them for past incomplete upgrades, the Los Angeles city attorney’s office said Thursday.

City Atty. Rocky Delgadillo, who has in the past threatened to seek revocation of Adelphia’s franchises in Los Angeles and has even suggested the city might seize the company’s systems here, will hold a news conference today to propose the rebates, his office said.

The statement said Delgadillo would also call for free cable for customers, though it did not elaborate on that point.

Adelphia’s franchise agreements with the city expire Aug. 2, though Delgadillo has said he expects those agreements to be temporarily renewed. The company, the nation’s sixth-largest cable operator, filed for bankruptcy protection in late June following months of disclosures of off-balance sheet loans to its founding Rigas family, as well as overstated earnings and criminal and regulatory probes into its accounting practices.

Adelphia missed its quarterly franchise fee payment to the city, equal to 5% of its local revenue, that was due June 30. The company has until July 31 to make the payment or be held in default.

Coudersport, Pa.-based Adelphia said earlier this month that because of its bankruptcy filing it would reconsider an earlier move to put its Southern California assets up for sale.

Those assets, which represented almost half of the company’s subscribers, attracted a number of expressions of interest, the company has said, but no formal bids.

Separately Thursday, Adelphia Business Solutions Inc. said its audit committee had asked outside counsel to conduct an independent investigation into related-party transactions and agreements between the company, the Rigas family and its former parent Adelphia Communications.