Charter customers may get free services under settlement

ST. LOUIS -- Charter Communications Inc. subscribers may get free premium services under a proposed settlement the nation's third-largest cable TV systems operator reached in a lawsuit over questioned charges.

As part of the deal spelled out in the company's full-page advertisement in Thursday's USA Today, eligible customers may be able to choose six months of free high-speed Internet service, service upgrades or movie channel service. Other options include six free pay-per-view or video-on-demand selections.

St. Louis-based Charter, controlled by Microsoft Corp. co-founder Paul Allen, has more than 6 million customers in 37 states.

It was not immediately clear how many consumers would be eligible for the free services or the settlement's cost to Charter, though trade magazine Multichannel News reported Monday that amount may reach as much as $200 million, depending on compensation chosen by customers.

The settlement applies to people who before July 8 subscribed to Charter's residential cable TV service and paid a fee to participate in the company's wire-maintenance plan, or who paid a fee to rent an analog or digital converter box while getting basic or expanded basic service.

The lawsuit filed in 2001 by two Spartanburg, S.C., customers accused Charter of charging for a wire-maintenance service without adequately notifying that the plan was not mandatory. The company also allegedly billed some basic and expanded-basic customers for unneeded converters.

That lawsuit later was joined with a similar case in Georgia, where a judge on July 8 gave preliminary approval to the settlement. The matter may be finalized during a hearing there Nov. 10.

Cam Lewis, a South Carolina attorney representing the plaintiffs, cheered the deal reached with help from a San Francisco mediator, crediting Charter with "stepping up and correcting this."

"You've got to straighten up what WE consider bad practices," Lewis said. "This happens so often these days -- a lot of the things that happen to consumers are nickel things, dime things, quarter things.

As part of the settlement, Charter admits no wrongdoing, saying in the newspaper ad it "denies that it has been in any way misleading and raises a number of defenses to these claims."

Saying it settled the matter to "avoid the significant cost in time and money to litigate," Charter insists on its Web page detailing the settlement -- -- that "we have been fair and honest in dealing with our customers with respect to the charges."

Charter did not return telephone messages.

On its Web site, Charter said it anticipates that all benefits would be disbursed by the end of next year, though it acknowledged it has no control of the timing of the settlement's final approval.

Existing Charter customers also were being notified of the proposed deal in their September bills.

A month ago, Charter agreed to pay $144 million in cash and stock to settle shareholder lawsuits accusing the company of inflating its financial results and customer numbers.

In July 2003, four former Charter executives were indicted on federal charges of scheming to defraud investors by inflating the company's revenue and cash flow.

In July of this year, the company announced that the Securities and Exchange Commission had closed its probe of the same accounting issues. The SEC sought no fine, and the company agreed to an order prohibiting future violations. The company did not admit or deny wrongdoing.

Charter shares fell a penny to close at $3.28 Thursday on the Nasdaq Stock Market.


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That Charter charged a rental fee for an analog or digital cable converter box on customers who subscribed to basic or expanded cable service only when such boxes had no value and served no purpose for those customers. The company also allegedly imposed wire maintenance fees on subscribers without their request or permission, and that the wire-maintenance plan was worthless or of lesser value than charged.

Among other things, the plaintiffs allege that Charter is liable for damages and refunds of the questioned fees.CHARTER'S RESPONSE

Under the settlement, Charter admits no wrongdoing and denies it misled.WHO'S ELIGIBLE

Residential cable TV subscribers in the continental United States who before July 8 paid the questioned fees.RENUMERATION

Current customers who paid at least one of the questioned fees and who file a timely proof of claim may select -- at no charge -- one movie-channel service for six months, high-speed Internet for six months, the lowest tier of digital service for six months, or an upgrade from basic to expanded service for three months.

Former customers who paid at least one of the questioned fees may get either free Charter high-speed Internet or the lowest tier of digital service for the same length of time, each for six months.HOW TO SUBMIT A CLAIM

Claim forms were included in a full-page advertisement Charter had in Thursday's USA Today.SETTLEMENT QUESTIONS

Call (866) 869-9382, or look online at

Claims must be postmarked on or before Dec. 25, 2004.CHECKING ON YOUR CLAIM

To verify whether Charter has received your claim form, call Jacqueline O'Quinn of Thompson Coburn LLP at (314) 552-6061 on or after Nov. 15.