Localities weigh in on Charter woes
Published 8:37 am Wednesday, March 4, 2009
Local officials are busily determining what course to take with Charter Communications after the beleaguered company announced that it will file for Chapter 11 bankruptcy protection by April 1.
The St. Louis-based company spent last week assuring its customers across the country that plans to refinance about $8 billion of its $21 billion debt would have no effect on service.
“Charter’s operations are strong and the company remains focused on continuing to provide its customers with quality service and support today and going forward,” the company said in the same statement announcing the Chapter 11 filing.
Locally, Charter serves more than 25,000 cable television customers in Franklin, Isle of Wight County, Southampton County and Suffolk.
Both Franklin and Isle of Wight use Charter’s services to disseminate meeting notices and public information.
According to Public Information Officer Don Robertson, Isle of Wight also broadcasts Board of Supervisors and some planning commission meetings, as well as County Beat, a governmental affairs program, using Charter.
While some local government officials were already evaluating other service providers before the announcement, others say they are content with the service.
Isle of Wight’s franchise with Charter is set to expire Aug. 16, 2010. The county is soliciting public comments on the quality of Charter’s service.
Supervisor Al Casteen, who sits on the county’s Charter committee, said this development may be an opportunity to evaluate other companies.
“I think the whole Charter cable renewal process is going to be an opportunity for us to see what’s out there,” Casteen said.
“We obviously want to continue to see if we can pursue a relationship with them. But, for now, I think the best strategy will be to wait and see how this all washes out,” he said.
Charter’s agreement with the city of Suffolk is up for renewal this year; officials there are currently in the midst of negotiations.
Suffolk spokeswoman Debbie George said, “We are taking this very seriously and talking with our attorney about what impact this might have,” she said.
Southampton County Administrator Michael Johnson said the county will stick by the cable provider.
“Charter communicates with us regularly,” Johnson said. “They maintain that their operations are strong. At this point we have no cause for alarm.”
Andy Ritter, Franklin’s director of information technology, said the city hasn’t had a problem since Charter’s announcement.
“So far, the service has been solid,” he said.
According to Johnson, the county has had a 15-year non-exclusive franchise agreement with Charter since 2002. Johnson said it does have a provision in the franchise agreement that should Charter fall into receivership, the county has the right to revoke the franchise.
“That’s certainly one of the protections that we do have in the agreement,” Johnson said.
The company was placed on a watch list by ratings agency Moody’s Investors Service in December, alerting consumers that Charter was in financial trouble.
Questions about Charter’s financial stability were raised again when the company missed a $74 million interest payment on bonds that was due Jan. 15.
Charter worked with its creditors to develop a plan to raise $3 billion through refinancing debt and getting new capital while two of its subsidiaries will cover the missed $74 million payment.
The press release revealed that the deal will leave the company with $800 million in available cash and cash equivalents.
“We are pleased to have reached an agreement with such a significant portion of our bondholders on a long-term solution to improve our capital structure,” said Neil Smit, president and chief executive officer. “We are committed to continuing to provide our 5.5 million customers with quality cable, Internet and phone service.”
In December, Charter made headlines here because of unsuccessful negotiations with local ABC affiliate WVEC-TV that nearly resulted in a loss of the channel’s signal for
area analog customers.