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Comcast Settles Dispute in Monterey

Comcast Corp. and Monterey County, Calif., reached a settlement that should end two years of litigation over whether Comcast's predecessor, AT&T Broadband, was living up to its franchise requirements.

Comcast will pay $1 million plus concessions to settle the dispute, enabling approval of final transfer of the cable system. The deal has been tentatively approved by Monterey County's Board of Supervisors but several documents, including the transfer agreement and stipulations regarding a local institutional network, still need to be signed, according to Virgil Schwab, county information technology director.

Comcast spokesman Andrew Johnson said the parties were still hammering out the final details and would not discuss them. But he said Comcast is optimistic and confident that all the agreements will be completed.

The county began complaining about AT&T Broadband in 1998, Schwab said. A number of issues irritated regulators, including a lack of public, educational and government channels, lack of connections for public buildings as required in the franchise and the county's outdated cable plant. The 11,000 consumers served in the county — mostly in the farm country around Monterey Bay and Salinas — complained about poor service. (Monterey County also includes such scenic coastal sites as Big Sur and Pebble Beach.)

When the problems were rectified, the county assessed liquidated damages and dipped into its AT&T-bankrolled security for payment of those damages, Schwab said.

AT&T Broadband responded by filing suit in state court in Salinas, challenging the county's action.

The operator also filed a complaint with the Federal Communications Commission, asserting the demands of the county were "commercially impracticable." Then Comcast bought AT&T Broadband and approached the county for a franchise transfer.

The county supervisors rejected the transfer on legal, technical and financial grounds.

"We're not seeking new terms and conditions. We just wanted a commitment to perform," Schwab said.

The parties have been negotiating since the transfer proceeding. In addition to the cash payment, Comcast reportedly will commit to building on the I-net, including stepping back into the city of Monterey and connecting a courthouse there that was bypassed during initial construction, the county executive said. Comcast will submit better records on service performance and will develop formal escalation proceedings for unresolved consumer complaints, according to the county.

Both sides expect final agreements in June.