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Comcast Sues Calif. City Over Impasse

Contending that officials in Walnut Creek, Calif., are “actively prohibiting” a local system upgrade, Comcast Corp. has sued the city in federal court in hopes of getting that upgrade underway.

Comcast’s Feb. 25 lawsuit, in U.S. District Court for the Northern District of California, claims the city has tied permits for an upgrade of the 450-MHz system to improper franchise-agreement concessions.

Walnut Creek is part of a consortium in the San Francisco Bay-area county of Contra Costa which recently reached agreement in principle with Comcast to complete refranchises.

It’s is the only city in the consortium that has not been upgraded, because Comcast can’t obtain the necessary permits.

Walnut Creek assistant city attorney Paul Valle-Riestra, a leading figure in the consortium, said he hoped franchise talks would continue. An agreement with Comcast would render the lawsuit moot.

Comcast said it hasn’t agreed to a franchise because in the guise of an institutional network, the city wants improper concessions, such as building a separate, advanced telecom network for municipal use.

The city also wants support for public, educational and governmental access channels in excess of the 5% franchise fee cap, Comcast has alleged.

Without an upgrade, Comcast can’t offer such services as expanded DTV, high-speed Internet and HDTV. That’s made it more vulnerable to competition from rival companies that range from Verizon Communications Inc. to Astound Broadband, a bundled-services provider.

Astound has captured 46% of the cable customers in Walnut Creek and neighboring Concord, according to Valle-Riestra.

The lawsuit also notes that Walnut Creek has the right of first refusal to buy Astound’s plant in the city.

Valle-Riestra called the suit ridiculous, and added that Comcast has mischaracterized the situation in his town. “We never told them they can’t upgrade,” he said. But he also said the city has terms and conditions regarding that construction.

Though Comcast officials believe they are close to completing franchise talks with the consortium, it sued Walnut Creek because the cable company had “exhausted all other remedies” in its attempts to gain permits, according to a Comcast statement.

“We regret that this dispute has reached this point,” the statement added. In 2004, Comcast filed four similar lawsuits in California, including a widely watched challenge to PEG demands by the city of San Jose. The federal judge there — who ruled the operator could only challenge completed terms, not proposals — rebuffed the company.