CSG Drops Suit Against Comcast

Prompted by the looming close of the AT&T Broadband-Comcast Corp. merger, CSG Systems Inc. is holding out a legal olive branch in hopes of smoothing its future relations with what will be the largest U.S. MSO.

CSG — which has been in a legal wrangle with both companies over its billing-systems contract with AT&T Broadband — withdrew a complaint it had filed against Comcast in U.S. District Court in Denver.

Englewood, Colo.-based CSG and AT&T Broadband have staged a series of legal battles over a 15-year billing contract struck by Broadband predecessor Tele-Communications Inc. in 1997.

In the latest round, now before an arbitrator, AT&T Broadband is pressing to be released from the contract, claiming CSG has withheld key customer data. CSG, in turn, has filed a counterclaim, charging that AT&T Broadband conspired to replace it with another billing firm and was preventing it from competing fairly for a billing-aggregation contract. The related complaint against Comcast, filed in June, charged the Philadelphia-based MSO with interfering in its contract with Broadband.

The withdrawl of that complaint at this time has everything to do with the close of the AT&T-Comcast merger, something expected as early as this week,
according to Joseph Ruble,
senior vice president of corporate development and general counsel.

"So we thought the timing was right in [that] the chances of the merger going through are 99-plus percent, and we thought this would be a good time, in advance of the merger, to basically extend the olive branch," he said.

He added: "You don't make a lot of friends when you sue the second largest or what will be the biggest cable company in the United States."

CSG believes the exclusivity clause in its contract with AT&T Broadband gives it the right to take over the billing systems for AT&T Comcast Corp. once the merger closes. The only exceptions would occur in cases where Comcast has existing exclusive billing contracts already in place.

At present, the Philadelphia-based MSO has billing-services contracts with DST Innovis Inc. and Convergys Corp.

Comcast spokeswoman Jenni Moyer said the company would not comment on the CSG action.

Ruble also declined to say whether Comcast had responded to the action, but he did add there is no guarantee that the withdrawal will change the MSO's stance once it inherits the AT&T Broadband arbitration.

"There was no quid pro quo with Comcast — in other words, 'If I drop the lawsuit then you will do this for me,' kind of thing," Ruble said.