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FCC Sidesteps Adelphia Fee Dispute in Vt.

The Federal Communications Commission will not take up a late-fee dispute between Vermont's Department of Public Service and Adelphia Communications Corp.

In 1999, the DPS disallowed Adelphia to charge a $5 late fee. The agency was concerned that the cost of recovering late bills was both a cost element within basic-rate benchmarks, and charged as a separate fee. To protect customers against perceived "double-dipping," it ordered a refund of all late fees charged between July 23, 1998 and May, 1999.

Adelphia challenged the FCC, arguing that the DPS erred when it concluded late-fee costs might be recovered within benchmarked rates. But the commission has declined to regulate late fees, stating such disputes can be disposed of during negotiations or through state or local customer-service laws.

Adelphia then asked the FCC for an advisory opinion, stating that costs uniquely associated with delinquent accounts are not part of normal billing-collection costs. Cities across the country would see the commission's lack of action as "an invitation" to reject late-fee charges.

But on Aug. 27, the FCC declined to make the clarification. It is appropriate, the federal agency said, for local regulators to demand assurance that an operator is not recovering costs twice.

Neither representatives of the PSC nor Adelphia returned calls.

The Vermont PSC has kept close tabs on Adelphia, which became the state's dominant operator through its acquisition of FrontierVision Operating Partners and its purchase of systems from Harron Communications Corp.

Resolution of the late-fee dispute will be added to the ongoing state regulatory proceeding. The PSC has demanded that Adelphia explain why it is behind on a Vermont-wide upgrade project. The MSO secured franchise renewals in 2000 by agreeing to improve capacity to 750 Megahertz.

Regulators assert the operator has upgraded less than one-quarter of the 1,600 miles of plant it agreed to build by year's end.

Adelphia has petitioned the state for relief, asserting the buildout has become too expensive.