Lee County, Mediacom reach deal

LEESBURG, Ga. -- Officials with Lee County and with local cable provider Mediacom Communications said Wednesday they have reached an agreement whereby Mediacom will pay the county $55,170.24 in overdue franchise fees.

Interim County Administrator Al Crace, whose last day in that position is Friday, said the agreement will end a long-standing negotiating process with the county and the cable provider.

"I give a lot of credit to (former county administrator) Alan Ours," Crace said. "He spent a good amount of time trying to negotiate a settlement with Mediacom, so there was no need for me to take anything but a hardball position.

"The record suggests that there were periodic meetings (between Ours and Mediacom) to resolve the matter. I basically went from third base to home with it."

Mediacom Government and Community Affairs Manager for Georgia Sally Bloom confirmed Wednesday that the company considers the matter with Lee County settled.

"This will be finalized in the next day or so; the billing issues have been corrected," Bloom said. "The only reason I could say that the issues existed is that (Mediacom) has dealt with two county managers in Lee County. But as far as I know, everything has been cleared up to both parties' satisfaction.

"This was just an isolated case where billing issues surfaced. I don't think there's anything to hold up this getting settled."

Ours sent a letter to Bloom on May 2, 2007, outlining the results of an audit conducted for the county by Telecommunications Consulting Associates of Waynesville, N.C. TCA principle John C. Howell indicated in a letter to Ours that when Lee County renewed its franchise agreement with Mediacom in 2004, the method of fee collection in the county had been changed dramatically.

Instead of collecting fees on all revenues generated by Mediacom in the county, the new agreement limited collections to fees on basic cable services only. The reduction in fees amounted to almost $130,000 annually.

However, during 2005-06, Mediacom continued to collect franchise fees from county customers at the old rate but paid the county at the new rate. The net result was that the cable provider overcollected $109,306.02 in fees. Howell suggested the county offer a settlement solution for half the amount, which at the time was $54,653.01.

The next recorded meeting between Ours and Bloom took place almost two years later, on June 25, 2009. In a follow-up letter to Ours dated Sept. 16, 2009, Bloom said that in repaying the overcharge of franchise fees to subscribers, the company had actually surpassed the $109,306.02 in overcollections by $55,170.24.

She noted, "In our conversation, we discussed options to reimburse Mediacom for the $55,170.24 variance, and there appears to be three options: the county reimburse Mediacom $55,170.24; or withhold payment of franchise fees to the county until the variance is repaid; or bill the customers the additional amount to cover the overpayment."

That is where Crace and County Attorney Jimmy Skipper stepped into the fray.

"The agreement Mediacom had with its customers was a two-way arrangement," Crace said. "We were not a party to Mediacom's billing system. By overrebating the fees due to customers, they were not paying the correct franchise fees due the county.

"They indicated that they wanted us to collect those fees from their customers. But we're not in the business of collecting fees for any company that operates in the county."

So Crace and Skipper dashed off a letter that spelled out what the county expected.

"This is to request the payment of the overdue Mediacom franchise fees that were last reported to be $55,170.24 in your letter of September 16, 2009," Crace wrote in a letter to Bloom dated Dec. 30, 2010. "These funds are expected to be paid no later than January 31, 2011.

"... If the overdue payment is not received by January 31, 2011 then the Lee County Board of Commissioners reserves all of its rights to take any and all appropriate actions to seek the full payment of the principal, interest and other related costs including court costs and attorney's fees."

Crace discounted Mediacom's efforts to pass its overreimbursement of subscriber fees off on the county.

"As you clearly stated in your letter of September 16, 2009 to Alan Ours," he wrote, "the $55,170.24 amount you are now withholding from Lee County is the amount by which Mediacom overreimbursed its Lee County cable subscribers because of Mediacom's original mistake ... in overbilling your Lee County cable subscribers in 2005 and 2006 in the amount of $109,306.03.

"... There is no basis in fact or law for Mediacom to now claim that somehow Lee County owes Mediacom the $55,170.24 that you overreimbursed your own customers by mistake. You should also keep in mind that the original mistake Mediacom made in overbilling its customers was only discovered after a county audit of Mediacom records, and that it is Mediacom's legal obligation, under the franchise (agreement) to pay the franchise fees due to Lee County in a timely manner. Anything else is a breach of that franchise."

The outgoing interim Lee administrator said there appears to be an attempt by Mediacom officials to clear up these lingering issues that have surfaced.

"Evidently somebody made the decision high up to clean up this mess," he said. "It's been lingering for a while now, and there seems to be a renewed energy to get back on track. I think they figured out this is not like wine; it will not get better with age."

Mediacom officials have been engaged in similar negotiations with the city of Albany after an audit showed that the cable provider had underpaid franchise fees owed the city by more than $105,000. The city negotiated a repayment agreement of $139,000 with fees and penalties, but Mediacom has since offered to swap a building it owns in exchange for the fees.

The Albany City Commission tentatively agreed to accept the swap and was to take a final vote on the matter at its business meeting Tuesday, but the matter was pulled from the agenda to allow commissioners more time to conduct research.

-- J.D. Sumner contributed to this report.