Cox Cable sending out coupons to settle suit

Thursday, June 8, 2000 | 11:33 a.m.

Las Vegas-area cable TV customers will soon receive with their bills coupons that can be used to pay for two free pay-per-view movies.

A spokesman for Cox Communications Inc. said the coupons and instructions on how to use them will be distributed in the next 30 to 60 days as part of a settlement reached in a class-action lawsuit against the company.

Steve Schorr, a Cox vice president, said the free movies are being offered as a settlement for the suit, filed in Clark County District Court by Robert G. Hillsman. The suit alleged Cox's late-fee policy violated Nevada's Deceptive Trade Practices Act.

The suit said the policy was in violation because it fails to explain how the late fee is calculated and it alleged the fee assessed is unrelated to late payments. The company used the fee as a profit-generator, the suit said, with late fees ranging from $5.15 to $7.50.

Cox denied the allegations, but agreed to the settlement to avoid litigation. Schorr said late fees generally are about $5 a month and are assessed 45 days after a bill is delinquent. He said the amount is based on the cost of collecting the bill.

In a recent hearing before Judge Mark Denton, there was no opposition to the settlement agreement. The agreement says, "any late fee imposed by the company that does not exceed $5.50 in 1998 adjusted annually for inflation based on the consumer price index shall be presumed reasonable to cover the cost associated with the delinquent payment."

Hillsman's attorney, Colby Williams of the Las Vegas law firm of Campbell & Williams, said Hillsman was satisfied with the settlement terms.

Next comes the matter of compensating members of the class. Schorr said inserts in bills would go to all of the company's 350,000 customers, but it's only intended that eligible class members use them.

In notifications mailed to potential class members in March, the company said customers who paid a late fee between Oct. 2, 1994, when the company was operated as Prime Cable, and the settlement date, May 19, are eligible to receive a transferable product certificate, which could be submitted as payment for two pay-per-view movies.

Customers who don't have an analog converter box for pay-per-view will be able to use one from the company for free.

The normal cost of a pay-per-view movie is either $2.95 or $3.95, depending on the movie, and the company has no estimate on the number of customers eligible for a claim since some have moved or are no longer customers.

Prime Cable, the company that operated the cable television system until it was sold to Cox in September 1998, is based in Austin, Texas. The Greenspun family, which owns the Las Vegas Sun, was a majority owner of the cable company when it was operated by Prime and is now a minority shareholder in the Las Vegas cable operation under Cox.