Cox offers free movies as lawsuit settlement

Tuesday, March 28, 2000 | 10:55 a.m.

Cable television customers of Cox Communications Inc. are receiving notices of a proposed settlement of a class-action lawsuit with this month's bills.

The proposed settlement would allow customers who paid late fees to Las Vegas' dominant cable company over the past 5 1/2 years to receive two free pay-per-view movies.

The class-action suit, filed in District Court by Robert G. Hillsman, alleges that Cox's late fees are excessive and the company's late-fee policy is in violation of Nevada's Deceptive Trade Practices Act.

The suit claims the policy violates Nevada law by not disclosing how the late fee is calculated and that the fee assessed is unrelated to late payments. The company is using the payments as a profit-generator, the suit says, with late fees ranging from $5.15 to $7.50.

Most utilities charge 1 percent to 1.5 percent of a bill as a late fee.

Cox denies the allegations, but has agreed to a settlement to avoid litigation. A company spokesman said the late fees that are charged are in line with what is acceptable under existing franchise agreements between the company and Clark County and local municipalities.

The agreement says "any late fee imposed by the company that does not exceed $5.50 in 1998 adjusted annnually for inflation based on the consumer price index shall be presumed reasonable to recover the cost associated with the delinquent payment."

Steve Schorr, a Cox vice president, 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 unpaid bills.

Colby Williams of the Las Vegas law firm of Campbell & Williams, which represents Hillsman, said terms of the settlement agreement prohibit him from making comments to the press about the suit. Hillsman could not be reached for comment.

Potential class members were notified of the proposed settlement in an insert in March bills.

According to the mailing, customers who paid a late fee between Oct. 2, 1994, when the company was operated as Prime Cable, and the settlement date, projected to be May 12, are eligible to receive one transferable product certificate, which can 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.

Schorr said it is unknown how many customers would be part of the settlement class and Cox has no estimate of how much the settlement would cost.

The final settlement hearing is scheduled May 12 before Judge Mark Denton. If the court approves the settlement, the terms would be implemented. If rejected, litigation would continue, going to trial in the fall.

The mailing says there are four options for customers. They can remain a member of the settlement class if they have no objections, they can file an objection to the terms of the settlement by April 28, they can represent themselves at the settlement hearing in person or through an attorney or they can request exclusion from the settlement class, which also requires written notice by April 28. Customers don't have to appear for the hearing unless they file an objection.

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.