ADELPHIA'S RATE HIKES BLACKED OUT.

Byline: Harrison Sheppard Staff Writer

The Los Angeles City Council ordered Adelphia Communications on Friday to rescind rate increases it imposed last year and refund about $4 million to the bankrupt company's 235,000 cable TV customers in the San Fernando Valley and elsewhere.

Speaking in harsh tones about the company - whose executives have been charged with financial crimes - council members said Adelphia failed to justify the increase.

``Let's send a strong message to Adelphia,'' Councilman Jack Weiss said.

``If this is a new Adelphia, show us that you're new by rolling back these unfounded rate increases,'' he said. ``Otherwise the new Adelphia is going to continue to profit from the old, fraud-oriented Adelphia.''

Cable customers shouldn't expect checks in the mail anytime soon, however, because the company plans to appeal the decision to the Federal Communications Commission within the next 30 days.

If the council decision is upheld, company officials said, they don't yet have details on how or when the rebates would be distributed.

An Adelphia official said they were disappointed with the decision, saying it relates to actions by the company's prior management. The cable company's executives have been replaced and it is making an effort to upgrade its technology and improve customer service, the company spokesman said.

``I see really what has occurred here as a legacy issue related to the past management practices of Adelphia,'' said Thomas Carlock, the company's regional vice president of law and public policy, who was hired less than two weeks ago.

``Ultimately, for us, the proof is in the pudding to turn that around,'' he said. ... We're going to show them not only can we improve and work with the city, but we're doing great things for the customers now.''

Adelphia founder John Rigas and his two sons have been indicted on charges of stealing millions of dollars from the company, and two other company officials pleaded guilty to fraud-related charges. Adelphia declared bankruptcy last June and has brought in a new management team.

The council action affects 235,000 subscriber households out of 240,000 in the city, resulting in up to $4 million in potential rebates, based on an average of $1.50 to $2.25 a month in increased charges for the cable service, said Liza Lowery, the city's chief information officer.

Also, city officials believe Adelphia owes Los Angeles $3.8 million in franchise fees. With the rate rollback, the city would have to return $450,000 in franchise fees to the company, but Lowery said officials will look at whether that money could simply be deducted from Adelphia's franchise debt.

The city has been negotiating with Adelphia over the franchise fees. However, the company's debt is tied up in bankruptcy court, so it could be some time before the issue is sorted out.

According to city officials, Adelphia had raised monthly rates from $12 to $12.57 in the east San Fernando Valley; $32.09 to $34.09 in Sherman Oaks; $27.17 to $28.54 in Eagle Rock; and $30.71 to $32.73 in West Los Angeles.

Adelphia's fifth region in the city, Boyle Heights, was not affected by the council action. That area is not regulated by the city because FCC rules limit regulation if a company has only a small part of a particular market.

Adelphia officials, however, contend there was no increase in the East Valley.

Laurence Windsor, the company's government affairs manager for Southern California, said the apparent increase in that region was actually just a change in the billing that itemized the city's franchise fee, rather than include it in a single number, and resulted in no actual bottom-line increase to customers. The other figures, he said were accurate.

Windsor argued this means the amount owed to customers - if any - would be closer to $2.4 million.

The council had to act no later than Friday and was required to pass the measure by at least 12 votes in order to meet the FCC deadlines of June 1 and June 2 for the four areas, Lowery said. The council passed the measure 13-0 and Mayor James Hahn signed it immediately.

ADELPHIA's RATE HIKES

The Los Angeles City Council has ordered Adelphia Communications to pay rebates to about 235,000 customers for the following rate increases imposed last year.

--East San Fernando Valley: $12 to $12.57*

--Sherman Oaks: $32.09 to $34.09.

--Eagle Rock: $27.17 to $28.54

--West Los Angeles: $30.71 to $32.73

* Adelphia disputes the rate increase in the East Valley.

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ADELPHIA's RATE HIKES (see text)