Cable franchisees overstated local subscribers by 30,000.

The three major cable franchisees in Los Angeles have revised their subscription numbers downward, opening themselves to a partial refund of lee payments from the city.

"This is a case where the city may have to return money," said Betty Ngo, division manager in charge of cable franchises at the Los Angeles Information Technology Agency, which collects subscription figures and fees from the cable systems.

Adelphia Communications Corp., Comcast Corp. and Cox Communications Inc., which together control 78 percent of the city's cable business, cited either confused processing methods or staff turnover for the overcounting of 30,000 subscribers.

The revised numbers show 611,861 L.A. cable subscribers in 2003, down 3.3 percent from the year earlier, according to an ITA report.

The report said revenues from franchise fees rose in the same period to $20.9 million, modestly higher than the $20 million in fees it received in 2002. The increase may be attributable to additional revenue generated by cable providers from enhanced service products such as digital cable and annual rate increases for cable services.

"The initial numbers were prepared hurriedly and revised when we had more complete information pulled together," said Erica Stull, an Adelphia spokeswoman in Denver. "We have taken steps internally to make sure there is no discrepancy again."

Ngo said she had been instructed by ITA commissioners to meet with executives of Adelphia, Comcast and Cox on July 7 to get an explanation from them on how the subscriber reporting errors occurred.

"Generally speaking, we were told that different offices process different portions of the figures we collect," said Ngo.

The discrepancies arose when the ITA reviewed the 2003 subscription figures submitted by each company in January. The following month, after contacting each operator with questions about their count, the city was given revised figures.

As a result of the delays caused by the recount, the ITA's annual report on cable services was not approved by the ITA board until June 15, several months behind schedule, Ngo said.

She said ITA's accounting staff was continuing to go over the numbers, but said she could not provide an estimate on bow much money is at stake.

Perry Parks, a Comcast vice president, blamed the reporting error on a "transition with new people here who inadvertently drew the numbers from a wrong report."

He said the franchise fees paid to the city, an estimated $9 million in 2003, were correct and had no correlation to the subscription numbers it submitted since the lees are based on its gross system revenues, including basic cable charges, additional products and services sold, and advertising income.

"When you do a franchise fee report, you roll all this together and they (L.A.) get 5 percent of the revenue," Perry said. "So the numbers being off doesn't affect if we overpaid or underpaid."

He said the subscription numbers submitted to the city were inaccurately copied from "timing reports" and not the "franchise fee" reports which are used to calculate what Comcast pays the city.

Art Yoon, Cox's manager of government affairs, explained in a June 8 letter to ITA Telecommunications Manager William Imperial that only a portion of the subscription information was provided. Cox controls roughly 2 percent of the market.

He wrote that Cox's quarterly statistical report included "the number of high speed data only subscribers" and not all of its other "video subscribers."

Time Warner Inc., which has a 20 percent share of the L.A. market, did not have reporting problems, Ngo said.

Each of the franchisees is negotiating for the renewal of its agreements with the city. All four expired in 2002 and have been extended through next month.