Time Warner Cable 2006 Annual Report Download - page 54

divisional operations throughout the country. TWC’s signal reception sites, primarily antenna towers and headends,
and microwave facilities are located on owned and leased parcels of land, and TWC owns or leases space on the
towers on which certain of TWC’s equipment is located. TWC owns most of its service vehicles.
TWC believes that its properties, both owned and leased, taken as a whole, are in good operating condition and
are suitable and adequate for its business operations. The nature of the facilities and properties that TWC acquired
as a result of the Transactions is substantially similar to those used in its existing business.
Item 3. Legal Proceedings.
On May 20, 2006, the America Channel LLC filed a lawsuit in U.S. District Court for the District of Minnesota
against both TWC and Comcast alleging that the purchase of Adelphia by Comcast and TWC will injure
competition in the cable system and cable network markets and violate the federal antitrust laws. The lawsuit
seeks monetary damages as well as an injunction blocking the Adelphia Acquisition. The United States Bankruptcy
Court for the Southern District of New York issued an order enjoining the America Channel from pursuing
injunctive relief in the District of Minnesota and ordering that the America Channel’s efforts to enjoin the
transaction can only be heard in the Southern District of New York, where the Adelphia bankruptcy is pending.
America Channel’s appeal of this order was dismissed on October 10, 2006 and its claim for injunctive relief should
now be moot. However, America Channel has announced its intention to proceed with its damages case in the
District of Minnesota. On September 19, 2006, TWC filed a motion to dismiss this action, which was granted on
January 17, 2007 with leave to replead. On February 5, 2007, the America Channel filed an amended complaint.
TWC intends to defend against this lawsuit vigorously. TWC is unable to predict the outcome of this suit or
reasonably estimate a range of possible loss.
On June 22, 2005, Mecklenburg County filed suit against TWE-A/N in the General Court of Justice District
Court Division, Mecklenburg County, North Carolina. Mecklenburg County, the franchisor in TWE-A/N’s
Mecklenburg County cable system, alleges that TWE-A/N’s predecessor failed to construct an institutional
network in 1981 and that TWE-A/N assumed that obligation upon the transfer of the franchise in 1995.
Mecklenburg County is seeking compensatory damages and TWE-A/N’s release of certain video channels it is
currently using on the cable system. On April 14, 2006, TWE-A/N filed a motion for summary judgment, which is
pending. TWE-A/N intends to defend against this lawsuit vigorously. TWC is unable to predict the outcome of this
suit or reasonably estimate a range of possible loss.
On June 16, 1998, plaintiffs in Andrew Parker and Eric DeBrauwere, et al. v. Time Warner Entertainment
Company, L.P. and Time Warner Cable filed a purported nationwide class action in U.S. District Court for the
Eastern District of New York claiming that TWE sold its subscribers’ personally identifiable information and failed
to inform subscribers of their privacy rights in violation of the Cable Communications Policy Act of 1984 (the
“Cable Act”) and common law. The plaintiffs seek damages and declaratory and injunctive relief. On August 6,
1998, TWE filed a motion to dismiss, which was denied on September 7, 1999. On December 8, 1999, TWE filed a
motion to deny class certification, which was granted on January 9, 2001 with respect to monetary damages, but
denied with respect to injunctive relief. On June 2, 2003, the U.S. Court of Appeals for the Second Circuit vacated
the District Court’s decision denying class certification as a matter of law and remanded the case for further
proceedings on class certification and other matters. On May 4, 2004, plaintiffs filed a motion for class certification,
which TWC has opposed. On October 25, 2005, the court granted preliminary approval of a class settlement
arrangement on terms that were not material to the Company. A final settlement approval hearing was held on
May 19, 2006, and on January 26, 2007, the court denied approval of the settlement. TWC intends to defend against
this lawsuit vigorously, but is unable to predict the outcome of the suit or reasonably estimate a range of possible
loss.
Certain Patent Litigation
On September 1, 2006, Ronald A. Katz Technology Licensing, L.P. filed a complaint in the U.S. District Court
for the District of Delaware alleging that TWC and several other cable operators infringe a number of patents
purportedly relating to TWC’s customer call center operations, voicemail and/or VOD services. The plaintiff is
seeking unspecified monetary damages as well as injunctive relief. TWC intends to defend against the claim
vigorously. TWC is unable to predict the outcome of the suit or reasonably estimate a range of possible loss.
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