After a protracted battle with state and local governments in New York State, Time Warner (News - Alert) Cable is on the hook for $2.2 million in refunds to customers in 10 municipalities following a deal with Attorney General Eric Schneiderman’s office.

Following a two-year investigation, the MSO will be required to pay refunds to 18,437 customers—at an average of $119 each—for franchise fee overcharges collected since March 2007. Time Warner also agreed to pay $200,000 in fees and costs to the state.

The issue relates to franchise agreements (i.e., the monies that a cable MSO must pay a municipality in order to operate), which TWC inherited when it bought a swath of upstate New York territory from Cablevision in 1995. Under those agreements, the cableco could only charge a certain amount in fees to subscribers. And while it complied with the fee structure in some areas, in others the cableco instead implemented its own rate for franchise fees, which violated the agreements.

"Many New York families operate on a tight budget and every dollar counts," Schneiderman said in a statement. "My office will not tolerate cable companies that ignore their contractual obligations and overcharge New York subscribers."

This latest settlement is not TWC’s first refund rodeo: In 2007 and 2010 it voluntarily halted overcharges in eight towns and refunded $1.7 million to subscribers.

TWC subscribers in the towns of Glenville, Livonia, Stafford, Oakfield, Geneva, Thompson, Lima, Batavia and the villages of Waterloo and Ellenville should start seeing refunds rolling in within the next 90 days; individual credits will vary according to package tiers that customers pay for. In Glenville, where the complaint originated, residents will see a one-time deduction on their cable bill of between $150 and $300, supervisor Chris Koetzle told the Albany Times Union.

"It's vindication that the town's position was correct," said Koetzle, acknowledging that the battle was hard-fought. "We knew we were right and our residents deserved that money back." Overall, residents’ monthly cable bills will decrease by $1.50, he said.

For its part, "Time Warner Cable is prepared to be in full compliance with the settlement agreement entered into with the Attorney General's office," TWC said in a statement. "Impacted cable customers will receive a credit proportional to their monthly video charges on their statement within 90 days."