The Motion Picture Assn. of America has settled out of court for an undisclosed sum a copyright infringement suit filed against Bresnan Communications, a Westchester, N.Y.-based cable multisystem operator.

The suit, filed last year, alleged that Bresnan established a “sham” tier of broadcast stations on its cable systems in Michigan and Minnesota to avoid paying higher royalty fees to Hollywood programmers.

Under the cable compulsory copyright license, cable operators pay a percentage of their gross receipts to compensate programmers for shows aired on distant broadcast station signals such as superstations.

The coin goes into a pool established by the federal government’s Copyright Royalty Tribunal, which then distributes the money to Hollywood studios, local TV stations and professional sports leagues.

MPAA claimed Bresnan set up a low-priced “broadcast-basic” tier of service to avoid paying higher royalties from mid-level tiers. MPAA further claimed Bresnan charged exorbitant installation fees to discourage its customers from subscribing to the low-priced tier.

Bresnan denied the MPAA charges, and in a joint statement released yesterday by MPAA and the cable MSO, the two sides said they settled out of court “as a means of avoiding the time, expense and uncertainty of continuing the litigation.”

Terms of the settlement were not disclosed.

Settlement of the suit marks the second case in 1992 in which MPAA has closed the books on an investigation into alleged underreported copyright royalty payments by a cable operator. In February, MPAA announced that an unidentified cable operator paid $ 500,000 to settle an infringement suit.

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