Gurdon, Ark. Mayor Files Class Action Claiming Suddenlink Owes Franchise Fees for Broadband, Cable, Internet Services

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The mayor of Gurdon, Arkansas claims Suddenlink owes quarterly five-percent franchise fees for the use of the city’s public easements and rights of way in providing residents with broadband and phone services that, according to the lawsuit, are plagued by rampant outages, “erratic” price increases and near-non-existent customer service. 

According to Gurdon Mayor Sherry Kelley’s 11-page lawsuit, Suddenlink provides cable, internet and phone services, often to consumers who have “little to no alternative sources” outside of what the company provides, without living up to certain customer service standards. The case alleges that although Suddenlink has been the subject of “almost 16,000” complaints with the Better Business Bureau in the last three years, the company has increased the costs of its services, most recently during the COVID-19 pandemic, while offering in return no corresponding uptick in quality.

Aside from its alleged customer service failures, Mayor Kelley alleges that Suddenlink, which reportedly does not have an existing franchise agreement with Gurdon or the Arkansas Secretary of State, has failed to pay the city and similarity situated municipalities a quarterly franchise fee of five percent of its gross revenue, as derived from the services provided to the cities. 

“Based on good faith knowledge and belief, Suddenlink has failed to properly pay the required fee, necessitating this lawsuit, and entitling Plaintiff to the relief requested herein,” per the complaint, which has been removed to Arkansas federal court since its initial filing on February 21. 

According to the lawsuit, Suddenlink parent company Altice USA delivers services to approximately 4.9 million customers across 21 states. In the last year, the case says, customers spanning Suddenlink’s service areas, as well as the North Carolina attorney general’s office and a West Virginia government official, have lodged complaints with regard to price increases, service issues and a lack of customer services. 

As the suit tells it, “hundreds” of Arkansas residents have filed complaints about Suddenlink with the state attorney general’s office. Many of these complaints, the case says, are consistent with those of Suddenlink customers in other states. In one Arkansas city, Suddenlink customers reported cost increases of 14.4 percent “despite declining services since the current declaration of emergency,” according to the complaint. 

The lawsuit, citing an affidavit from a Suddenlink director in another case, goes on to state that Suddenlink has increased charges for more than 31,000 Arkansas customers by more than 10 percent since last March at the onset of the COVID-19 pandemic, allegedly pulling in more than $3.6 million revenue from those customers alone. It’s the revenue that Suddenlink derives from Arkansas customers that mandates the company pay a five percent fee to cities and municipalities in the state, the suit claims. 

When providing services to Gurdon, Arkansas customers, Suddenlink uses the city’s wireline facilities and equipment and appliances located at least in part in public rights-of-way, the lawsuit attests. As such, Suddenlink is required to pay Gurdon in exchange for its use of the city’s space and equipment, Mayor Kelley says. 

Per the case, while Suddenlink has in the past remitted a single payment to Gurdon in or around the end of January each year, the company “has not provided evidence to demonstrate the basis for how this payment was calculated.”

“The amount of this payment has decreased in recent years,” the lawsuit states, while Suddenlink has, in turn, increased customers’ rates. 

As the lawsuit tells it, Suddenlink has fallen short of both its franchise fee obligations and one or more of the standards imposed upon it as a video services provider, particularly during a time when many Arkansans are working from home and have children who require internet service for online schooling.

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