Suddenlink Communications

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Suddenlink Communications
Subsidiary
Industry Telecommunications
Founded 1992 (as Classic Communications)
2003 (as Cebridge Connections)
2006 (as Suddenlink)
Headquarters St. Louis, MO
Key people
Dexter Goei (Chief Executive Officer, Altice Group / Executive Chairman, Altice USA)
Hakim Boubazine (Co-President and Chief Operating Officer, Altice USA)
Charles F. Stewart (Co-President and Chief Financial Officer, Altice USA)
Services
Parent Altice USA
Website www.suddenlink.com

Suddenlink Communications is an American telecommunications subsidiary of Altice USA which specializes in cable television, high-speed internet, broadband phone, home security and advertising. Prior to its acquisition by Altice the company was the seventh largest cable operator with 1.5 million residential and 90,000 business subscribers. After Altice acquired Cablevision Systems Corporation (Cablevision) on November 30, 2016 Suddenlink was combined with Cablevision to become Altice's American division known as Altice USA. Together with Optimum, the service brand name used by Cablevision for its products, Altice USA because the United States' fourth largest cable operator with 4.6 million subscribers and the sixth largest pay tv service provider with 3.50 million subscribers.

History[edit]

The predecessor to Suddenlink Communications was Cebridge Communications that was formed in September 2003 by its parent company Cequel III. Cequel III was formed in January 2002 by Jerry Kent, a former CEO for Charter Communications, Charter's co-founder Howard Wood and Dan Dergstein, a telecommunications lawyer.[1] The company invested in Classic Communications on February 10, 2003 shortly after it emerged from bankruptcy.[2] Classic Communications was founded in 1992 by Merritt Belisle and Steven Seach and the company was taken public on October 31, 1999 and filed for Chapter 11 bankruptcy protection on November 14, 2001.[3][4] Classic had a total of 325,000 subscribers when Cequel III assumed management of the cable provider on February 10, 2003.[2] Shortly after Cequel III acquired cable systems located in Texas with 27,000 subscribers from Canadian telecommunications provider Shaw Communications.[5][6][7] In August 2003 Cequel acquired 81,000 subscribers from Alliance Communications Partners.[8] After this acquisition Cequel formed Cebridge Connections which consisted of all the cable systems Cequel acquired up to this point. The combined company had 450,000 subscribers by the time the news was announced on September 15, 2003.[9]

Logo of Cebridge Communications from 2001-2006

The company continued to acquire smaller cable systems after it became Cebridge including 78,000 from Thompson Cablevision on January 26, 2004 expanding the company into sixteen states. [10] The company's coverage increased to twenty-three states when it closed its acquisitions of 19,000 customers from Tele-Media on June 3, 2004 and 40,000 customers from USA Media Systems on August 19, 2004.[11][12] Cebridge Connections announced it would change its name to Suddenlink Communications in a soft launch on May 1, 2006 after the company completed its acquisition of 869,000 customers from Cox Communications.[13] The hard launch of the re-branding occurred in July after the company completed its acquisition of 250,000 customers from Charter Communications after these acquisitions the company increased its total size to 1.4 million.[13][14]

After Suddenlink completed its acquisition of the cable system from Charter it focused on upgrading its existing infrastructure that was deemed "under-served" by previous owners. Suddenlink completed a $600 million debt offering on November 5, 2009 which allowed the company to make significant upgrades.[15] The result of the upgrades allowed the company to expand its HD services and increase the number of HDTV channels while its broadband infrastructure was upgraded to DOCSIS 3.0 technology allowing for faster broadband speeds across its footprint. In July 2013 Suddenlink was the first major cable provider that all technicians and installers with the company for 90 days or more had obtained at least one professional certifications from Society of Cable Telecommunications Engineers.[15][16] During the same month Suddenlink and TiVo announced that Suddenlink would distribute co-branded TiVo set top boxes to its subscriber base which allows the company to provide whole home DVR services and out of home streaming of recorded content.[15][17] Four years after its last acquisition Suddenlink gained 8,000 subscribers it acquired from Windjammer Communications on August 1, 2010.[18] On April 1, 2011 Suddenlink closed its acquisition of NPG Cable from the News-Press & Gazette Company.[19] Suddenlink would go on to complete two more acquisitions in 2014 the first was Northand Communications that closed on January 2nd and New Wave Communications that closed on October 1st. [20][21]

New logo of Altice that will replace the Suddenlink brand[22]

Acquisition by Altice[edit]

Suddenlink announced on July 18, 2012 that the company reached an agreement to be acquired for $6.6 billion by BC Partners, CPP Investment Board and Suddenlink’s management team, led by Chairman and CEO Jerry Kent. Prior to this Goldman Sachs Capital Partners and including Quadrangle and Oaktree Capital Management were the majority holders of the company.[23] Altice and Suddenlink announced on May 20, 2015 that Altice agreed to acquire 70% of Suddenlink in a deal valued at $9.1 billion. As part of the deal BC Partners will retain 15% voting share and 18.2% in equity while CPP Investment Board will retain 15% voting share and 11.8% in equity.[24] At the time of the announcement Suddenlink was the seventh largest cable operator with 1.5 million residential and 90,000 business subscribers.[25] The deal closed on December 21, 2015.[26][27] Altice also announced on September 17th that year it would acquire Cablevision for $17.7 billion and completed the deal on June 21, 2016. [28] After both deals were completed Altice USA became the fourth largest cable operator in the country with 4.6 million subscribers and the sixth largest pay television operator with 3.50 million subscribers.[29][30] Altice USA announced on April 11, 2017 the company has filed for an initial public offering. The company plans to raise up to $100 million with the IPO.[30] Altice NV the parent company of Altice USA announced on May 24, 2017 that "all consumer-facing brands across the globe will change." Altice stated the re-branding would be complete by the second quarter in 2018.[22] [31][32]

Carriage disputes[edit]

Suddenlink has been involved with two high profile carriage disputes over the years. The first was with Sinclair Broadcasting Group over two local stations it operates in the Huntington-Charleston, WV designated market area (DMA). The dispute became public on June 30, 2006 and after a month long public battle was resolved on August 8, 2006. The second involved Viacom and its cable channels Nickelodeon, MTV, Spike, TV Land. VH1 and various spin-off channels.

Sinclair Broadcasting Group[edit]

After Suddenlink completed its acquisition of cable system from Charter Communications in 2006 the company entered into a public carriage dispute with Sinclair Broadcasting Group over two local television stations in the region. Sinclair owns and operates WCHS-TV the local ABC affiliate in the Huntington-Charleston, WV DMA. Sinclair also operates the local Fox affiliate WVAH-TV which is owned by Cunningham Broadcasting and operated through a local marketing agreement (LMA) by Sinclair.[33] The dispute impacted a total of 240,000 Suddenlink subscribers, 200,000 of which were included in the Huntington-Charleston, WV DMA proper. The dispute also impacted 40,000 subscribers in the nearby Bluefield-Beckley-Oak Hill, WV and Parkersburg, WV DMAs where Charter imported the signals of WCHS and WVAH because Beckly didn't have a Fox affiliate and Parkersburg lacked an ABC affiliate at the time.[33][34][35]

The agreement between Charter and Sinclair had expired prior to Suddenlink's acquisition both parties began negotiations in May 2006 before the acquisition was completed. Sinclair announced on June 30, 2006 it was not able to reach an agreement with Suddenlink. Sinclair argued that Suddenlink's proposals included no compensation and no response to their counteroffer.[33] Without a retransmission consent agreement Suddenlink would not be allowed to carry the two stations on any of its cable systems. During the dispute Sinclair posted a letter on the websites of the two stations and began to notify viewers with scrolling crawl messages on the bottom of the screen encouraging them to switch to another provider like DirecTV or Dish Network. While this was a comparable solution for the Huntington-Charleston area the two satellite providers didn't provide the two stations to viewers in Beckley or Parkersburg.[33] [36][35]

Suddenlink subsequently filed an Emergency Retransmission Consent Complaint with the Federal Communications Commission (FCC) on July 5, 2006 claiming Sinclair failed to negotiate in good faith for the stations and demanded Suddenlink to stop carriage of the two stations during a Nielsen rating sweeps period.[33] The following day Sinclair also submitted a filing with the FCC requesting the Commission order Suddenlink to cease carriage of its signals. Suddenlink claimed that Sinclair was originally asking for $4 million in fees over the three-year life of an agreement but changed the offer to a one time fee of $200 per subscriber ($40 million total) and $1 per month in subscriber fees ($2.4 million annually) in order to carry the stations after Sinclair found out how much Suddenlink paid Charter for the systems.[33][36]

Suddenlink claimed it informed Sinclair it was obligated to carry the stations until the end of the Nielson sweeps period however Sinclair disputed this was applicable and that the rule was to benefit broadcasters not distributors. On July 3, 2006 Sinclair pulled the out of market signals but left the stations on in Suddenlink's Huntington-Charleston systems.[33][35] On July 27, 2006 both parties agreed to a temporary extension which kept the stations on Suddenlink's systems until August 7 if an agreement was not reached.[37] Suddenlink and Sinclair reached an agreement on August 8, 2006 and withdrew their FCC petitions. While the terms of the agreement were not made public Pete Able, Suddenlink's vice president of government relations, stated the company "made it very clear" that the $40 million fee "was never something we could find mutually agreeable."[38]

Viacom[edit]

Prior to October 1, 2014 Suddenlink carried cable channels from Viacom, a media conglomerate specializing in cinema and cable television which included BET, CMT, Comedy Central, MTV, Nickelodeon, Spike, TV Land, VH1 and various smaller spin-off networks. The two companies were able to reach an agreement at the end of 2010 for continued carriage of Viacom's channels that was to end on September 30, 2014.[39] Viacom has been involved in notable contract discussion in the past including a media battle with satellite provider DirecTV in 2012 which resulted in their channels being unavailable for nine days before reaching an agreement.[40] After Viacom's channels were pulled from smaller provider Cable ONE on April 1, 2014 the cable provider replaced them with other channels.[41][42] The contract negotiations became public on September 25, 2014 after five months of talks broke down between both companies.[39] Suddenlink claimed Viacom wanted a 50% in fees for its programming despite its ratings decreasing. Viacom rebutted stating it attracts the greatest share of viewing of any cable provider. Suddenlink noted the majority of its customer base "do not want the Viacom channels" and didn't want to pay more for Viacom's channels and wanted others instead.[43]

After the deadline passed all Viacom channels were pulled from Suddenlink's lineup on October 1, 2014. Viacom claimed that Suddenlink rejected one of its own proposals and informed them they would drop the channels. Suddenlink maintained that Viacom rejected every proposal the company made to continue carrying Viacom's channels. Suddenlink reorganized their channel lineups to replace the Viacom channels some of the replacements were already available to Suddenlink while some were not previously available.[44] Suddenlink replaced Viacom's channels with twenty other channels including FXX, Hallmark Movies & Mysteries, Investigation Discovery, OWN, Sprout, TheBlaze, Pivot and Up.[44][45][46] Due to Suddenlink's size the company received positive reception in the media saying the decision could inspire other mid-small size operators.[47] Six months after dropping Viacom's channels Suddenlink's then CEO Jerry Kent stated 2%-2.5% of its video subscribers dropped their service. He also noted the some of the replacement channels were viewed more than some of the dropped channels. Despite losing some video subscribers Kent also stated "meeting the programmer’s demands would have been more costly. When Pivot ceased operations, Suddenlink started carried i24 News."[48]

Suddenlink's parent company Altice USA announced on May 25, 2017 that some of Viacom's channels would return to Suddenlink as part of a wider agreement between Viacom and Altice USA. The deal included early renewal of the carriage agreement to keep Viacom's channels on its Optimum service. Viacom and Altice USA did not announce which Viacom channels or the date they would return to Suddenlink systems.[49]

Controversial practices[edit]

Starting in 2011 Suddenlink began to implement data usage limits, also known as data caps, on its broadband services on all its service plans.[50][51] After exceeding the data allowance for a particular service plan an overage charge of $10 per 50 GB block is billed to the customer.[51] Shortly after data usage limits began to roll out across Suddenlink's territory customers began to report the meter used was inaccurate. One example highlighted one user's router measured that 2.22 GB of data was used in one day while Suddenlink's meter showed 23 GB of data was used in the same period.[52] Another user questioned a customer service representative how her equipment logged 12 GB of data used when electricity was out.[53] By August 27, 2012 the company temporarily suspended its controversial data usage policy while a third party was hired to validate the accuracy of its metering systems.[53][54] By June 3, 2013 Suddenlink had resumed its data usage limits policy and began charging overages.[55] After Altice completed its acquisition of Suddenlink the company added back unlimited usage plans for its top two tiers only on April 1, 2016.[56]

Altice USA and its Optimum branded services have been criticized for a policy change in where if a subscriber cancels one or all of their services before the end of their billing cycle they do not receive a refund.[57][58] Altice USA has implemented this policy change for both its Suddenlink and Optimum branded services. This policy went into effect for Suddenlink subscribers on June 1, 2016 and for Optimum on October 10, 2016.[59][58] On May 30, 2017 a class action lawsuit was filed against Altice USA claiming that the company illegally changed the terms and conditions of its cancellation policy and didn't provide adequate notice to customers.[57] The lawsuit also claims the company broke New York's General Business Law for deceptive practices and unjust enrichment. Altice has stated subscribers were given advance notice of the new policy and that customer service representatives are trained to tell departing customers billing continues until the end of the billing cycle so they can chose to disconnect at that time.[57]

References[edit]

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  2. ^ a b Farrell, Mike (February 16, 2003). "A Classic Return". New York City, New York, United States: Multichannel News. 
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  45. ^ "Suddenlink - Residential Services Agreement". suddenlink.com. June 1, 2016. Archived from the original on June 21, 2016. Retrieved June 7, 2017. 4. Payment. ... Monthly Subscriptions: Your monthly subscription begins on your start of service date and renews on a monthly basis thereafter until cancelled by you. If your subscription renews on a day not contained in a given month, we will bill you, and your service period begins, as of the last day of such month. The subscription fee for Service(s) will be billed at the beginning of your service month and each month thereafter unless and until you cancel your subscription. PAYMENTS ARE NONREFUNDABLE AND THERE ARE NO REFUNDS OR CREDITS FOR PARTIALLY USED SUBSCRIPTION PERIODS 

External links[edit]