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Calif. County Opposes Suddenlink-Altice Merger

Humboldt County, Calif. (pop. 134,493), has come out in opposition to Suddenlink Communications’ $9.1 billion merger with European telecom giant Altice, saying the deal is not in the public interest.

The Humboldt County Board of Supervisors sent a letter to the Federal Communications Commission arguing that the merger would conflict with local ordinances, according to a report in theEureka Times-Standard.

In its July 21 letter to the FCC, available on the county website, the board of supervisors wrote that transferring ownership of Suddenlink to more distant owners – Altice is based in Luxembourg – is not in the public interest.

“From experience we know that consolidated absentee ownership reduces competition, threatens media localism and harms information diversity,” the letter stated.

Altice agreed in May to purchase a 70% interest in Suddenlink for $9.1 billion. It has said it expects the deal to close by the fourth quarter and plans to use Suddenlink as a vehicle to acquire more U.S. cable companies. Suddenlink, which has about 1.5 million customers in Arkansas, Arizona, Louisiana, North Carolina, Oklahoma, Texas, West Virginia and elsewhere, has about 33,000 customer relationships in Humboldt County.   

Money appears to be at the heart of the Humboldt opposition to the deal.  According to the letter, Suddenlink ended its local cable franchise agreement in April 2014 and began operating under a state-issued cable franchise. In August 2014, the country informed Suddenlink that it was out of compliance with local ordinances adopted by the county and the cities of Eureka, Arcata, Rio Dell, Ferndale and Blue Lake, which require payment of public, education and government access (PEG)  fees totaling 3% of video revenue. The county argues that Suddenlink has been paying PEG fees at the state minimum rate of 1% of video revenue and as a result, the cable company failed to pay the county about $500,000 in PEG fees since April 2014.

The county and Suddenlink negotiated a 1.4% fee, which the country says has not been honored. Suddenlink begs to differ, according to the report.

“We have been actively engaged in good-faith negotiations with Humboldt County and cities within the County about a mutually agreeable resolution to their questions regarding Public, Education, and Government (PEG) fees,” Suddenlink said in a statement. “In fact, we’ve already agreed to the 1.4% rate referenced in local media reports.  We will continue negotiating in good faith and trust the involved government officials will do the same, so that we can amicably resolve this local matter as soon as possible.”

Should the FCC decide to approve the Altice deal, Humboldt County has asked that it consider conditions including promoting universal access to its least served people and places;  ensuring localism  with meaningful support for PEG access and roles for local, state and tribal jurisdictions;  protecting the Open Internet with strong net neutrality requirements and extending broadband adoption by providing free connections and at-cost support for low income communities and community anchor institutions.