Officials with the City of Pikeville plan to audit Suddenlink and review whether the cable television company has complied with its franchise agreement with the city and made its required payments.
The Pikeville City Commission approved an agreement on Sept. 14 to work with a firm that specializes in audits in order to review Suddenlink’s compliance with making payments to the city under its franchise agreement — known as a cable television franchise fee payment compliance review. This recent decision comes after the commission found Suddenlink to be in violation of its franchise agreement with the city in late July this year.
Pikeville City Manager Philip Elswick said that Suddenlink’s franchise agreement requires that it must pay the city a percentage of its gross revenue for the customers they have in the city and that it must pay fees for each day that it is found to be in violation of the franchise.
“For every day that they’re in default, they’re getting charged, and they will have to pay us, when we finally cure all these defaults,” Elswick said. “It’s certainly not about the money. It’s about making certain that they comply with their agreement and provide quality services to our citizens.”
Elswick said the city plans to work with the firm and audit Suddenlink in order to review if the company has made its payments. He added, though, that some reports from Suddenlink have shown “discrepancies” in the company’s fee payments.
“Quarterly, Suddenlink will provide a report of their gross revenues and send their franchise fees. Just looking at some of the reports that they have provided, there appears to be some anomalies and discrepancies that we believe they may not be paying the correct amount of franchise fees,” Elswick said. “The agreement we executed (on Sept. 14) is with a firm that specializes in audits of utilities, like Suddenlink and any number of other things. Essentially, they will gather the data from Suddenlink, they will audit it and make certain that the fees they are paying the city are actually what are due.”
Elswick said that he was not certain of the exact discrepancies yet, but he said they appear to be related to discrepancies in Suddenlink’s reported total customers and revenue.
“The customer counts that they’re showing and the revenue that they’re showing just doesn’t appear, on the surface, to be accurate,” Elswick said. “That is the purpose of the audit. It may be entirely correct, but we have a duty to our citizens to ensure that it is.”
The Pikeville City Commission found Suddenlink to be in violation of its franchise agreement during a meeting on July 27, after holding a public hearing that day. During the hearing, Pikeville City Attorney Rusty Davis said that the company allegedly violated the franchise agreement by failing to provide services, forcing long wait times on customers and failing to provide proper documentation for finances and insurance required by the agreement, among other things. Davis said that day that representatives with Suddenlink could not attend the public hearing.
Elswick said that the city is continuing to work with Suddenlink on trying to address their defaults in the agreement. He said he expected the audit to be completed in less than 90 days.